• Decides to award Rs205bn M-13 contract to FWO
• Opts for negotiated process to fast-track 117km project

ISLAMABAD: The government has decided in principle to award the contract for the Rs205 billion Kharian-Rawalpindi Motorway (M-13) to the Frontier Works Organisation (FWO) through a negotiated process, bypassing competitive bidding to ensure the early launch and expedited completion of the 117km project.

Sources in the Public Private Partnership Authority (P3A) told Dawn that the decision was taken at a meeting of the P3A Board of Directors, virtually presided over by Adviser to the Prime Minister on Privatisation Muhammad Ali from Turkiye, in view of the urgency attached to the project.

According to the sources, the decision to award the contract to the FWO — the engineering and construction arm of Pakistan Army — was made on the recommendation of the National Highway Authority (NHA). The authority argued that the FWO had already completed two adjoining sections of the Lahore-Rawalpindi Motorway corridor, of which the Kharian-Rawalpindi section forms a part.

The sources said Section 20 of the P3A Act allows negotiated procurement instead of competitive bidding under certain circumstances.

They said the government wanted the project to be completed on a fast-track basis as it would reduce the Lahore-Rawalpindi distance by about 100km and cut travel time by more than an hour compared to the existing Lahore-Islamabad Motorway (M-2).

The NHA informed the P3A board that a competitive bidding process would be time-consuming, whereas the FWO was already positioned to begin construction because of its involvement in the Lahore-Sialkot and Sialkot-Kharian motorway sections.

The sources said the P3A board’s approval for a negotiated contract with the FWO would be submitted to the federal cabinet for formal endorsement and implementation.

The Executive Committee of the National Economic Council (Ecnec) approved the 117km project in the first week of April this year at an estimated cost of Rs203.32bn. At the time, Ecnec had directed that the project be procured through international competitive bidding.

The cost of the project has more than doubled from the Rs96bn estimate approved by Ecnec in January 2022 after it was upgraded from a four-lane to a six-lane motorway on the instructions of the Special Investment Facilitation Council (SIFC). The project is being developed on a build-operate-transfer (BOT) basis and has a financing viability gap of more than Rs40bn to be met by the federal government.

An official statement said the principal agenda item before the P3A board was consideration of the NHA’s proposal for the Kharian-Rawalpindi Motorway project, described as a strategically important transport corridor expected to improve regional connectivity, mobility and economic activity.

“The board deliberated on the matter in light of the applicable provisions of the P3A Act, 2017, relevant procurement and approval requirements, and the need to ensure that all future actions are undertaken in the public interest, with due regard to transparency, value for money, sound risk allocation and applicable legal and regulatory requirements,” the statement said.

It added that the board agreed the NHA, as the implementing agency, could process the matter through the Ministry of Communications to obtain all required federal government approvals under the P3A Act, 2017.

The board also noted that the commercial terms of the proposed concession arrangement — including the financing structure, concession period, tolling framework, risk allocation and return profile — would be evaluated at the appropriate stage in accordance with the approved transaction framework and applicable legal and regulatory requirements.

Published in Dawn, June 25th, 2026