ISLAMABAD: Pakistan Railways ML-1 project package-1 is reportedly facing delays as China has not formally communicated any firm commitment of loan amounting to $ 2.435 billion, sources close to Minister for Planning, Development and Special Initiatives told Business Recorder.
Sharing details, sources said ML-l project of Pakistan Railways was the largest infrastructure project of the country under the CPEC to which executive committee of the National Economic Council (ECNEC) accorded its approval at a total cost of US$ 6.8068 billion on August 5, 2020.
The sources said, for the financial negotiation of loan terms with the Chinese side, a high-level financing committee headed by Deputy Chairman Planning Commission was formed under the directives of Prime Minister which has convened eight meetings on the issue of financing of ML-1 project so far.
On April, 8, 2020 a proposed term-sheet comprising various terms of loan was shared with the Chinese side. However, final terms and conditions of loan would be settled after due deliberations and negotiation process between the Financing Committees of the two countries. A formal request for the loan of Package-1 amounting to US $ 2.435 billion was made to the Chinese side through Economic Affairs Division (EAD) on November 25, 2020.
In the last meeting of the financing committee, the decision of the Pakistani side upon the four queries/options raised by the Chinese side regarding currency of loan, share of loan, tenor of the loan and mode of repayment had been communicated to the Chinese side on January 26, 2021. The response of the queries was sent to the Chinese side from EAD on the same date.
According to sources, at this stage, Ministry of Railways requires a commitment of loan from the Government of China amounting to $ 2.435 billion for package of ML-l project to proceed with the tendering process of package 1.
The Ministry of Railways has sought intervention of the government on the following issues: (i) early finalization of the negotiation process of loan terms between the Financing Committees of China and Pakistan and; (ii) tender documents are ready; however, commitment of loan is required for the package-1 from the Chinese side so that the tender of package-1 may be advertised which is at present held up due to no formal commitment of loan from the Chinese side.
According to Ministry of Planning, Development and Special Initiatives work will be carried out from financing through Chinese Government Concessional Loan (GCL). The work will be awarded through open bidding as per the PPRA rules through ECP contract.
The scope of the project is as follows: (i) doubling of entire track from Karachi to Peshawar; (ii) speed of passenger train to be raised from 65/110 km/h to 160 km/h; (iii) freight trains to operate at 120 km/h; (iv) computer based signaling and control system and; (v) grade separation to ensure safety of train operations.
Copyright Business Recorder, 2021