PTI govt clears six development projects worth Rs218.5b

These include two Karachi-based projects funded by international creditors

ISLAMABAD: The federal government on Tuesday cleared six more development projects worth Rs218.5 billion, including two Karachi-based mass transit projects funded by international creditors.

The Central Development Working Party (CDWP) approved two projects worth Rs3.33 billion and recommended four schemes costing Rs215.2 billion to the Executive Committee of National Economic Council (Ecnec) for approval, according to a statement issued by the planning ministry.

The CDWP has the mandate to approve up to Rs3 billion schemes and projects costing more than that are referred to Ecnec for final endorsement. Headed by Planning Commission Deputy Chairman Jehanzeb Khan, the CDWP deferred approval for six projects including two schemes of the Pakistan Atomic Energy Commission and one Gwadar project.

The project sanctioning authority took up two mass transit schemes of Karachi - for the second time in the past four months. It recommended the Asian Development Bank-funded Bus Rapid Transit - Red Line - to Ecnec for approval at a cost of Rs78.6 billion. However, the World Bank-funded Karachi Urban Mobility project - Yellow Line - was conditionally referred to Ecnec at a cost of Rs61.5 billion.

10 more state units picked for privatisation

Ecnec on Thursday will take up the Red Line project while the Yellow Line scheme will be vetted by a planning ministry committee before sending it to Ecnec - a body of the constitutionally formed National Economic Council (NEC).

The Pakistan Tehreek-e-Insaf (PTI) government has also set up the National Development Council, which is parallel to NEC, but it does not have constitutional cover.

The cost of the Red Line project increased 19.3% or Rs12.7 billion in the past one year due to currency depreciation. In May last year, the project’s cost had been estimated at Rs65.6 billion.

Pakistan will get $575 million in loan to build the Red Line bus transit system in Karachi, which will facilitate 300,000 commuters every day in the country’s largest metropolis.

As part of the $575-million financing envelope, the Asian Development Bank (ADB) last month approved a $235-million loan for the bus rapid transit (BRT) system. The Asian Infrastructure Investment Bank and the Agence Française de Développement (AFD) are also providing $100 million each for financing the project’s civil works and equipment cost.

CDWP approves Rs32.5b worth of 15 projects

The Karachi Transformative Strategy of the World Bank has put infrastructure needs of the city at $9-10 billion over the next 10 years. Such a financing was required to improve urban transport, water supply, sanitation and municipal solid waste treatment.

The Karachi Bus Rapid Transit Red Line project will provide a 26.6km corridor and associated facilities benefiting 1.5 million people (10% of Karachi’s population) who live within a kilometre of a Red Line station.

In April this year, the CDWP had conditionally cleared the Red Line project, subject to rationalisation of the cost and other issues raised by the Ministry of Planning and Development.

The World Bank has approved $382 million for construction of a 21km long yellow corridor in Karachi.

Karachi Yellow Line project will need Rs1.7 billion annual operational subsidies. In May this year, the CDWP had also considered the Yellow Line project for approval. It recommended the project subject to the condition that its cost and scope will be rationalised.

The CDWP had also given directives for operationalising the Green Line Karachi project and integrating all mass transit schemes in the city under one mass transit authority for operation and maintenance purposes.

But the government of Sindh did not give response to these observations raised by the CDWP in May this year.

Six development projects approved 

The planning ministry statement said two projects related to health were presented in the CDWP meeting. First project Sehat Sahulat Programme, which is now named as Prime Minister’s National Health Programme phase-II, worth Rs31.9 billion was referred to Ecnec for its nod.

This scheme has been built upon former prime minister Nawaz Sharif’s health scheme.

The CDWP approved the establishment of a safe blood transfusion service in the Islamabad Capital Territory at a cost of Rs102.9 million.

It referred the construction of Peshawar Torkham Motorway as part of the Khyber Pass Economic Corridor project worth Rs41.4 billion to Ecnec. This scheme is also funded by the World Bank.

The CDWP also approved the construction of the AJK Legislative Assembly Complex at a cost of Rs2.9 billion. It seems the project cost has been deliberately put below Rs3 billion to avoid Ecnec’s approval.

Published in The Express Tribune, August 28^th, 2019.

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