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Subsidy sharing formula of Metro project decided
04-18-2015, 05:11 PM
Post: #1
Subsidy sharing formula of Metro project decided
Islamabad - Finally the much awaited subsidy sharing formula of multi-billion Rawalpindi-Islamabad Metro Bus project has been decided with federal and Punjab governments will have to bear approximately Rs2 billion per annum subsidy and prime minister will finally approve the formula soon.
According to the details available with The Nation, the subsidy sharing formula calculated - on the basis of ridership and length of metro buses corridor - by the Punjab Metro Bus Authority (PMBA), the federal government will be sharing Rs1.2 billion and the Punjab government Rs0.8 billion annually to keep buses on track.
According to the new estimates the metro bus project is expected to be completed by mid-May 2015 and the final cost of the project is approximately Rs44.2 billion.
Surveys conducted by the different institutions disclosed that the Punjab government will benefit the most from the project - as an expected 75,000 passengers from Rawalpindi will be travelling on daily basis through the much-praised bus service - but the federal government will be paying having more share in the subsidy.
The agreement of the project, sharing of subsidy between Punjab and federal government has been calculated on the basis of length of metro corridor that is 8.5-kilometer in Rawalpindi and 13.9-kilometer in Islamabad and estimated daily ridership calculated by the Nespak, the design consultant for the project.
According to Nespak, as many as 139,000 people will daily commute through the service between Rawalpindi and Islamabad. It includes 75,000 passengers from Rawalpindi and 64,000 from Islamabad.
As the length of metro bus corridor is more in Islamabad and a number of passengers are less so it would be receiving less revenue and spending more on expenditures and thus its share in subsidy will be more than Punjab Government. The document suggests a revenue sharing formula between Punjab and federal governments.
The revenue collected from sale of tickets to passengers only travelling within Rawalpindi city will be given to the Punjab government, while amount collected from passengers travelling within Islamabad will be shared with the federal government.
Similarly, revenue collected from the passengers travelling between Rawalpindi and Islamabad will be shared equally between Punjab and federal government. One way ticket for the service is fixed at Rs20.
While the operational cost of metro buses stations will be more in Islamabad, as there are a total of 14 stations in Islamabad and 10 in Rawalpindi.
As the CDA seems reluctant to sign an agreement with the PMBA over the operations of the metro bus project in Islamabad, it has been decided to redraft the language of proposed agreement.
In a meeting during this week, held under the chair of secretary cabinet division it was decided that CDA, keeping in view the financial constraints of the authority, would sign the agreement on behalf of the federal government and after the due approval from the federal planning, finance and law ministries.
During the meeting the CDA representatives said that the authority was even unable to timely pay monthly salary to its employees and that under given circumstances it could not manage the project within Islamabad’s limits. “We can only sign the agreement on behalf of the federal government but it will be federal government’s responsibility to share annual subsidy and other operational costs of the Islamabad portion of the project,” said a senior CDA official.
He said it had been decided that case would be presented before the Prime Minister Nawaz Sharif and following getting necessary approvals from federal ministries the CDA would sign the project on behalf of the federal government.
It is also decided that in agreement the word, the CDA, would be replaced with the word, federal government, the official said. If signed, the proposed agreement would also give mandate to the PMBA to operate the service within federal capital.
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