ISLAMABAD: The ML-I project of Pakistan Railways once again faces delays as the Chinese projected cost of first segment of the scheme has been computed at $4 billion, $627 million higher than estimates of the Pakistani authorities.
Due to the differential in costs of the ML-I project, the Chinese have also refused to give the concessionary loan offered for this project, according to Planning Commission officials, reported Express Tribune.
As per the framework agreement reached, China will be funding 85 percent of the cost of the project as a concessionary loan and this project has been named as strategically significant and comes under the China-Pakistan Economic Corridor (CPEC).
A meeting of Central Development Working Party (CDWP) held on Thursday took up the issue of approving the ML-I upgrade project of Pakistan Railways which was presided over by Planning Commission Deputy Chairman, Sartaj Aziz.
The planning ministry told the ML-I project wasn’t taken up for consideration during the meeting as per the request of Railways ministry.
At the start, the ML-I project was envisaged to have a length of 1,872 kilometers with a projected cost of $8.2 billion.
But the government broke the project into two parts because of high cost associated with refurbishing and expanding the main railway line.
A new PC-1 of the scheme submitted to the Planning Commission by PR sees the authorities wanting to only construct 748-kilometer track in the first phase of the project.
To compute the estimated cost of the first phase of ML-I project, a syndicate had been setup in this regard which included China Railway Eryuan Engineering Group Co Limited (CREEC), National Engineering Services Pakistan (NESPAK) and Pakistan Railways Advisory and Consultancy Services (PRACS).
Nespak worked out the cost of the first phase of ML-I project at $3.4 billion, but Creec computed the cost at $4.02 billion and PRACS estimated the cost at $3.2 billion.
Ironically, the scope of the work under the new PC-I has been decreased by 56 percent compared to the one approved by CDWP in June 2016.
The 56 percent decrease in scope of the work has resulted in a cost rise by 6 percent at lowest cost as worked out by Nespak, as per the planning ministry.
In the previous first phase of ML-I project, the Multan-Lahore railway line had a length of 334 km, which has now been raised by 5 kilometers.
The 182-kilometer railway line between Karachi-Hyderabad has been totally omitted along with Karachi-Kotri section of 163 kilometers from the new PC-I of the ML-I project.
Also, Multan-Hyderabad section has seen a decrease in length to 183 kilometers as per new PC-I of the ML-I project