CDWP clears Metro bus project without securing funds

Also endorses Rs41b LNG terminal project for Gwadar

ISLAMABAD: The government on Thursday cleared the Gwadar liquefied natural gas (LNG) terminal project with an investment of Rs41 billion besides endorsing a Rs17-billion scheme to provide Metro bus service for the New Islamabad International Airport.



The Central Development Working Party (CDWP) cleared both the schemes and sent them to the Executive Committee of National Economic Council (Ecnec) for final approval.

Overall, the CDWP approved 17 projects valuing Rs103.4 billion including five projects costing Rs98 billion which were referred to Ecnec. Ecnec has the final say in projects worth over Rs3 billion.

However, it appeared that the CDWP endorsed the Metro bus service under ‘political compulsions’.

“The Rs16.9-billion project has been recommended for Ecnec’s approval without securing funds,” commented an official of the Ministry of Planning, Development and Reform.

CDWP Chairman Ahsan Iqbal, who is also planning minister, approved the Metro bus project, though no allocation had been made for it in the current fiscal year’s Public Sector Development Programme (PSDP).

Earlier, Iqbal had given instructions that no project should be brought before the committee for approval without first securing funds for its completion. The meeting was told that the project was initiated on the directives of the Prime Minister’s Office that had also assured them of the provision of funds.

However, an official of the Ministry of Finance told The Express Tribune that the planning ministry as well as the Ministry of Communication had not approached it with the request of funds.

There is a strong likelihood that the Ministry of Planning will divert funds from other schemes, which will affect work on them.

An official of the National Highway Authority (NHA) insisted that the federal government would ensure the provision of funds.

The CDWP approved PC-I of the Metro project, but it lacked details about key performance indicators, relationship with the transport sector and its overall impact. The outcome of consultations with stakeholders was also missing.

On the basis of 2014 rates of the NHA, the project will cost Rs658.7 million per kilometre. Annual maintenance cost has been estimated at Rs1.1 billion.

The project includes construction of around 26km-long signal-free road that will connect Islamabad city with the New Islamabad International Airport that is being constructed in the suburbs of the city.

There will be 10 Metro bus stations at regular intervals while four will be added at a later stage.

The new Islamabad airport is expected to become operational in August this year and the government is keen to complete the Metro bus extension project in one and a half year.

LNG terminal

The CDWP also cleared Gwadar-Nawabshah LNG terminal project at a cost of Rs41.1 billion. This includes Rs29.9 billion in Chinese loan but its terms have not yet been finalised.

Inter State Gas Systems will execute the project, which will be constructed by a Chinese company on the engineering, procurement and construction (EPC) model.



Initially, the government considered to club both the pipeline and terminal and approved it as one project. Later, the Chinese sponsors proposed that the 700km pipeline should be constructed on the EPC model and the LNG terminal may be constructed on the build, operate, own and transfer (BOOT) model.

Later on, the Chinese sponsors changed their mind and proposed to complete the terminal on the EPC mode.

The Economic Coordination Committee has already approved the pipeline project at a cost of Rs203.1 billion including Rs135 billion foreign loan. The pipeline will carry 500 million cubic feet of imported LNG per day.

Financing terms for the $300 million loan component of the terminal project remain unclear to date. This may affect the project’s overall cost and its financial viability, said officials of the planning ministry.

Published in The Express Tribune, March 10^th, 2017.

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