ISLAMABAD The Executive Committee of the National Economic Council decided on Thursday to revive the Karachi Circular Railway as a modern commuter system at a cost of Rs128.5 billion.
The committee suggested dualisation of railway tracks with the provision of two dedicated tracks along the main lines from Karachi City station to Drigh Road.
The system will have advanced technology to provide facilities of international standard to around 700,000 daily commuters.
The Karachi circular railway, which was set up in the mid-60s, was shut down in 1997 when Pakistan Railways suffered huge losses.
Information Minister Qamar Zaman Kaira told newsmen that tenders would be floated for the project and a third-party valuation would be carried out to ensure transparency.
He rejected a perception that there were differences in the committee over the project and said that a study had been conducted by the Japan International Cooperation Agency and the World Bank.
Official sources said Japan's ministry of economy, trade & industry would arrange funds for the project through the Japan Bank of International Cooperation.
They said Japan had commissioned a soft loan at a nominal mark-up with a long-term payback time and a grace period of 10 years.
The circular railway will be operated by a semi-autonomous body, the Karachi Urban Transport Corporation.
The Pakistan Railways will have 60 per cent share in the corporation, Sindh government 25 per cent and the City District Government of Karachi 15 per cent.
The Environmental Protection Agency has already approved the environmental impact assessment of the project.
A resettlement plan to clear encroachments from tracks and land of the circular railway has also been approved.
Karachi Nazim Syed Mustafa Kamal welcomed the decision and said an operation would soon be launched to remove encroachments.