Metro bus service: Centre will pay more in subsidy, get less from revenue

Federal govt will pay Rs1.2 billion in subsidy while Punjab will pay Rs0.8 billion

ISLAMABAD: The federal government’s love for Punjab knows no end as it will share more of the subsidy and operational cost of the metro bus project while get less from the revenue.

According to a subsidy sharing formula, — calculated on the basis of ridership and length of track by the Punjab Metro Bus Authority (PMBA) — the Centre will pay Rs1.2 billion and Punjab Rs0.8 billion annually to keep the bus service running.

Punjab will benefit more from the bus service while the federal government will get less revenue share in contrast to its subsidy.

Of the total length of the metro corridor, 8.5km falls in Rawalpindi and 13.9km in Islamabad.



As the length of the metro corridor is longer in Islamabad and the number of passengers lesser, the federal government will get less revenue and spend more on expenditures.

According to Newspeak, a design consultant of the project, 139,000 passengers will commute daily between the twin cities — 75,000 from Rawalpindi and 64,000 from Islamabad.

The Rs44.2 billion project is expected to be completed by mid-May.

Subsidy sharing formula

Punjab will collect revenue from the sale of tickets for travelling from Saddar to Faizabad and the Centre will get the revenue collected from passengers travelling from Faizabad to Secretariat.

The revenue collected from passengers travelling between the twin cities will be shared equally by the Punjab and federal governments and one way ticket will cost Rs20.

Similarly, the operational cost of metro bus stations will be more in Islamabad as it has 14 stations as compared to 10 in Rawalpindi.

Who will own the project?

As the CDA seems reluctant to sign an agreement with the metro bus authority on operations of the project in Islamabad, it has been decided to redraft the contents of the agreement.

On April 15, a meeting presided over by the cabinet division secretary, decided that the CDA will sign the agreement on behalf of the federal government after due approvals from planning, finance and law ministries.

During the meeting, the civic agency representatives said that under the current circumstances it will not be able to manage the project.

“We will only sign the agreement on behalf of the federal government, which will be responsible to share the subsidy and other operational costs of the Islamabad section of the project,” said a senior official.

If signed, the agreement will allow the bus authority to operate the service within the federal capital.

Published in The Express Tribune, April 17^th, 2015.