Tariff for KCR: Railways ministry-PD dispute to land on CCoE table today

ISLAMABAD: The dispute between the Ministry of Railways and the Power Division on tariff for Karachi Circular Railways (KCR) will land in the Cabinet Committee on Energy (CCoE) meeting on Wednesday (Feb 2), sources close to Minister for Planning, Development and Special Initiatives told Business Recorder.

The Karachi Circular Railways (KCR) remained an effective mass transportation system since it was commissioned in 1964 and remained useful till 1984.

However, due to various reasons, the operational efficiency deteriorated, which resulted in reduction of ridership and its subsequent closure in December 1999. Several attempts were made to revive the KCR but in vain.

The Supreme Court of Pakistan in its decisions February 21, 2020 and March 6, 2020 directed that Pakistan Railways revive and make KCR operational as it existed before its closure within six months. The Court also directed to continue working on modern KCR.

KCR Project: P3A Board approves proposal/transaction structure

The Supreme Court of Pakistan in its order of March 6, 2020 ordered the construction of infrastructure of underpasses and overhead bridges at level crossing by the Sindh government and directed the FWO to be commissioned to construct the flyover and under passes within a period of six months.

Pakistan Railways has restored operations of about 28kms of old KCR out of44km. At the same time, Pakistan Railways has completed feasibility for modern KCR under Build-Operate-Transfer (BOT) mode and submitted it to Public Private Partnership Authority (P3A) on August 5, 2021.

According to Ministry of Railways, in order to make project viable, subsidy in CAPEX and OPEX is inevitable. The Ministry also stated that a huge percentage of operational subsidy includes electricity cost.

Currently, there is no tariff category for Railway Track in K-Electric Schedule of Tariff (SoT), whereas Orange Line Train is being charged at Bulk Supply tariff. Furthermore, the KCR does not fall under the definition of industrial supply and changing tariff category for a specific consumer requires a regulatory process involving revision of Schedule of Tariff and terms & conditions.

Copyright Business Recorder, 2022