ADB financing for procurement of 300 locomotives sought

Pakistan Railways has sought Asian Development Bank (ADB) financing for procurement of 300 locomotives to meet its operational requirements, official sources revealed. Well-placed sources in the Railways Ministry told Business Recorder that Werner E Liepach, Director General (DG) for Central and West Asia Department, ADB met with Parveen Agha, Chairperson Ministry of Railways here on Monday. Xiahong Yang, Country Director, ADB Pakistan and Mazhar Ali Shah, DG Planning, Ministry of Railways also attended the meeting.
ADB showed keen interest in modernizing PRs infrastructure, rolling stocks and human resource management and agreed to provide seed money to further attract public/private financing. PR has submitted PC-1 to Planning Commission for procurement of 300 locomotives to fulfil its requirements to be added to the system by 2025. Currently, PR has a fleet of 468 locomotives out of which around 311 are operational including 80 locally rehabilitated and around 157 non-operational; additionally, 75 locomotives have been procured during the last four years. "Up-gradation of Risalpur Locomotive Factory, procurement of new locomotives and Freight Company was discussed with ADB team. ADB officials showed interest in co-financing. Liepach stated that ADB finance would provide seed money to bring in commercial financing. This co-financing will be done through public private partnership. ADB will play an active role in identifying and arranging commercial co-financing for Pakistan Railways' projects", sources added.
ADB officials argued that despite recent developments, PR needs to further improve its infrastructure to provide inexpensive transport services and recover the market share lost to roads. According to the Country Operations Business Plan (COBP) 2018-2020, ADB is supporting (i) the development of a national transport policy and master plan, (ii) Pakistan Railway strategic plan, and (iii) national road safety action plan for improved road asset management. As per the COBP, ADB has increased resource allocation from $1.51 billion to $1.76 billion for the transport sector, which comprises roads, road safety, and asset management border services improvement, urban transport and Railway rehabilitation and regional connectivity. Sources said that railways earlier decided not to avail the assistance of ADB for up-gradation of existing Main Line (ML-1) from Karachi to Peshawar after China agreed to provide financing for the project on favourable terms.
The ADB had originally planned to finance the ML-1, but Railways remained engaged with China to procure loans on more favourable terms. During the last Joint Cooperation Committee (JCC) of China-Pakistan Economic Corridor (CPEC), China termed ML-1 a strategically important project and agreed to provide long-term loan on favourable terms for its up-gradation. Initially, the financial support to PR under the CPEC was estimated at $ 5.7 billion, which increased to $ 8.2 billion after approval of the new framework. With the up-gradation of ML-1, the speed of trains will increase to 160 km/h compared to the current 120km/h while the frequency of trains would increase from the current 32 to 171 per day.