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Govt green-lights three CPEC projects at 23% higher cost

Ryuzaki

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ISLAMABAD:
The government has cleared three infrastructure projects of the China-Pakistan Economic Corridor (CPEC) at an upward revised cost of $4.4 billion, a billion dollars more than the original approved price, further deepening transparency concerns regarding the award of contracts under the $46 billion package.

The government revised the cost within one year to one and a half year approval of these schemes by the country’s highest project approval authority amid transparency concerns expressed by the governor of the State Bank of Pakistan over financing and terms of the CPEC package.

‘CPEC a win-win opportunity’

It approved these projects just hours before Prime Minister Nawaz Sharif left for China on a two-day visit. The government showed unusual haste in approval of these projects and called a meeting of the Central Development Working Party (CDWP) on Sunday, an official holiday.

Even the planning ministry was not given sufficient time to technically evaluate these projects. The ministry received the project documents on Dec 10, just two days before their clearance from the CDWP.

These projects are vital for linking western China with the Gwadar port and fall on the eastern alignment of the corridor.

The CDWP has a mandate to approve up to Rs3 billion projects and to clear the higher cost mega schemes for final approval of the Executive Committee of National Economic Council (Ecnec).

CPEC projects worth $11b cannot be completed in two years: IPR

Headed by Planning Minister Ahsan Iqbal, the CDWP cleared the 392-kilometre Multan-Sukkur section of the Lahore-Karachi Motorway at a price of $3 billion or Rs315 billion. The revised cost is Rs56 billion or $550 million more than cost at which the Ecnec approved this project in July last year.

The CDWP also cleared the 120km Havelian-Thakot road project at a price of $1.4 billion or Rs141.9 billion. In December last year, the Ecnec approved this scheme at Rs95 billion or $930 million. Within a year, the project cost jumped by almost 50%.

The CDWP approved construction of allied infrastructure in the Mullah Band area of Gwadar at a three-time upward revised cost of Rs2.2 billion. The CDWP had approved this project in November last year at price of just Rs835 million.

Instead of convening the Ecnec meeting for getting its final nod, the government immediately initiated the process for seeking anticipatory approval of the Ecnec Chairman, Finance Minister Ishaq Dar, sources revealed to The Express Tribune.

China is now the top foreign investor in Pakistan: minister

Within 24 hours of the CDWP meeting, the Cabinet Division received a request from the Communication Division to forward these projects for anticipatory approval of the finance minister, the officials confirmed to The Express Tribune. Dar is likely to give his stamp today (Tuesday).

One of the reasons given for upward revision in the cost was that the contractors placed bids at higher than approved prices, said a planning ministry official. He said due to limitations imposed under the framework agreement signed with China, the government did not have any option but to award these projects to Chinese contractors at whatever price they quoted in the bids.

Interestingly, the bidding was confined to just Chinese firms. The government had exemption from the Public Procurement Regulatory Authority from international competitive bidding of these projects.

Highly-placed sources said that a non-career diplomat in Beijing’s Pakistan Embassy played an underhand role in determining the cost of these two infrastructure projects.

Govt green-lights three CPEC projects at 23% higher cost - The Express Tribune
 
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So 4 billion USD for 400 kms highway. That is 10 million dollars per km. India makes 4 lanes highways at 2 million dollars per km.
 
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ISLAMABAD:
The government has cleared three infrastructure projects of the China-Pakistan Economic Corridor (CPEC) at an upward revised cost of $4.4 billion, a billion dollars more than the original approved price, further deepening transparency concerns regarding the award of contracts under the $46 billion package.

The government revised the cost within one year to one and a half year approval of these schemes by the country’s highest project approval authority amid transparency concerns expressed by the governor of the State Bank of Pakistan over financing and terms of the CPEC package.

‘CPEC a win-win opportunity’

It approved these projects just hours before Prime Minister Nawaz Sharif left for China on a two-day visit. The government showed unusual haste in approval of these projects and called a meeting of the Central Development Working Party (CDWP) on Sunday, an official holiday.

Even the planning ministry was not given sufficient time to technically evaluate these projects. The ministry received the project documents on Dec 10, just two days before their clearance from the CDWP.

These projects are vital for linking western China with the Gwadar port and fall on the eastern alignment of the corridor.

