ISLAMABAD: Despite concerns about its high cost, the government on Tuesday gave a green light to the Rs165.2 billion Lahore Orange Line Metro Train project, which will be funded by obtaining a concessionary loan from China.
Headed by Minister for Planning and Development Ahsan Iqbal, the Central Development Working Party (CDWP) recommended the project to the Executive Committee of National Economic Council (ECNEC) for final approval.
The planning minister observed that the provincial government should conceive non-ticket commercial spaces to make the mega mass transit project financially viable in the long run, according to a handout issued by the ministry on Tuesday.
During Tuesday’s meeting, the CDWP sanctioned seven projects worth Rs180.1 billion.
The technical appraisal section of the Ministry of Planning and Development objected over the high cost of civil works and ambiguity over the interest rates on the loan that the provincial government will obtain for the Orange Line scheme, said officials who had attended the meeting.
Although, both the sides have signed the government-to-government concessional loan and export buyer credit, the Export-Import (Exim) Bank of China was demanding over 3% interest rate. The local authorities have offered 2.4% interest on the loan amount, the officials said.
Lahore Orange Line Metro Train project is Punjab government’s project that it will finance from its own resources. Since the project will be funded by obtaining a loan from China, it has to be approved by the federal government that will also extend sovereign guarantees against the foreign loan component.
The project was part of over 50 schemes costing Rs2.85 trillion, which were signed during the visit of Chinese President Xi Jingping.
The provincial government had already rejected the proposal of a combination of underground and elevated roads, opting instead for a single 27.1 kilometer elevated stretch of road.
It will be a landmark mass transit project for the poor people and the middle class to commute with world class facilities in affordable fare, Minister for Planning and Development said. He added that the commercial spaces should be conceived as part of the metro stations’ architecture to help overcome the big difference in the operational cost and the revenue of the mass transit system. The design should also be consistent with local heritage, he added.
The 27.1 km long dedicated signal free train corridor will start from Ali town and pass through Niazbaig, Bund road, Chaubrugi, Anarkali, Lakshmi, Railway Station, UET, Shalamar Garden, Islam Park and finally terminate at Dera Gujran. The corridor will be capable of accommodating two trains running both up and down the track, ferrying up to 30,000 passengers per hour.
The minister has asked the Lahore Development Authority (LDA) to ensure the completion of the mega project in the stipulated period of 27 months set by the Punjab government.
He also emphasized the transfer of technology in order to build indigenous capacity for the construction of such projects.
The CDWP further approved four projects worth Rs2.4 billion. A project for provision of academic and allied facilities at University of Malakand worth Rs996.3 million and a four-year undergraduate program in water resource engineering and petroleum engineering at UET Taxila were approved in principle.
The CDWP recommended to the ECNEC a Rs7 billion project for the construction of a four-lane bridge across the river Indus linking Layyah with Taunsa. Larkana Development Package of infrastructure projects worth Rs8.1 billion was also cleared subject to cost rationalization.
