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Orange Line Metro System: Delays cost Rs11 bn to national exchequer

The estimated premium cost of the project was Rs22 billion but it has increased to Rs30 billion. An additional Rs3 billion has been allocated for the construction of footpaths for this project adding the total premium cost to Rs33 billion.

By Fakhar Durrani
September 21, 2019

ISLAMABAD: Delay in construction of Orange Line Metro System has escalated the premium cost of the project by 50 percent.

The suspension of development work on this mega project has cost Rs11 billion to the national exchequer, officials in Punjab Mass Transit Authority reveal. The estimated premium cost of the project was Rs22 billion but it has increased to Rs30 billion. An additional Rs3 billion has been allocated for the construction of footpaths for this project adding the total premium cost to Rs33 billion.

The Orange Line MetroOrange Line Metro System has two components — CPEC component and local component. The first component of Orange Line is part of the CPEC project whereas the second part is to be funded by the Punjab government. The estimated cost of first component, which includes the civil and E&M works is unchanged i.e. $1,458,141,720 ($1.458 billion). The entire funding for CPEC component has been provided by the Chinese government. However, the estimated premium cost of local component, which has to be funded by the government of Punjab has been escalated from Rs22 billion to Rs33 billion.

In order to cut the project’s expenditure, the sitting Punjab government has slashed some components of the project but even then the cost has escalated by 50 percent. As per the PC-1 of the project, the Punjab government has to install a 0.4 kilometer long Walkalator from Lahore Railway Station to Metro Bus Station for connecting the two junctions with Orange Line station. However, the PTI government has dropped this from the masterplan. Similarly, a passenger transfer section was to be built between Anarkali and MAO but the present government has slashed this component from the project as well. The project cost would have escalated further if these two section were built as per the original plan.

The Punjab Mass Transit Authority’s (PMTA) officials claim the local component price escalation was not because of the delays as the civil works or the E&M were completed in time. The delay in completion of this project was because of court cases, some issues on part of Parks and Horticulture Authority (PHA) Punjab, Special Protection Unit (SPU) and some other reasons.

According to PMTA authorities, 96.5 percent work on Orange Line Metro Project has been completed and it is on the punch list stage. They cannot give an exact deadline for the inauguration of this project but the Orange Line Metro System is almost complete. It depends on the present government when it decides to complete the remaining part and inaugurate the project.

Cost of Civil Works

As per the PC-1 of Orange Line Metro, the cost of civil works has been estimated $535,641,720 million and the cost of E&M was estimated $922,500,000. The sum of civil works and E&M was estimated at $1,458,141,720 ($1.458 billion). This entire amount is to be paid by Chinese government under the China Pakistan Economic Corridor (CPEC). However the government of Pakistan has to spend $22,282,696 as an added premium on the cost of civil works for this mega project.

As per the PC-1, the civil work cost has been divided into seven parts. The cost of viaduct has been estimated $266,459,217, Underground Section (Cut and Cover) cost was estimated as $27,581,746. Similarly, the cost of stations has been divided into two parts i.e. elevated and underground stations. The cost of Elevated Stations (24 Nos) has been estimated as $112,042,497 and Underground Stations (02 Nos) cost was estimated as $23,084,142.

The depot and stabling yard cost was fixed at $62,850,821, High Voltage Substations (HVS) cost was estimated as $4,635,000. The documents further show that $9,933,068 has been allocated for the escalation @2.00 percent for 15 months similarly $29,055,227 has been fixed for miscellaneous items including design and supervision of civil works, review of E&M design and supervision of E&M installation, EIA, geotechnical investigation and topographic survey.

Cost of E&M Works

The PC-1 of the Orange Line Project reveals that E&M cost $922,500,000 is divided into 20 different heads. The cost of depot has been estimated at $44,704,660, signaling system cost has been fixed as $84,857,313 and stabling yard cost has been estimated as $4,646,986. Similarly, $50,905,151 has been allocated for Lighting Power Substations, $35,812,762 has been allocated for Automatic Fare Collection System.

As per the documents, $51,312,488 were allocated for the communication system, $24,397,141 for High Voltage Substation, $105,859,880 for Traction Substation, $10,144,402 for Fire Extinguishing system and $28,582,205 for Water Supply & Drainage and Fire Fighting System. Similarly, the estimated price of Heat Ventilation & Air Conditioning system was fixed as $25,750,728 whereas $30,120,043 were fixed for Illumination System and $183,300,916 were allocated for Rolling Stock.

The estimated price of tracks has been fixed as $120,202,067, and $3,173,306 have been allocated for SCADA. Similarly, $28,569,114 have been allocated for PD & APG whereas 34,437,096 have been allocated for escalators. The documents further show $8,874,794 have been fixed for elevators, $12,248,692 estimated for Building Automation System and $17,167,135 have been allocated for Fire Alarm System.

The documents further show that $46,325,956 were fixed for design cost for E&M, $10,000,000 allocated for supervision cost, $12,260,000 fixed for extra cost due to civil works subletting and $10,240,000 have been allocated for interface management costs. The total estimated price of entire E&M Works of Orange Line Metro System was $973,748,433 however after the negotiation and rebate the estimated price was reduced to $922,500,000.

Per Hour Passenger Capacity

As per the documents, the line is designed with double track with maximum speed of 80 kilometers per hour. For this line the minimum headway is 2 minutes, the design capacity of the system is 30 pairs per hour and design transport capacity is 30,000 persons per hour.

A total of 27 train-sets (135 cars) are to be operated on the Lahore Orange Line Project. Each train-set is composed of 5 cars, including 3 motor cars and 2 trailer cars, with DC 750V current to be collected from bottom of the third rail.

Loan Repayment

At the time of submission of proposal for the Orange Line Metro Project, the Ministry of Planning and Development asked the Punjab government to submit the proposal for loan. The Executive Committee of National Economic Council (ECNEC) gives approval of any such proposal. However, to get it approved from the ECNEC, the department concerned has to complete all the paper work including the details of the project, source of funding and repayment plans.

To complete the paper work, the Punjab government submitted PC-1 of the project, which include the 20 years repayment plan. The provincial government also presented four options of interest rate to fulfil the documentary requirement for this project. As per the PC-1, the project’s total funding requirement comprises 100 percent loan. Per annum repayment of the loan over 20 years at 1 percent, 2 percent, 2.4 percent and 3 percent rate of interest has been determined as $97.46 million, $107.55 million, $111.75 million and 118.21 million per annum.

However, which option of interest rate was finalised between the two state i.e. China and Pakistan is not confirmed. The News contacted the authorities concerned in Punjab government, instead of replying the question the officials said it’s a state secret and it cannot be revealed.

When contacted Managing Director Punjab Mass Transit Authority Sibtain Fazal Halim on September 13, 2019, he said Orange Line Metro System case is pending in the court and he cannot talk on this matter. When the MD was told that this correspondent just wants to know the reasons of price escalation of this project, he hung up the phone and did not attend the call again.