The CDWP has a mandate to approve up to Rs3 billion projects and to clear the higher cost mega schemes for final approval of the Executive Committee of National Economic Council (Ecnec).

CPEC projects worth $11b cannot be completed in two years: IPR

Headed by Planning Minister Ahsan Iqbal, the CDWP cleared the 392-kilometre Multan-Sukkur section of the Lahore-Karachi Motorway at a price of $3 billion or Rs315 billion. The revised cost is Rs56 billion or $550 million more than cost at which the Ecnec approved this project in July last year.

The CDWP also cleared the 120km Havelian-Thakot road project at a price of $1.4 billion or Rs141.9 billion. In December last year, the Ecnec approved this scheme at Rs95 billion or $930 million. Within a year, the project cost jumped by almost 50%.

The CDWP approved construction of allied infrastructure in the Mullah Band area of Gwadar at a three-time upward revised cost of Rs2.2 billion. The CDWP had approved this project in November last year at price of just Rs835 million.

Instead of convening the Ecnec meeting for getting its final nod, the government immediately initiated the process for seeking anticipatory approval of the Ecnec Chairman, Finance Minister Ishaq Dar, sources revealed to The Express Tribune.

China is now the top foreign investor in Pakistan: minister

Within 24 hours of the CDWP meeting, the Cabinet Division received a request from the Communication Division to forward these projects for anticipatory approval of the finance minister, the officials confirmed to The Express Tribune. Dar is likely to give his stamp today (Tuesday).

One of the reasons given for upward revision in the cost was that the contractors placed bids at higher than approved prices, said a planning ministry official. He said due to limitations imposed under the framework agreement signed with China, the government did not have any option but to award these projects to Chinese contractors at whatever price they quoted in the bids.

Interestingly, the bidding was confined to just Chinese firms. The government had exemption from the Public Procurement Regulatory Authority from international competitive bidding of these projects.

Highly-placed sources said that a non-career diplomat in Beijing’s Pakistan Embassy played an underhand role in determining the cost of these two infrastructure projects.

Govt green-lights three CPEC projects at 23% higher cost - The Express Tribune


Interesting

So 4 billion USD for 400 kms highway. That is 10 million dollars per km. India makes 4 lanes highways at 2 million dollars per km.

Don't compare sub standard Indian Infra with Chinese Infra
 
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We dont expect anything good from these looters called politicians for a reason.
 
. . . .
ISLAMABAD:
The government has cleared three infrastructure projects of the China-Pakistan Economic Corridor (CPEC) at an upward revised cost of $4.4 billion, a billion dollars more than the original approved price, further deepening transparency concerns regarding the award of contracts under the $46 billion package.

Headed by Planning Minister Ahsan Iqbal, the CDWP cleared the 392-kilometre Multan-Sukkur section of the Lahore-Karachi Motorway at a price of $3 billion or Rs315 billion. The revised cost is Rs56 billion or $550 million more than cost at which the Ecnec approved this project in July last year.

How many of you people on here have ever managed a billion dollar program??

In the case above, on a 3 billion project, 20% contingency would be $ 600 million. Here, they are going over $ 550 million (still within 20%). So there is NO issue on here. In fact, a program this massive that's designed to be spread across an entire nation, with so much land routes, potential future natural issues (floods, earth quakes, material shortages, etc, etc) which will all cause work to be stopped on certain parts temporarily and happens to EVERY project, expect a $ 30% increase to majority of the project.

Here's how programs like these work. Just so everyone reading understands the mechanics. I see Indians doing propaganda and Pakistanis, as always playing defense without a need, as majority just don't know or care to understand how these things work. Before the Indian members bit*ch about these, take a look at your own project overruns, the ISRO, DRDO, the LEAST Combat Aircraft (LCA), acquisition of Rafale, ALL have cost over runs or time overruns and corruption involved. But they won't talk about those!!!!

Our Pakistani members will quickly raise the "corruption flag" quickly, out of paranoia and "conspiracy theories" than care to understand a very serious Mathematical and Scientific process that goes into these programs for estimation. And they won't care to realize that there are international auditing companies auditing ALL projects done by the government and any wrong doing will come out. But here's how a typical complex, international program works

1) Gov't of Pakistan needs to revise the CPEC "Project" to CPEC "Program". A Program has MANY projects in it. And these projects, due to their cost and size, are independent so the $ 46 billion was "allocated" for an entire program. What would be built out of that, would be many projects with independent budgets, etc.

