P3A Board approves Sukkur-Hyderabad, Kharian-Rawalpindi Motorway projects
ISLAMABAD: The Public Private Partnership Authority (P3A) Board has approved the 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 during its 20th meeting held on Wednesday.
The Project Proposal for the construction of Sukkur-Hyderabad Motorway M6 was approved in the meeting. The Board considered Project Proposal of the successful bidder which had demanded provision of capital Viability Gap Funding (VGF) amounting to Rs 9.5 billion only.
The Project encompasses construction of 306 KM green-field controlled access motorway at a cost of Rs 307 billion per successful bidder’s proposal. The successful bidder has proposed to pay Rs 408 billion guaranteed revenue share to GoP/ NHA over the operations period of 22 years. The Project also expects to generate Rs 918 billion in the form of corporate taxes.
During the meeting it was informed that M6 is the only missing link between 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 the Peshawar and vice-versa. The Project is expected to generate phenomenal economic benefits through promoting tourism, creating job opportunities, reducing travel time & saving costs and contributing towards socio-economic development of urban & rural centers along the corridor.
DCPC while highlighting the importance of the Project said ‘M6 is the 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 & economic activities.
During the meeting, it was further informed that Sindh will pay for the land acquisition on the behalf of NHA and meetings in this regard took place with provincial authorities of Sindh.
NHA had initiated International Competitive Bidding process in which it had received two bids (M/s ZKB & 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 GoP/ 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 6 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 6-lane) green-field facility that is expected to be completed in a period of 2 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 the several implementing agencies including Pakistan Post to prepare its flagship logistics business project for offering to the private sector.
The projects were approved in a meeting chaired by Deputy Chairmanship Dr Mohammad Jehanzeb Khan which was attended by Secretary PD&SI, 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 Caption Muhammad Khurram Agha, Chief Executive Officer CEO, P3A, Malik Ahmad Khan were among the participants.