Metro expenses

This refers to the news report, ‘Rs165.2bn Lahore Orange Line Metro Train project cleared’ (May 6). It seems the only thing the present government is capable of is contracting out mega projects – as if such lavish spending will enrich our country. The metro train project will serve only one route of 27.1km and will have the capacity to carry 30,000 passengers each way.
All capital projects have a 12 percent discount rate which is the opportunity cost of capital. At this rate, the annual interest accrued on the metro train project would be Rs19.8 billion, which amounts to Rs905 per passenger. In addition, there will be operating and management costs. Who will pay this amount? Of course, the poor people of this country. According to a World Bank report: “In Bangkok, 145km of traffic lanes were set aside for exclusive use of buses in 1980. Flows of 250 standard buses and 150 private minibuses with carrying capacity of 18,000 passengers using a single lane during an average rush hour were observed. In Porto Alegre (Brazil) average peak hour flows of 28,000 passengers per bus lane were achieved by a combination of bus convoys and bus lanes.” If such high flows can be achieved by simple traffic management, unnecessary expenditure on mega projects is nothing but a waste of resources.
Abdul Majeed
Islamabad