2) When someone announces a program or a project, it is merely an "intent" or an "initiation". As no one knows how much it would cost. The definition of a "project" is a unique effort, resulting in producing a unique deliverable (road, plane, car, etc), which is a brand new end product. Which means, it will have its own budget.

3) At the time of initiating an investment, there is some "due diligence" that's done. In other words, I sign a contract with Mayor Joe in a City to build a highway with my investment. Some of my engineers and proposal experts write up the contract and use our previous projects as an example. Mayor Joe needs this completed in "X" amount of time and I have 2 months to complete my "estimates". We visit the site and check it out a few times. We see a lot of in-usable land, or mountains we'd have to cut through, etc, and to understand the entire real cost, it would take "x" months, which would push the project BEYOND its expected delivery date.

So we make exceptions and add assumptions to the contract that if there are 10 KM worth of mountain cutting, it would me "x" dollars, more than that, would be "y" dollars as we don't know. So with these "assumptions", the project moves forward WITH money added to the budget as a "contingency" (usually 20% of the cost of the project, to cover these "unknowns" which didn't exist before, or couldn't be estimated correctly like the additional mountain cutting example I provided above).

We start the project and re-did our estimates (now doing the work, called "actual") as we had more time beyond just an "intention", and by being on the ground, or being on the ground for another project, we learned there is 50 miles of the mountain cutting involved (just making up an example).

So in this case, we'll revise our estimates and will go talk to Mayor Joe. AS LONG AS, we don't go over the contingency, we should be good (contingency is 20% allocated JUST to meet these issues of "intentional estimates" vs. the actual estimates). This situation in this article represents a less than 20% SD and the contingency will cover it. Only a small amendment is needed by two sponsors. Nothing else as it would be a part of the contract to use the contingency if needed. In 98% of the small to medium projects, the contingency is used. On 100% big projects, the contingency is used.

These kind of programs only take place ONCE in a nation's history and set her up for success for centuries. Everything else is an add on project for later. Like Pakistan's GT Road was built by the British centuries ago, resulting in connecting an entire country. The CPEC program is MUCH bigger than that.

We dont expect anything good from these looters called politicians for a reason.

Read my post above. Instead of taking the bait, learn how these programs actually work. People you are responding to, have hundreds of millions of dollars worth of corruption inside their home country on EVERY project. But instead of bringing that out, they'll bit*ch about everything you guys are doing, and you guys will make stupid statements and will agree to stuff you should really learn before commenting!!

So 4 billion USD for 400 kms highway. That is 10 million dollars per km. India makes 4 lanes highways at 2 million dollars per km.

1) Indian contractors can NEVER build something within budget as everyone gets a share. I can write a million examples on here, take a look at DRDO, ISRO, Dams, Highway construction and other projects, your leaders "conveniently" go over by MANY hundred millions (Least Combat Aircraft sounds familiar as an example)??

2) PLEASE, don't compare the Indian infrastructure to what's being built here. The only comparison is either some highways around Delhi, or new construction in Bangalore. The remainder of India's infrastructure isn't at this level. Hell, you guys don't have a comparison to Pakistan's M1, M2 system, with the exception of a few recently built highways.

When this gets built here, you'll see it on youtube and pictures on PDF, it would be amazing to see. In fact, take a look at the first few projects like Metro-Bus, Orangle line, etc. You can clearly see the quality and the beauty emphasis on these projects.

@MadDog : I just saw your comment on the other post. Thought I'd tag you on here too.
@MastanKhan : Please see the thread and provide some "Car Salesman" opinion, I know you've seen all this work in the US :)
@Oscar: you've seen many such infrastructure projects in the US. Any insight on the topic?
 
Last edited:
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How many of you people on here has ever managed a billion dollar program??

In the case above, on a 3 billion project, 20% contingency would be $ 600 million. Here, they are going over $ 550 million (still within 20%). So there is NO issue on here. In fact, a program this massive that's designed to be spread across an entire nation, with so much land routes, potential future natural issues (floods, earth quakes, material shortages, etc, etc) which will all cause work to be stopped on certain parts temporarily and happens to EVERY project, expect a $ 30% increase to majority of the project.

