Lyari freight corridor cost escalates to $1.085b

NA panel condemns 6% IDB loan offer as reckless

ISLAMABAD:

The National Assembly Standing Committee on Economic Affairs Division on Thursday met under the Convenorship of Member National Assembly (MNA) Dr Mirza Ikhtiar Baig to discuss important matters related to development projects, and flood relief efforts.

The committee was presented with a stark contrast in financing options: a highly concessional loan from the Korean Exim Bank at 0.1% for fifty years, alongside a proposal from the Islamic Development Bank at 6% for twenty years, said a news release.

The body unanimously condemned the 6% offer as financially reckless, demanding to know how such a high-cost option could be seriously considered when a vastly superior alternative was available.

The committee expressed deep concerns that unregulated construction along riverbanks had significantly worsened the destruction caused by the recent floods.

The committee emphasized the need for effective policy measures and practical actions to prevent such construction in the future, in order to reduce the risk of similar damage during future flood events.

The committee was briefed on the current status of study conducted by Karachi Port Trust regarding the Lyari Elevated Freight Corridor, a vital project intended to resolve the severe traffic congestion constricting the Karachi Port Trust by providing a direct 24/7 highway link.

While the project is essential to unlock the port's full capacity and boost national trade, the committee was informed that a recent study has declared the original 23.5-km plan with a dramatic cost escalation from an initial $288 million to a staggering $1.085 billion.

The committee emphasized that the NHA's cost estimation is more reasonable and its proposal should be seriously considered.

Despite the project's cost ranging from Rs68 to Rs100 billion, members challenged the perception of its non-viability.

They argued that given the massive economic impact of a fully-functional KPT enabled by the (Lyari Elevated Freight Corridor) LEFC the project's strategic value justifies its funding through either the Public Sector Development Programme (PSDP) or a Public-Private Partnership (PPP).

The committee members emphasized the need for the Karachi Port Trust (KPT) and the National Highway Authority (NHA) to hold joint discussions to develop a practical and sustainable solution to the traffic management issues and Lyari Elevated Freight Corridor (LEFC) project.

Furthermore, the committee highlighted the importance of including the LEFC project in the Public Sector Development Programme (PSDP) and added that the committee will make efforts to take up the matter with the Minister for Communications to ensure the project's consideration and approval under the PSDP.