Hyderabad-Sukkur motorway: government to allow concessionaire to raise portion of project cost

To make Hyderabad-Sukkur motorway financially a viable project, the government of Pakistan will allow concessionaire to raise a portion of project cost in form of buyers/suppliers credit, it is learnt. Official sources revealed toBusiness Recorder that 6 international firms pre-qualified for the Hyderabad-Sukkur Motorway project, having estimated cost of Rs 163 billion, which the government is undertaking on build-operate-transfer (BOT) basis.
According to documents, the government will provide land and support the project viability by allowing concessionaire to raise a portion of project cost in form of buyers/suppliers credit. Furthermore, the project will be given on lease for up to 20 years.
The NHA had sought expression of interest (EoI) from local and international investors/firms for Hyderabad-Sukkur motorway while expecting up to 60 per cent investment of the project cost of Rs 163 billion. However 3 firms/joint venture including China State Construction Engineering Corporation + SACHAL Joint Venture (China/Pakistan), China Communication Construction Company Limited (China) and Shan Dong Hi Speed / Frontier Works Organisation (FWO) / Sinohydro Joint Venture (China/Pakistan) submitted bids.
Sources revealed that bids have been opened and technical evaluation is under process. The 296 km long project will be 6-lane motorway with design speed of 120 km per hour, having 89 bridges, 11 interchanges and 243 underpasses. The construction work is expected to start in the first quarter of 2017-18, the deadline given by Prime Minister Nawaz Sharif, and would be completed in 3 years. The NHA spokesperson toldBusiness Recorder that whole process for awarding the Sukkur Hyderabad Motorway is on track and the authority is fully confident to meet the desired timeline for this very important section of China-Pakistan Economic Corridor (CPEC).
The spokesperson said that the government is undertaking construction of Peshawar-Karachi Motorway, a high speed, controlled access, 6-lane modern motorway system. The motorway forms part of trade corridor linking ports of Karachi and Gwadar with China, Afghanistan and Central Asian states. The general alignment runs parallel to the National Highway (N-5), which carries 65 per cent traffic of the country. All the segments of Peshawar-Karachi Motorway have either been completed or awarded for construction except the Hyderabad-Sukkur motorway section, the official added.
In a bid to attract investors, the government will apply China-Pakistan Economic Corridor (CPEC) agreement clauses for offering Sukkur-Hyderabad Motorway on BOT, giving investors the choice to bring their own contractors/manpower and plan/design. Since it is a very big project with high cost, the government expects that the private investors will at least bear 60 per cent of the project cost and the remaining may be borne by the government through Public Sector Development Programme.
According to the Ministry of Planning, Development and Reform; Rs 2.5 billion have been earmarked for the Sukkur-Hyderabad section (296-km) in the PSDP 2016-17 while the project will be completed at a total cost of Rs 163 billion. The NHA official said that the investor may bring their own manpower or use local resources through joint venture. China is currently funding 2 road projects namely, Havelian-Thakot and Multan-Sukkur road projects under the CPEC, and according to a clause of the CPEC agreement, these projects are also being awarded to Chinese contractors, while Chinese labourers are working in these projects, sources confirmed.