Federal govt to spend Rs450 million for hiring consultant for ML-1 project under CPEC

Islamabad-The federal government will spend Rs450 million for hiring of consultant for the preparation of governance-HR structures, development of business and cash flow models and its implementation for upgradation of Karachi to Peshawar Main Line-1 (ML-1) under China-Pakistan Economic Corridor (CPEC).

The Central Development Working Party (CDWP) has approved the China-Pakistan Economic Corridor Support Project (2nd Revised) at the cost of Rs909.285 million – the main component of which is the hiring of consultancy firm and salaries of the employees, a source told The Nation. For hiring of consultancy firm—an allocation of Rs450 million, for the payment of salaries and allowances—Rs383.373 million, while the remaining allocation will go to other components of the project, the source said. The Original PC-I of the project was approved by the Central Development Working Party (CDWP), in 2015, at the total cost of Rs252.0 million without FEC. The project envisages establishing a China-Pakistan Economic Corridor (CPEC) Support Secretariat at Ministry of Railways. The 1st Revised PC-1 of the project was approved by the DDWP, in 2020 at the total cost of Rs910.347 million with FEC of Rs198.0 million. Now the CDWP once again revised the PC-I at the cost of Rs909.285 million.

According the source, the main reason for the revision of PC-1 was hiring of consultants for the preparation of Governance and HR Structures and Development of Business and Cash Flow Models for upgrading ML-1 and their implementation. Revision of pay packages according to new Project Pay Scales (PPS) issued by the Finance Division and rationalisation of human resource as per requirement of the project.

The 2nd Revised Project envisages establishing Project Management Unit (PMU) at the Ministry of Railways and a Project Implementation Unit (PIU) in Lahore, for efficient and effective implementation of the CPEC activities on ML-1 of Pakistan Railways. These activities primarily comprise supervision and monitoring of the project activities like preliminary design, cost estimation, preparation of PC-1, monitoring and processing of tenders for EPC contract(s), and monitoring and liaison during the execution of the project, and for this purpose, a specific provision was made in the PC-1 for hiring of human resource.

Main objective of the project is to establish/strengthen Project Management Unit (PMU) in the Ministry of Railways, Islamabad and Project Implementation Unit (PIU) at Pakistan Railways, Lahore for overall coordination and implementation of China-Pakistan Economic Corridor projects/activities. The project will facilitate, coordinate, monitor and evaluate the programme and projects related to ML-I; provide a much-needed platform for multi-sector coordination and a consultative, ‘informed’ approach to trade and transport reforms and policy formulation; enhance capacity and provide policy and governance advice to support GoP’s transport and energy infrastructure modernisation agenda in the context of regional connectivity. Moreover, it will enable Pakistan Railways to use innovative modes of implementing and financing projects and tap modern sources of financing; provide secretarial services for procurement of sector specialists; supervise preparation and implementation of governance/managerial reforms to get the desired benefits of upgraded ML-1; hiring services of advisory/consultancy firms/individual consultant/consultants for preparation and scrutiny of bidding documents/RFPs, designing/survey, evaluation of tenders/RFPs and for third party appraisal/validation of feasibilities, design/survey, project estimates, other documents and to assist PIU in any matter related to project, etc.

The technical section of the Planning Commission asked the sponsor of the project to clarify that an amount of Rs239.5 million has been utilised till June 2022 by the sponsors since the inception of the project in 2015. This infers that in the period of 6.5 years i.e. Jan 2016 to Jun 2022 only Rs239.5 have been utilised which is 26.32 percent of the 1st revised approved cost. It was also asked that sponsors may inform about the performance of the Project Management Unit/PIU till now as justification for revision of the project. The cost of hiring of consultancy services provided as Rs450.0 million needs to be rationalised and it should be based on actual– since the consultants have already been hired by MoR/PIU.