ISLAMABAD: The Public-Private Partnership Authority (P3A) Board on Thursday approved construction of two major road projects worth Rs403 billion, besides the regulations meant for project development facility through private sector participation.
A meeting presided over by Deputy Chairman of the Planning Commission Mohammad Jehanzeb Khan approved the proposal for construction of the Sukkur-Hyderabad Motorway (M6) with provision of capital Viability Gap Funding (VGF) amounting to Rs9.5bn as demanded by the successful bidder.
Secretaries of planning and communications, additional finance secretary, private sector members of the board Asim Saeed, Akbar Ayub Khan and Huma Ejaz Zaman, the National Highway Authority (NHA) chairman and chief executive officer of P3A also attended the meeting.
The M6 project envisages construction of a 306-kilometre-long green-field controlled-access motorway at a cost of Rs307bn as per successful bidder’s proposal.
The successful bidder has proposed to pay Rs408bn guaranteed revenue share to the government/NHA over the operations period of 22 years. The project is expected to generate Rs918bn in the form of corporate taxes.
The meeting was informed that M6 was the only missing link in the country’s north-south motorway network. With its completion, the commuters will be able to use the motorway network to travel from Karachi to Peshawar and vice versa.
According to the Planning Commission, the project is expected to generate “phenomenal” economic benefits by promoting tourism, creating job opportunities, reducing travel time and saving costs and contributing towards socio-economic development of urban and rural centres along the corridor.
The meeting was informed that Sindh would pay for land acquisition on NHA’s behalf. The NHA has initiated the international competitive bidding process in which it had received two bids from M/s ZKB and M/s Techno-CMC-ACC. Both bids met technical qualification requirements as specified in the bid documents.
However, the consortium led by M/s Techno offered the best financial terms and was declared as the most advantageous bidder.
Following approval of the public-private partnership (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 of construction period and six months of financial close period.
Published in Dawn, February 18th, 2022
