CDWP differed over ML-1 project in recent meeting

World Bank insisted Railway’s restructuring for ML-I

The World Bank (WB) has penned that without restructuring the railway sector in Pakistan, the ML-I project under the China-Pakistan Economic Corridor (CPEC) worth $9.172 billion will not be successful.  As the implementation of the Pakistan Railways Strategic Plan (PRSP) is a pre-requisite to the success of this Project, the improvement of the quality and financial sustainability of the railway sector in general is also a necessity. The official document revealed that the project has been designed to meet Pakistani conditions and reflect good current practices including its safety designs but momentous new human capacity and skills in operating and maintaining the elevated system will be obligatory. The cost estimates are adequate. However, the eventuality allowance (4 per cent) seems very low at this stage of project development and accordingly the estimated cost should be regarded as a minimum. On economic aspect there is no demand elasticity with fare increase and no detail available for the economic evaluation so no prediction is determined about it. While the financial side generates significant savings in rolling stock capital. On debt service of loan for the project, in 2030, the debt service is 80 per cent of projected revenue. The high demand case has a better result, but the project saves only cover 20 percent of the 2025 debt service.