Islamabad January 26 2022: Karachi Circular Railway (KCR) approved project proposal/ TS entailed the Project to be implemented on BOT – user charge basis.
Government of Pakistan (GOP) would provide Capital Viability Gap Funding (VGF) in order to improve the financial viability and bankability of the Project; and to seek adequate investor interest in the Project and to magnify its success prospects, the private sector would also be given Minimum Revenue Guarantee (MRG) for first 5 operational years of the Project and a right to undertake commercial development of the KCR stations to supplement fare and non-fare revenues incidental to the Project.
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This was approved as Federal Minister for Planning, Development & Special Initiatives (MoPD&SI) Mr. Asad Umar chaired the 19th P3A Board meeting here in Islamabad.
The Board reviewed the key statistics and components of the Project Proposal of the KCR which envisaged the Project to be built on PPP basis whereby the private sector would be responsible to finance the construction of Civil Works, Electrical & Mechanical (E&M) component (including procurement of Rolling Stock) and Operations & Maintenance (O&M) of the Project from its own resources under a Single Package PPP Contract.
The Project entails construction of a 43-km dual-track urban rail mass transit system proposed to be built in a period of 3 years. The Project is expected to serve daily ridership of 457K which is expected to soar to 1 million per day by the end of 33 years concession period. The Project will deploy use of electric trains and will be operational for 7 days a week for 17 hours a day. 30 stations are proposed to be developed along the corridor covering densely populated areas of the city. The economic benefits of the Project are phenomenal in terms of saving vehicles operating costs, environmental protection, accidents & time savings, promoting gender equality, and spill-over tax impact.
Mr. Asad Umar while highlighting the importance of the Project said “the Project is an important part of the Karachi Transformation Plan and will play a pivotal role in providing affordable and reliable public transport system to the Karachiites’.
The Project will be floated in the market once approved by the CDWP/ ECNEC and Risk Management Unit.
Mr. Muhammad Jehanzeb Khan, Deputy Chairman Planning Commission & Vice-Chairman P3A Board, Secretary Finance, Secretary MoPD&SI, Secretary Railways, Member Private Sector Development, Mr. Akbar Ayub Khan, CFA and Ms. Huma Ejaz Zaman (Private Sector P3A Board Members), and Chief Executive Officer-P3A were among the meeting participants. The meeting was also attended by Member IRC & Implementation Planning Commission; Director-General Debt Office (Finance Division); Chief Economist Planning Commission and senior officials of the MoPD&SI, P3A, and Pakistan Railways.
