ECNEC okays Rs289b worth projects

One scheme will be executed jointly with private sector to improve connectivity

ISLAMABAD:

The Pakistan Tehreek-e-Insaf (PTI) government on Thursday approved four road infrastructure projects at a total cost of Rs289 billion, including a scheme that would be executed in partnership with the private sector.

The Executive Committee of National Economic Council (Ecnec) approved the schemes that would improve inter-provincial connectivity. Adviser to Prime Minister on Finance Dr Abdul Hafeez Shaikh chaired the meeting.

The approved projects included construction of 306km Hyderabad-Sukkur Motorway at a cost of Rs165.7 billion, construction of 47.55km Khyber Pass Economic Corridor (KPEC) at a cost of Rs77.9 billion, construction of 146km Hoshab-Awaran-Khuzdar section of the M8 project and land acquisition for Swat Motorway Phase-II at a cost of Rs20 billion.

The Hyderabad-Sukkur Motorway project will be completed on build, operate and transfer (BOT) basis and involves the construction of a 306km-long, six-lane wide, access-controlled motorway.

The motorway is proposed to be a high-speed toll road facility for efficient and safe transportation, which will start from Hyderabad (the end of Karachi-Hyderabad Motorway, M-9) and terminates at Naro Canal (the start of Sukkur-Multan Motorway, M-5).

The allocation for the project in the current fiscal year is Rs100 million against the government’s share of Rs1.1 billion and the project will be completed in two and a half years. The share of the concessionaire is estimated at Rs164.6 billion.

The contractor will build the project on the BOT model. The facility will be handed over to the National Highway Authority (NHA) after the expiry of concession period.

The per-kilometre construction cost of the six-lane motorway is Rs537.7 million compared with the cost of Rs760 million for the Sukkur-Multan Motorway built under the China-Pakistan Economic Corridor (CPEC), according to the Ministry of Planning.

The total project cost of the Sukkur-Hyderabad Motorway is Rs541.4 million per kilometre.

The Sukkur-Multan Motorway had been built under a government-to-government deal between China and Pakistan. Compared with the Sukkur-Hyderabad project, the Sukkur-Multan project’s per-kilometre construction cost is Rs222 million or 29% lower. In terms of total project cost, it translates into savings of Rs50 billion.

While recommending the project to Ecnec a few weeks ago, the Central Development Working Party (CDWP) had directed the Pakistan Engineering Council to review rules and regulations that limited competition, especially for foreign companies.

Ecnec also approved the KPEC project, which comprised two components - construction of Peshawar-Torkham Motorway and a link road connecting the motorway to Badabher.

The project envisages construction of a 47.55km-long, four-lane wide, dual carriageway and high-speed access controlled motorway from Peshawar to Torkham.

The Peshawar-Torkham Motorway is part of the Peshawar-Jalalabad-Kabul Motorway project.

The original proposed cost of the KPEC project was Rs49.8 billion, which was later increased to Rs78 billion. The cost had been increased due to depreciation of the rupee from Rs115 to a dollar at the project’s planning stage to Rs155 when the PC-1 was submitted for approval.

The revised PC-I also includes the additional scope for a four-lane 55km link road connecting the Peshawar-Torkham Motorway to N-55 at Badabher and further linking N-5 between Chamkani and Jhagra.

The cost of the additional road is estimated at Rs22.5 billion that will be funded from increased availability of Pakistani rupees due to the exchange rate depreciation.

The World Bank is providing $460 million in loan for the project. There is an allocation of Rs1.5 billion in the FY21 budget for the project.

Ecnec - the highest project approval authority - also gave the go-ahead for constructing the Hoshab-Awaran-Khuzdar section of M-8.

The government has allocated Rs4 billion in the budget for the M-8 project and it is expected to be completed in 42 months. The CDWP had recommended the project to Ecnec at a rationalised cost of Rs25.8. billion without any foreign exchange component by deleting the security cost of Rs207.4 million and reducing contingencies from 5% to 3% of the construction cost.

The government of Balochistan will provide security and transfer the ownership of existing track from Hoshab to Awaran to the NHA free of charge.

Ecnec approved a proposal for the purchase of land for the Swat Motorway Phase-II project by the federal government at a cost of Rs20 billion. The motorway is proposed as a high-speed toll road facility for efficient and safe transportation.

The federal government will provide Rs20 billion while the Khyber-Pakhtunkhwa government’s share is estimated at Rs50 billion.

Published in The Express Tribune, July 17^th, 2020.

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