Hopper wagons, bogie brake vans: Rs 5.861 billion project approved by Dar

Finance Minister Ishaq Dar has approved a project of Rs 5.861 billion for manufacturing and procurement of 585 hopper wagons and 20 bogie brake vans for transportation of 6 million tons coal from Karachi to Punjab for power plants, it was learnt. Sources in the Finance Ministry told Business Recorder that the project was submitted in the meeting of the Executive Committee of National Economic Council (ECNEC) chaired by Finance Minister for consideration and approval. 


They added that the project envisages procurement/manufacture of 585 new design high speed/high capacity hopper wagons -285 completely built unit (CBU) and 300 complete knock down (CKD) - as well as 20 brake vans (10 CBU & 10 CKD) to meet the demand for the transportation of 6 million tons of coal from Karachi port to upcountry in Qadirabad district Sahiwal of Punjab. 


The meeting was informed that the new wagons will be equipped with air brakes, central couplers, roller bearings and with enhanced pay load and improved turn-round the availability of wagons will increase, leading to higher productivity. The government is establishing coal-based power plants in different parts of the country to generate electricity at comparatively low cost and Qadirabad Power plant near Sahiwal is the first one to be established. 


The ECNEC in a proposal, submitted by Ministry of Planning and Development, stated that in order to meet the requirement of coal for the power plants, the Pakistan Railways showed its commitment to transport coal from port to said plant. The project will be done in two phases. Under phase I, 780 new design / high capacity hopper wagons and 20 brake vans will be manufactured and procured, which has already been approved by ECNEC on 13th May, 2015 at a total estimated cost of Rs 8.863 million and at present it is in tendering stage, while in Phase II, 585 new vans will be procured under the instant PC-I. 


The ECNEC was told that the costs are based on the process received in the last tender of 780 hopper wagons and 20 brake vans in phase-I and updated according to Planning Commission's formula and keeping in view the existing price hike in the steel market the government of Punjab will provide Rs 1,227 million including Rs 1,195 million Foreign Exchange Component (FEC) for the year (2015-16). 


The project was submitted to the Central Development Working Party (CDWP) at the total cost of Rs 6,000 million including FEC of Rs 4,011.438 million on 30th September, 2015 and the meeting approved the project in principle subject to rationalisation of scope and cost. 


The CDWP also observed that procurement of bogie vans is a commercial transaction; hence its financing mode should also be on commercial lines. The meeting also decided that the committee will also consider other modes of financing for the project such as Public Private Partnership (PPP) and Built Operate and Transfer (BOT) as well as requirement of Viability Gap Funding (VGF) or loan from Finance Department without compromising the time lines of the project. The project is submitted to the ECNEC at the rationalised cost of Rs 5,86l million including FEC of Rs 3,950.997milion for consideration and approval.