Cost of ML-1 railway project may jump beyond $10 billion: report

ISLAMABAD: With completion of 90 per cent designing work for much-awaited M-1 under China–Pakistan Economic Corridor (CPEC), the government has asked Ministry of Railways to update the PC-1 for re-submission before Planning Commission with expectation that its cost would go up beyond $10 billion, reported The News. 

Although the coronavirus epidemic has negatively impacted the Chinese economy, Pakistani authorities seem confident that the multi billion project of ML-1 would be on ground from next fiscal year 2020-21, perhaps in July, after completion of all procedural/approval requirements before June 2020.

Top official sources confirmed to The News on Tuesday that the Ministry of Railways was given deadline of end of ongoing month for submission of updated PC-1 of ML-1, as it was told during one of top level meeting held under Minister for Planning Asad Umar in second week of February 2020 that the concerned ministry has completed over 90 per cent designing work of the project.

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Now the Ministry of Railways has been assigned to align the cost, along with designing of the project, and its cost is set to go up beyond $10 billion against earlier estimates of $9.2 billion. Under ML-1, the rail line from Peshawar to Karachi will be modernised after which the speed of train will be increased up to 160km/hour from existing level of 60/80km per hour.

“The biggest question arising before the policy makers is that who will run the modernised railways after the completion of ML-1,” said one top official, One of the proposal under consideration was to handover the railways to the Chinese for period of three to five years because the existing workforce of Pakistan Railways would not be able to run the modernised rail that would be run through computerised technology. 

“The Pakistan Railways will require professionals having MBA degrees, economists and experts having expertise in logistics, and other areas, so existing workforce will not be able to deliver” said the official sources.

The working of the government showed that the PC-1 was presented before the Planning Commission on October 24, 2019 when designing work was completed just 60 per cent, but now they have accomplished over 90 per cent work so the Ministry of Railways was asked to come up with updated PC-1 including revising its cost.

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Prime Minister Imran Khan also established financing committee under leadership of Deputy Chairman Planning Commission Mohammad Jehanzeb Khan and so far three meetings were held to finalise modalities for financing of ML-1.

Federal Minister for Planning Asad Umar has instructed the financing committee to hold negotiations with Chinese side for obtaining favourable terms and conditions for loan in order to construct ML-1 project.

Pakistan would have to take final decision related to O&M (Operation & Management) after completion of ML-1, because the existing workforce of Pakistan Railways cannot tackle modernised rail.

There is one proposal to build capacity of Project Management Unit (PMU) in next five years and then the O&M would be handed over to PMU of Pakistan Railways. The official sources said that it would be premature to say anything with surety because it will be part of upcoming negotiations on how O&M of modernised railways after completion of ML-1 would be undertaken.

Originally published in The News