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Pakistani Government to Finalize ML-1 Project by June 2020

26/12/2019

Pakistani Government to Finalize ML-1 Project by June 2020

Current Pakistani government seems to be very much interested in initiating new and completing all the on-going development projects. Therefore, the government has decided to accomplish all procedural and approval requirements of multibillion dollar project Mainline-1 for modernizing railways line from Peshawar to Karachi before June 2020 under China Pakistan Economic Corridor (CPEC).

The groundbreaking ceremony of ML-1 is expected to take place in next fiscal year 2020-21 after July 2020. As per the officials, the work is underway on two fronts - as on one side, the government has to take care of procedural requirements and on other hand, it involves finalizing the financing modalities with Chinese authorities. However, officials also understand that the ML-1 project had already got delayed, so the government seems serious to make progress on this project swiftly within the given deadline of June 30, 2020.

The estimated cost of the ML-1 project stands at $9.2 billion. It is also learnt that the Ministry of Railways forwarded its PC-1 to Planning Commission for due diligence before granting approval to the project. Pakistan's Planning Commission (PC) has decided to hire international consultant to scrutinize detailed feasibility and engineering design of the ML-1 through securing technical assistance from donors' project. It is hoped that this process would be accomplished till end April or early May 2020.

However, the official sources said that Pakistan would have to take decision to handover O&M (Operation & Management) to the Chinese side after completion of ML-1, because the existing management of Pakistan Railways cannot handle modernized rail with existing skills of its staff. 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 sure because it will be part of upcoming negotiations on how O&M of modernized railways after completion of ML-1 would be done. The ML-1 is expected to be completed in 6 to 8 years.

The Pakistani side proposed that the project financing may be considered through RMB. The JCC expressed satisfaction with the completion of the review of the Preliminary Design Phase I for ML-1 and agreed to expedite the preliminary design and review of the remaining sub projects. Both sides agreed that the Pakistani side shall complete the project approval process (PC-1), formulate the bidding documents.

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