ECNEC approves Kartarpur Corridor at 20% higher cost

In total, committee gave go-ahead to six projects worth Rs101 billion

Shahbaz Rana March 17, 2020

ISLAMABAD: The federal government on Monday approved six projects worth Rs101 billion, including post-construction approval for the Kartarpur Corridor at 20% higher cost in relaxation of rules.

The Executive Committee of the National Economic Council (Ecnec) cleared these schemes in a meeting held in Islamabad, chaired by Adviser to Prime Minister on Finance Dr Abdul Hafeez Shaikh.

“Ex-post facto approval for the development of Kartarpur Sahib Corridor on EPC/turnkey basis phase-I (Gurdwara Kartarpur Sahib, Narowal district) at a revised cost of Rs16.55 billion was granted by Ecnec,” said a statement issued by the Ministry of Finance.

The approval of the project will pave the way for the release of money from the Public Sector Development Programme (PSDP).

First phase of Kartarpur Corridor project completed

It was the second time that Ecnec took up the project for approval in the past five months, as in October the country’s highest project-approving authority had referred the matter to the Public Procurement Regulatory Authority (PPRA) for a waiver.

The Pakistan Tehreek-e-Insaf (PTI) government had allowed Frontier Works Organisation to work on the project. Under the PPRA Rules of 2004, public contracts cannot be given without first ensuring competitive bidding.

Under the rules, no public sector project can be started without first securing approval from competent forums like the Central Development Working Party (CDWP) and Ecnec. The planning ministry also initially refused to give post-construction approval to the project.

The finance-ministry statement was silent whether Ecnec gave approval after the PPRA gave the go-ahead to the Ministry of Religious Affairs, the sponsoring agency of the project.

The Kartarpur Corridor has been built to facilitate religious tourists from India, which had been a longstanding demand of the Sikh community living in eastern Punjab, India. In July last year, the Ministry of Religious Affairs had submitted PC-I for the Kartarpur Corridor, putting the cost at Rs13.8 billion. However, two months later, it again submitted the project documents with a revised cost of Rs16.5 billion, higher by Rs2.7 billion or 19.6%.

The major increase was on account of the operation and management cost of Rs1.6 billion for up to November 2021, which was not included in the original PC-I.

The government also included Rs300 million worth of inauguration cost of the project in the PC-I, which usually is not built into the project construction cost.

The government gave Rs496 million in consultancy services fee, Rs248 million in contingency cost and another Rs248 million in quantity variation cost.

The National Accountability Bureau (NAB) has launched a case against former planning minister Ahsan Iqbal on the allegation of misusing authority in the case of Narowal Sports City Complex.

However, the Narowal project had been approved by the CDWP while the Kartarpur project contract was given on a single-party basis.

Other projects

The Winder Dam project, to be constructed across Winder River in Lasbela district, Balochistan, was approved by Ecnec at a total cost of Rs15.3 billion.

The project was approved with the condition that command area development and land acquisition would be started in parallel to the main project by the government of Balochistan.

The Balochistan government will ensure completion of the project with the approved scope and cost. In case of revision, the increase in the cost will be borne by the provincial government from its own resources. It is expected that the project will be completed in four years.

Ecnec also approved the Kachhi Canal project at a revised cost of Rs22.9 billion. It directed that there would be no deviation from the scope and cost endorsed by the follow-up committee constituted by the CDWP.

Detailed engineering design/tender documents/PC-Is for phase-II and phase-III costing Rs120 million were added to the cost summary, which would be actively pursued.

The Balochistan Agriculture Department will ensure resolution of the land settlement issues and development of the command area of 102,000 acres by December 2020. The project will be completed in three years from the date of approval.

Diplomats laud Pakistan’s Kartarpur initiative

Ecnec approved a Rs12.5-billion or $80-million component for the World Bank-funded Pakistan Raises Revenue project. The aim of the proposed programme is to eliminate the country’s fiscal constraints through a sustainable increase in revenues and reduction in tax expenditure by broadening the tax base and modernising the Federal Board of Revenue (FBR) with advanced ICT-based operations under its transformation road map.

Ecnec approved the Lahore Water and Wastewater Management project at a revised cost of Rs14.4 billion. The project is aimed at a comprehensive and detailed design of the sanitation system for the disposal of sewerage and wastewater.

Ecnec also endorsed the construction of Eastern Wastewater Treatment Plant (44 MGD) of Faisalabad City (phase-I) at a total cost of Rs19 billion.

Published in The Express Tribune, March 17th, 2020.

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