Three major Sindh projects make way into CPEC (Karachi Circular Railway, Keti Bandar project and Dhabeji Special Economic Zone)

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ISLAMABAD/BEIJING – China yesterday approved adding three major projects of Sindh province to the multi-billion dollar China Pakistan Economic Corridor.

The decision paves way for inclusion of proposed Karachi Circular Railways, Keti Bandar and Dhabeji Special Economic Zone in the multi-billion-dollar project.

This decision was taken in the 6th CPEC related Joint Cooperation Committee (JCC) meeting held at National Development and Reform Commission building in Beijing. The Chinese delegation was led by Vice Chairman Wang Xiaotao.

The Sindh government was led by Sindh Chief Minister Syed Murad Ali Shah. The other members of his delegation included Industries Minister Manzoor Wassan, Transport Minister Nasir Shah, Energy Secretary Agha Wasif and others.

Khyber Pakhtunkhwa Chief Minister Pervez Khattak and Balochistan Chief Minister Sanaullah Zehri also attended the meeting. Federal Minister Saad Rafiq and Special Assistant to Prime Minister on Foreign Affairs Tariq Fatemi also participated.

The JCC approved, in principle, Sindh’s plea and asked the provincial government to present its feasibility within three months. Transport Minister Syed Nasir Shah was assigned the task to expedite the work of conducting feasibility within the given time.

Sindh Minister for Industries Manzoor Wassan urged the JCC to also include Khairpur Special Economic Zone (SEZ) but the JCC decided to give one SEZ to every province, and thus adopted only Dhabeji SEZ of Sindh.

The smaller provinces including Sindh have been blaming Punjab of taking the lion’s share in the $46 billion CPEC project. Sindh, Balochistan and Khyber Pakhtunkhwa claim the federal government changed the original plan in favour of Punjab. The federal government says it has retained the original plan and that the CPEC project was equally beneficial for all the provinces.

Federal Minister for Planning Ahsan Iqbal, who is also in Beijing, said the CPEC project will benefit billions of people across the world. He said the CPEC had become the biggest project of regional and international connectivity.

Addressing the JCC, he said the ongoing energy projects under the CPEC will be completed by 2017-18 and generate five thousand megawatts electricity. He said Pakistan and China have recently signed an agreement on North to South Transmission Line which will be linked with energy projects.

Ahsan Iqbal said the project is a part of Chinese President Xi Jinping’s One Belt One Road vision.

China intends to invest more than $46 billion in energy and infrastructure projects in Pakistan till 2017-18 of which $15 billion investment is anticipated in infrastructure projects alone. These include Lahore-Karachi Motorway, Karakorum Highway and expanding the capacity of Gwadar Port. In the transportation sector, the railway line from Karachi to Peshawar would be modernised and upgraded.

Briefing the media after the conclusion of the meeting in Beijing in the evening, Ahsan Iqbal said the meeting reviewed the implementation of the CPEC project in detail. The JCC expressed satisfaction that by the cooperation of the leadership of both the countries and the implementing departments CPEC is moving ahead successfully, he added.

He said that the meeting expressed satisfaction that work on power projects of 8,000MW is already underway. He said the government of Pakistan is working on 10,000MW power projects in total, which would be completed by 2018 and CPEC will have 50 percent contribution in this initiative.

The minister said the committee also approved the transmission line for the power projects completed under CPEC. He said through this transmission line the power will be transmitted to southern parts of the country from the projects started in the northern region. He said that a working group was constituted to carry forward the work on Bhasha Dam to be built on Indus River.

Ahsan said the working group on transport infrastructure expressed satisfaction on the progress of work on two big projects: Multan-Sukkur project and Karakorum Project from Havelian to Thakot.

He said commitment was made to start work at the earliest on two projects Gwadar East Bay Expressway and New Gwadar Airport and Chinese side assured full cooperation in this regard.

The minister said both the sides agreed for early start of the railway project from Karachi-Peshawar and Chinese experts will visit Pakistan next month for its final approval.

