ISLAMABAD: The federal government is yet to provide Rs2.83 billion in subsidies for the Rawalpindi-Islamabad metro bus service, creating difficulties in running the service. The Punjab Masstransit Authority (PMA) is saying it is facing difficulties in ensuring the smooth running of operations.

On behalf of the government, the Capital Development Authority (CDA) is bearing over 60pc of the subsidy cost for the metro service and is to pay the amount to PMA.

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However, the CDA is yet to pay Rs2.83 billion and the civic agency says it will be able to make the payment when it receives it from the federal government.

Based on bus track length, federal govt was to pay 60pc of the subsidy and the rest by Punjab govt

“After receiving a letter from PMA on June 4, we wrote to the finance ministry through the Ministry of Capital Administration and Development Division saying that we will immediately transfer funds to PMA when we receive them,” said CDA spokesperson, Malik Saleem.

The PMA letter dated June 4 and available with Dawn says that CDA has only released Rs1.4 billion yet in subsidies since the start of the Rawalpindi-Islamabad metro bus service.

“Now, after deduction of above stated amount received on account of subsidy an amount of Rs2.83 billion still outstanding inclusive of estimated subsidy share up to quarter ending June 30, 2018,” the letter says.

PMA has requested the CDA to release the remaining amount for the smooth operation of the bus service.

When asked, PMA General Manager Operations Uzair Shah said the CDA is violating the agreement signed between the two organisations. He said the civic body was to pay the subsidy share without delay.

He said that PMA is running the service after getting funds from Punjab but needs the CDA subsidy to ensure the smooth operation of the bus service.

The bus service between the twin cities was started in 2015 but the matter of subsidy was undecided for the first year and a half.

The federal government then surrendered to the demands of the Punjab government and decided it will pay for the majority of the subsidy via CDA. In Dec 2016, Islamabad Mayor Sheikh Anser Aziz, who was also CDA chairman at the time, signed an agreement with PMA to this effect.

The CDA bureaucracy was reluctant to sign the agreement according to which it will have to pay for 60pc of the annual subsidy for the bus service while the Punjab government is to pay 40pc, based on the length of the bus track. Of the 24 kilometre track, 14km is in Islamabad and 10km in Rawalpindi.

Initially, the federal government had wanted to pay half the subsidy the way it had halved Rs45 billion cost of conducting the project with the Punjab government. However the latter had rejected the formula and in Oct 2015, the then Punjab chief minister Shahbaz Sharif had requested former prime minister Nawaz Sharif to review it.

The Punjab government said that instead of factoring passenger load when deciding the payment of subsidy, the length of bus track should be considered instead.

In Sept 2016, Nawaz Sharif approved the summary for revising the subsidy formula after which the CDA chairman and PMA had signed the agreement for sharing the subsidy.

Published in Dawn, June 16th, 2018