Metro operational contract : City managers asked not to sign agreement with Punjab (Islamabad city)

PMA has asked CDA to sign an eight-year operational contract on centre’s behalf .

ISLAMABAD:

A committee has asked the capital city’s civic agency to refrain from entering into an agreement with the Punjab Mass-Transit Authority (PMA) over operational contract for Rawalpindi-Islamabad Metro Bus Project.

The Capital Development Authority (CDA) “should not enter into agreement, as it is beyond the authority’s mandate,” a seven-member committee, formed by the civic agency over the issue, has recommended.



The committee, comprised of member finance, director-general works, DG environment, deputy DG law, deputy DG finance, project director, and the legal adviser, was tasked to review technical, financial, and legal aspects of the move and come up with recommendations.

The development came in the backdrop of a letter written by Punjab Chief Minister Shahbaz Sharif to the prime minister seeking his “urgent intervention” into long-pending settlement of subsidy sharing formula between the Centre and the province.

Earlier, the PMTA had asked the CDA to sign an eight-year operational contract on behalf of the federal government.

Due to pending agreement, the CDA has been refusing to transfer the first quarter subsidy of Rs375 million to the Punjab government released by the Centre.

Documents seen by The Express Tribune also give reasons for not signing the contract.

“CDA was never consulted by the PMA, while entering several agreements with service-providing private firms engaged with the project. It was a federal government-funded project, so the CDA may not assume any liability in this regard,” reads the document.

The committee also observed that low revenue and high expenditure of the project could burden the CDA in terms of providing funds to keep buses on track.

“It’s a public welfare project and relates to transport, which in the federal capital is a subject purely related to the Islamabad Capital Territory (ICT) Administration,” it says.



The CDA’s stance was also reflected in a reply submitted to the National Assembly on Wednesday. While replying to a query asked by Dr Shazia Sobia about maintenance, per day expenses and profits of the project, the house was informed by Capital Administration and Development Division Minister Dr Tariq Fazal Chaudhry said “Currently, the Metro Bus Service is not being maintained by the CDA but the PMA. Therefore, no information is available in this regard.”

Punjab Metro Bus Authority has recently been renamed as Punjab Mass-Transit Authority.

The Punjab government has recently termed the federal government’s subsidy-sharing formula for the twin-city metro bus project “unworkable”.

Though the project has been operational since June 2015, both governments have yet to finalise a formula to share nearly Rs2 billion per annum in subsidies for the project.

The federal government wants an equal sharing (50:50) arrangement for the subsidy, as it shared equally in the Rs45 billion cost of the project.

However, the provincial government is of the view that the formula should be based on length of track in Rawalpindi and Islamabad, rather than passenger load or equal sharing.

In his letter to the prime minister, the chief minister has said, the subsidy sharing formula proposed by the federal government is not workable, as it will saddle the provincial government with extra financial strain to sustain bus operations in the federal areas.

“I will earnestly request you [prime minister] to kindly reconsider the stance of the federal government, as the subsidy-sharing formula already proposed by us [the Punjab government] is not only equitable but also sustainable. It will obviate the possibility of any future friction between the governments in the times to come,” the chief minister wrote.

Published in The Express Tribune, January 7^th, 2016.