KCR among top govt priorities ahead of China visit in April

Asad Umar says govt serious in fixing issues hampering mega project's revival

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ISLAMABADAhead of the visit of the Chinese National Development and Reforms Commission (NDRC) in April, Pakistani authorities have sprung into action to get the Karachi Circular Railways project on track and held a series of meeting in Karachi and Islamabad to review the progress made so far.

The NDRC will be visiting Pakistan in April 2020 to review the progress of the mega projects taken up by Pakistan under the China-Pakistan Economic Corridor (CPEC), with its focus on Social Sector Infrastructure Development and ML-I project.

Two meetings were held in Karachi on Monday and Tuesday, wherein the authorities concerned huddled to evolve a consensus on projects in Sindh, particularly the KCR that was included in the CPEC  project list in 2016 on the request of the Sindh government.

These meetings were followed by a meeting chaired by Planning Minister Asad Umar, attended by the secretaries of Ministries of Planning, Finance, Economic Affairs Division, Communications and senior officials of the Planning Commission, on Wednesday. The minister was briefed on the issues linked to the project indicated by Sindh, such as lack of sovereign guarantees, encroachments etc.

During the meeting, the minister was told that the PC-I of the KCR project was approved in October 2017 by the ECNEC [Executive Committee of National Economic Council] at a cost of US$ 1.97 billion, but the project had hit a snag due to lack of financing among other issues.

Umar, however, assured its commitment to the project. He said that the federal government was fully committed to supporting the project in consultation with China. He directed the Planning Division and EAD, with the help of the Chinese side, to initiate work for finalisation of the implementation mechanism.

As per available documents, China was not ready to sign the framework agreement on KCR even though it agreed to include the mega project in the CPEC during the 6th Joint Coordination Committee (JCC) of the CPEC.

But the project remained excluded in 7th and 8th JCC for want of the required documentation, feasibility studies, and approval from relevant forums.

The project is part of the agenda during the 9th meeting of the JCC; however, due to a non-serious attitude of the government and still unresolved issues, both sides failed to sign an agreement.

In November 2019, NDRC Vice Chairman Ning Jizhe had visited Pakistan along with a delegation for participation in the 9th JCC meeting. Apart from the KCR, the financing committee on ML-I constituted during the 9th JCC was working on financing terms and conditions and was likely to finalize its recommendation before the April visit.

However, the finance ministry has yet to issue its sovereign guarantee for the project as is a case in projects involving international tenders and huge costs.

The federal planning and development ministry also needs to approve the framework agreement of the KCR after which it will be formally included in the CPEC and there will be a financial close, following which international tenders will be invited for the project. However, after the International Monetary Fund (IMF) loaned $6bn to Pakistan, it seems the government will have to convince the IMF in this regard.

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