Venues’ upgrade cost increase forces PCB to seek overdraft
The Pakistan Cricket Board (PCB) has decided to take an overdraft of Rs3 to 6 billion for the current fiscal year after the estimated budget for the reconstruction of three major international venues of the country was raised by Rs5 billion, the minutes of the Board of Governors (BoG) meeting held in December last year reveal.
The PCB in recent months carried out major renovation of the Gaddafi Stadium (Lahore), National Bank Stadium (Karachi) and the Rawalpindi Cricket Stadium (Rawalpindi) for the eight-nation ICC Champions Trophy starting on Feb 19.
“The CFO [Chief Operating Officer] brought to the attention of the BoG members that as per the revised estimate provided by the PCB Director Infrastructure, the estimated budgetary requirement for the three stadia upgradation projects has increased by Rs5 billion i.e. Rs13 billion vs Rs18 billion,” read the minutes of the BoG meeting, a copy of which is available with Dawn.
“In order to fund this additional requirement, the management has taken proactive measures by reducing overall operational expense budget for fiscal year 2024-25 by Rs3 billion. Additionally, most of the other capital expenditures for this fiscal year have been either cancelled or postponed. All future budgeted operational and capital expenditure are being closely monitored to ensure judicious spending. However, based on overall estimated results, there might be a periodic shortfall of approx. Rs 3 billion to Rs 6 billion during the current fiscal year.
“He (CFO) further added that considering the anticipated overall future cash flow requirements, there is a strong possibility that the PCB will require period external cash flow support for the foreseeable future. Consequently, the management has agreed in principle to secure external cash overdraft facilities in the amount of Rs3 billion to Rs6 billion to support any unexpected additional funding requirements. The management is in negotiations with different governmental and private banks to secure the best possible arrangements.
“The BoG unanimously endorsed the increase in the stadium upgrade budget by Rs5 billion. Moreover, the BoG endorsed the CFO’s proposal to secure external cash flow overdraft facilities up to Rs 6 billion to meet possible periodic funding shortfall, if any,” the documents further said.
Meanwhile, sources said that the PCB will struggle to again raise its financial resources as in 2023 it had the reserves of Rs26 billion. And after selling out the broadcast rights and others for the next three years (2024-26) for a meagre amount of Rs1.70 billion, which was far less than its reserve price of around Rs3 billion plus, there are two widows left for it to raise funds in the latter part of this year.
One of them is to sell the six franchise teams of the PSL later this year as the first phase of ten years of the current six teams will complete after the end of the 10th edition in April this year.
Secondly, the PCB must expect revenue from the ICC, specially from the Champions Trophy.
The PCB had already signed an agreement with the ICC to give it a specific (undisclosed) amount against the revenue to be generated through gate money of the Champions Trophy matches.
But as the Indian team will not play any of their matches on Pakistan soil as they will remain in Dubai for the entire tournament, the main source of ticket sale was received from the three sold out matches of India vs Pakistan, India vs Bangladesh and India vs New Zealand.
PCB chairman Mohsin Naqvi in a talk with media had disclosed that the revenue of all the Champions Trophy matches being staged in Dubai would also be added when the ICC would decide the specific amount for the PCB.
BoG unanimously endorses increase in stadium upgrade budget by Rs5 billion.
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