He said under the transport infrastructure, rail based mass transit projects were approved for all the provincial capitals under which Peshawar greater circular railway, Quetta circular railway, Karachi circular railway and Lahore Orange Line train projects were included in the CPEC framework.

Ahsan Iqbal said the meeting agreed for early start of rehabilitation work on the 136km section of Thakot dry port at Karakorum highway. He said that Khuzdar-Baseema road that links Gwadar with Khuzdar has also been approved. He said that approval has also been given to dualise the Dera Ismail Khan and Zhob Road.

Ahsan Iqbal CPEC will not be limited to development projects but people to people contacts will also be enhanced.

He said that after the conclusion of the meeting, CPEC will be extended to all the parts of the country and every citizen of the country will reap the fruit of this project.

The minister said that under CPEC, eight industrial zones will be set up in all the provinces and Federally Administered Tribal Areas, Azad Jammu and Kashmir, Gilgit-Baltistan and Gwadar free zone.

Karachi Circular Railway

Chief Minister Murad Shah pleading his case for KCR said that Karachi is one of the most populated cities of the world. In 2016, its population is estimated at around 25.1 million which is more than Tokyo, Guangzhou, Seoul, Delhi, Mumbai, Mexico City, New York, Sao Paulo, Manila and Jakarta. The population of the city would touch 34.3 million in 2030, according to Sindh government estimates.

Therefore, the CM said, there will be ample returns of any investment made in the city. Giving details of the transport facilities available in the city, Murad said there were 3.9 million registered vehicles in the Karachi. “Some 24 million trips are generated daily, 42 percent are catered by public transport employing 4.5 percent of the registered vehicles,” he said.

He told the JCC that there are “6,457 buses of various sizes [plying] on 192 routes. Besides it, there are 2,715 contract carriages (buses and coaches). Some 85 percent or 5,400 of these buses are more than 2 years old which means fuel consumption is high and services are poor.”

Talking about traffic volume and occupancy rate, the chief minister said that “4.5 percent of total vehicles (public transport) carry 42 percent passengers. 36.5 percent of total vehicles (private) carry only 21 percent commuters.”

Talking about modal distribution of vehicles volume, he said there were 47.3 percent motorcycles, 36.5 percent private vehicles, 9.9 percent para transit, 4.5 percent public transport and 1.7 percent contract carriage.

About modal distribution of passengers, he said that 42 percent of the commuters use public transport, 21 percent private cars, 19 percent motorcycles, 10 percent contract carriage and 8 percent para transit.

Talking about the strength of KCR, the CM said there was high public demand with ample ridership of 700,000 per day. “The project has been approved by ECNEC, [and] its feasibility study has been conducted for which third party validation of feasibility study has been completed,” he said.

“It’s environmental impact assessment (EIA) has also been done, relocation of utility services are not required, K-Electric has assured uninterrupted power supply, federal and provincial taxes have been exempted, integration with BRTS Lines have been made and the institutional framework in the shape of Karachi Urban Transport Company (KUTC) is available,” he further informed the JCC.

Murad Shah also spoke about time saving effect of KCR and said, “KCR would take 28. 20 minutes from North Nazimabad to Karachi Cantt while a bus takes 56.25 minutes. From Nipa to Baldia the KCR would take 23.2 minutes while bus takes 60.35 minutes. From Drigh Road to Karachi City the KCR would take 19 minutes while bus takes 65.50 minutes. From Baldia to Karachi City the KCR would take 10 minutes while bus takes 49.25 minutes. Similarly, from Baldia to Drigh Road the KCR takes 28 minutes while a bus takes 83.40 minutes.”

He said, “The Japanese had estimated the cost of KCR at about $2609 million and had developed the financial structure as 85 percent debt and 15 percent equity of Sindh/federal governments.”

Giving economic and financial evaluation, Singh CM said, “The economic IRR is estimated at 13.8 percent. The economic benefits include reduced vehicle operation cost (VOC) and travel time cost (TCC).”

