The government on Monday approved the New Gwadar International Airport project at an upward revised cost of Rs51.3 billion, showing an increase of 138% in its construction price within five years amid a slow pace progress on an important China-Pakistan Economic Corridor (CPEC) scheme.
The Central Development Working Party (CDWP) took the decision to revise upward the project cost. Planning Commission Deputy Chairman Jehanzeb Khan chaired the CDWP meeting. The body has a mandate to scrutinise and approve development schemes and refer the mega projects for final ratification of the Executive Committee of the National Economic Council (Ecnec).
“New Gwadar International Airport (NGIA) second revision worth Rs51.3 billion referred to the Ecnec for further consideration,” according to the Ministry of Planning handout. The second revised PC-1 of the project had been submitted by the Aviation Division to revise the scope and cost of ASF camp, CAA residential building to be funded and executed by the Pakistan side, it added.
The CDWP accorded go-ahead to the Gwadar airport being an ongoing project with the directions to “review PSDP requirements keeping in view limited development portfolio and future revenues to the country”.
Out of Rs51.3 billion, an amount of Rs18.1 billion is planned to be spent from the Public Sector Development Programme while the remaining Rs33.8 billion will be provided by China. China is providing a grant of 1.52 billion yuan or Rs34 billion for the project. Oman had also given a $17.5 million grant for the project.
The project was part of phase-1 of CPEC that was supposed to be completed by 2018. However, the construction of the New Gwadar International Airport is also falling behind schedule along with dozens of other CPEC projects.
The Planning Commission deputy chairman also directed that combined electricity generation from solar and wind should be explored to meet the future needs for Gwadar Airport.
The new Gwadar airport is considered important for the development of Gwadar Port and its free zone. The Ministry of Planning is now gradually taking back control of CPEC.
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The original Gwadar airport project had been approved at a cost of Rs7.5 billion in 2010 and the revised one was cleared in 2015 at a cost of Rs22.2 billion. The CDWP approved the second revision on Monday at 138% higher than the 2015 cost.
A key reason behind the increase in cost was that the new plan was based on a detailed design of the project.
In October last year, the Civil Aviation Authority (CAA) had presented the project for CDWP approval but the body had raised certain objections.
For the ASF camp, Rs6.4 billion, and for the CAA Residential Complex, Rs2.5 billion, have been included in the project construction cost.
At the time of approval of the original PC-I in January 2010, the dollar was at Rs85 against the rupee. The PML-N government made the first revision in January 2015 as part of the CPEC project and then the dollar strengthened to Rs100. Now, the PTI government has proposed the second revision and the dollar value jumped to Rs169 in September this year.
The existing airport is capable of handling only small aircraft while the new airport is being designed to cater to the needs of large Airbus A-380 aircraft.
The CDWP also approved one development project with a cost of Rs2.7 billion. The feasibility studies and detailed engineering design for KPCIP (Transport and Municipal Services) Under Project Readiness Financing -PRF2 was approved by the CDWP.
The project envisages engineering and procurement support, planning feasibility, detailed design and capacity building for Urban Municipal Services, and project management, financial management, procurement, and transport planning.
Published in The Express Tribune, September 21st, 2021.
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