Orange Line loans: Deadline nears for BoP payback
Govt had acquired Rs392-million ‘bridge finance facility’ at 7.2% per annum
Over sluggish progress, Lahore Development Authority (LDA) has also cancelled the contract of package-2 contractor, Maqbool Colsons JV, and floated a new tender of Rs11 billion for the remaining civil works. PHOTO: APP
LAHORE:
The Punjab government’s prized Lahore Metro Orange Line isn’t cheap. The project will force the authorities to cough up about Rs400 million in markup alone to one commercial bank.
Official documents show the provincial government acquired a ‘bridge finance facility’ at 7.2% per annum from the Bank of Punjab (BoP) to overcome financial constraints of the Orange Line project’s civil contractors and to ensure a consistent pace of work.
The decision was taken as soft-loan payments from China’s Exim bank were delayed owing to lengthy documentation and rigorous scrutiny of contracts by the Chinese authorities.
But the province agreed to pay around Rs392 million markup to the commercial bank for the short-term loan. Documents show the government has already paid Rs143.38 million markup to BoP and another payment of Rs217.30 million is due by October 30.
In addition, another Rs10.82 million will be paid on account of contingency payments and about Rs20 million for others arrangements and legal fees.
The Orange Line Metro Train (OLMT) civil contractors had obtained the credit facility on a governmental guarantee issued by the Punjab Finance Department that negotiated the loan terms, markup and service charges with the bank.
After completion of the lengthy documentation, however, the Chinese Exim bank released the first instalment of the projected Rs162 billion loan in May. The bank has so far released around $44 million (Rs44 billion) to the Punjab government for civil works of the metro train project.
The 27-km Orange Line is funded through $1.65 billion (approx Rs165 billion) in soft loans through the Export-Import Bank of China (Exim bank).
Project documents indicate around $1 billion would be directly transferred to the Chinese contractors for acquiring the rolling stock while the remaining amount would be transferred to Pakistan for construction of track and provision of allied infrastructure.
The project is part of Lahore’s metro network and when completed, will connect Raiwind, Multan Road, McLeod Road, Lahore Junction Railway Station and the Grand Trunk Road. This will be the first line of the Lahore Metro, which is the country’s first train rapid transit system.
According to OLMT Steering Committee Chairman Khawaja Ahmad Hassan, half of the civil work on the metro train project has been completed.
Construction of 12 elevated as well as one underground station for the train has commenced along the 13.7-km-long track from Dera Gujjaran, GT Road to Chuburji.
While chairing meeting on Wednesday, Hassan said 20 U-tub girders, a locally precast structure used for the first time in Pakistan, had been installed along GT Road and the process would be accelerated in the coming days for speedy execution of the project.
He directed the project contractors to fix separate deadlines for completing each station, and ensure connection of utility services as per the design approved by NESPAK.
NESPAK General Manager Salman Hafeez said the consultant company had established a special taskforce for quick finalisation of designs.
Work on construction of a bridge on Lahore Ring Road has already started, he said while briefing about the pace of work on each of the four packages of the project.
Over sluggish progress, Lahore Development Authority (LDA) has also cancelled the contract of package-2 contractor, Maqbool Colsons JV, and floated a new tender of Rs11 billion for the remaining civil works.
Published in The Express Tribune, October 6th, 2016.
The Punjab government’s prized Lahore Metro Orange Line isn’t cheap. The project will force the authorities to cough up about Rs400 million in markup alone to one commercial bank.
Official documents show the provincial government acquired a ‘bridge finance facility’ at 7.2% per annum from the Bank of Punjab (BoP) to overcome financial constraints of the Orange Line project’s civil contractors and to ensure a consistent pace of work.
The decision was taken as soft-loan payments from China’s Exim bank were delayed owing to lengthy documentation and rigorous scrutiny of contracts by the Chinese authorities.
But the province agreed to pay around Rs392 million markup to the commercial bank for the short-term loan. Documents show the government has already paid Rs143.38 million markup to BoP and another payment of Rs217.30 million is due by October 30.
In addition, another Rs10.82 million will be paid on account of contingency payments and about Rs20 million for others arrangements and legal fees.
The Orange Line Metro Train (OLMT) civil contractors had obtained the credit facility on a governmental guarantee issued by the Punjab Finance Department that negotiated the loan terms, markup and service charges with the bank.
After completion of the lengthy documentation, however, the Chinese Exim bank released the first instalment of the projected Rs162 billion loan in May. The bank has so far released around $44 million (Rs44 billion) to the Punjab government for civil works of the metro train project.
The 27-km Orange Line is funded through $1.65 billion (approx Rs165 billion) in soft loans through the Export-Import Bank of China (Exim bank).
Project documents indicate around $1 billion would be directly transferred to the Chinese contractors for acquiring the rolling stock while the remaining amount would be transferred to Pakistan for construction of track and provision of allied infrastructure.
The project is part of Lahore’s metro network and when completed, will connect Raiwind, Multan Road, McLeod Road, Lahore Junction Railway Station and the Grand Trunk Road. This will be the first line of the Lahore Metro, which is the country’s first train rapid transit system.
According to OLMT Steering Committee Chairman Khawaja Ahmad Hassan, half of the civil work on the metro train project has been completed.
Construction of 12 elevated as well as one underground station for the train has commenced along the 13.7-km-long track from Dera Gujjaran, GT Road to Chuburji.
While chairing meeting on Wednesday, Hassan said 20 U-tub girders, a locally precast structure used for the first time in Pakistan, had been installed along GT Road and the process would be accelerated in the coming days for speedy execution of the project.
He directed the project contractors to fix separate deadlines for completing each station, and ensure connection of utility services as per the design approved by NESPAK.
NESPAK General Manager Salman Hafeez said the consultant company had established a special taskforce for quick finalisation of designs.
Work on construction of a bridge on Lahore Ring Road has already started, he said while briefing about the pace of work on each of the four packages of the project.
Over sluggish progress, Lahore Development Authority (LDA) has also cancelled the contract of package-2 contractor, Maqbool Colsons JV, and floated a new tender of Rs11 billion for the remaining civil works.
Published in The Express Tribune, October 6th, 2016.