Concealing facts

This refers to the news report, ‘Orange Line Train Project not part of CPEC’ (March 16). Federal Planning & Development Minister Ahsan Iqbal has deliberately concealed vital information about the funding of the project to avoid public criticism. He said the federal government is not providing funds for the project and the Punjab government is completing it from its own budget and therefore there will be no burden on federal resources. The foreign exchange component of the investment will be met from the Chinese loan of Rs162 billion for which the sovereign guarantee has been issued by the federal government. The repayment of $1.6 billion loan equivalent to Rs162 billion plus mark-up will be settled by the federal government out of its forex resources, with the rupee cover provided by the Punjab government. Provinces do not maintain forex funds and all external obligations are met by the centre.

The repayment of loan together with mark-up will cause a huge burden on the country’s balance of payment. The project will generate revenues in the local currency while repayments are made in the US dollar. The project is therefore not self-sustaining. Even otherwise, the hugely over-priced project is expected to incur massive losses in the tune of Rs15-20 billion per year.

Kulsoom Arif

Karachi