Here's how programs like these work. Just so everyone reading understands the mechanics. I see Indians doing propaganda and Pakistanis, as always playing defense without a need, as majority just don't know or care to understand how these things work. Before the Indian members bit*ch about these, take a look at your own project overruns, the ISRO, DRDO, the LEAST Combat Aircraft (LCA), acquisition of Rafale, ALL have cost over runs or time overruns and corruption involved. But they won't talk about those!!!!

Our Pakistani members will quickly raise the "corruption flag" quickly, out of paranoia and "conspiracy theories" than care to understand a very serious Mathematical and Scientific process that goes into these programs for estimation. And they won't care to realize that there are international auditing companies auditing ALL projects done by the government and any wrong doing will come out. But here's how a typical complex, international program works

1) Gov't of Pakistan needs to revise the CPEC "Project" to CPEC "Program". A Program has MANY projects in it. And these projects, due to their cost and size, are independent so the $ 46 billion was "allocated" for an entire program. What would be built out of that, would be many projects with independent budgets, etc.

2) When someone announces a program or a project, it is merely an "intent" or an "initiation". As no one knows how much it would cost. The definition of a "project" is a unique effort, resulting in producing a unique deliverable (road, plane, car, etc), which is a brand new end product. Which means, it will have its own budget.

3) At the time of initiating an investment, there is some "due diligence" that's done. In other words, I sign a contract with Mayor Joe in a City to build a highway with my investment. Some of my engineers and proposal experts write up the contract and use our previous projects as an example. Mayor Joe needs this completed in "X" amount of time and I have 2 months to complete my "estimates". We visit the site and check it out a few times. We see a lot of in-usable land, or mountains we'd have to cut through, etc, and to understand the entire real cost, it would take "x" months, which would push the project BEYOND its expected delivery date.

So we make exceptions and add assumptions to the contract that if there are 10 KM worth of mountain cutting, it would me "x" dollars, more than that, would be "y" dollars as we don't know. So with these "assumptions", the project moves forward WITH money added to the budget as a "contingency" (usually 20% of the cost of the project, to cover these "unknowns" which didn't exist before, or couldn't be estimated correctly like the additional mountain cutting example I provided above).

We start the project and re-did our estimates (now doing the work, called "actual") as we had more time beyond just an "intention", and by being on the ground, or being on the ground for another project, we learned there is 50 miles of the mountain cutting involved (just making up an example).

So in this case, we'll revise our estimates and will go talk to Mayor Joe. AS LONG AS, we don't go over the contingency, we should be good (contingency is 20% allocated JUST to meet these issues of "intentional estimates" vs. the actual estimates). This situation in this article represents a less than 20% SD and the contingency will cover it. Only a small amendment is needed by two sponsors. Nothing else as it would be a part of the contract to use the contingency if needed. In 98% of the small to medium projects, the contingency is used. On 100% big projects, the contingency is used.

These kind of programs only take place ONCE in a nation's history and set her up for success for centuries. Everything else is an add on project for later. Like Pakistan's GT Road was built by the British centuries ago, resulting in connecting an entire country. The CPEC program is MUCH bigger than that.



Read my post above. Instead of taking the bait, learn how these programs actually work. People you are responding to, have hundreds of millions of dollars worth of corruption inside their home country on EVERY project. But instead of bringing that out, they'll bit*ch about everything you guys are doing, and you guys will make stupid statements and will agree to stuff you should really learn before commenting!!



1) Indian contractors can NEVER build something within budget as everyone gets a share. I can write a million examples on here, take a look at DRDO, ISRO, Dams, Highway construction and other projects, your leaders "conveniently" go over by MANY hundred millions (Least Combat Aircraft sounds familiar as an example)??

2) PLEASE, don't compare the Indian infrastructure to what's being built here. The only comparison is either some highways around Delhi, or new construction in Bangalore. The remainder of India's infrastructure isn't at this level. Hell, you guys don't have a comparison to Pakistan's M1, M2 system, with the exception of a few recently built highways.

When this gets built here, you'll see it on youtube and pictures on PDF, it would be amazing to see. In fact, take a look at the first few projects like Metro-Bus, Orangle line, etc. You can clearly see the quality and the beauty emphasis on these projects.

