Project of Inducting 5,000 CNG Buses in the Doldrums

Here is the real picture of all the hype about CNG Buses project .............. nothing will be done to improve the lives of common man

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LAHORE (December 24, 2010) : Despite tall claims of Punjab government and allocation of one billion in the annual budget 2010-11, no visible improvement could be made in the transport system as transport companies are showing reluctance in bringing new 5,000 CNG buses in big cities including the provincial metropolis.

As many as 10 investors including seven foreigners had signed Memorandum of Understanding with Punjab government for making investment in the transport sector with the plying of new buses. However, no headway has so far been made in this regard. Lahore Transport Company Chairman Tasneem Ahmad Noorani also failed to bring any improvement despite enjoying huge perks and privileges. He finally resigned from the slot citing personal reasons.

Sources told Business Recorder the investors were showing hesitation, because they think investment unsafe, high fluctuation in fuel prices, role of transport mafia in existing system, dilapidated existing infrastructure and poor commitment on the part of concerned authorities to safeguard the interests of the investors.

Punjab government signed seven memorandums of understanding with the interested investors including one each of Iran, Glasgow, Canadian and four of Turkey to invest in different projects relates to improvement of public transport system in the province. Three local investors were also taken onboard for the purpose. All the MoUs were signed in May this year by Punjab transport and commerce and investment departments on the directions of Muhammad Shahbaz Sharif, who expressed satisfaction in briefings from the officials of these companies.

The MoUs signed, were for mutual co-operation for the affairs of public transport and its ancillary issues, exchange of experiences and initiatives in the field of traffic management, Lahore fleet management and BRT system, improvement of public transport system through electronic fare collection system and fleet management, development and provision of management of intelligent transport system, consultancy/exchange of experts' services for Lahore Rapid Mass Transit System.

Foreign investors, who were scheduled to come up with solid suggestion and physical investment capital for the improvement of existing transport system in the province, failed to remain in contact with the Punjab government despite reminder letters sent by the later since signing of MoU, an official requesting anonymity said. Over the lacklustre attitude of investors it seems that MoU ceremonies were merely a photo session to depict high commitment in reducing public miseries.

The foreign investors were reluctant to go ahead for investment after visiting ground realities in the sector, prevailing circumstances and economic feasibility. The same is the story with the local investors who feared that the present transport infrastructure was hijacked by a mafia, and rapid fluctuation in fuel prices prevails, leaving no room for the new entry to regulate economically feasible profit oriented transport business.

On the other hand, the government on the proposal of Lahore Transport Company (LTC) capped subsidy Rs 1.00 million and Rs 1.20 million for diesel and CNG bus respectively to avoid over-invoicing and misuse of subsidy, an official of finance department told this scribe. The finance department allocated Rs 1 billion in annual budget 2010-11 to provide subsidy at the rate of 20 percent on total price per bus.

It may be mentioned here the previous government led by Chaudhary Pervaiz Elahi conceived an idea to introduce economical and environment friendly bus service in the province to replace existing diesel and old buses in phases. The idea was not matured during his tenure and the new PML-N government announced to launch the project on war footings. Mian Shahbaz Sharif announced 25 percent subsidy on each CNG bus and a MoU to bring 300 buses till June, 2009 was signed with five investors but could no be accomplished.

The sources in the transport department said that the government had planned to import 2500 CNG buses for city and 2500 for rest of the province to be used as public transport within two year starting from January, 2009. The government intends to import separately 5,000 CNG buses for free pick and drop of poor students studying in public sector schools during 2009-10 the sources further said.

To materialise this plan Punjab government established Lahore Transport Company and a hired the services of a retired bureaucrat Tasneem Noorani while offering Management Professional scale-I (MP-I) as chairman in April 2009. Earlier Noorani served as chairperson Task Force on Public Transport System from June 2008 to April 2009 but he badly failed to materialize the plan.

A sum of Rs 35 billion were calculated to be provided as subsidy on all the buses. The investors brought only 31 buses till June 2009. Later, over a tussle between the LTC and transport department, the investors who signed MoU to bring buses refused to invest more from pockets to bring CNG buses with the observation that regulatory mechanism of transport in the city was grabbed by a mafia.

Meanwhile, the transport department signed a MoU with a Chinese company for the import of 2000 buses in the province when the local investors refused to import more buses. The MoU was revoked with the observations that it was not in public interest and the government offered 15 percent subsidy on CNG buses instead of 25 already announced by the government.

The chief minister Mian Shabaz Sharif has transferred and posted four secretaries in transport department since April, 2008 which was the highest number of heads transferred in any department. Aga Nadeem was replaced by Maroof Afzal, then Hashim Khan Tareen, Shahzad Cheema and now Muhammad Yousif the sitting incumbent. Later in 2010, it was decided to bring 300 diesel buses for public transport as an interim arrangement for one time to mitigate the miseries of commuters in the city. To bring these buses, chairperson LTC started negotiations with the local and foreign investors to bring these buses because the project of CNG buses may be further delayed.