ISLAMABAD: The Public-Private Partnership Authority (P3A) on Friday approved the transaction structure of Kharian-Rawalpindi Motorway project aimed at providing the fastest alternative route between Lahore and Rawalpindi/Islamabad.

The Planning Commission said in a statement that the transaction structure of the project was approved at the 18th meeting of the Board of Directors of the P3A. Planning Minister Asad Umar presided over the meeting.

The board considered the transaction structure of the project proposed by the P3A and the commercial feasibility study undertaken by the National Highway Authority (NHA).

Project entails construction of a 117km, four-lane green-field access controlled facility

The board approved the structure on a build-operate-transfer (BOT) user-charge basis at a cost of Rs79 billion with provision of government support in the form of capital and operational Viability Gap Fund (VGF) to make the project financially viable and bankable for the private sector.

The project entails construction of a 117km four-lane (expandable to six-lane) green-field access controlled facility in 24 months.

The concession period of the project is 25 years, including construction, and six-month financial close period.

The concessionaire, apart from being provided VGF support, will be given project tolling and commercial exploitation rights to cover its life-cycle costs and earn an adequate rate of return on its investment.

The P3A board recommended providing an optimal mix of capital and operational VGF in order to seek adequate investor interest in the project while ensuring a value for money solution is offered to the public sector.

The deputy chairman of the Planning Commission, secretaries and nominees of planning, finance, communications, Member Private Sector Development, Member Infrastructure and Regional Connectivity, Director General Debt Office of the Finance Division, the NHA chairman, P3A Chief Executive Officer and private members of the board Huma Ejaz Zaman and Akbar Ayub Khan also attended the meeting.

Published in Dawn, October 16th, 2021