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The government has decided to hire international consultant/firm to scrutinize the financial and technical design of Pakistan Railways' Main Line (ML-1) project, worth around $9.23 billion, under the China-Pakistan Economic Corridor (CPEC).

This was confirmed by Federal Minister for Planning and Development Asad Umar in an exclusive talk with Business Recorder here on Friday. The Minister did not rule out further delay in project implementation as billions of dollars worth of investment requires proper groundwork to remove flaws, if any, and avoid damages in the long term.

He further said that the $9.23 billion may not be the final cost of ML-1 as it is based on preliminary design/feasibility study. The cost would be finalized once the contract is awarded, Umar added. Before granting final approval of the project, the government wants to determine financial and technical flaws, if any, and the capacity of Railways to conceive such a huge project.

Railways Minister Sheikh Rashid Ahmed had announced at a press conference on October 24, 2019 that Pakistan Railways submitted PC-1 of ML-1 project worth around $9.23 billion, under CPEC framework to the Planning Ministry for approval. After getting approval from Executive Committee of the National Economic Council (ECNEC), tender of the project would be issued and work on the project would be initiated in March 2020.

Sources in the Railways Ministry revealed that Planning Ministry has asked for preliminary design/drawing however it is not informed about hiring of a consultancy firm. Sources further said that it would definitely delay the project implementation, if government goes for hiring a consultant.

The official further said that PC-1 was submitted to the Planning Ministry back in October 2019, but is yet to be considered by Central Development Working Party (CDWP) and ECNEC. The PC-1 approval is necessary for bidding process, commercial contract and financial close. After getting approval of the PC-1 from the Ministry of Planning and Development, the government will deliberate with Chinese authorities for financing the project. Pakistan wants China to take on the $9.23 billion ML-1 project, which is declared a strategic project under CPEC, on soft loan terms.

Railways Minister repeatedly raised the issue of a delay in ML-1 in cabinet meetings as well as with Prime Minister Imran Khan, said the official, adding that the project may go to next financial year if government goes for hiring a consultant/firm. Railways Ministry senior officials contested several times before parliamentary panels that in case ML-1 is delayed it will have serious implications for Pakistan Railways, adding that cost of the project is 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).

Copyright Business Recorder, 2020

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