Yellow Line hits snags as funding not arranged by Chinese firm

Yellow Line hits snags as funding not arranged by Chinese firm:

KARACHI: As the Sindh government prepares to launch “Red Line” of the bus rapid transit system (BRTS) in August, a similar project — Yellow Line — hit a snag after the Chinese company tasked with building crucial parts of the mass transit project has so far been unable to arrange funds through its financial institutions under the defined agreement, it emerged on Sunday.

 

The 26.5-kilometre-long Yellow Line project — from Landhi to New M.A. Jinnah road — is to be built with an estimated cost of Rs14.4 billion with 104 new buses on the route.

Sindh Transport Minister Nasir Shah confirmed to Dawn the current status but vowed that the provincial government was determined to initiate the project this year and if its Chinese partner remained unable to meet the terms of the contract, it would re-launch the project “with someone else”.

“We signed the agreement with the China Urban Elected Company in September 2016 for Yellow Line,” the minister told Dawn. “According to the contract terms, the Sindh government would share 14 per cent of the total cost and the Chinese company would share 16 per cent. At the same time, it has to arrange a loan for remaining 70 per cent of the cost through its local [Chinese] financial institutions which it has not done so far.”

However, he said that the Sindh government was in contact with the firm and had sent it a reminder to complete the job so that the project could formally be launched, work on which was scheduled to begin in July.

“It doesn’t look possible to launch it as per schedule but we have made it clear to the company that we can only give margin of another two to three months and if they still remain unable, we would re-tender the project,” added Mr Shah.

On the other hand, the minister claimed that the plan to build the Red Line project — from Malir Cantt to Regal Chowk via Safoora Goth and University Road — was expected to be launched in July.

“Arrangements and all other formalities with the ADB [Asian Development Bank] have been completed to launch the Red Line project,” he said, hoping that work on the project would commence in July.

The 27-km-long Red Line — another BRT project — would be built with an estimated cost of $184.23 million, or roughly Rs19bn. The project cost would be shared by the ADB (52pc), DFID-UK (12.62pc) and the Sindh government (34.42pc).

A high-powered ADB delegation had recently met Sindh Chief Minister Syed Murad Ali Shah where a committee was constituted to shape up the financial and technical aspects of the project.