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Business Plan Appendix - 3 TTHE SSTUDY FOR KKARACHI TTRANSPORTATION IIMPROVEMENT PPROJECT BBUSINESS PPLAN ((DDRAFT)) December, 2012 Nippon Koei Co., Ltd. Yachiyo Engineering Co., Ltd. Oriental Consultants Co., Ltd. Karachi Transportation Improvement Project Business Plan Table of Contents Chapter 1 Introduction .............................................................................................. 1 1-1 Background of the Project .................................................................................. 1 1-2 Present Situation of Public Transport in Karachi ............................................... 1 1-3 Future Urban Growth in Karachi ........................................................................ 2 1-4 Necessity of the Project ...................................................................................... 3 1-5 Vision .................................................................................................................. 3 1-6 Mission ............................................................................................................... 3 Chapter 2 Bus Rapid Transit (BRT) Scenario in Karachi ......................................... 4 2-1 What is BRT?...................................................................................................... 4 2-2 Challenges for BRT Introduction to Karachi Road System ............................... 7 2-3 Proposed BRT System for Karachi .................................................................... 11 2-4 Target Year ........................................................................................................ 18 Chapter 3 Demand Forecast and Revenue .............................................................. 19 Chapter 4 Capital Costs .......................................................................................... 28 4-1 Construction Cost ............................................................................................. 28 4-2 Procurement Cost ............................................................................................. 30 4-3 Engineering Services ........................................................................................ 32 Chapter 5 Operation and Maintenance Costs ......................................................... 34 5-1 Operation Plan .................................................................................................. 34 5-2 Personnel Plan .................................................................................................. 38 5-3 O&M Costs ....................................................................................................... 39 Chapter 6 Business Model ...................................................................................... 41 6-1 Introduction ...................................................................................................... 41 6-2 Contract Type.................................................................................................... 41 Chapter 7 Financial Analysis .................................................................................. 45 7-1 Funding Sources ............................................................................................... 45 7-2 Financial Calculation ........................................................................................ 46 7-3 Financial Statements ......................................................................................... 49 Chapter 8 Economic Analysis ................................................................................. 52 8-1 Economic Benefits of the Project ..................................................................... 52 8-2 Cost-Benefit Analysis ....................................................................................... 53 Chapter 9 Implementation Schedule ....................................................................... 56 9-1 Environmental Impact Assessment (EIA) ........................................................ 56 9-2 PC-I Approval ................................................................................................... 56 9-3 Institutional Setup ............................................................................................. 56 9-4 Financial Arrangement ..................................................................................... 56 9-5 Schedule ........................................................................................................... 56 Karachi Transportation Improvement Project Business Plan Chapter 1 Introduction 1-1 Background of the Project The plan of Karachi Mass Transit Corridors is the official mass transit master plan notified by the Government of Pakistan in 1995. The plan was based on Karachi Mass Transit Study in 1990 in which elevated and at-grade bus corridors were proposed. Bus corridors were designed so that they can be converted to Light Rail Transit System. There had been several attempts to implement the plan but these corridors were not implemented. The original concept of busway was changed to the railway system and the concession on Corridor-1 as BOT basis was given private investors, but all projects have failed. Meanwhile, Bus Rapid Transit (BRT) system was proposed in “Private-Public based environmental friendly public transport system for Karachi (2006)”. This study has introduced the modern style BRT system to Karachi and BRT became popular among transport authorities and planners in Karachi. The proposed system consisted of 16 BRT corridors, 21 secondary routes, and feeder routes. Asian Development Bank (ADB) took over the BRT projects as a part of Megacity Project and identified 3 priority corridors. However, ADB withdrew the BRT project in 2007. Karachi Transportation Improvement Project (KTIP) was conducted by Japan International Cooperation Agency (JICA) in collaboration with Karachi Mass Transit Cell (KMTC), CDGK from April 2010 to June 2012. KTIP consisted of the master plan stage and feasibility study stage. In the master plan study, the JICA Study Team proposed KCR, 2 railway systems, and 6 BRT corridors. Each corridor has been given a name of color so that the corridors can be easily understood. After the master plan stage, JICA selected 2 BRT corridors, namely Green Line and Red Line for the projects of the feasibility study. The feasibility study on Green Line and Red Line was conducted from July 2011 to June 2012. It was proposed to construct dedicated bus lanes in the median of road along Green Line (M.A. Jinnah Road – Gurmandir – Lasbela – A.O. Clock – Surjani) and Red Line (Regal Chowk – People’s Roundabout – University Road – Model Colony) with 57 stations. 1-2 Present Situation of Public Transport in Karachi Presently, public transport system in Karachi is very poor. The number of bus passengers is approximately 5.6 million per day, accounting for 40% of motorized travel modes. Since the number of registered buses and minibuses is approximately 21,800, a bus carries 257 passengers per day. The average speed of buses is as slow as 17km/h. Since buses are operated by individual operators who want to maximize the fare revenue, overloading including roof top seating, waiting for passengers at a bus stop for a long time, non-stop at bus stops where the number of passengers is small, and low frequency in off-peak hours are commonly observed in Karachi. Bus services are unpredictable, unstable and uncomfortable. People who can use other transport modes prefer motorcycle, rickshaw and taxi rather than using buses. - 1 - Karachi Transportation Improvement Project Business Plan Photo: The Study for KTIP 1-3 Future Urban Growth in Karachi It was estimated that Karachi had a population of 18.9 million in 2010. The present population would be approximately 20 million considering the population growth. The population will increase to 27.6 million in 2020 and 31.6 million in 2030. This means that more than 10 million people will be added to Karachi city in next 20 years. Source: The Study for KTIP Figure 1-1 Future Population The basic concept of the future land use plan is to expand the city in the suburban area such as Gadap, Keamari, and Bin Qasim. In Gadap Town, it is estimated that the increase in the population would be 2.54 million by 2020 and 4.52 million by 2030. Increase in the population in Bin Qasim is also as large as 1.51 million by 2020 and 2.18 million by 2030. - 2 - Karachi Transportation Improvement Project Business Plan Source: The Study for KTIP Figure 1-2 Population Increase by Town 1-4 Necessity of the Project For the public transport system in Karachi, BRT system does not necessarily the best solution because of its disadvantages such as lower capacity than railway system and consumption of existing road space. However, investment cost on a railway system is too expensive to realize in Karachi, and only Karachi Circular Railway (KCR) shows a progress with the financial support of JICA. The growing city cannot wait mass transit system until the economic level of the city is high enough to introduce expensive system. To improve the public transport system in Karachi, BRT is the best system on the project corridors considering the cost-efficiency and available resources. 1-5 Vision The vision of the Karachi BRT Project is: Moving in Karachi will be no more stressful activity because of the reliable, comfortable, and sustainable public transport system. 1-6 Mission Missions are: To introduce a Bus Rapid Transit (BRT) system To provide frequent,
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