China to provide $2.9 billion financing for Railways

China will put in $2.890 billion financing to upgrade Pakistan Railways (PR) Mainline -I (ML-I) in the first phase of the project under China-Pakistan Economic Corridor (CPEC) investment framework. The total cost of the project comes around $ 3.400 billion and China would extend a loan of $2.890 billion to meet 85 percent cost of the project as per its commitment under CPEC, a working paper of Planning Commission of Pakistan on the project indicates.
The working paper available with Business Recorder spells out the details of financing for the mega project under CPEC framework. The project, which is awaiting the approval of Ecnec after passage from Central Development Working Party (CDWP), recently, is the part of road and rail infrastructure upgradation component of CPEC.
The financing side of the project shows that apart from $ 2.890 loan from Chinese side, Pakistan would put in $510 million as part of its 15 percent share in the project. In Public Sector Development Programme (PSDP) for the next financial year, Rs 5 billion has been allocated for this project as part of Pakistan's share in the project.
The commencement of work on the project has been targeted during financial year 2018-19 whereas it has been scheduled to be completed during in fiscal 2021-22.
The cost break-up shows that upgradation of 339km long Multan-Lahore track would cost $1.002 billion whereas 174 kms long Peshawar-Rawalpindi track's cost comes around $985 million. Upgradation of Kaluwal -Pindora track stretching 52km would cost $334 million. 183km long Nawabshah-Rohri track would cost $490 million.
Establishment of Dry Port at Havelian in KPK would cost $79 million and the cost for upgradation of Pakistan Railway Academy Walton Lahore comes to $38 million. The procurement of locomotive & rolling stock would cost $479 million.
The financial phasing of the project suggests that $ 973 million would be required during the financial year 2018-19, one billion dollar would be required in 2019-20 & 2020-21 each and $427 million would be required in 2021-22 to meet the total cost of $ 3.400 billion to complete the project in scheduled time frame.
The working paper states that after upgradation, ML-I would facilitate passenger train operations at speed of 160 kph from existing 120 kph and freight operations from existing maximum speed to 70 kph to 120 kph with enhanced line capacity from existing 34 to 171 trains each way.
The project under phase-I is planned to be implemented on EPC (Engineering, Procure-ment & Construction) mode. A Special Purpose Vehicle (SPV) will be established for coordination and supervision during execution.