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This photograph taken on June 5, 2013, shows Pakistani employees walking beside metro buses parked at a terminal in Lahore. — AFP Photo.
This photograph taken on June 5, 2013, shows Pakistani employees walking beside metro buses parked at a terminal in Lahore. — AFP Photo.

LAHORE: Pakistanis are hoping their new prime minister will roll out high-profile projects that became his party's trademark in its political heartland of Punjab, but the nation's dire finances threaten the optimism.

The Pakistan Muslim League-N (PML-N) won popularity with a series of big-ticket schemes over the past five years in Punjab, the country's richest, most populous province.

A metro bus system in the provincial capital Lahore – the first such scheme in the country's 65-year history – free laptops and solar energy panels for students and a network of high-quality schools in poor rural areas were amongst some of the projects taken on by the Punjab government.

In the campaign for the May 11 general election, PML-N leader and now Prime Minister Nawaz Sharif and his younger brother, Punjab Chief Minister Shahbaz Sharif, promised similar schemes for the whole country. After five years of listless government under the Pakistan People's Party (PPP), voters responded to the promise of action and handed the party a majority.

In Lahore, the Metro Bus which opened in February has transformed travel around the city, a traffic-clogged mishmash of colonial-era buildings, cheap housing and newer, more upmarket suburbs. The 27-station network of buses running on dedicated lanes and elevated roadways, run by a Turkish company and carrying 120,000 passengers a day, was built at a cost of 30 billion rupees ($300 million).

Terminals offer a computerised fare system and commuters can use smart cards to avoid the hassle of queuing – a welcome use of technology in a bureaucratic land where paperwork, preferably in triplicate, is still king.

Hira Farhat, a pharmacy student at the University of Punjab, was delighted with the service. “It's comfortable and quicker than other means of transport. It has a cooling system and takes me to my university in 15 minutes. The government must start it in other cities also,” she said. The PML-N has promised to take the metro bus to Karachi, the largest city and economic heart of Pakistan, and the capital Islamabad.

Nawaz's first speech in his third term as PM last week was strong on talk of investment in infrastructure, particularly a road and rail network to link northern neighbour China to the southwestern port of Gwadar, recently taken over by Beijing. “All development projects will be completed before the completion of our five-year term so that people can get the fruits,” said Sharif.

But populist projects do not come cheap and Pakistan is in a dire financial predicament, with a fiscal deficit in 2012 of 8.5 percent of GDP and growth in 2013 forecast at 3.5 percent – half what economists say is needed to absorb the growing young population into the workforce.

More pressingly, foreign exchange reserves are dwindling, to just $6.6 billion in late May, or less than two months' export cover, down from $11.3 billion a year earlier. The opposition in Punjab said the PML-N's flagship projects were marred by corruption and ran hugely over budget, leaving other cities and districts under-resourced.

“The Punjab government crossed the initial estimates for Metro Bus and spent 70 billion rupees instead of 30 billion rupees,” claimed Raja Riaz, former PPP opposition leader in Punjab. “They cut the development funds of other cities for this one project and also diverted the finances of much more important departments like education and health.”

Islamabad is due to repay the International Monetary Fund (IMF) more than $4 billion by the end of 2014, putting further pressure on currency reserves, and many observers expect Pakistan to have to ask for another loan.

That would come with a host of tough conditions, including boosting Pakistan's wretched tax collection, which currently brings in less than 10 percent of GDP. Sharif has said he would welcome help from the likes of Turkey and China as he seeks to boost the economy, but analysts are warning the PML-N's projects could create extra burdens.

“These are good projects but at the same time the government should also be in the business of mobilising resources,” said Ashfaq Hassan Khan, principal of the National University of Science and Technology Business School. “If resources are not mobilised and yet we go for financing all these kinds of projects nationally, it will lead to a larger budget deficit and accumulation of more debt.”

Economist Kaiser Bengali agreed, saying there was scope to improve existing infrastructure at much lower cost than beginning new schemes.

“For example, we have already a network of circular railway in Karachi and government can use it for better transportation of commuters instead of working on a new project,” he told AFP. “But our rulers go for new fancy projects and they want to spend money on new schemes.”

