ISLAMABAD: The Public-Private Partnership Authority (P3A) board has approved the development project proposals for the construction of Sukkur-Hyderabad Motorway (M6), Kharian-Rawalpindi Motorway (KRM), and Project Development Facility (PDF) Regulations, 2022, on Public-Private Partnership (PPP) basis.
The board considered the construction of Sukkur-Hyderabad Motorway M6 project proposal of the successful bidder, which had demanded provision of capital Viability Gap Funding (VGF) amounting to Rs9.5 billion only.
The project encompasses construction of 306km green-field controlled access motorway at a cost of Rs307 billion per successful bidder’s proposal. The successful bidder has proposed to pay Rs408 billion guaranteed revenue share to the government of Pakistan/National Highways Authority (NHA) over the operations period of 22 years. The project also expects to generate Rs918 billion in the form of corporate taxes.
The projects were approved in a meeting chaired by Deputy Chairman Dr Mohammad Jehanzeb Khan, which was attended by Secretary Planning, Development and Special Initiatives, Abdul Aziz Uqaili, Additional Secretary Finance Division, Imamdullah Bosal, members Private Sector Development, Asim Saeed, Akbar Ayub Khan, and Huma Ejaz Zaman.
Secretary Ministry of Communication Zafar Hasan, Chairman NHA (Retired)Capt Muhammad Khurram Agha, Chief Executive Officer CEO, P3A, Malik Ahmad Khan, were among the participants.
During the meeting, it was informed that M6 is the only missing link between the country’s north-south bound motorway network. With its completion, the commuters will be able to use motorway network, while travelling from the port city of Karachi to Peshawar and vice-versa. The project is expected to generate phenomenal economic benefits through promoting tourism, creating job opportunities, reducing travel time and saving costs, and contributing towards socio-economic development of urban and rural centers along the corridor.
The deputy chairman Planning Commission, while highlighting the importance of the project said M6 is one of the most important projects in the Sindh Package that the incumbent government had designed to benefit masses of the Sindh province and with its coming online, the region is going to witness a major uplift in trade and economic activities.
During the meeting, it was further informed that Sindh will pay for the land acquisition on behalf of the NHA and meetings in this regard took place with the provincial authorities of Sindh.
The NHA had initiated International Competitive Bidding process, in which, it had received two bids (M/s ZKB and M/s Techno-CMC-ACC), the meeting was informed. Both bids were able to meet technical qualification requirements as specified in the bid documents.
However, the consortium led by M/s Techno offered the best financial terms to the government of Pakistan/NHA and were declared as the most advantageous bidder.
Following approval of the PPP Contract by the P3A Board, the concessionaire will initiate financial close process for the project, followed by the construction and operations period. The concession period of the project is 25 years including 30 months construction period and six months financial close period.
The Board also accorded approval to the Project Proposal of construction of Kharian-Rawalpindi Motorway (KRM) on PPP basis. KRM has been approved by Risk Management Unit, Central Development Working Party and Executive Committee of the National Economic Council.
The project will be floated in the market in a short-while. KRM is 117 km 4-lane (convertible to six-lane) green-field facility that is expected to be completed in a period of two years, following achievement of financial close by the concessionaire.
Besides above, the board also approved Project Development Facility (PDF) Regulations, 2022, which envisaged providing financial support to the implementing agencies to meet transaction advisory cost related to the PPP project development, structuring and procurement. Under the said Regulation, P3A is already providing PDF support to several implementing agencies including Pakistan Post to prepare its flagship logistics business project for offering to the private sector.
Copyright Business Recorder, 2022
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