48416-003: MFF CAREC Railway Connectivity Investment Program | Asian Development Bank

Pakistan: MFF CAREC Railway Connectivity Investment Program

Sovereign (Public) Project | 48416-003 Status: Proposed

The proposed multitranche financing facility (MFF) will improve the railway sector in Pakistan by making the railway transport system more efficient and competitive. The outcome will be improved railway corridor of Lahore-Peshawar and improved PR's institutional efficiency. The outputs will be (i) approximately 411 km of upgraded and dualized railway track for the Lahore-Peshawar section of ML-1 together with new signaling and telecommunications system (including power supply for these systems) and upgraded passenger facilities at Lahore, Rawalpindi, and Peshawar stations; (ii) 52 km of newly constructed double-track rail line linking Kaluwal and Pindora; and (iii) PR's modernized and IT-based accounting system and PR's accounting data and information transformed and migrated into the new accounting system.

Project Details

Project Officer
Pyo, Dong-Soo Central and West Asia Department Request for information
Country
  • Pakistan
Sector
  • Transport
 
Project Name MFF CAREC Railway Connectivity Investment Program
Project Number 48416-003
Country
Project Status Proposed
Project Type / Modality of Assistance Loan
Source of Funding / Amount
MFF Facility Concept: MFF Railway Sector Development Investment Program
Ordinary capital resources US$ 1,000.00 million
Strategic Agendas Inclusive economic growth
Regional integration
Drivers of Change Governance and capacity development
Partnerships
Sector / Subsector

Transport / Rail transport (non-urban)

Gender Equity and Mainstreaming No gender elements
Description The proposed multitranche financing facility (MFF) will improve the railway sector in Pakistan by making the railway transport system more efficient and competitive. The outcome will be improved railway corridor of Lahore-Peshawar and improved PR's institutional efficiency. The outputs will be (i) approximately 411 km of upgraded and dualized railway track for the Lahore-Peshawar section of ML-1 together with new signaling and telecommunications system (including power supply for these systems) and upgraded passenger facilities at Lahore, Rawalpindi, and Peshawar stations; (ii) 52 km of newly constructed double-track rail line linking Kaluwal and Pindora; and (iii) PR's modernized and IT-based accounting system and PR's accounting data and information transformed and migrated into the new accounting system.
Project Rationale and Linkage to Country/Regional Strategy

For the past 150 years, railways have played an important role in the social, political, and economic life in Pakistan. For most of that time, railways were the leading mode of transport, in many places the only available mode. In a relatively large country, railways have offered unique advantages for transporting freight and passengers over long distances. In the past 20-30 years, however, increasing competition from road transport has reduced railway's market share. As of 2016, railway accounts for 4% of freight traffic and 6% of passenger traffic with major shares taken by road. As a result, the financial performance of PR, has deteriorated and has not generated enough resources to finance necessary investments in asset replacement and capacity expansion.







In Pakistan, government's public investments have been heavily skewed favorably to the road sector. Neglected from public investments and overburdened with social responsibilities, the performance of the railway sector had continuously deteriorated until 2011 and the sector was on the verge of a collapse, faced with poor rail infrastructure with huge backlog of maintenance, outdated and non-functioning locomotives and rolling stocks. Since 2011, however, PR's operational performance has markedly improved and helped avoid a total failure of the sector mainly owing to improved availability of functioning locomotives and PR's well-thought-out marketing strategies like strategic tariff setting, adroit market segmentation and focusing on profitable target markets, and long-term engagement with clients.







Despite recent improvement, the railway sector need upgrade its infrastructure on a large scale to provide more competitive transport services, regain the market share lost to roads, and ultimately rebalance the unbearably unbalanced modal share between rail and road in the country. Rebalancing the modal shares will accrue huge economic benefits to the country by relieving the overloaded road sector of overstress to road infrastructure and excessive maintenance burden and better utilizing huge sunk investments of rail infrastructure which, otherwise, will be left idle and further deteriorated. The Vision 2025 emphasizes the importance of railway transport and arranges public supports to revitalize the railway sector.




Impact Efficiency and competitiveness of the railway transport system to be improved.
Outcome Efficiency in railway corridor of Lahore-Peshawar improved.
Outputs

Lahore-Peshawar railway corridor improved.

PR's accounting system modernized with accounting data and information migrated into the new accounting system.

