The railways ministry has estimated the cost of package-I of the project at $2.4 billion. PHOTO: FILE
The issue of slow progress on ML-I was also discussed at a meeting last week between Federal Minister for Railways Sheikh Rashid Ahmad and Federal Minister for Planning and Development Makhdoom Khusro Bakhtiar, sources told The Express Tribune.
They said in order to allay concerns of the bureaucracy, Rashid proposed to get the project vetted from the newly constituted National Development Council (NDC). Chief of Army Staff General Qamar Bajwa is also a member of the NDC. Prime Minister Imran Khan has lately made former finance minister Asad Umar a member of the NDC.
But the planning ministry bureaucracy was alarmed by the increasing scrutiny of CPEC projects by the National Accountability Bureau (NAB). After firming up the design and scope, the Ministry of Railways has submitted the third proposed PC-I (Project Cycle-I) of the ML-I project with the Ministry of Planning for review and placement before the Central Development Working Party (CDWP) for clearance.
ML-1 to be completed in five years
The railways ministry has estimated the cost of package-I of the project at $2.4 billion, showed official documents. The original cost of the full project had been estimated at $8.2 billion. The project has now been split into three phases besides reducing its scope. ML-I is the only project of CPEC that has been declared “strategically important” by both China and Pakistan but it has faced delay of at least four years.
Sources said the federal bureaucracy was reluctant to process the ML-I project without first seeking clarification after NAB recently launched an inquiry into another CPEC project - the Rs134-billion Thakot-Havelian scheme.
Sources said NAB was looking into the role of Shahid Tarar, who was then chairman of the National Highway Authority (NHA), and questioned certain bureaucrats of the planning ministry about Tarar’s role.
Tarar - one of the competent officers from the Pakistan Administrative Service - is currently serving as Pakistan’s Executive Director at the World Bank.
NAB spokesman did not reply to a question on its inquiry into the Thakot-Havelian project.
It is the second big road project of CPEC that NAB has picked for inquiry. It is already looking into the Rs315-billion Sukkur-Multan CPEC project. Both of these projects have been undertaken under the framework agreement signed between China and Pakistan in April 2015.
Sources said NAB’s decision to investigate CPEC road projects has also raised questions over the viability of ML-I framework agreement that Pakistan and China signed in May 2017, also during the tenure of the Pakistan Muslim League-Nawaz (PML-N) government.
Pakistan, China to amend railways ML-1 agreement
The Multan-Sukkur project and Havelian-Thakot project of CPEC had been approved by all the relevant authorities but NAB was looking into individual roles. It has obtained the list of members of the CDWP and the Executive Committee of National Economic Council (Ecnec), the sources said. The planning ministry would move ahead with the ML-I project only after seeking input of the Prime Minister’s Office, Public Procurement Regulatory Authority (PPRA) and other agencies concerned, according to an official who has been involved in the approval process.
They said the NDC was not the constitutional forum to approve such projects as the only constitutional forum was the National Economic Council (NEC), which is headed by the prime minister and comprises provincial chief ministers and three federal ministers. The version of the federal minister for planning and development could not be obtained before filing of the story.
Package one of the ML-I costing $2.4 billion pertains to the upgrade of four segments of the mainline from Karachi to Peshawar in addition to the upgrade of Walton Railways Training Academy.
Pakistan Railways has dropped the Karachi-Hyderabad track from the ML-I project scope, which will now be built under the public-private partnership mode and help cut the overall cost by $1 billion, according to the ministry.
According to the original framework agreement of May 2017, China will provide 85% of the project cost as a concessionary loan. The project design has been prepared by Chinese consultant CREEC. A review consultant comprising MMP, Canarail and Crimson has vetted the design.
After coming to power, the Pakistan Tehreek-e-Insaf (PTI) government levelled serious allegations of corruption in CPEC deals. The focus of these allegations has so far remained on the Multan-Sukkur project. China State Construction Engineering Corporation, which is executing the scheme, has expressed “extreme shock over the baseless allegations” of Rs50 billion kickbacks in the Multan-Sukkur project.
Sources said the Chinese embassy is also irritated over the delay and corruption allegations and has given presentations to various government ministries to address their apprehensions. The Multan-Sukkur project was approved by Ecnec in its meeting held on July 3, 2014 at a total cost of Rs259.4 billion with 90% credit financing through Chinese Exim bank loan. The original project cost was based on NHA’s scheduled rates of 2014.
After adding Rs20.6 billion as the overhead cost, the final cost of the revised PC-I went up from Rs259.4 billion to Rs315 billion - a 21.44% increase over the original cost.
Published in The Express Tribune, July 25th, 2019.
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