Bright prospects: KCR gets another boost

Economic body waives on-lending charges for project.

ISLAMABAD: The revival of the Karachi Circular Railway (KCR) got another boost on Tuesday as the Economic Coordination Committee (ECC), the highest economic decision making body of the federal cabinet, agreed to waive the “on-lending charges” for the project.

The KCR is an attractive alternative to the city’s congested public transportation vehicles, and is also expected to cut travelling time by half for about 700,000 people a day. Electrical locomotives are expected to run at an average speed of 44 km per hour, on a system of elevated, on-the-ground and tunnel track spanning 43.12 kilometres, while a train will pass through each of the nearly two dozen stations every six minutes.

The bulk of the financing for the revival of intercity railway system (93.5 per cent) or $2.4 billion, will be provided by the Japan International Cooperation Agency (JICA). The government has to pay the company back in 40 years, 10 of which have been reserved as the “grace period”. The remaining funds, totalling around $169.6 million, will be provided by the railways ministry (60 per cent), the Sindh government (25 per cent) and the Karachi Metropolitan Corporation (15 per cent). Together, these three government entities are part of the Karachi Urban Transport Corporation (KUTC), which is going to manage the operational details of the project.



The railways ministry had originally requested the ECC to waive the “on lending charges,” which are, in essence, the interest that the KUTC has to pay the federal government as it pays back its share of the funds.

Published in The Express Tribune, January 2^nd, 2013.