The $9.2 billion Main Line (ML-1) project under the China Pakistan Economic Corridor (CPEC) is planned to be executed in January 2021, if PC-1 of the project is approved in the upcoming Central Development Working Party (CDWP) meeting scheduled for June 3, 2020.
This was revealed by senior officials of the Railways Ministry. “The project will be further delayed if it is not approved by the Planning Commission”, the official added.
According to official documents, the project has been divided into three packages. Package-I is proposed to be executed in January 2021 and will be completed with proposed spending of $3.37 billion in four years i.e. by December 2024. The package-II is proposed to be executed in January 2022 and will be completed in five years i.e. by December 2026 with a proposed amount of $2.24 billion. Package-III is proposed to be executed in January 2023 and will be completed by December 2029 with the proposed amount of $3.56 billion.
Railways Minister Sheikh Rashid Ahmed in October 2019 had announced to initiate ML-1 in March 2020. However, the Planning Ministry had rejected the PC-1 and asked the Railways Ministry to come up with PC-1 for the entire project instead of parts of it, as well as raised technical and financial issues in the project, sources added.
After getting approval from CDWP the project will be referred to the Executive Committee of the National Economic Council (ECNEC). PC-1 approval is necessary for the bidding process, commercial contract, and financial close.
According to documents, after getting approval from ECNEC, the tender will be issued in July 2020. The tender evaluation and acceptance is proposed for October 2020. The government will deliberate with Chinese authorities for financing the project.
The government is planning loan negotiation and financial close in November 2020, said the official, adding that Pakistan wants China to take on the $9.2 billion ML-1 project, which is declared a strategic project under CPEC, on soft loan terms. Physical work is proposed to be executed in January 2021.
Railways Ministry senior officials contested several times before parliamentary panels that in case ML-1 is delayed it will have serious implications for Pakistan Railways, adding that cost of the project is also likely to go up with delays.
Railways project will consist of early harvest – ML-1 upgrade and establishment of dry port – mid-term – establishing new rail link from Gwadar to Mastung and Besima to Jacobabad and long-term, establishing new rail link from Havelian to Khunjerab (China border).
The up-gradation of the ML-1 project has been planned in line with the government of Pakistan long term plan for revival of railways in Pakistan as imbibed in Vision 2025. Pakistan Vision 2025, which seeks to establish an efficient and integrated transportation system that will facilitate the development of a competitive economy.
According to Vision 2025, ‘Railways will be revived as a socially and financially viable organization, with its share growing from less than 4 percent of the freight transport sector to more than 20 percent’.
The project of up-gradation of ML-1 has been declared a strategic commercial project with a loan on favorable terms as it presents a perfect business plan covering 75 percent traffic/population and 65 percent industrial areas.
With the up-gradation of ML-1, train speed will increase from the current 65-105 km to 120-160 km, line capacity from 34 to 171 trains each way per day, freight volumes from 6 to 35 millions tons per annum by 2025, railway share of freight transport volume from less than 4 percent to 20 percent. The project will create around 0.1 million jobs for the young people.