Environment Friendly CNG Puses Planned for 10 Mega Cities

Karachi expected to get 4,000 CNG buses out of 8,000

ISLAMABAD: To improve public transport system, the government approved Private-Public Partnership Environment Friendly Public Transport system for major urban centres of Pakistan with a total cost of Rs 5 billion, sources told Daily Times here on Saturday.This transport system would be initiated in 10 major cities including Karachi, Lahore, Quetta, Peshawar, Faisalabad, Multan, Rawalpindi/Islamabad, Hyderabad, Gujranwala and Sukkur.

The buses will be operated and maintained by private investors under the government’s defined regulatory framework duly assisted by provincial governments in provision of routes, provision of depots, land infrastructure and CNG stations. Sources said that the CNG buses project was a modified umbrella PC-I, envisaging provision of 8,000 dedicated CNG buses in major cities of the country. The scheme would address the public transport problems besides improving environmental conditions. The federal government would meet the interest component (partial) of the capital cost of buses to be inducted on leasing from financial institutions by the private sector bus investors.

Out of the 8,000 buses, 4,000 would be earmarked for Karachi and 4,000 buses would be for the rest of the nine mega cities. With fixed bus price of Rs 3.6 million and the bank interest rate of 10 percent per annum, the cost of interest subsidy over 5 years worked out at Rs 677,181 per bus. Overall progress on the project initially remained slow due to the fact that the only incentive of subsidising the interest component appeared to bus investors as an invisible or indirect subsidy. For effective implementation of the project and in order to attract greater participation of bus investors, Planning Commission sought approval of the cabinet to provide upfront grant of Rs 300,000 per bus to meet interest subsidy and to pay balance amount of Rs 377,181 by the investor over the repayment period of 5 years.

The cabinet in its meeting held on July 16, 2008 accorded its approval. It was also decided that the Ministry of Environment would oversee the implementation of the scheme by ensuring that all the stakeholders, especially the chief ministers of the provinces, were fully on board and provide the essential pre-requisites for the success of this scheme. In pursuance of the above decision of the cabinet, Ministry of Environment as sponsoring agency has prepared the present PC-I to meet the interest subsidy of Rs 5 billion over a period of 5 years for induction of 4,000 CNG dedicated buses in Karachi and the remaining 4,000 CNG buses in others nine mega cities. The Central Development Working Party (CDWP) in its meeting in April 2009 recommended the revised umbrella project for 10 mega cities of the country on Public-Private Partnership (PPP) basis for approval of Executive Committee of the National Economic Council (ECNEC). The ENCNEC in its meeting on January 21 approved the project.

It also recommend for proper implementation plan for approval of sub-projects in major cities, route planning, land use, provision of CNG high pressure stations other than Karachi and other allied components/ social/ physical required for effective implementation of the scheme would be developed. To encourage local bus manufacturing industry, diesel buses to be converted into CNG system should also be included in the revised scheme, the sources maintained