$9.2 billion ML-1 project under CPEC planned to be executed in Jan 2021 – Business

ISLAMABAD: The $9.2 billion Main Line (ML-1) project under the China-Pakistan Economic Corridor (CPEC) is planned to be executed in January 2021, if the PC-1 of the project is approved in the upcoming Central Development Working Party (CDWP) meeting scheduled for tomorrow (Wednesday).

This was revealed by senior officials of the Railways Ministry, while talking to Business Recorder here on Monday.

“The project will be further delayed, if it is not approved by the Planning Commission,” the official added.

According to official documents, the project has been divided into three packages for the purpose of execution.

The package-I is proposed to be executed in January, 2021, and would be completed with proposed $3.37 billion in four year i.e. by December 2024.

The package-II is proposed to be executed in January, 2022, and would be completed in five year i.e. by December, 2026 with proposed amount of $2.24 billion.

Package-III is proposed to be executed in January, 2023 and would be completed by December, 2029 with proposed amount of $3.56 billion.

Railways Minister Sheikh Rashid Ahmed in October 2019 had announced to initiate ML-1 in March 2020.

However, the Planning Ministry had rejected the PC-1 for package-I, and asked the Railways Ministry to come up with PC-1 for the entire project instead of in-parts, as well as raised technical and financial issues in the project, the sources added.

After getting approval from the CDWP, the project would be referred to the Executive Committee of the National Economic Council (ECNEC).

The PC-1 approval is necessary for the bidding process, commercial contract and financial close.

According to documents, after getting approval from the ECNEC, the tender would be issued in July 2020.

The tender evaluation and acceptance is proposed for October 2020.

The government will deliberate with Chinese authorities for financing the project.

The government is planning loan negotiation and financial close in November 2020, said the official, adding Pakistan wanted China to take on the $9.2 billion ML-1 project, which was declared a strategic project under the CPEC, on soft loan terms.

Physical work is proposed to be executed in January 2021.

Senior officials of Railways Ministry contested several times before parliamentary panels that in case ML-1 was delayed, it would have serious implications for Pakistan Railways, adding the cost of the project was also likely to go up with delays.

Railways project will consist of early harvest, ML-1 upgrade and establishment of dry port; mid-term, establishing new rail link from Gwadar to Mastung and Besima to Jacobabad; and long-term, establishing new rail link from Havelian to Khunjrab (China border).

The up-gradation of ML-1 project has been planned in line with the Government of Pakistan long-term plan for revival of railways in Pakistan as imbibed in Vision 2025.

Pakistan Vision 2025, which seeks to establish an efficient and integrated transportation system that will facilitate the development of a competitive economy.

According to Vision 2025, “Railways will be revived as a socially and financially viable organization, with its share growing from less than four percent of the freight transport sector to more than 20 percent.”

The project of up-gradation of ML-1 has been declared a strategic commercial project with loan on favorable terms as it presents a perfect business plan covering 75 percent traffic/population, and 65 percent industrial areas.

With the up-gradation of ML-1, train speed will increase from the current 65-105 km to 120-160 km, line capacity from 34 to 171 trains each way per day, freight volumes from six to 35 million tons per annum by 2025, railway share of freight transport volume from less than four percent to 20 percent.

The project would create around 0.1 million jobs for the young people.

Copyright Business Recorder, 2020

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