Banks, DFIs likely to finance CNG bus project

Thursday, June 18, 2009

KARACHI: Local and international commercial banks and development financial institutions (DFIs) led by the State Bank of Pakistan (SBP) are likely to finance the long-awaited CNG bus project for Karachi. This was observed in a meeting, comprising representatives of CDGK, CNG bus supply and manufacturing firms and banks, held last Tuesday at SBP.

According to sources in Karachi Mass Transit Cell (KMTC) of City District Government Karachi (CDGK) the bankers and DFIs after being satisfactorily briefed by CDGK have shown interest in providing loan to the pre-qualified manufacturers and suppliers of CNG buses.

They said, almost 37 bankers and 25 bus suppliers, who participated in the meeting, were given a detailed briefing on the important project by Director General KMTC Malik Zahoorul Islam regarding the project, its procedure and the facilities to be provided to the bus suppliers. Although the ground work for launching the project was completed, it needed the private-public support to run these buses on at least 40 routes of the city.

The selected and qualified banks led by SBP, the sources said, in co-operation and co-ordination of Enercon would provide the 80 percent loans of the project. The government would also provide subsidy of at least Rs 0.7million for each bus while the private bus suppliers would facilitate 20 percent equity, they added.

Initially, they said, 500 CNG powered buses were to run on the city routes and this would gradually increase to 4,000 during the next five years, they added. For the successful launching of the project, the co-ordination and help of other institutions like Hydro-Carbon Development Institution of Pakistan (HDIP), Infrastructure Project Development Facility (IPDF) and Enercon were also stressed in the meeting.

It is pertinent to mention here that President Asif Ali Zardari, in his visit to the city on April 20, 2009, had approved the project and directed to run approximately 500 CNG buses on the city routes by end of this year. At least 14 private companies including M/s Midway Consortium, a Punjab based CNG dedicated bus supplier, which has vast experience in operating such buses in Lahore and other cities of Punjab had earlier shown interest to operate their buses in Karachi.

Participants of the meeting and representative of federal government for projects included Chief Executive of HDIP Hilal Raza, Legal Advisor of IPDF Muhammad Awais, Chief Economist Government of Sindh Orangzeb Haq, Chief Technical Officer of Enercon Asif Mehmood.


(BRecorder)