K-IV project cost rises to Rs75bn because of design change, rupee fall

Published October 31, 2018
The mega scheme pertained to supply of 650 million gallons daily of potable water will be executed in three phases.— File
The mega scheme pertained to supply of 650 million gallons daily of potable water will be executed in three phases.— File

KARACHI: The cost of the long-delayed Greater Karachi Bulk Water Supply project, better known as K-IV, has been increased from Rs25 billion to a whopping Rs75bn due to issues relating to design and site as well as a hike in exchange rate.

K-IV project director Asad Zamin told a high-level meeting, chaired by Sindh Chief Minister Murad Ali Shah and especially attended by Karachi Corps Commander Lt Gen Humayun Aziz, that the mega scheme pertained to supply of 650 million gallons daily of potable water which would be executed in three phases.

The meeting was especially convened by the CM here at the Chief Minister House on Tuesday to settle all K-IV water project issues, including the increasing cost of the project.

The Sindh govt to ask the Centre to share 50pc of the revised cost

Mr Zamin said that the first phase of the project was meant for 260 MGD with a length of around 121 kilometres starting from Keenjhar Lake, Thatta and ending at Deh Allah Phihai, Malir.

He said that the Executive Committee of National Economic Council (Ecnec) had approved Rs25.551bn K-IV in 2014 and the prices/cost of the project was based on the rates of 2010.

The federal government had committed to share 50 per cent cost of the project while the remaining 50pc was being borne by the provincial government. The project was scheduled to be completed in three years i.e. 2019.

The CM was told that the estimated cost of the project may increase to Rs45bn from the PC-1 that estimated the cost at Rs25.5bn.

He was told that the design and site issues, major deviations in quantities and exchange rate hike were the key reason behind such a huge increase that now ranged between Rs73.4bn and Rs75bn.

The funds so far committed by the federal and the provincial governments for the water project are Rs12.5bn each. With the increase in estimated cost, both the province and the Centre have now to bear a total cost of Rs37.5bn each for the project.

Federal govt to be asked for sharing 50pc cost

CM Shah told the meeting that he would ask the federal government to share the increased cost of the project.

He directed Mohammad Waseem, the chairman of the planning and development board, to head a committee comprising experts of the provincial government, Karachi Water and Sewerage Board (KWSB) and Frontier Works Organisation (FWO) to go through all the estimates once again and firm up their recommendations so that he could take up the matter with Prime Minister Imran Khan.

He also issued categorical instructions to the project director Zamin and the FWO to continue work on the project so that it could be completed by the end of the next year.

The meeting was also briefed by FWO director general Maj Gen Inam Hyder, KWSB chief Khalid Shaikh and the project director.

The Sindh government had awarded the project to the FWO for Rs28.187bn in June 2016. The missing components of the K-IV project such as ancillary works and 50-megawatt power plant to power two pumping stations were also to be developed.

The meeting was also told that the Rs18.6bn augmentation project also included Rs4bn for land and utilities. The project was sent to the planning and development department for its approval from the provincial development working party (PDWP). After its approval, it would be sent to Ecnec for further approvals.

Mr Zamin said that the ancillary works amounting to Rs9.8bn had also been submitted to the P&D department for approval from its technical committee.

CM Shah had already decided to establish a 50 MW power plant on a public-private partnership mode. This project may be extended up to 100 MW.

A recent report of retired Justice Amir Hani Muslim-led commission on water and sanitation in Sindh, only 38pc of the work on the K-IV project had been completed.

Although acquisition of encroached land had been progressed considerably, a 5.7-km-long portion was yet to be handed over to the project executing agency, the report said.

Other participants of the meeting were Principal Secretary to CM Sajid Jamal Abro and other senior officers of the FWO and the provincial government.

Published in Dawn, October 31st, 2018

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