KARACHI, Nov 19: An agreement between a multinational companies’ consortium and the government may be inked next month for construction of the long-awaited light rail mass transit project for Corridor One in this city of 16 million.

Well-placed sources in the government said a meeting held in Islamabad was told that the letter of intent had been issued to the consortium of the multinational companies which included a local company.

The consortium would build the project on build-operate-transfer basis. Earlier, Prime Minister Shaukat Aziz chaired a meeting in September in this respect and the subsequent meeting advanced the process to finalise the deal with the consortium.

Financial and other matters including sovereign guarantee, allocation of land for workshops, depots, etc., supply of gas for power generation, waiver of sales tax, income tax and reduction in duties on imported items, besides many other things were discussed in the meeting.

A proposal was given to the meeting about land allocation near Sohrab Goth. The meeting was told Pakistan Railways did not have sufficient land in the vicinity of Merewether Tower and land for depots, workshops, etc., be allocated near Sohrab Goth.

The consortium will install its own electricity generation plant which would require 30 MMCFD (millions of cubic feet per day) gas. Electricity would be used to operate the light train.

The meeting suggested to the consortium to install a dual fire system for the power generation plant so that there would be two options available with the consortium to generate power either by utilising gas or furnace oil. The meeting observed that the required gas supply be ensured to the consortium as it was an important segment to make the project successful, sources said.

Regarding the financial aspect, the meeting was told that instructions by the Prime Minister said to follow the procedure of giving concessions similar to the independent power producers (IPPs) case, which included considerable reduction in withholding tax, customs duties, etc. The meeting observed that incentives given by other countries in mass transit projects be reviewed and if possible more incentives be given to the consortium.

Thirty Nine Asian cities are operating successful mass transit system by adopting light rail, mono-rail or metro system but Karachi, where this idea was floated in 1952, is till without one.

The city government, after taking the charge, decided to come up with a modern transport system for the metropolis along with revival of the Karachi Circular Railway.