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KLRMT project financial close time extended to Sept 30

KARACHI: The Steering Committee for Karachi Light Rail Mass Transit (KLRMT) project has extended the financial close of the project by six months up to September 30, 2000.

A decision in this regard was taken at a meeting of the Steering Committee held under the chairmanship of Sindh Chief Secretary Zubair Kidwai.

The meeting was attended, among others, by Additional Chief Secretary Dr. Mutawakkal Kazi, Transport Secretary Ghulam Sarwar Khehro, Finance Secretary Abdul Wajid Rana, KMTC DG Dr. Tahir Soomro, Assistant Economic Advisor, Ministry of Finance, Tanwir Hussain, KMTC Planning Director Mohammad Athar, IMTC Chairman Aftab Adamjee and others.

It was decided that during the period for financial close all out efforts would be made at all levels to finalise the question of revision of PC-1, feasibility, etc. if it was required, in case the cost increases above 15 percent.

The Administrative Department may receive the PC-1, if required, with financing plan and firm option about funding arrangement.

It was also decided that Indus Mass Transit Company (IMTC) would continue efforts to explore direct funding for the project to replace the loan from the Government of Pakistan, as according to the government's policy based on existing economic scenario the floating of bonds nor the additional guarantees can be considered at this stage.

As per decision taken at the last steering committee meeting held on July 28, 1999, the IMTC Chairman presented the revised financing plan based on the government of Pakistan loan of $172 million and Government of Pakistan/Government of Sindh/KMC equity of $60 million acceptable by the IMTC in Pakistani currency.

On a question raised about PC-1, cost audit and revised feasibility, the IMTC Chairman clarified that they had participated in the International Boot tendering process and their offer was accepted by the Pakistan Government on the basis of international competitive bidding process.

These decisions were taken by the government at the highest level, duly covered by an approved PC-1 by the competent authority, the National Mass Transit Authority Council (NMTAC) headed by the Prime Minister. This was followed by signing of an international implementation agreement, subject to financial close.

To a query by the Chief Secretary, the KMT DG stated that the minutes of the NMTA policy council meeting held by the Planning Commission Deputy Chairman on December 22, 1997 conforming the approval of PC-1 were also on record.

In continuation of his presentation, the IMTC Chairman said the company had fulfilled its commitments by arranging financing from various sources and had also submitted the required terms sheets, etc. in this respect to the Finance Ministry/Government.

However, the government commitments have not yet been finalised and extensions have been given from time to time on this account. He also stated that in such a Boot contract based on international competitive tenders, the question of cost audit does not arise.

However, after several months of scrutiny, the then Deputy Chairman, Planning Commission, was satisfied and accordingly an MoU was signed in December 1997 confirming government's commitments to proceed.

During discussion it was suggested that Boot financial commitments could either be met through raising of bonds or through Abu Dhabi loan. The Abu Dhabi funds are, however, given on government to government basis and, therefore, the initiative lies with the Pakistan Government.

The IMTC Chairman proposed that due to prevailing circumstances a two years extension in financial close may be considered.

The Finance Ministry representative was of the opinion that extension for the financial close may be allowed for 30 days only. APP