PESHAWAR: International lenders Asian Development Bank and French Agency for Development have formally asked the Khyber Pakhtunkhwa government for the immediate payment of dues to the contractors of the Peshawar Bus Rapid Transit warning its failure to sort out the issue will negatively impact their partnership for the province’s development.

The ADB and AFD have provided a total of $475.7 million funds for the mass transit.

The BRT contractors insist that the provincial government has not paid the five contractors engaged for the public transport system in the past several months with liabilities totalling over Rs1 billion.

On Friday, Daewoo Pakistan, which operates the 244 bus fleet of the mass transit, had informed the KP government about imminent closure of the service due to dire financial straits it was faced due to the non-payment of Rs750 million of its dues.

ADB, FAD warn issue will badly impact their support for province’s uplift

In a joint letter, ADB country director Young Ye and AFD head Philippe Steinmetz informed additional chief secretary of the province Zubair Asghar Qureshi that any further delay in payments to the operators and possible closure of the BRT service would constitute a violation of the loan and project agreements their financial institutions signed with the provincial and federal governments.

“This breach, if not rectified promptly, will have serious consequences for the ongoing projects, future loans, and the continuation of the co-financing being provided by the AFD for the Peshawar BRT project,” the two noted in the communication.

The representatives of the ADB and AFD asked the provincial government that it was crucial to address this issue promptly to“minimise any negative impact on the joint efforts and continuity of their partnership.”

“We kindly request the provincial government to investigate the non-payment of the issue involving the TransPeshawar contractors thoroughly and promptly resolve it. Ensuring smooth and uninterrupted bus operations is vital.”

In the letter, Mr Ye and Mr Steinmetz said they were seriously concerned about reports that the current bus operators hadn’t been paid for several months increasing the likelihood of them stopping the bus service.

They added that the possible development could lead to significant negative reactions from the public and media, besides causing negative financial and economic impacts for both residents of the city and provincial government.

The representatives of the ADB and AFD also said that Peshawar BRT was the most efficient mass transit in the country and they were unable to understand the rationale for delaying payments to the contractors and thus, threatened its operation.

According to them, the ADB and AFD are working closely with the KP government for inclusive, resilient and sustainable growth of the province.

“Part of this commitment is the Peshawar Sustainable BRT Corridor project, which has received $475.7 million in funding from the ADB and AFD. This project served over 320,000 passengers trips every day, with high public approval ratings for its quality services.”

The two noted that in order to improve the operational sustainability and extend services of Peshawar BRT, the ADB and AFD were actively working with the KP Urban Mobility Authority to come up with the second urban mobility project (UMP-2) in Peshawar, which would extend services to cater for an additional 300,000 passenger-trips daily.

“The estimated investment required for UMP-2 is $560 million.”

In the joint communication, Mr Ye and Mr Steinmetz said the expansion would connect important areas of Peshawar to the existing BRT system and that it would not only improve mobility but also bring significant socio-economic benefits to the local people.

“This work is also being supported by technical assistance grants being provided by the ADB and AFD amounting to $2 million.”

The documents available with Dawn show that Daewoo Pakistan and four other contractors of the Peshawar mass transit have not been paid over Rs1 billion liabilities for the last several months.

According to them, Daewoo alone has to claim Rs750 million from the government for the months of February, March, April and May.

Published in Dawn, June 4th, 2023