KCR project: Sindh govt to bear share of local cost burden
The Sindh government will bear the share of the total local cost of Karachi Circular Railway project and no funding would be provided by the federal government.
The Central Development Working Party (CDWP) meeting on October 25, 2022, considered the KCR project and recommended to the Executive Committee of the National Economic Council (ECNEC) with recommendations that the project is sponsored by the government of Sindh and all the local share of the total cost would be borne by the provincial government and no funding will be provided by the federal government as proposed in the PC-I.
The meeting of the ECNEC presided over by the Minister for Finance approved the project on October 31, 2022, which would be implemented in four years from July 01, 2023–June 30, 2027. The total cost of the project in the PC-I was estimated at Rs 292 billion to Rs 263 billion foreign exchange component under the CPEC and Rs 29 billion will be the local component.
The ECNEC was informed that the CDWP after considering the project on October 25, 2022 has recommended in principle that; (a) the project is sponsored by the Government of Sindh and all the local share of the total cost would be borne the provincial government and no funding will be provided by the federal government as proposed in PC-I; (b) cost of the project will be rationalized by a committee; (c) the Issue of ownership of land will be resolved by the government of Sindh and Ministry of Railways by mutual consultation within three days and a certificate regarding readiness and availability of land will be provided by the provincial government prior to submission of Summary to ECNEC; (d) the issue of ownership of the KUTC company will also be resolved by the government of Sindh and Ministry of Railways, by mutual consultation within three days; (e) as decided in the high-level meeting in the Prime Minister’s Office, the earlier PC-I of the KCR project sponsored by the Ministry of Railways and approved by the ECNEC on public private partnership (PPP) mode will not he further processed/implemented and will be returned to the sponsors; (f) since the sponsoring agency is now provincial government, therefore, the PC-I of KCR project namely, construction of flyovers/ underpasses for elimination of 22 Level crossings from the KCR loop from Drigh Road to Karachi City Station approved at cost of Rs 20.715 billion sponsored by the Ministry of Railways will now be executed by the provincial government as the cost is also part of the total cost of instant PC-1.
The meeting was further told that the KCR project was earlier included in the CPEC framework and concurrence was accorded in the 6th JCC meeting held in Beijing on December 29, 2016 and a PC-I for the revival of the KCR was also approved by the ECNEC on October 6, 2017, at a cost of Rs 207.546 billion including FEC of Chinese loan of the same amount equivalent to US 1,971.00 million dollars.
Presently, a meeting was held between the minister for Railways and the chief minister Sindh on June 24, 2022, and subsequently, a committee was formed, which on August 5, 2022, decided that; (i) KCR project be carried out under the CPEC government-to-government (G2G) framework agreement, to be executed and operated by the Sindh government through Karachi Urban Transport Corporation (KUTCI); (ii) right-of-way of KCR, will he handed over to Sindh government for KCR project; (iii) ongoing work pertaining to the construction of structures for elimination of level crossings etc for modern KCR being carried out under PSDP may be handed over and continued by the provincial government through KUTC subject to completion of required formality.
The ECNEC meeting was further informed that in light of the above, the PC-I of the project is prepared on the same technical lines of the earlier submitted by Pakistan Railways and approved in March 2022 with the scope of work of construction of 43.2-kilometer of modern urban railway in Karachi with all the associated facilities.