Comments (16) Closed

Adnan Anwar Jun 10, 2013 04:30pm

In Projects like these Hino Pakistan must be engaged and made mandatory on Hino Pak to develop buses that meet metro requirement. Creates Jobs in Pakistan and keeps Rupee within Pakistan.

asif Jun 10, 2013 07:21pm

Why is a Turkish company running the service? Is there no institution or private enterprise within Pakistan that can run a bus service properly? This bus service should be run by the city government of Lahore.

m.a.hussain Jun 10, 2013 09:00pm

@asif: do you know turkey today.? I am sure you will try to know it now , Fastest growing economy in europe !!!!!! Best transport system in the muslim world,,,,,,Hahahahaah

Mushtaq Jun 11, 2013 02:20am

If the new Govt. recovers the embezzled money from big wigs, collects taxes from defaulters and recruits qualified people, Pakistan will march ahead. I have recently visited Turkey. It has a well organized system of transportation and thousands of tourists enjoy the stay. The economy is booming. Sincerity of purpose from the leadership is all Pakistan needs.

asif Jun 11, 2013 06:00am

@m.a.hussain: and pakistan is what? incapable of running a bus service on its own? its sad you are not smart enough to grasp what i said.

Syed Jun 11, 2013 10:00am

Pakistan is not so poor in terms of technology that i will have to ask Turkey to provide her with transport infrastructure. It all goes down to willingness. We must start developing ourselves else its hard to survive. If nuclear program could be made, we can also make telecom companies, transport companies, sophisticated IT parks and industrial machinery, energy and energy products. Energy and water system is very important to build and remodel.

Ravi Ingale from University of Pune Jun 11, 2013 10:15am

Buses are too good and big one looking like Bombay's Best city bus system. If these buses carry 1.2 lakh people everyday and ticket of min 10 Rs then city can earn 36 million PKR per month and 13.14 Billion PKR per year while by cutt of 3.14 Billion PKR to Bus driver, conductor, Diesel and Servicing. City can collected about 10 billion PKR per year. This city bus system is the "Sone ke ande dene wali Murgi" if Government run this system themselves.

Best wishes from India.

UAE Jun 11, 2013 01:24pm

@Adnan Anwar: buses were donated for free by Turkey

Sami Ullah Jun 11, 2013 04:19pm

@ Asif: It is the not the matter of Pakistan, it is the matter of expertise, professionalism and finances. We even don't know that public transport is something of importance and if someone comes and introduce a system then people raise objections, why we as a country cannot do it? You as a country cannot do many other minor things you never considered.

Hamid Awan Jun 11, 2013 06:01pm

@UAE: Turkey like Saudia Arabia clarified that No Buses are free and infact Pakistan is paying more interest on these buses than normal buses. The buses turkey have offered were retired junk buses of Istanbul public transport which Punjab government have already rejected. Our so called brothers consider Pakistan a Waste bin to dump their garbage and that is what Turkey did. All the above buses are bought by Punjab government on hefty amounts and nothing is free and even a Million Dollars is not donated in this project by Turkey.

Salim Jun 11, 2013 07:54pm

We can also make buses and the Metro Bus system, that will also help generate employment. But then how will the Shariff brothers get the kickback? Corrution decides where to buy from. Jun 11, 2013 09:05pm

No one is mentioning that Punjab province is spending 1 billion rupees every month to run this bus service which means 12billion every year, after few years this subsidy will be doubled because of maintenance and probably corruption. just spending this kind of money on Lahore alone is not fair to other cities of Pakistan, specially Karachi which generates 70% of total revenues of Pakistan. So in simple words Karachi is paying taxes and Lahore is enjoying the services. This will not take Pakistan very far.

Raju Jun 11, 2013 10:40pm

@Syed: did pakistan really made the nuke? or chinese donated it?

Jalaluddin S. Hussain Jun 12, 2013 02:04am

@Syed: I agree. Pakistanis need not wait for outside help, including from the IMF and other countries. Pakistanis are hard working and intelligent.

Outside help necessarily involves a "pound of flesh". 180 million and more Pakistanis can achieve a lot on their own. They are self-respecting and do not need help, alms or charity. Long live Pakistan!

ahmed Jun 12, 2013 02:11am

@Ravi it is a private partnership so the money is going to Turkey investors....

Ebrhm shakir Jun 12, 2013 10:21am

we should appreciate all the projects which have completed or in work in proceed by Punjab Government. but it all were just about one province. Now let us to see, that how will handle the current situation of the country by PMLN in other cities as well. the construction works are not a sighs of development in any country. because GDP are not measure by this kind of work. the Pakistani government have to pay all the debt which is a huge Borden on the country, if we decrease construction works and other projects for few year an make plan to remove Borden of debts and try to solve the energy crisis in the country. Then Government might solve may other issues automatically, which are we can't change just because of foreign debt. the Government should emphasis on improve GDP ratio instead to improve construction ratio that will cause of increase in foreign debt, and sources of increase vote bank for any political government in a illiterate country in which people are unable to recognize, what is beneficial or harmful for them and their future. The upcoming Budget,2013-14, will tell us how Government are sincere with the country to improve the education system by increasing education budget.