ECNEC gives nod to four projects costing Rs265b

Approved schemes include construction of much-delayed Sukkur-Hyderabad motorway

ISLAMABAD:

The Executive Committee of the National Economic Council (Ecnec) on Wednesday approved four development schemes at a cost of Rs265 billion, including the construction of the much-delayed Sukkur-Hyderabad motorway – a missing link between Peshawar to Karachi hassle-free road network.

The meeting of Ecnec, chaired by Finance and Revenue Adviser Shaukat Tarin, gave the nod to the revised project for the construction of Hyderabad-Sukkur Motorway on a build-operate-transfer (BOT) contract at a cost of Rs191.5 billion, according to the finance ministry.

The project will be executed by the National Highway Authority (NHA) and envisages the construction of 306lm long, six– lane wide motorway between Hyderabad and Sukkur.

The NHA has received two bids from local parties in its third attempt to award the project after Chinese companies decided to stay away from the bidding process.

In April this year, the Public Private Partnership Authority (PPPA) board had approved the provision of Rs92 billion from the budget and through toll charges to make the Hyderabad-Sukkur motorway project financially viable and attractive for private parties.

The contractor will collect the toll from commuters for 25 years. The first year toll rate will be Rs860 per car that the contractor will be allowed to increase 7.5% annually, according to board’s decision.

The PPPA has authorised the viability gap fund and transaction structure for the Hyderabad-Sukkur motorway project.

The government would also provide Rs43 billion from the budget during the construction period as capital injection and another Rs49 billion as operational viability gap fund with Rs7 billion per annum for the debt service period of seven years, according to the PPPA board decision.

Ecnec also approved the project of Land Acquisition for Lai Expressway and  Flood Channel, Rawalpindi worth Rs25 billion with directions that no expenditure will be incurred till the completion of Environment Impact Assessment (EIA) report and its approval from the PPPA Board.

The project will be executed by the Rawalpindi Development Authority (RDA). The project envisages acquisition of 750 kanals of land to provide clear ‘Right of Way’ for the construction of the Lai Nullah Expressway and flood Channel, which would constitute an integral part of the transportation network of Rawalpindi besides flood mitigation and sewage disposal.

The committee also approved the  construction of Rawalpindi Ring Road (R3), the main carriageway from Baanth (N-5) to Thallian (M-2) amounting to Rs23.6 billion with the condition to acquire the concurrence of the Planning Commission and the inclusion of the axel load management in the project.

The project has now been rendered to mere a bypass and it does not fit into the definition of a complete ring road project.

Ecnec decided that the Punjab government would finance the project.  The RDA would execute it for the construction of a six-lane access-controlled Rawalpindi Ring Road of 38.3km in length.

A few months ago, the route of the project had tainted the image of the government after two cabinet members were found connected with a change in it that escalated the land acquisition cost by Rs10 billion.

However, the Central Development Working Party (CDWP) cleared only the construction component of the project at a cost of Rs23.6 billion.

The Punjab government has already separately revised downwards the land component scheme cost from over Rs16 billion to Rs6.7 billion.

The project is planned to be completed in three years but there is hardly any venture in Pakistan that has been completed on time due to scarcity of resources and poor planning and execution.

The construction of the project had been originally proposed to be taken up on a BOT basis in the public-private partnership (PPP) mode. However, the Punjab government shelved the private financing plan and instead opted to fund the scheme from the taxpayer money.

Ecnec also approved the revised Southern Punjab Poverty Alleviation Project (SPPAP) worth Rs25.2 billion.

Contributions from the International Fund for Agriculture Development (IFAD), Punjab government and beneficiaries will assist the funding of project spread over 10 districts of Punjab.

The committee deferred the Greater Thal Canal Project (Phase-II) with observations to discuss in the next meeting after considering the technical aspect of the project, inclusion of the comments of the Sindh government in the report of CDWP and addressing the reservations of all stakeholders.

Earlier, the CDWP had also deferred the project.

Ecnec also could not reach a consensus on the second phase of Greater Thal Canal project due to opposition from Sindh. The project costing Rs19.3 billion has been planned to provide irrigation water for around 294,110 acres in the districts of Layyah, Bhakkar and Khushab in Punjab.

However, the Sindh government is opposing the project due to its adverse impact on livelihoods in its province. The Punjab government was of the view that it did not require a fresh no-objection certificate (NOC) from the Indus River System Authority (Irsa) for the Greater Thal Canal project.

Under the water accord, allocations have been made for the project for the Kharif season in addition to which surplus flood flows will also be available. The project will help increase crop production from 12,032 tons per annum to 378,270 tons.