Concessionary loan from China: After Metro bus, Lahore could see Metro train

Published: May 5, 2015
In this file photo Minister for Planning, Development and Reforms Ahsan Iqbal chairs a CDWP meeting in Islamabad. PHOTO: PID

In this file photo Minister for Planning, Development and Reforms Ahsan Iqbal chairs a CDWP meeting in Islamabad. PHOTO: PID


After the Lahore Metro bus project, the government is now working towards introducing another source of mass transit for the city.

The federal government has given a green signal to the Rs165.2 billion Lahore Orange Line Metro Train project, which will be funded by obtaining a concessionary loan from China amid concerns about its high cost.

Headed by Minister for Planning and Development Ahsan Iqbal, the Central Development Working Party (CDWP) recommended the Lahore Orange Line Metro Train Project to the Executive Committee of National Economic Council (Ecnec) for final approval.

The Planning Minister observed that the provincial government should conceive non-ticket commercial spaces to make the mega mass transit project financially viable in the long run, according to a handout issued by the ministry.

The CDWP sanctioned seven projects costing Rs180.1 billion.

The technical appraisal section of the Ministry of Planning and Development objected over the high cost of civil works and ambiguity over interest rates on the loan that the provincial government will obtain for the Orange Line scheme, said officials who attended the meeting.

Although both sides have signed the government-to-government concessional loan and export buyer credit, the Export-Import (Exim) Bank of China was demanding over 3% interest rate. The local authorities have offered 2.4% interest on the loan amount, said the officials.

Lahore Orange Line Metro Train project is the Punjab government’s project that it will finance from its own resources. Since the project will be funded by obtaining Chinese loan, it has to be approved by the federal government that will also extend sovereign guarantees against foreign loan component.

The project was part of over 50 schemes costing $28 billion, which were signed during the visit of Chinese President Xi Jingping.

The provincial government has already rejected the proposal of a combination of underground and elevated roads and now a 27.1-kilometre dedicated elevated road will be constructed.

It will be a landmark mass transit project for poor people and the middle class to commute at affordable fares, said the Planning Minister. He said the commercial spaces should be conceived at the metro stations architecture to help overcome the big difference in the operational cost and the revenue of the mass transit. The design should also be consistent with local heritage, he added.

The project envisages construction of a 27.1-km long dedicated signal free corridor for train mass transit system in Lahore. The proposed alignment of the project starts from Ali Town passing through Niaz baig, Bund road, Chaubrugi, Anarkali, Lakshmi, Railway Station, UET, Shalimar Garden, Islam Park and finally terminates at Dera Gujran. The corridor will be capable of accommodating trains running both ways with a capacity of 30,000 passengers per hour.

The Minister asked the Lahore Development Authority to ensure the completion of the mega project in 27 months as.

Other projects approved

The CDWP also approved four projects worth Rs2.4 billion. A project for the provision of academic and allied facilities at University of Malakand worth Rs996.3 million was approved in principle. Another University project of Commencement of four-year Undergraduate Program in Water Resource Engineering and Petroleum Engineering at UET Taxila was also approved in principle. A committee was formed by the minister to revise the scope of the project.

The CDWP recommended Rs7 billion project for construction of four-lane bridge across river Indus linking Layyah with Taunsa to the ECNEC. . Larkana Development Package of infrastructure projects worth Rs8.1 billion was also cleared subject to cost rationalisation.

Published in The Express Tribune, May 6th,  2015.

Like Business on Facebookfollow @TribuneBiz on Twitter to stay informed and join in the conversation.

Facebook Conversations

Reader Comments (27)

  • raider
    May 5, 2015 - 9:18PM

    next election would be contested on this piece and would be hyped by media and Chinese investment will be used for political ends, no one would tell nation that 11 billion allocated for infrastructure is a loan and Pakistan will have to payback internal rate of return @17% amounts to 8.5 billion dollers to Chinese companies per yearRecommend

  • Ali
    May 5, 2015 - 10:07PM

    Half the goverment schools are falling apart in Punjab. That’s assuming children are lucky to get into school.
    Can we instead invest our miniscule resources in improving schools?

    These loans are not free we will have to pay them back – with interest.Recommend

  • pervaiz
    May 5, 2015 - 10:22PM

    good work by Shahbaz Sharif. CMs of other provinces should also try to get foreign investment for public welfare projectsRecommend

  • sabi
    May 5, 2015 - 10:35PM

    This is a blessing for common Pakistani but cause for lose motions for pmln viz a viz democracy opponents (dharna walas)Recommend

  • sabi
    May 5, 2015 - 10:43PM

    For people like you there are double Shahs in the market. You may continue to follow such thugs promising planting dollar bearing trees!Recommend

  • raider
    May 5, 2015 - 11:07PM

    I don’t expect this type of passionate comments by literary personnels, still Pakistan is standing at nil position to harvest a benefit of this corridor or any infrastructure, all economists have shown concerns about cost of this project even Chinese very like gadani power project where Chinese censured Pakistan to withdraw 6 units of 660 megawatt each out of 10 due to cost ineffectiveness Recommend

  • Blithe
    May 5, 2015 - 11:14PM

    Give it a break.
    If you dislike development so much ,move to kpkRecommend

  • Lahore
    May 6, 2015 - 12:17AM

    Brilliant news!Recommend

  • AB
    May 6, 2015 - 12:28AM

    @Raider! Stop using fake facts. IRR of 17% is for commercial power projects, which has been the same for all IPPs. KPK govt is also fighting to get permission in KPK for a gas fuelled power plant at the same IRR. As for Chinese loan, “concessionary” interest rate is likely to be around 4%. Prove your $8.5 billion figure, I dare u.
    Nevertheless, in my opinion same money would have been better spent on another project like replacing of old power infrastructure. But still, as long as money is being spent in a developmental project, it’s acceptable.Recommend

