The government on Monday approved, in principle, the New Gwadar International Airport project at a cost of Rs55.4 billion, about 147% higher than the first revision, and also sanctioned a reduction in the scope of an important Gwadar road scheme.
The decisions were taken by the Central Development Working Party (CDWP) – a body having mandate to scrutinise and approve development schemes and refer the mega ones for final ratification of the Executive Committee of National Economic Council (Ecnec). Planning Commission Deputy Chairman Jehanzeb Khan chaired the CDWP meeting.
The CDWP took up the New Gwadar International Airport project, which would be built with the help of Pakistan government funds and Chinese grant of 1.52 billion yuan or Rs34 billion. Total cost of the project is Rs55.4 billion.
The new Gwadar airport is considered important for the development of Gwadar Port and its free zone. The Ministry of Planning is now gradually taking back the control of China-Pakistan Economic Corridor (CPEC) after the CPEC Authority law lapsed four months ago.
The government has also brought back Hassan Dawood Butt to handle affairs in the next CPEC Joint Cooperation Committee (JCC) meeting. JCC is scheduled to meet this month and will take important decisions on future roadmap of the multibillion-dollar strategic bilateral initiative.
Butt had earlier been the deputy project director of the CPEC support project but moved to Khyber-Pakhtunkhwa Board of Investment.
The original Gwadar airport project had been approved at a cost of Rs7.5 billion in 2010 and the revised one was cleared in 2015 at a cost of Rs22.2 billion. The CDWP approved the second revision on Monday with a cost of Rs55.4 billion, higher by Rs33 billion or 147% than the 2015 cost.
A key reason behind the increase in cost was that the new plan was based on a detailed design of the project.
The CDWP directed the Civil Aviation Authority (CAA) to review the possibility of cutting the construction cost of buildings to be used by the Airport Security Force (ASF) and the CAA. For the ASF camp, Rs9.9 billion, and for the CAA Residential Complex, Rs2.7 billion, have been included in the project construction cost. In the current fiscal year’s Public Sector Development Programme (PSDP), the government has allocated only Rs519 million for the construction of the project.
At the time of approval of the original PC-I in January 2010, the dollar was at Rs85 against the rupee. The PML-N government made the first revision in January 2015 as part of the CPEC project and then the dollar strengthened to Rs100. Now, the PTI government has proposed the second revision and the dollar value jumped to Rs155.1 in May this year when documents were submitted in the Planning Commission for scrutiny.
Oman is giving a $17.5 million grant while China is providing a grant of 1.67 billion yuan. The share of Chinese grant in total construction cost is 63.3%.
The existing airport is capable of handling only small aircraft while the new airport is being designed to cater to needs of large Airbus A-380 aircraft.