SOCIO-ECONOMIC BENEFITS

The implementation of the KMTP will produce economic benefits in terms of travel time savings, reduction of vehicle operating costs for private and public vehicles and the elimination of the need to purchase additional buses. These economic benefits have been quantified and will exceed 7.5 billion rupees, out of which 50% is related to reduce vehicle operating costs and new buses. There will also be an Economic Internal Rate of Return at 19.6%.

Typically, the EIRR for Mass Transit Systems is within the range of 8% to 15%. The EIRR for the Karachi Project exceeds the norm due to its location in the most densely traveled corridor of the city. Two-third of the passenger trips are income related, making possible the setting of fares at fair market rate in an exclusive corridor. The LRT will be efficiently operated by the private sector and the elevated guide way and simple but functional station design produce a lower than usual capital cost per kilometer.

FINANCIAL BENEFITS

There are going to be substantial financial benefits for both the government and the consortium named the Indus Mass Transit Company. As already mentioned earlier, the return on equity after taxes for ITMC will be 17.2 %. The GoP investment in the form of a loan to IMTC will be completely reimbursed. The GoP will also receive $ 1.5 billion during the 30 year concession period.

Corporate taxes paid by ITMC over the 30 year concession period are expected to reach $ 902 million generating a total return to the GoP of $ 2.4 billion.

EMPLOYMENT

The Karachi Mass Transit Project when implemented will provide employment to over 8,000 people during the construction period and 900 permanent jobs after completion for the next 30 years.

Transport benefits

According to the Transport Department of the Sindh Government, the KMTP will provide service to 350 million commuters per annum when it is completed; this number of commuters will go up to 500 million commuters per annum by the year 2031.