  • shahid
    May 6, 2015 - 12:49AM

    This is madness. Is Lahore the only city in Punjab? Southern Punjab needs to break away from Reign of these kings. Go to layyah, bhakkar, RYK and then go to lahore. What a disgrace.Recommend

  • raider
    May 6, 2015 - 12:56AM

    truth is bitter, but it is so, kpk is in Pakistan, how hypocritical statement is this, these are thugs masked as economics experts, mark my words Pakistan will never be benefited from this in the presence of these looters, plunderers. they have nothing to do with economy they are monsters in disguised precisely democratic dummies. i think sustainable development in kpk could not be equated by Punjab spanned at 6 terms of plmn, metro or any flyovers confined to Lahore is not development, Recommend

  • Karim
    May 6, 2015 - 1:50AM

    Lahore doesn’t need a metro train! Karachi faisalabad Hyderabad Peshawar quetta needs urban transport systems! Recommend

  • Humza
    May 6, 2015 - 6:15AM

    @Ali: I disagree. The schools in Punjab consistently score better than schools anywhere else in Pakistan. People in Punjab welcome the provincial initiatives started by Shahbaz Sharif which have benefited many cities in the province. Rather than complain, why not ask the CMs in each province to work like Shahbaz Sharif to improve things?Recommend

  • Malveros
    May 6, 2015 - 6:16AM

    Well done to SS led Punjab Provincial Govt for pursuing this project. This is much needed in Lahore. I wonder why the people of Karachi are not pushing Sindh Govt to pursue a similar project on which feasibility study has also been done by Japan and Japan is ready to provide loan for Karachi Metro Train Project.Recommend

  • bitter truth
    May 6, 2015 - 6:20AM

    supporters of such projects must visit government hospitals once where poor patients are being decomposed live by heat due to no air conditioning and eaten live by cockroaches. just go to general, gulab devi, services, mayo or any other public hospital in lahore. Recommend

  • ZAK
    May 6, 2015 - 6:21AM

    Lahore will become model city for other provinces.

    It is need of all Pakistanis including Lahories to have better infrastructure and world class urban transport facilities.

    No one stop other Provinces to provide such facilities to their people.

    So do not be jealous and strive for better living.Recommend

  • raider
    May 6, 2015 - 9:03AM

    at least show us where that naive shahbaz sharif has developed anything for 7 years, investment by others for securing lions share of benefits is not development, what is your own skill and contribution is termed development Recommend

  • raider
    May 6, 2015 - 9:12AM

    Lahore may become model city in a century, in 7 years white elephant metro constructed with few flyovers then estimate any other development. if 7 years would have been given to a competent and capable leadership then there could have been a neo-lahore at least Recommend

  • Javed
    May 6, 2015 - 9:29AM

    Lahore do not need a metro train. Most of the jobs are in unorganized sector. First you need to create massive private sector jobs then worry about the transit system. The only city in Pakistan that need it is Karachi.Recommend

  • Zahid
    May 6, 2015 - 10:00AM

    Dear PM,
    Please also focus on worst public transport issues in Karachi, there is no better option for mode of transport. The city require Circular Railway & Metro Bus service Recommend

  • Blunt
    May 6, 2015 - 11:25AM

    As far as I know, Pakistan can also be found outside of Lahore and Punjab.Recommend

  • Saleem Javed
    May 6, 2015 - 12:07PM

    While the whole world has a subway system, we are stuck with oldies thinking their train projects would work in the long run.Recommend

  • pervaiz
    May 6, 2015 - 1:16PM

    I’m from KPK and what is our fault if we do not have any Shahbaz Sharif for KPK, we have only a dancing CM. Better for you if your question goes to Mr. Khattak or IK where they have govt.Recommend

  • Axad Ahmad
    May 6, 2015 - 3:18PM

    There are several other cities that needs reforms, instead of further developing Lahore.
    Well before considering metro, proper roads should are required in all major cities and villages as well.
    people need employment and basic education with proper reforms are required in all major public institutions, kindly look forward to that first, talking about metro specifically, KARACHI needs metro as compared to any other city, first make public records for the metro bus that how much it costed and how much revenue it is generating.
    One other thing, instead of making new metro bus or train, kindly focus on existing TRAINS we have so called Pakistan Railway, it need much more attention than any other development projects in Pakistan. Kindly pay attention to current assets we have which are incurring heavy losses every day instead of making new projects on loans and our Halal earned money.Recommend

  • raider
    May 6, 2015 - 6:08PM

    we are ashamed of having peoples like showy shahbaz sharif with his suspected mental health, for seven years man is ranting about police today same police is even withered further and killed more than 14 peoples and injured more than 100 just on order of touts which were ultimately funneled to cm cell and then pm house Recommend

  • Zain
    May 7, 2015 - 8:15AM

    Can they really maintain this new infrastructure while the existing roads, rails, health, and educational institutions are crumbling.. I hope this projects adds value to existing infrastructure and we (the civilians) maintain it i.e keep it clean..Recommend

  • junaid Ahsan
    Jun 8, 2015 - 11:54PM

    The message for CM Punjab…… Sir your project is going to finish the schools, homes, shops, business, of millions of families ….what they do without there houses , there businesses your this project brings unemployment in bundles ……. I am the one effected person who is going to lose my home and my fathers business due to this project and any one think where we live….from we earn …..from where we full fill our needs. please Think about it.Recommend

More in Business