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Railway project sent to Chinese bank for approval of $6 Billion loan - Inside Financial Markets

Railway project sent to Chinese bank for approval of $6 Billion loan

– Dawn News

The Chinese government has sent Pakistan’s first modern railways’ infrastructure project — Main Line-1 (ML-1) — to the Exim Bank of China for approval of a $6 billion loan after all technical, administrative and other issues have finally been resolved, paving the way for launching civil work on this scheme within this year.

“The latest on the $6.8 billion ML-1 project is that a finance committee comprising Chinese officials has sent the case related to $6 billion loan approval of the project to Exim Bank. Since the remaining $800 million will be provided by the government of Pakistan as equity, the total $6.8 billion will be spent on completion of the entire rail-related infrastructure, mainly the line, fencing, civil works etc,” Pakistan Railways Federal Secretary / Railway Board Chairman Dr Habibur Rehman Gillani said while talking to Dawn on Tuesday.

“We appreciate our Chinese counterparts for taking the ML-1, a project to be executed under the China-Pakistan Economic Corridor (CPEC), seriously by resolving various issues in consultation with senior Pakistani officials concerned,” Mr Gillani added.

The construction of ML-1 project in three phases had been approved by the Executive Committee of National Economic Council (Ecnec) in its meeting held in August last year. The actual cost of the project was initially $9bn, including equity amount of the government of Pakistan. But later, it was reduced gradually to $6.8bn.

“The cost was reduced since money included / allocated earlier for train sets / rolling stock etc was not needed during completion period of the project,” the chairman explained. When the project will reach nearing completion, another project proposal regarding procurement of train sets / rolling stock etc would be prepared and approved separately, he maintained.

Mr Gillani said once the loan was approved by the Exim bank, the project would be sent to respective Chinese ministries dealing with the railways and planning / development related matters. This whole process would take a couple of months, after which the ministry would be able to initiate the international bidding / tendering process for execution of the project.

The project would have upgrade of ML-1 from Karachi to Peshawar and Taxila to Havelian (1,872km), laying of new track with improved sub grade for 160km/per hour, rehabilitation and construction of bridges, provision of modern signalling and telecom systems, conversion of level crossings into underpasses/flyovers, fencing of track, establishment of dry port near Havelian and upgrade of Walton Training Academy (Lahore).

It will create 24,000 direct (20,000 local labour/technical experts and 4,000 Chinese experts) jobs and reduce travel time from Karachi to Lahore from 18 to 10 hours.

Syed Zaki Hussain

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