Concessionary loan from China: After Metro bus, Lahore could see Metro train

Ecnec to review proposal which suggests govt seek concessionary loan from China for the project

ISLAMABAD:

After the Lahore Metro bus project, the government is now working towards introducing another source of mass transit for the city.

The federal government has given a green signal to the Rs165.2 billion Lahore Orange Line Metro Train project, which will be funded by obtaining a concessionary loan from China amid concerns about its high cost.

Headed by Minister for Planning and Development Ahsan Iqbal, the Central Development Working Party (CDWP) recommended the Lahore Orange Line Metro Train Project to the Executive Committee of National Economic Council (Ecnec) for final approval.

The Planning Minister observed that the provincial government should conceive non-ticket commercial spaces to make the mega mass transit project financially viable in the long run, according to a handout issued by the ministry.

The CDWP sanctioned seven projects costing Rs180.1 billion.

The technical appraisal section of the Ministry of Planning and Development objected over the high cost of civil works and ambiguity over interest rates on the loan that the provincial government will obtain for the Orange Line scheme, said officials who attended the meeting.

Although both sides have signed the government-to-government concessional loan and export buyer credit, the Export-Import (Exim) Bank of China was demanding over 3% interest rate. The local authorities have offered 2.4% interest on the loan amount, said the officials.

Lahore Orange Line Metro Train project is the Punjab government’s project that it will finance from its own resources. Since the project will be funded by obtaining Chinese loan, it has to be approved by the federal government that will also extend sovereign guarantees against foreign loan component.

The project was part of over 50 schemes costing $28 billion, which were signed during the visit of Chinese President Xi Jingping.

The provincial government has already rejected the proposal of a combination of underground and elevated roads and now a 27.1-kilometre dedicated elevated road will be constructed.

It will be a landmark mass transit project for poor people and the middle class to commute at affordable fares, said the Planning Minister. He said the commercial spaces should be conceived at the metro stations architecture to help overcome the big difference in the operational cost and the revenue of the mass transit. The design should also be consistent with local heritage, he added.

The project envisages construction of a 27.1-km long dedicated signal free corridor for train mass transit system in Lahore. The proposed alignment of the project starts from Ali Town passing through Niaz baig, Bund road, Chaubrugi, Anarkali, Lakshmi, Railway Station, UET, Shalimar Garden, Islam Park and finally terminates at Dera Gujran. The corridor will be capable of accommodating trains running both ways with a capacity of 30,000 passengers per hour.

The Minister asked the Lahore Development Authority to ensure the completion of the mega project in 27 months as.

Other projects approved

The CDWP also approved four projects worth Rs2.4 billion. A project for the provision of academic and allied facilities at University of Malakand worth Rs996.3 million was approved in principle. Another University project of Commencement of four-year Undergraduate Program in Water Resource Engineering and Petroleum Engineering at UET Taxila was also approved in principle. A committee was formed by the minister to revise the scope of the project.

The CDWP recommended Rs7 billion project for construction of four-lane bridge across river Indus linking Layyah with Taunsa to the ECNEC. . Larkana Development Package of infrastructure projects worth Rs8.1 billion was also cleared subject to cost rationalisation.

Published in The Express Tribune, May 6th,  2015.

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