Karachi Transit Projects Under Fire Over Nearly Full Payments Despite Slow Progress
Nadeem Tanoli
Islamabad: Karachi’s foreign funded mass transit projects have come under scrutiny after a parliamentary committee was told that contractors received nearly full payments despite limited physical progress, while the cost of the Red Line and Yellow Line bus rapid transit projects increased by a combined $281 million. The Senate Standing Committee on Economic Affairs, chaired by Senator Saifullah Abro, raised strong objections to excessive payments, project delays, cost escalation and weak financial oversight in Karachi’s mass transit schemes.The most controversial issue surfaced during the briefing on the KBRT Red Line Project, where officials informed the committee that Package-I, costing Rs13.79 billion, had achieved only 26 percent physical progress but had already received approximately Rs13 billion in payments. Package-II, valued at Rs15.93 billion, had achieved 38 percent progress but had already been paid around Rs15 billion.The committee expressed serious concern over how nearly 100 percent payments were made to contractors when actual work stood at only 26 percent and 38 percent in the two packages. Officials were unable to satisfy the committee regarding the justification for such excessive payments.Documents presented by the Sindh Government further revealed that a 92 percent escalation amounting to Rs3.6 billion, along with Rs3 billion as mobilisation advance, had also been paid. The mobilisation advance was stated to be around 22 percent. Chairman Senator Saifullah Abro observed that it was unprecedented for a contractor with slow project progress to receive escalation payments.The committee questioned why Lot-II of the Red Line project was terminated despite achieving 38 percent progress, while Lot-I, with comparatively lower progress, remained under execution. The chairman directed the Economic Affairs Division to invite the contractor to the next meeting along with complete details.The Red Line project, funded by the Asian Development Bank, has also faced major delays and cost escalation. The committee was informed that the project was initially estimated at $490 million, but delays of almost two years increased its cost by approximately $100 million. The project was earlier targeted for completion in 2024, but it is now expected to be completed in December 2027.Officials attributed the increase in cost to rupee depreciation, design changes and changes in the number of buses planned for the project. The committee was also informed that the tendering process was delayed by one and a half years, while complaints by car showroom owners at Numaish led to design changes. Another major delay was caused by non payment of utility shifting costs by the Sindh Government, amounting to approximately Rs4 billion.The committee expressed concern that an additional burden of $100 million had been created despite utility shifting expenses of only Rs 4 billion. It was further informed that the project had also incurred interest charges of $10.9 million.The KBRT Yellow Line Project also came under scrutiny after officials informed the committee that its initial estimated cost of $439 million had increased to $620 million, creating an additional financial burden of $181 million. The project, funded by the World Bank, starts from Dawood Chorangi and ends at Numaish, covering around 21 kilometres.The Transport and Mass Transit Department, Government of Sindh, attributed the Yellow Line cost increase to design changes, construction of an additional bridge and the shift from diesel hybrid buses to electric vehicles. The committee was informed that Package-IV had achieved 55 percent progress, while the project completion timeline had been extended from its original target to 2028.The Jam Sadiq Bridge Project also raised serious questions after the committee was told that 99 percent payment had already been made to the contractor despite only 55 percent physical progress. The project is estimated to cost Rs12.5 billion.Chairman Saifullah Abro again objected to excessive payments made to contractors despite slow progress and emphasized the need to address delays, strengthen financial oversight and ensure transparency in payments. The committee recommended that the Economic Affairs Division formally write to the Chief Minister Sindh to conduct an inquiry and take action against officials involved in slow progress and excessive payments to contractors.
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