LAHORE: In a bid to expedite development process, the provincial government has approved a short-term loan of Rs391.5 million for the Lahore Metro’s Orange Line project. The funds were allocated by the Punjab Provincial Development Working Party (PDWP) during its 27th meeting held on Friday.
A sum of Rs405.491 million was approved for two development schemes with the major chunk going to the Orange Line and the rest for hiring of transaction advisory services for construction of two parking plazas-cum-shopping malls in Faisalabad.
The bridge-finance facility approved for the metro train project would be used by the Lahore Development Authority’s (LDA) civil contractors for meeting running expenses.
The government would pay mark-up on the loan amount as it would be obtained from the Bank of Punjab on the government’s guarantee.
The Punjab government has paid around Rs392 million on account of mark-up to the Bank of Punjab for a similar bridge-finance facility for the metro train project.
Official documents reveal the provincial government acquired the previous loan at 7.2% per annum to overcome financial constraints of the train project’s civil contractors as soft-loan payments from the Chinese exim bank were delayed owing to lengthy documentation and rigorous scrutiny of contracts by the Chinese authorities.
The exim bank has released over $44 million (Rs44 billion) to the Punjab government for civil works of the 27-kilometre-long Orange Line track, which is part of the city metro network.
When completed, the first line of Lahore Metro, which is country’s first mass rapid transit train system, will connect Raiwind, Multan Road, McLeod Road, Lahore Junction Railway Station and the Grand Trunk Road.
Published in The Express Tribune, November 5th, 2016.