He invited investors to contribute in equity of KCR along with governments of Pakistan and Sindh. He added, “The equity IRR, compatible with infrastructure projects currently being developed in Pakistan, would be offered to the investors.”

In the conclusion of his presentation, the chief minister sought Chinese cooperation to include the project in CPEC. “Prime Minister Nawaz Sharif has approved its inclusion in the CPEC and has also assured sovereign guarantee,” he said.

The JCC decided to include the project and asked Sindh government to present its feasibility within three months. On this, the chief minister directed Transport Minister Nasir Shah to expedite the work of conducting feasibility within the stipulated time.

Keti Bandar project

Taking up the Keti Bandar project, Sindh CM told the working group of JCC on Ports, “Pakistan’s coastline is more than 1,000 kilometres long. It has three major ports, Karachi, Bin Qasim and Gwadar. Keti Bandar is an ideal location to serve as a Thar Coal-based power park and an important port for future exports.”

He said, “Keti Bandar is located at a distance of 160 kilometres from Karachi and connected with metallic road. It is in the south of Thatta and it is located in the south of Karachi… Keti Bandar is [also] in the proximity to Thar Coal field. It has easy road connectivity with Karachi-Lahore Motorway.”

He added that, “Thar coalfield has been declared Special Economic Zone, [and it encompasses] projects supporting Thar having multiple economic benefits. There is sparse population and [therefore there] would be less environmental effects. There is vast area available for power park and other uses.”

Murad said, “Keti Bandar is most suitable location for power park because there is availability of coolant [water] and fuel [coal]. A new jetty at Keti Bandar would enhance country’s capability to export coal with potential to develop it as a full port.”

He further said there would be comparative advantage of skilled, semi-skilled work force. “Five million people living in surrounding areas would directly benefit from it.”

Disclosing his strategic plan, the chief minister said, they would be able to exploit full potential of Thar coal reserves with the construction of new jetty as it would minimise cost of electricity produced from Thar coal. This would enhance country’s competitiveness by providing affordable electricity.

He added that the power park would have the capacity of generating 10,000MW and there would be a transmission line to connect Keti Bunder with Jamshoro and Matiari grids.

“A 235 kilometre long railway line from Islamkot to Keti Bandar would be laid to transport coal. A 190-km long road will be constructed to connect Keti Bandar with Nooriabad,” he added.

The CM said, “A comprehensive bankable study of the coal reserves is being conducted and the master plan will cover all auxiliary infrastructure.”

He requested JCC to approve the project in principle as discussed in the Transport Infrastructure Joint Working Group in November 2016. He vowed to present detailed bankable feasibility in the next working group meeting.

The JCC included the Keti Bandar Power Park and Sea port project in CPEC and decided to conduct feasibility study.

Dhabeji Special Economic Zone

Pleading the case of Dhabeji Special Economic Zone, Chief Minister Murad Ali Shah said that “Sindh is the first province of Pakistan to have introduced special economic zones, [like] Bin Qasim Industrial Park, Korangi Creek Industrial Park and Khairpur Special Economic Zone.”

He said, “Special Economic Zone Authority Sindh proposes the Dhabeji and Keti Bander SEZs, both in Thatta district.”

Talking about Dhabeji, he said, “It stretches over 1,000 acres and is about 55 kilometres from Karachi at the Easter alignment of CPEC (N-5) or M-9. It has commercial viability and development potential in the immediate term.”

“Keti Bander SEZ stretches over 3,000 acres and is at 153kms from Karachi. Its industrial development potential would be realised after the construction of port,” he said and proposed it to be adopted as medium-term project.

He said both the SEZs were discussed by Sindh government, Planning Commission [of Pakistan] and its Chinese counterpart NDRC on November 16, 2016.

Murad said soil investigation has been conducted for both the proposed SEZs and commercial feasibility and master plan would be done soon.

Approving the inclusion of project in the CPEC in principle, the JCC asked Sindh government to work out detailed plan and feasibility of the project to formally approve it.