@MadDog : I just saw your comment on the other post. Thought I'd tag you on here too.
@MastanKhan : Please see the thread and provide some "Car Salesman" opinion, I know you've seen all this work in the US :)
@Oscar: you've seen many such infrastructure projects in the US. Any insight on the topic?
The figures of USD 2 million per kms for 4 lane highways in India is for new highways constructed recently by National Highway Authority of India.

So stop your bullshit.
 
. .
There is NO project in the Indian history that was done on budget. The figure you are quoting me, has NO fukking relevance to the scope of work on CPEC. Nor do you have the contract to do a real comparison. A 1 KM built around an ocean would cost significantly different than a land route on a flat land like you find in Punjab. Similarly, the same 1KM would cost you significantly higher in Ladakh, go ask your IA, they'll tell you how many hundreds of millions extra they've paid (both in bribes and due to real issues).

Go take your propaganda and sorry as*s elsewhere. Next time you post utter crap, you should know there are people who have a lot of experience around these things on here and they'll call your bullshiit lying and propaganda out. Go hug your mother or dad and cry on their lap. This place has harsh mean people like me, who call bullshiit out and will hurt your little feelings :rofl: :cheers:
Between Multan & Sukkur there are flat lands. First learn geography of Pakistan.
 
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The figures of USD 2 million per kms for 4 lane highways in India is for new highways constructed recently by National Highway Authority of India.

So stop your bullshit.

Pakistan itself has constructed roads and highways for a wide range of cost/km/lane....

This is entirely a commissions thing. This is nothing new.

Between Multan & Sukkur there are flat lands. First learn geography of Pakistan.

that creature is a pml-n paid troll....
 
. .
There is NO project in the Indian history that was done on budget. The figure you are quoting me, has NO fukking relevance to the scope of work on CPEC. Nor do you have the contract to do a real comparison. A 1 KM built around an ocean would cost significantly different than a land route on a flat land like you find in Punjab. Similarly, the same 1KM would cost you significantly higher in Ladakh, go ask your IA, they'll tell you how many hundreds of millions extra they've paid (both in bribes and due to real issues).

Go take your propaganda and sorry as*s elsewhere. Next time you post utter crap, you should know there are people who have a lot of experience around these things on here and they'll call your bullshiit lying and propaganda out. Go hug your mother or dad and cry on their lap. This place has harsh mean people like me, who call bullshiit out and will hurt your little feelings :rofl: :cheers:

I have read your both comments in this thread and have been reading your comments for months on various topics.

I have to say that most of the time people arguing with you got owned by you. Secondly what i want to say that Despite born and raised in Pakistan and claiming myself a patriot, I do not even know a percent about my country and its economy what a fella sitting across Atlantic knows and writes. I am ashamed. Actually we Pakistanis are too much influenced by media, easily buy what media sells. Pakistani media has made word 'corruption' synonym of Nawaz Sharif, that is why people especially IK followers blindly criticize NS and company. He may involve in corruption but far better than zardari and his criminal enterprise. People complain that why NS doesn't take any action against Zardari (Mr. 10%)? Why Zardari is not in jail? Thats it.

Btw, a request to you, keep writing about Pakistan. Your posts are realistic and full of optimism. It is always refreshing to see a foreigner writes positive about a country.

:pakistan::smitten::usflag:
 
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How many of you people on here has ever managed a billion dollar program??

In the case above, on a 3 billion project, 20% contingency would be $ 600 million. Here, they are going over $ 550 million (still within 20%). So there is NO issue on here. In fact, a program this massive that's designed to be spread across an entire nation, with so much land routes, potential future natural issues (floods, earth quakes, material shortages, etc, etc) which will all cause work to be stopped on certain parts temporarily and happens to EVERY project, expect a $ 30% increase to majority of the project.

Here's how programs like these work. Just so everyone reading understands the mechanics. I see Indians doing propaganda and Pakistanis, as always playing defense without a need, as majority just don't know or care to understand how these things work. Before the Indian members bit*ch about these, take a look at your own project overruns, the ISRO, DRDO, the LEAST Combat Aircraft (LCA), acquisition of Rafale, ALL have cost over runs or time overruns and corruption involved. But they won't talk about those!!!!

