Finance Ministry is said to be completely ignorant of total cost of Karachi Circular Railway (KCR) project requiring a sovereign guarantee, well-informed sources told Business Recorder. This was observed at a recent meeting of Cabinet Committee on CPEC which met under the chairmanship of Prime Minister Shahid Khaqan Abbasi. Minister for Planning, Development and Reform Ahsan Iqbal briefed the committee that the government of Sindh has forwarded a modified framework agreement in respect of KCR duly vetted by the provincial law department for signing between the government of Pakistan and the government of China.
The Prime Minister on December 7, 2016 considered the letter from chief minister, government of Sindh, of December 3, 2016 on Karachi Circular Railway and approved, in principle, the inclusion of KCR project in the China Pakistan Economic Corridor (CPEC) and provision of a sovereign guarantee for the KCR on the same lines as was provided to the Lahore Orange Line Metro Train project.
In the 6th Joint Cooperation Committee (JCC) meeting held in Beijing on December 29, 2016, the JCC agreed, in principle, for the inclusion of KCR, Quetta Mass Transit System and the Greater Peshawar Region Mass Transit System as a component of the CPEC and further instructed the transport infrastructure Joint Working Group (JWG) to work out proposals on the implementation of these projects on the basis of further studies and consultations.
Prior to approval of the KCR project by the ECNEC, on the request from government of Sindh, a feasibility study was shared with China. The project envisaging revival/construction of 43.2km standard gauge (1,435 mm) double railway track (14.945 km at-grade and 28.18 km elevated) with allied structures on the existing land reserved for KCR with a total 24 of stations was approved by the ECNEC in its meeting held on October 6, 2017 at a rationalized cost of Rs 207.546 billion including FEC/Chinese loan of same amount equivalent to $1.971 billion. The project having a 36=month completion period was proposed to be executed on EPC (Engineering Procurement Construction) basis under CPEC framework agreement. The cost of the project including repayment of loan would be borne by the government of Sindh.
The secretary, Ministry of Planning, Development and Reform further briefed the committee that the projected ridership as per feasibility study was estimated at 515,000 passengers per day in initial stage (2025), 680,000 persons per day in short-term (2030), and 746,000 persons per day in the long-term (2040). Scope of the project also includes procurement of 162 locomotives having a seating capacity of 250 with DC traction power supply of 750V to be provided through third rail running along the track, besides provision for a centralized power supply system and allied facilities. The Planning & Development Department, government of Sindh, has stated that a delegation from the government of Sindh would visit China to discuss modalities of execution of the subject project with the Ministry of Commerce, Ministry of Transport of China and China Exim Bank. It was further stated that the 7th JCC meeting was scheduled to be held on November 21, 2017 in Islamabad wherein further deliberations would be made upon the settlement of formalities and financing arrangements before execution of the project.
The Ministry of Planning, Development and Reform requested the Cabinet Committee on CPEC for approval of modified framework agreement for KCR project for entering into negotiations with China.
During ensuing discussion, the secretary railways expressed her concern over the alignment of proposed Karachi Circular Railway (KCR) as it would overlap the route of another critical CPEC project, ie, ML-I (up-gradation of the existing main line to Peshawar). She also explained how right of way (ROW) for both KCR and ML-I would be shared. She emphasized on resolving the issue prior to negotiate framework agreement of both projects.
However, the secretary Finance Division stated that they have not complete information about the total cost of the project. He requested Planning, Development & Reform Division to provide total estimated cost of the project for issuance of a sovereign guarantee. The Prime Minister observed that ML-I project would be affected by KCR due to the issues raised by the secretary railways. He directed Planning, Development & Reform Division to take into account the concerns of Ministry of Railways while negotiating the framework agreement of both projects.