ISLAMABAD: The much-delayed mega project of Karachi Circular Railway (KCR) is once again likely to be neglected at the highest forum of China Pakistan Economic Corridor (CPEC), Pakistan Today has learnt.
Although the mega project is included in the agenda of the 9th Joint Cooperation Committee (JCC) of CPEC, scheduled to be held on November 6, sources believe the progress on the same is unlikely as the centre has not given a green signal with regard to the required guarantee.
“The issue of guarantee is related not only to KCR but ML-I railway project as well; the International Monetary Fund (IMF) has objected against sovereign guarantees,” sources said, adding that the government may take up the issue with the visiting IMF mission.
“Until the IMF is convinced regarding the guarantee, funding for mega projects under CPEC may not be possible,” said a source at the Ministry of Planning, Development and Reforms.
Meanwhile, Sindh Chief Minister Syed Murad Ali Shah on Thursday met Planning Minister Makhdoom Khusro Bakhtiar to discuss financing for mega projects in the province, particularly KCR. However, the ministry highlighted various issues related to the project, including sovereign guarantee, land disputes and a lack of interest on part of financers.
The chief minister reportedly urged the ministry to take up these issues with the prime minister and relevant authorities ahead of the next JCC meeting. He also requested the minister to give priority to KCR against ML-I and other mega projects.
Bakhtiar assured that the project would be supported, however, a “workable model needs to be articulated to make it viable for financing”.
As per documents available with this scribe, China was not ready to sign the framework agreement on the financing of KCR despite its in-principle decision to include the mega project in CPEC during the 6th JCC in 2016.
The project remained excluded in 7th and 8th JCCs for want of required documentation, feasibility studies and approval from relevant forums etc.
KCR, with a revised cost of Rs207 billion, was approved by the Executive Committee of the National Economic Council (ECNEC) in 2017. However, the project is continuously facing delays owing to unresolved guarantee issue and land dispute between Pakistan Railway and the Sindh government.
Japan, which earlier intended to invest in the project, had also backtracked due to the unfriendly approaches of centre and Sindh government towards resolution of the issues. In 2010, JICA had begun a three-year survey to assess the feasibility of reopening the loop line. The Japanese aid agency had offered a 40-year loan at a 0.2pc interest rate to fund the project, but it was stymied by administrative delays.
The KCR served commuters in Pakistan’s largest metropolitan area from 1969 to 1999.
The meeting on KCR and other projects was attended by Planning Commission Deputy Chairman Mohammad Jehanzeb Khan, Planning Secretary Zafar Hasan, KP Board of Investment Chairman Hassan Daud and senior officials of the ministry.
Separately, in a meeting on the proposed Punjab-related projects to be taken up in the upcoming JCC, the planning minister stated that emphasis would be laid on socio-economic development projects under the second phase of CPEC.
He said that projects would be recommended based on economic viability and after due diligence under CPEC plans.
