CPEC agreement clauses to be applied: government mulling offering Sukkur-Hyderabad motorway on BOT basis

In a bid to attract investors, the government will apply China Pakistan Economic Corridor (CPEC) agreement clauses for the proposed Sukkur-Hyderabad motorway on Built-Operate-Transfer (BOT), giving investors the choice to bring their own contractors/manpower and plan/design, it is learnt. Due to financial crunch, the government is considering offering Sukkur-Hyderabad motorway on BOT basis with an estimated investment of $1.7 billion, official sources revealed to Business Recorder.
The 296-km long motorway is the last missing link on the Karachi-Lahore motorway as well as in the CPEC. The construction work is expected to begin in the first quarter of 2017, the deadline given by Prime Minister Nawaz Sharif with scheduled completion in three years. Senior official of the National Highway Authority (NHA) however said that since it was a very high cost project the government expected the private investor to at least bear 50-60 percent of the project cost and the remaining might be borne by the government through Public Sector Development Programme.
According to the Ministry of Planning, Development and Reform Rs 2.5 billion has been earmarked for the Sukkur-Hyderabad section (296 km) in the PSDP 2016-17 while the project will be completed at a total cost of Rs 163 billion. NHA official said that investors might bring their own manpower or might use local resources through Joint Venture (JV). China is currently funding two road projects-Havilian-Thakot and Multan-Sukkur road projects under the CPEC and according to a clause of the CPEC agreement, those project were also being awarded to Chinese contractors, besides Chinese labour was working on those projects, sources confirmed.
The same agreement clause might be applied in the Sukkur-Hyderabad motorway project but all depended on what kind of response NHA receives, said the official, adding that a good response was expected from investors. The official further said that Korean Ambassador had met Chairman NHA and expressed an interest in the project, while some backdoor discussions with Turkey were ongoing.
NHA was all set to seek Expression of Interest (EoI) from investors next week for the Sukkur-Hyderabad motorway and after bid evaluation, a decision would be taken, sources added. The official said CPEC projects were being funded through four sources including Chinese soft loans, PSDP, multilateral donors and BoT/PPP. Sukkar-Hyderabad motorway fell in the last category, official added. Sukkur-Hyderabad was crucial for CPEC as it was the only missing link given that work on Hyderabad-Karachi was already under way and would contribute to the country's economy enormously, the source added.