Service agreement: CDA refuses to sign contract with metro bus authority

Says PMBA signed service contracts with private firms unilaterally.

ISLAMABAD:

The Punjab Metro Bus Authority (PMBA) has signed three service agreements with private firms without taking the Capital Development Authority (CDA) on board. 

Officials say the CDA, which would look after the Rawalpindi-Islamabad metro bus project’s Islamabad section, had recently refused to sign the eight-year operational contract for the project, citing low revenue and high operation and maintenance costs.

The three agreements PMBA signed with private companies are for an automatic fare collection system, security and surveillance systems, and bus operations.

A fare collection contract has been signed with the private firm Inbox for Rs500 million per annum. The firm is also a partner of the Punjab government in its laptop scheme. Another firm, Interactive, has been awarded the contract for security and surveillance of the project at Rs250 million per annum. Similarly, the bus operation contract was signed with Turkish company Al-Bairak, which also runs the Lahore metro buses.

“Neither the federal government nor the CDA has any idea of how and when these contracts were awarded,” said a senior CDA official, who requested not to be named.

He said the civic agency was of the view that these contracts were given at relatively high rates, pointing to the Rs500 million PMBA will be paying the firm tasked with fare collection.

He said that according to estimates, around 80,000 people would use the buses every day, paying a flat Rs20 for a one-way trip. “Going by our estimates, the firm would collect Rs584 million per year, and would keep Rs500 million as service charges. This rate is not rational and depicts poor work on the PMBA’s part,” the official said.

He said other services contracts were signed on the same pattern.

CDA had recently refused to sign an agreement with PMBA to share the Rs3 billion annual subsidy meant to cover operational losses.

Though the CDA lacked legal standing to sign the agreement as it had no role in the execution of the project, PMBA had sent it a draft of the agreement requesting signature.

The civic agency maintained that regulating public transport in Islamabad is within the mandate of the Islamabad Capital Territory (ICT) Administration and it should be the body signing the contract.

The official said that a committee was constituted to resolve the issue, but the federal government’s response is still awaited.

PMBA Operations General Manager Ozair Shah said the CDA’s apprehensions were unrealistic and could hinder the project. He said the provincial and federal governments were taken on board before awarding the service contracts.

He said issues over sharing subsidy costs would be resolved soon. Shah said the CDA will not have to pay for the subsidy from its own budget as the federal government would allocate funds for it.

Published in The Express Tribune, March 25^th, 2015.