Orange Line Project Just Became an Inter-Provincial Controversy

Punjab’s Orange Line has already been subject to many controversial statements. However, the most recent one, worth Rs. 20 billion, is raising quite a few eyebrows as some experts are saying that exemptions provided to Punjab government for the Orange line are violating other provinces’ share.

Background

A few months ago, Punjab government had asked the federal government to exempt all taxes on the Orange line metro train so that it could restrict the costs to the original $1.6 billion.

Orange Line faced difficulties in restricting the project to the original project cost

These taxes included complete exemption of customs duty on all equipment and machinery required for the Orange line, reduction in withholding tax payments and exclusion from any sales tax on imported equipment.

The total exemptions amount to $195 million (Rs. 20 billion).

The Initial Dispute

When the Punjab government requested the tax exemptions, experts and provincial leaders criticised it saying that such a huge sum in tax exemptions would be unfair and that the management’s failure to meet its target expenditure of $1.6 billion should not affect other provinces.

Punjab asked for tax exemptions worth Rs. 20 billion

According to law, Customs duties and similar taxes are collected by the federal government and divided between the provinces based on equal or equivalent shares.

In other words, the requested Rs. 20 billion in tax exemptions were to be rightfully distributed between the provinces.

Change in Plans

Following criticism, CM Punjab took the matter to the 6th Joint Cooperation Committee meeting held in Beijing, China. Punjab requested China to include the Orange line under the CPEC banner along with any rail based projects in other provinces. However, no such projects have been launched in any other provinces.

Govt requested China to include Orange Line under CPEC banner to help eliminate taxes   

This was done to present a case citing that Orange line should be exempted from taxes like most other CPEC projects.

Economic Coordination Committee (ECC) of the Cabinet, following withdrawal of FBR’s powers to issue statutory regulatory orders, accepted the request last week. The tax exemption was then approved by the federal government.

The Controversy

The experts and stakeholders are saying that the federal government is depriving other provinces’ of their fair share. The Rs. 20 billion was to be divided amongst the provinces, and considering how large the sum is, it could have helped the provinces in putting those funds to good use.

They are also claiming that Punjab is already getting a major share of the development budget while other provinces face difficulties in getting their projects approved.

Stakeholders claim that Punjab is being given unfair advantage

Another issue being raised is that Orange line is a project limited to a certain areas in Lahore. Why is such a limited project is being provided with exceptional exemptions while major projects do not get such tax exemptions and funds?

Some have even linked this to the fact that since the CM Punjab and PM Nawaz are brothers and that the federal government also rules in Punjab, this was done as a favor to improve party’s performance in the province.

Consequences

These tax exemptions could bring about a dispute amongst the provincial leaderships. This controversial step is being considered as a major denial of provincial equality. Depriving provinces of their fair share or not even considering discussing the matter with them as potential stakeholders is bound to bring about such issues.

In this case, the best way to clear the air is for the government to come out and explain the matter. The potential consequences from the accusations and rumors are significant and the longer it remains unaddressed, the harder it’s going to become to appease the slighted parties.

Sources: The News, Tribune, Dawn, Dunya News, Development Advisor, World Bank

He is the Editor-in-Chief at ProPakistani. Reach out at aadil.s[at]propakistani.pk


    • Breaking news: Sukkur Barrage se selfie letey huwey jis shakhs k marney ki itla propak ney di thi article k through aur jis pe logon ney fatiah bhi perh li thi aur condolence k messages bhi agaye thay woh zinda apnay ghar pohanch gaya hai.
      Propak plz update and publish an apologetic article as well.

  • Karachi Circular Railway and Quetta Mass Transit Project are also part of CPEC. Please correct ur information

  • Some have even linked this to the fact that since the CM Punjab and PM Nawaz are brothers and that the federal government also rules in Punjab, this was done as a favor the improve party’s performance in the province.

    Tu kia yeh baat pehle se kisi ko pata nahi thi?

    • Remember: ProPk is ProPotiLeage. Why they are not posting news about PotiLeage failure in Panama case???

      • Aslam O Alaikum,
        What? What you call POTi league has to do with this? The case is against injustice and corruption. No matter what is the judgement, in the end system will be strengthened. People want to know the truth behind exponential increase in wealth of some people in Pakistan. IK even said that disqualify him if he is wrong. Each and every politician should be put to justice. If someone is corrupt, he should be punished and if not then he should not. What is wrong in it?

        Think +ive.

        • Khali naan nahi yeh log siri paye aur nali nihari k shoukeen hain. Naan tou yeh log mechanical tandoor main kha gaye.

    • Unko mulk se kuch sarokar nahi, sirf punjab se jeet janay pe baray bhai ko federal aur chotay ko punjab ki government mil jaye gi. Tou baki mulk gaya bhaar main. Remember Sharif Bhaiyon ka nara? “jaag punjabi jaag teri pag nun lag gaya daagh?”

  • Mene iss article ka ek lafz nahe para hai.. but by reading the header I can say that the article is useless.. in a sense that there is a height of corruption nowadays and issues like tax exemptions and further amnesties are just to enhance, innovate and legalize the trend.. simple.. thats all your honour.. :)

  • wrong again it is not pro punjab it is pro noon league… even a chicken seller has difficulty in selling chickens unless hamza’s chicken business isn’t doing well.

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