Geographical Location
Summary of Environmental and Social Aspects
Environmental Aspects Since the MFF will upgrade existing rail tracks and build an additional track in the already secured right-of-way, the environmental impact from the MFF is expected insignificant. The PPTA will prepare an environmental assessment and review framework and an initial environmental examination for tranche 1 including an environmental management plan in compliance with ADB's Safeguard Policy Statement (2009).
Involuntary Resettlement

The MFF is aimed at rehabilitate and dualize Lahore_Peshawar (460 Km) railway track with realignment of its 53 Km section in hilly tract from Kaluwal to Pindora. Except for realignment sections in hilly tract, it is likely that, all works, for rehabilitation and upgradation of the physical infrastructure will be limited to the PR owned RoW.

Under proposed MFF, tranche-1 project will include rehabilitation and dualization of Railway Track (173 Km) from Peshawar to Rawalpindi section with installation of modern signaling and communication system. Pakistan Railway's secured ROW (30 to 50 meter in average for plain and hilly regions) is adequate for smooth execution of the project works, but at two locations in hilly region, proposed new tunnels for double track may require realignment of approaching tracks. This can necessitate permanent acquisition of RoW through uninhabited hilly land which mostly is state owned. Elsewhere, impacts are perceived particularly along existing railway stations or in the areas where the railway tracks passes through settlements or at level crossing locations. Nonetheless, such impacts are mostly limited to PR owned infrastructure, but it is likely that ROW clearance in such areas may impact about 15 residential and commercial structures. Keeping in view perceived impacts, the IR category B is justified for Tranche-1 project at this early stage. The PPTA Resettlement Specialists (International and National staff) will study the LAR impacts in detail and accordingly the IR category will be confirmed and LARF for MFF and the LARP for tranche-1 project will be prepared.

Indigenous Peoples Information available so far demonstrate that indigenous people as defined under ADB's SPS are not living in the Project area, so expected IP category is C. However, PPTA Social Development and Resettlement team will carry out a detailed survey to assess presence of indigenous people and extent of impacts (if any) to them. Based on PPTA's assessment, the project IR category (if required) will be revised and Indigenous People Planning documents will be prepared accordingly.
Stakeholder Communication, Participation, and Consultation
During Project Design

The main stake holders of the project include public institution (Ministry of Railway, Pakistan Railway Department, Local Government Departments with other law enforcing agencies like Railway Police) and project beneficiaries including business community and traders, freight forwarders, transport operators as well as passengers and the local community having their assets landed and non landed in project corridor and affected persons. Stakeholders participation will be ensured through (i) consultations, focus group discussions and information sharing meetings; (ii) project awareness campaigns; and (iii) engagement of local people in project related works and jobs etc.

Through consultations, focus group discussions and in-depth interviews with different stakeholders, project impacts will be assessed by PPTA social safeguards team. The potential requirements of community (particularly the poor) and other social issues that need to be addressed will be assessed and entitlement provisions and mitigation measures will be made in project planning and design documents including LARF, LARP, and Poverty and Social analysis reports and bidding documents.

Key Civil Society Organizations active in the project area will be identified and engaged during consultative process by PPTA and the Implementing Agency during project execution.

Acquisition of land and assets including clearance of encroached RoW may have disproportionate impacts on the poor due to their fragile income levels. During socio-economic and poverty analysis surveys (sample based) PPTA will conduct meaning full consultations, group discussions and individual interview for assessment of issues and suggest mitigations and livelihood restoration measures, contract provisions to be incorporated in bidding documents.

During Project Implementation The same scope and rigor of stakeholder consultation as that during project design will continue, particularly in response to stakeholders' feedback on project implementation activities.
Business Opportunities
Consulting Services Consulting services will be required for supervising construction, assisting Pakistan Railways in carrying out the accounting system reforms, and preparing subsequent tranches. Consultants will be recruited through firms in accordance with ADB's Guidelines on the Use of Consultants (2013, as amended from time to time).
Procurement Procurement of goods, civil works, and related services financed from the ADB loan will be done in accordance with ADB's Guidelines for Procurement (2015, as amended from time to time).
Responsible ADB Officer Pyo, Dong-Soo
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Transport and Communications Division, CWRD
Executing Agencies
The Ministry of Railways
Government of Pakistan D-Block, Pak Secretariat
Islamabad, Pakistan 44000
Timetable
Concept Clearance 10 Aug 2016
Fact Finding 06 Nov 2017 to 17 Nov 2017
MRM 13 Dec 2017
Approval -
Last Review Mission -
Last PDS Update 22 Mar 2017

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Public Communications Policy (PCP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

None currently available.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.


The Public Communications Policy (PCP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

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