Since the time population of Karachi swelled up to uncontrollable levels, the problem of commuting from one place to another has also become extremely critical. The vast expanse of the city with people travelling daily from one end to the other is the principal reason that something should be done on a war footing in order to avoid traffic congestions, inconvenience to commuters and unnecessary delays in reaching one's destination. Unfortunately, the laid-back attitude of those at the helm of affairs causes them to do nothing concrete to alleviate these sufferings. The provincial government continuously complains of lack of resources for public sector development yet there is no end to its imprudent expenditure on wasteful pursuits. With rampant corruption in almost all the departments responsible for developing infrastructure, the morbid condition of roads, railway tracks, electricity, gas, urban/rural planning, etc reflects the level of 'sincerity' with the provincial metropolis and its people. Karachiites seem to be running around like headless chickens, totally exasperated with the sorry state of affairs. Those who are truly committed to resolving these issues are shown thumbs down by the ones who have the power. All hopes related to settling matters appear shattered at the altar of disunity, lethargy and inter-departmental rivalries.
Revival of Karachi Circular Railway The government of Sindh on Thursday [February 17, 2016] announced the revival of the Karachi Circular Railway Project. The demands of Japan International Cooperation Agency (JICA) have been approved and the decision to provide compensation and area for resettlement for the affected families has also been approved. According to the Secretary Transport Taha Farooq, JICA will provide a soft-term loan of 2 billion dollars for the project. A tax break for the project has also been approved. The Sindh government has provided JICA with a Letter of Comfort and a letter for the mission overview. The government has also called for discussion with JICA regarding the loan. China is also prepared to initiate Karachi Circular Railway project. The Secretary of Transport has informed that there are 2500 homes and 4500 families in the path of the circular railway for whom compensation and area for resettlement will be provided for while a third survey on those who will be affected will also be conducted on request of JICA. A high level committee has been formed for the revival of the project-http://dunyanews.tv/en/Pakistan/323403-Sindh-govt-announces-revival-of-Karachi-Circular-
Karachi, which at one point of time in history was one of the cleanest cities of Asia, had a reasonable public transport system with buses, trams and an amazing circular train track that benefited a large segment of the public which used it to travel to and fro their homes and work places or other areas. Like the national railway system that is in shambles, the fate of this circular train track is almost the same. Its service was discontinued in 1999 with the result that the roads of the city are clogged with all sorts of vehicles making headways at the expense of traffic violations and subjecting citizens to a tortuous existence, vulnerable to fatal accidents.
In these circumstances, one wonders what prevents the local government in seeking alternate solutions for the purpose of handling the city's transport, especially if these methods do not even have a price tag attached. Why not out-source some of the projects, especially the circular train, to efficient and competent people? When countries like Thailand, Turkey, Taiwan, Saudi Arabia, Israel, India, Iran, Croatia, Japan, China, Vietnam, Malaysia, Philippines, Egypt, and a few US States (California, Florida, Indiana, Texas, and Virginia) have made use of this option, then why cannot Pakistan? If the rationale behind non-availing of Build-Operate-Transfer (BOT) is fear of foreigners taking hold of vital networks then this stands defied as the country is already a hostage in the hands of foreign donors, whose dictations are followed verbatim. Or is it because BOT means that it would not allow private coiffures to be filled with heavy kickbacks?
There is a consensus that BOT finds extensive application in the infrastructure projects and in public private partnership. In the BOT framework a third party, for example the public administration, delegates to a private sector entity to design and build infrastructure and to operate and maintain these facilities for a certain period. During this period the private party has the responsibility to raise the finance for the project and is entitled to retain all revenues generated by the project but is not the owner of the regarded facility. The facility will be then transferred to the public administration at the end of the concession agreement, without any remuneration of the private entity involved.
Some or even all of the following different parties could be involved in any BOT project:
The host government: Normally, the government is the initiator of the infrastructure project and decides if the BOT model is appropriate to meet its needs. In addition, the political and economic circumstances are main factors for this decision. The government provides normally, support for the project in some form. (provision of the land/changed laws)
The concessionaire: The project sponsors who act as concessionaire create a special purpose entity which is capitalised through their financial contributions.
Lending banks: Most BOT projects are funded to a big extent by commercial debt. The bank will be expected to finance the project on "non-recourse" basis meaning that it has recourse to the special purpose entity and all its assets for the repayment of the debt.
Other lenders: The special purpose entity might have other lenders such as national or regional development banks.
Parties to the project contracts: Because the special purpose entity has only limited workforce, it will subcontract a third party to perform its obligations under the concession agreement. Additionally, it has to assure that it has adequate supply contracts in place for the supply of raw materials and other resources necessary for the project.
Thus, the party that undertakes to work on a project puts in all the money, works on it and recovers its expenses by managing it for certain duration of time after lapse of which the establishment is transferred to the government. So, for example, if Swiss expertise is sought for managing the disbanded circular train system, perhaps in another couple of years even the elite would be proud to travel on it. It would also facilitate movement of both goods and passengers without glutting the highways with heavy traffic.
Similarly, the dire need of urban mass transit of Karachi can be catered for if experts in this field could be invited on a BOT basis to create an exemplary transport system to ease out congestion on the roads. Of course this would envisage a good power supply for which many leading international companies can be called to provide solutions on emergent basis under BOT agreements. Countries in Latin America and Caribbean have used this option recently. These projects included from temporary power solutions to permanent energy houses for factories, agricultural farms, and local and regional power grids for governments. In Columbia alone from 1998 to 2009, 17 power projects were completed using all kinds of resources: solar turbines, hydel dams, gas plants, diesel engines and wind mills. In Shagun-Bolivar, the Columbian government on BOT basis installed 1800-KWe plant in 1998 that has gas and solar turbines. We have failed to study such projects and are buying highly expensive electricity from IPPs rather than going for BOT projects.
There is no need to torment the public with schemes like the ones operational in the capital of Punjab. Existing structures can be utilised to introduce 'buses only' lanes for faster mobility and laying a parallel narrow train track alongside the existing ones for exclusive light carriages for regulating movement of the people. Despite tremendous potentials available in the grand city of Karachi, for some queer reason, our politicians and civil administration have failed to exploit them. Instead of harnessing these God-gifted resources for the best use of the city, they have been ruthlessly plundered and made redundant because of sheer short-sightedness and in-fighting. There is an urgent need to restore Karachi to its yester years' glory by setting aside ideological, political, inter-departmental differences as well as vested-interests and work together to rebuild, cleanse and reinstate the Karachi's status as not only the cleanest city of Asia but an exemplary metropolis of the world.
(The writers, lawyers and partners in Huzaima, Ikram & Ijaz, are Adjunct Faculty at the Lahore University of management Sciences (LUMS).)