HomeNewsGovernment to finalize ML-1 project by June 2020

Government to finalize ML-1 project by June 2020

#Pakistan hopes to accomplish all procedural and approval requirements of multibillion dollar project Mainline-1 (ML-1) for modernizing railways line from #Peshawar to #Karachi before June 2020 under #China #Pakistan Economic Corridor (#CPEC).

The groundbreaking of ML-1 is expected to take place in next fiscal year 2020-21 after July 1, 2020. Pakistani authorities say that the work is underway on two fronts, as one side the procedural and approving requirements would be accomplished and on other hand the financing modalities would be finalized with Chinese side.

The ML-1 project, according to officials, had already got delayed, so the government seemed serious to make progress on it for finalizing all details of the project within the ambitious deadline of June 30, 2020.

Pakistan’s top official sources confirmed to this scribe that the Ministry of Railways forwarded its PC-1 (basic document on the basis of which the project is approved by the competent forums) to Planning Commission for due diligence before granting approval to the project. The estimated cost of the ML-1 project stands at $9.2 billion.

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.

When contacted Pakistan’s Deputy Chairman Planning Commission Mohammad Jehanzeb Khan, he confirmed that the ML-1 would be on the ground by next financial year 2020-21. In Pakistan the financial year starts from July 1 and ends on June 30. So next fiscal year will commence from July 1, 2020 and will end on June 30, 2021. He further said that the financing modalities with Chinese side would also be done before June 30, 2020 as both sides were committed to move ahead on this project.

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.

On the occasion of last 9th joint cooperation committee (JCC) between Pakistan and China under CPEC framework, both the countries expressed satisfaction with the progress of ML-1 project. The Pakistani side informed that the umbrella PC-1 of the project has been submitted to the Planning Commission and will be approved expeditiously. It was further added that bidding documents are under process and will be finalized.

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.

To facilitate ML-1 financing, Pakistani side has established ML-1 Inter-Departmental Financing Committee. The Chinese side agreed to constitute a high-level financing committee for financing negotiation in the near future. It was also agreed that RMB financing for the project shall be considered

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