The Sukkur-Hyderabad Highway Was Confirmed With A Surprisingly Low VGF

The Sukkur-Hyderabad Highway Was Confirmed With A Surprisingly Low VGF

The Sukkur-Hyderabad highway was confirmed with a surprisingly low VGF

The Public-Private Partnership (P3A) Board has approved a project proposal for the construction of the Sukkur-Hyderabad highway (M6) with surprisingly low-viability field funding (VGF). 9.5 billion, or about 3 percent of the project cost.

At the 20th Board meeting of Public-Private Partnership (P3A) Foreign-Rawalpindi Highway (CRM) Rules and Project Development Mechanism (PDF) for 2022 were also approved on the basis of Public-Private Partnership. (PPP).

At the meeting, it was reported that the international competitive tender process for the National Highway Administration (NHA) Sukkur-Hyderabad highway received two bids from M/s ZKB and M/s Techno-CMC-ACC. Both tender offers met the technical qualification requirements specified in the tender documents.

However, a consortium led by M/s Techno offered the government/NHA the best financial terms and was declared the most profitable bidder. The consortium has reportedly placed a bank guarantee of Rs. According to the official source 150 million and its VGF rival M/s was much lower than ZKB. The source said M/s ZKB is asking for Rs. 170 billion VGF for the Sukkur-Hyderabad highway.

At the meeting, a project proposal for the construction of the Sukkur-Heyderabad highway was approved. The Board considered the project proposal which required the winning bidder to provide capital Viability Gap Financing (VGF) of Rs. Only 9.5 billion. The project includes the construction of a controlled access road to a green area of 306 km worth Rs. 307 billion.

The successful bidder offered to pay Rs. 408 billion guaranteed revenue share to government/NHA over 22 years of operation. The project also expects to earn Rs. 918 billion corporate tax In the meeting, it was noted that the only missing link between the country’s road network in the north-south direction is the M6. Upon completion, passengers will be able to use the road network from Karachi port to Peshawar and back.

The project is expected to bring significant economic benefits by promoting tourism, creating job opportunities, reducing travel time, saving costs and contributing to the socio-economic development of urban and rural centers along the corridor.
Once the PPP agreement is approved by the P3A Board, the concessionaire will begin the financing process for the project, then proceed to construction and operation. The concession period of the project is 25 years, with 30 months of construction and 6 months of financial closing.

Emphasizing the importance of the project, the vice chairman of the Planning Commission (DCPC) said, “M6 is one of the most important projects in the Sindh package that the current government has prepared to benefit the people of the province.

During the meeting, it was also stated that Sindh would pay for the land purchase on behalf of NHA, and talks were held with provincial officials.

The council also approved the project proposal “Construction of the Harian-Rawalpindi highway (KRM) on the basis of PPP”. CRM has been approved by the Risk Management Division, the Central Development Working Group and the Executive Committee of the National Economic Council.

The project will be implemented soon. KRM is a 117 km long 4-lane (convertible to 6 lanes) greenfield facility and is expected to be completed within two years of financial closure of the concessionaire.

The Council also approved the Project Development Mechanism Guidelines (PDF) for 2022, which provides financial support to executive bodies to cover operational advisory costs associated with the development, structuring and procurement of the PPP project.

As part of the arrangements, P3A provides PDF support to a number of implementing agencies, including Pakistan Post, to develop an advanced logistics business project for delivery to the private sector.

Chairman of the Planning Commission (DCPC) Vice President Dr. Mohammad Jehanzeb Khan, PD&SI Secretary Abdul Aziz Ugaili, Finance Department Additional Secretary Imamdullah Bosal, Private Sector Development Members Asim Said, Akbar Ayub Khan and Hüma Ejaz Zaman. Zafar Hasan, Secretary of the Ministry of Communications, Captain Mohammad Khurram Agha (retd), Head of the National Highway Administration, and Malik Ahmed Khan, CEO of P3A.

Leave a Reply

Your email address will not be published.