The plan for revival of Karachi Circular Railways (KCR) continues to hang in the balance in spite of the Supreme Court's directives because no stakeholders seem to own this multi-billion public sector project so far. Sources at Karachi Urban Transport Corporation (KUTC) Limited told Business Recorder that federal government, Sindh government and particularly the Ministry of Railway seem to be least-interested in revival of KCR.
They asserted that unreconciled approach from key authorities has resulted in reoccupying of the vacated land. They noted squatters have begun reoccupying the KCR's right of way (RoW) which was recently cleared by the local administration along with the railways for handover it to the provincial government. They also noticed lack of interest of the federal minister for railways and top officials of Pakistan Railways in the revival of KCR project.
The KUTC insiders pointed to Sindh government's failure to procure trains for operating on the project routes. They cited that revival of KCR was the election slogan of PTI. The insiders also expressed dismay over the state of affairs at KUTC - the vehicle for implementation of the project, as it has been working without Managing Director (MD) since 2014. Pakistan Railways Divisional Superintendent Mazhar Ali Shah has been given additional charge of MD, but he rarely visits KUTC office. Thirty employees have been laid off within a few years. Only four senior and six lower-cadre employees are currently working there.
Inordinate delay will increase the project's estimated cost which was around $ 2.6 billion in 2012. On May 09, 2019, SC bench at Karachi Registry passed an order wherein it was stated "Pakistan Railways will complete its work in fifteen days from today and thereafter the Sindh Government will take over the said project and run the trains both circular as well as the local. The Sindh Government shall ensure that Circular railway as well as local railway gets in operation within further one month's time."
According to official documents, KCR was commissioned in 1964 and it was highly patronised till 1984 when 104 trains were operating per day. However, due to lack of investment, operating efficiency was marginalised causing increase in running time, frequent breakdowns and cancellation of trains and eventually closed for public in December 1999.
In October 2004, federal government constituted a Task Force seeking recommendations for KCR's revival. The task force comprised of Minister of State for Railways as chairman and Sindh Minister of Transport and Karachi Nazim (mayor) as its members. That presented its recommendations in a meeting with prime minister where it was decided that KCR will be revived as a modern commuter system.
It decided to create Special Purpose Vehicle (SPV) Karachi Urban Transport Corporation (KUTC) Ltd to act as an implementation agency registered with SECP on 8th May, 2008 as a Public Limited Company (non-listed). That rallied Ministry of Railways (MoR), Government of Sindh (GoS) and City District Government Karachi (CDGK) (now called KMC) as shareholders on the basis of their equity: 60 percent, 25 percent and 15 percent, respectively.
On Pakistan's request in 2004-05, Government of Japan agreed to provide technical and financial assistance for the KCR Project. Initially pre-feasibility study was carried out by Japan External Trade Organisation (JETRO) for the KCR and the study was completed in March 2006. That was re-validated by M/s Scott Wilson UK in August 2008, with certain recommendations to be incorporated at the stage of design-level feasibility study.
Japan International Cooperation Agency (JICA) carried out feasibility study from November 2008 to May 2009. It estimated the project cost US $ 1.56 billion. The ECNEC approved the project in September 2009. Third party validation of feasibility study was carried out by M/s Lois Berger USA, concurring overall concept and planning technical details. Subsequently, this study was updated and approved by ECNEC in August 2012 at an estimated cost of $ 2.6 billion. The cost was estimated on the basis of Japanese loan at 0.1 percent mark-up repayable in 40 years, including 10 years grace period.
The KCR was considered the most viable project with availability of right of way (RoW) and completion of resettlement action plan (RAP) and carrying out public consultation meetings (PCMs) with project affected persons (PAPs). JICA completed all social, environmental and engineering studies/requirements as per guidelines of JICA, World Bank and Asian Development Bank, including all preconditions of JICA for negotiation of loan.
The JICA in association with KUTC also completed RAP and Environmental Impact Assessment (EIA), etc. In response to CM Sindh's letter dated December 3, 2016, Prime Minister approved, in principle, the inclusion of KCR in the China-Pakistan Economic Corridor and handing over the control of KUTCL to Sindh government for construction and management of KCR on December 7, 2016.
On December 29, 2016, Joint Cooperation Committee (JCC) meeting was held in Beijing, where KCR Project was included in CPEC. Based on feasibility report by GoS, the PC-1 of the project was approved by ECNEC at a project cost US $ 1.97 billion in July 2017. As per PC-1, the funding from Chinese lenders will be at 2.4 percent mark-up repayable in 20 years. The feasibility study was shared with Pakistan Railways which was under scrutiny.
The decision of according permission of laying track of KCR along existing ML-1 (from Karachi City Station to Drigh Road, 14km) is subject to finalisation of preliminary design of up-gradation of ML-1 under CPEC. The land for the right of way (RoW) of remaining 29km (on old KCR route) is proposed to hand over to GoS on mutually-agreed terms and conditions. The PR will provide technical support to GoS for implementation and operation of the project.
A committee comprising officers from PR and GoS has been formed to sort out the issues in order to implement the project. Presently, Chinese consultant nominated by GoS is coordinating with consultant of ML-1 to finalise the alignment of KCR keeping in view the additional requirement of PR. Although, Railways officials claimed around 90 percent of RoW have been cleared till July 18, 2019, yet insiders disclosed the revival remains in doldrums.