Our Pakistani members will quickly raise the "corruption flag" quickly, out of paranoia and "conspiracy theories" than care to understand a very serious Mathematical and Scientific process that goes into these programs for estimation. And they won't care to realize that there are international auditing companies auditing ALL projects done by the government and any wrong doing will come out. But here's how a typical complex, international program works

1) Gov't of Pakistan needs to revise the CPEC "Project" to CPEC "Program". A Program has MANY projects in it. And these projects, due to their cost and size, are independent so the $ 46 billion was "allocated" for an entire program. What would be built out of that, would be many projects with independent budgets, etc.

2) When someone announces a program or a project, it is merely an "intent" or an "initiation". As no one knows how much it would cost. The definition of a "project" is a unique effort, resulting in producing a unique deliverable (road, plane, car, etc), which is a brand new end product. Which means, it will have its own budget.

3) At the time of initiating an investment, there is some "due diligence" that's done. In other words, I sign a contract with Mayor Joe in a City to build a highway with my investment. Some of my engineers and proposal experts write up the contract and use our previous projects as an example. Mayor Joe needs this completed in "X" amount of time and I have 2 months to complete my "estimates". We visit the site and check it out a few times. We see a lot of in-usable land, or mountains we'd have to cut through, etc, and to understand the entire real cost, it would take "x" months, which would push the project BEYOND its expected delivery date.

So we make exceptions and add assumptions to the contract that if there are 10 KM worth of mountain cutting, it would me "x" dollars, more than that, would be "y" dollars as we don't know. So with these "assumptions", the project moves forward WITH money added to the budget as a "contingency" (usually 20% of the cost of the project, to cover these "unknowns" which didn't exist before, or couldn't be estimated correctly like the additional mountain cutting example I provided above).

We start the project and re-did our estimates (now doing the work, called "actual") as we had more time beyond just an "intention", and by being on the ground, or being on the ground for another project, we learned there is 50 miles of the mountain cutting involved (just making up an example).

So in this case, we'll revise our estimates and will go talk to Mayor Joe. AS LONG AS, we don't go over the contingency, we should be good (contingency is 20% allocated JUST to meet these issues of "intentional estimates" vs. the actual estimates). This situation in this article represents a less than 20% SD and the contingency will cover it. Only a small amendment is needed by two sponsors. Nothing else as it would be a part of the contract to use the contingency if needed. In 98% of the small to medium projects, the contingency is used. On 100% big projects, the contingency is used.

These kind of programs only take place ONCE in a nation's history and set her up for success for centuries. Everything else is an add on project for later. Like Pakistan's GT Road was built by the British centuries ago, resulting in connecting an entire country. The CPEC program is MUCH bigger than that.



Read my post above. Instead of taking the bait, learn how these programs actually work. People you are responding to, have hundreds of millions of dollars worth of corruption inside their home country on EVERY project. But instead of bringing that out, they'll bit*ch about everything you guys are doing, and you guys will make stupid statements and will agree to stuff you should really learn before commenting!!



1) Indian contractors can NEVER build something within budget as everyone gets a share. I can write a million examples on here, take a look at DRDO, ISRO, Dams, Highway construction and other projects, your leaders "conveniently" go over by MANY hundred millions (Least Combat Aircraft sounds familiar as an example)??

2) PLEASE, don't compare the Indian infrastructure to what's being built here. The only comparison is either some highways around Delhi, or new construction in Bangalore. The remainder of India's infrastructure isn't at this level. Hell, you guys don't have a comparison to Pakistan's M1, M2 system, with the exception of a few recently built highways.

When this gets built here, you'll see it on youtube and pictures on PDF, it would be amazing to see. In fact, take a look at the first few projects like Metro-Bus, Orangle line, etc. You can clearly see the quality and the beauty emphasis on these projects.

@MadDog : I just saw your comment on the other post. Thought I'd tag you on here too.
@MastanKhan : Please see the thread and provide some "Car Salesman" opinion, I know you've seen all this work in the US :)
@Oscar: you've seen many such infrastructure projects in the US. Any insight on the topic?

Wow, comparing space research, building fighter jets with building roads and highways.
First start investing in your space research or a jet engine project or start building your own warships, then you will know what cost overruns actually means.

If you really want to compare infrastructure projects in India and that of Pakistan, just compare the Delhi metro project to your metro 'BUS' (which is actually nothing but BRTS in India). Compare the cost incurred in the projects.
 
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