THE Punjab government says that the metro bus project has been completed at a cost of nearly Rs30 billion. By the time all the invoices are in, the final figure may well be considerably higher.

What is not being mentioned is the provincial budget that only had an allocation of Rs11bn for this project.

Nevertheless the Rs19bn cost overrun is a mundane issue and is not the reason why I’m writing. On the other hand I do get alarmed when I don’t hear quality discussions on important issues of public policy. First let’s look at some context.

The metro bus project is actually a much watered down version of what was to be the Phase 1 (green line) of the Light Rail Mass Transit System (LRMTS), an elevated monorail. Its subsequent phases were going to include the blue, purple and orange lines. On a city level, this would have been a strategic project giving Lahore a system comparable to the Delhi Metro.

In 2008, the Asian Development Bank agreed to provide a technical assistance loan and help the Punjab government develop the LRMTS and find an investor/operator consortium. A few months later, in a memo to his board in June 2008 the CEO of ADB reported that no investment bank appeared to be interested in the job.

Investment bankers had two major reservations with regard to the LRMTS. One, given its poor writ, they doubted that the Punjab government would be able to acquire the land smoothly and in a timely fashion for the transit corridor. Two, given the Punjab government’s credit rating they doubted it would be able to furnish a credible traffic guarantee.

Far from addressing the concerns of investors, the incoming PML-N government did not even appear enthusiastic about LRMTS, perhaps holding the misguided view that this was Pervaiz Elahi’s project. The Punjab bureaucracy also allowed the project files to slide to the bottom of the pile and the subject was never brought up in meetings. In due course, ADB’s offer lapsed.

Even after that, there were consortia from Malaysia and China that showed interest in the project. Given the PML-N’s tense working relationship with the ruling coalition in Islamabad, senior bureaucrats in Lahore could foresee the slog and stumbles ahead in terms of arranging financial guarantees for the project. On its part the PML-N also felt that the LRMTS was going to be a long haul whilst it was looking for ribbons to cut before elections in 2013.

Shunning the hard work, the Punjab government decided to go for the lazy option. Buses would run in designated corridors on existing roads. Worse still, it published the RFP (Request for Proposals) for this project inviting private-sector investors without conducting a proper feasibility study.

The investors who did respond and carried out some due diligence complained about the poor quality of information. For example the extent of the minimum revenue guarantee was not mentioned and something basic like a toll sensitivity analysis was not done.

The information was vague, generic and insufficient to draft a concession agreement or to base an investment decision on. Two bumbling bureaucratic years later, the last of the prospective investors walked away.

What do you do after you flunk the midterm? You go back, crunch your numbers, prepare better-quality project documents then re-invite bids. Instead the Punjab government once again chose a short cut and decided to venture where the angels had feared to tread. It would throw its own money at the project.

Spending money is easy. In fact, it would throw half of the province’s infrastructure development budget of Rs63bn into one corridor in one city.

This brings us to the questions of public policy that we are not hearing.

The State Bank estimates that $150bn is required to fund the hundreds of infrastructure projects that are awaiting development in Pakistan. Even if we conservatively assume one-third of these to be in Punjab then, with the province’s infrastructure budget of less than $630 million per year, it will take 79 years just to cover this backlog.

Should the government be funding these projects or should it play the enabler and let the private sector take the lead? Is there a public private partnership framework and legislation in the country? What is its purpose and when will we start to see private money flow into infrastructure projects?

Should the government be in the business of running buses? What have we learnt from our previous experience of government running buses in this country? Is the government doing a good job of running the railways, PIA and the Pakistan National Shipping Corporation? What will be different this time round?

What is the plan going forward, one year, three years and 10 years from today? If the government could not attract investors on the BOT (build operate transfer) model then how will it attract investors on the privatisation model?

Is this an investment that will create future national wealth? In the 1990s there were voices imploring Sharif to invest the $1bn being poured into the M2 motorway into upgrading and modernising the railways instead. Is it reasonable to expect that a dollar invested in 1997 ought to have brought back $20 to the national economy today?

Warren Buffet could probably be considered the 20th century’s most successful investor. Had he been asked in the 1990s for advice on where he thought Pakistan should invest this money, might he have suggested a state of the art hydrocracker plant because it would spawn the development of a globally competitive chemical industry in Pakistan?

But those choices are for the people of Pakistan to make and as we do that it would be useful if we are exposed to better quality analysis and more informed discussion on matters of public policy. That is something I find missing from the national discourse today.

The writer is an international business strategist and entrepreneur.

moazzamhusain@yahoo.com.au