ISLAMABAD: The Central Development Working Party (CDWP) on Monday cleared two development projects worth Rs196.46 billion, including the construction of 306km Hyderabad-Sukkur Motorway (M-6) in the public-private financing mode on the Build-Operate-Transfer (BOT) basis.
The meeting, presided over by Deputy Chairman of Planning Commission Muhammad Jehanzeb Khan, approved Rs5bn in the health sector for Balochistan and recommended the Rs191.47bn Hyderabad-Sukkur Motorway project to the Executive Committee of the National Economic Council (Ecnec) with significantly higher financial share of the government.
Under the current financial powers, the CDWP can itself approve projects costing no more than Rs10bn while projects of higher estimated costs are approved by Ecnec once the CDWP clears them on technical grounds.
In Monday’s meeting, only two projects related to health and transport & communications were presented.
A project related to health namely “Strengthening of Existing DHQs, and selected THQs, RHCs, BHUs in District Awaran, Washuk, Khuzdar, Lesbela , Panjgur, Gwadar and Kech” was also approved at a cost of Rs4.997bn.
The project envisages strengthening of seven districts, which are described as less developed areas of South Balochistan, through provision of civil infrastructure, medical equipment, machinery and ambulances.
A project related to Transport & Communication presented to the CDWP was “Construction of Hyderabad–Sukkur (306 km), 6-Lane Divided Fenced Motorway on BOT basis” worth Rs191.471bn. The project envisages construction of 306 km long, 06-lane wide, access-controlled Motorway.
The project was also discussed in the last CDWP on April 12, but was deferred pending its clearance from the board of directors of the Public Private Partnership Authority, now called P3A. The Chief Executive Officer (CEO) of the P3A Ahmad Khan was directed to also present a Viability Gap Funding (VGF) financing.
As of April 12, the P3A was proposing Rs76bn Government of Pakistan funding or almost 39pc share which has now been increased to almost 50pc. The BOT is practically now on 50:50 shareholding from the public and private sector.
The P3A board of directors had approved the provision of Rs92bn from the budget and through toll charges to make the Hyderabad-Sukkur motorway project financially viable and attractive for private parties.
On Monday, the P3A presented the financial model approved by its board before the CDWP. “The CDWP recommended the financial model for consideration of Ecnec which stated that the project would be implemented on a BOT — user-charge basis with the provision of capital and operational Viability Gap Funding (VGF) to improve the financial viability and bankability of the project.
Earlier, the government was seeking development of the project without budget support from the government and wanted this to be fully funded by the private sector which did not come up with the response the government was anticipating when the BOT model was originally finalised and approved in January and March last year respectively.
In the last meeting of April 12, the federal government’s share in the project was projected at Rs76bn or 39.5pc against the original proposed share of Rs1.1bn or 0.7pc.
Published in Dawn, April 27th, 2021