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Summary initiated for funds’ release
Monday, November 09, 2009
By Qadeer Tanoli
Karachi
The environment secretary has initiated a summary for the release of funds for the ‘Shaheed Benazir Bhutto CNG Bus Project’ in Karachi, The News has learnt.
The planning commission will submit the summary to the Executive Committee of the National Economic Council (ECNEC) for approval. As per the agreed policy, the upfront grant and the subsidy will be transferred to the State Bank of Pakistan (SBP).
Sources in the City District Government Karachi (CDKG) said that after the approval of the summary, it will take around 10 days or so to release funds, and CNG buses will start arriving in Karachi by March next year.
Rs300 million have allocated for CNG buses in the current federal budget; this amount will be sufficient to launch around 500 CNG buses in the city.
After the release of funds, the city government will issue a Request for Proposal (RFT) to bus operators who will submit technical and financial proposals before the authority concerned. The Implementation Regulatory Committee (IRC), headed by the district coordination officer (DCO), will evaluate these proposals, and decide routes for pre-qualified operators.
A subsidy of Rs2.5 billion was approved by the federal government for Karachi alone to bring 4,000 CNG buses to the city in five years. Moreover, these CNG buses will be exempted from 15 percent import duty.
According to the project modalities, bus investors can apply for a minimum fleet of 25 buses and a maximum debt-to-equity ratio of 80:20. The federal government will contribute a total of Rs677,181 as a subsidy over five years toward the cost of each bus; Rs300,000 will be provided as upfront grants for down payment; and Rs377,181 will be given as interest subsidies, payable in five years.
Moreover, Rs19.25 million will be given to the MTC for setting up the Project Implementation Monitoring Unit (PMIU), which will be responsible for the establishment of expenses and research. After the successful completion of the project in Karachi, it will be replicated in nine other cities of the country.
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ISSN 1563-9479 
