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Orange Line: LDA awaits Rs11.35bn reimbursement

Updated April 17, 2016

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The first bill worth Rs5.61 billion had been sent in December last year and the second worth Rs5.9 billion was sent about a month ago.─ Orange Line Facebook page
The first bill worth Rs5.61 billion had been sent in December last year and the second worth Rs5.9 billion was sent about a month ago.─ Orange Line Facebook page

LAHORE: The Chinese government has yet to reimburse two bills worth Rs11.35 billion to the Lahore Development Authority (LDA) related to civil/structure works on the Orange Line Metro Train Project.

The first bill worth Rs5.61 billion had been sent in December last year and the second worth Rs5.9 billion was sent about a month ago, Dawn learnt on Saturday.

Official sources said the reason behind delay and non-clearance of bills by the Chinese government could be the litigation and hearing by the Lahore High Court.

“I think the Chinese are waiting for decision of the Lahore High Court which is hearing various writ petitions against the project as they are unsure about the fate of the project,” a senior officer told Dawn.

Sharing details about the project loan and tasks to be completed by the Chinese, the LDA and the Punjab Mass Transit Authority (PMTA), the official said the total loan approved by the Chinese government was Rs155 billion. The loan allocation for various components in the project included Rs55 billion for civil/structure cost, Rs92 billion for rolling stock, signaling, electrical/mechanical systems etc and Rs8 billion for shifting of facilities.

The money (Rs19.8 billion) incurred on the land acquisition has been provided by the Punjab government. Thus the total project cost is Rs175 billion.

“The Rs55 billion structure work is being completed by the LDA. The Chinese will complete jobs (worth Rs92 billion) related to rolling stock, signaling, electrical/mechanical systems etc. And other departments such as Wasa, Lesco, PTCL, LDA, SNGPL etc will complete Rs8 billion component of shifting of facilities etc,” the officer explained.

He said under the agreement, the EXIM Bank of China wouldn’t give the loan amount directly to the Punjab government or the LDA but it would be reimbursed in the form of running payments that are normally paid after completion of works. The bills related to civil works and shifting of facilities will be submitted by the LDA to the Chinese government through the PMTA whereas the bills related to rolling stock etc would be submitted by the Chinese companies (China Railways-CR and Norinko) to its government through the PMTA, he said.

The officer said the Chinese government’s own consultant -- CEC (China Engineering Consultancy) -- was already stationed in Lahore. “This firm is monitoring and approving the entire civil and other works. The departments concerned are liable to first get their bills vetted by the CEC and then send to China for final approval and reimbursement.”

He said the government would return the total loan amount to the Chinese government within a period of 27 years including seven-year grace period.

He said the LDA had almost completed the piling work on the entire 27.1km long Orange Line route except the sites situated within 200-foot radius of heritage/historical buildings.

Published in Dawn, April 17th, 2016