SIFC steps in to help reach payment settlement
The Special Investment Facilitation Council (SIFC) has intervened to help reach an out-of-court settlement between the National Highway Authority (NHA) and motorway project contractor Bina Puri.
Under such an arrangement, the NHA will ensure that the agreed payment, according to a settlement agreement signed on January 10, 2025 between the two parties, is cleared and released from the road maintenance account. Both parties had agreed on a Rs1.29 billion settlement, requiring NHA to make payment within 60 working days (deadline: April 9, 2025). In case of delay, a 10% interest on the above amount will be levied from the date of signing the settlement agreement.
However, despite having sufficient time for the approval of documents, the NHA failed to pursue timely approvals with the relevant forums.
During a pre-Central Development Working Party (CDWP) meeting held on March 9, 2025, it was observed that the processing of a revised PC-1 was not required, as no earlier PC-1 had been approved nor any administrative nod issued. Moreover, the NHA clubbed the pending liabilities of two M-9 contracts (Bina Puri and SCORE) against the directives of SIFC, which were related only to Bina Puri.
SIFC noted that NHA only provided the option of payment through the Public Sector Development Programme (PSDP). It was not considered well-conceived as the project was originally approved on a public-private partnership (PPP) model by the NHA executive board. Also, the SIFC was not fully briefed about the available payment options.
Ministry of Communications secretary gave assurance that payment would be made from the road maintenance account within the timeline.
The M-6 (Sukkur-Hyderabad) project was also tabled before SIFC. NHA chairman informed the council that a review of the feasibility study was carried out by international consultant AT Kearney, which led to the division of the project into five sections.
The overall revised project cost on a PPP mode was estimated at Rs399 billion. The project qualification proposal was approved by P3WP (public-private partnership working party) on February 14, 2025. Moreover, the P3A board has to approve the project structure before the initiation of bidding for the first phase, covering section-I from Hyderabad to Tando Adam and section-II from Tando Adam to Nawabshah.
NHA chairman further informed the council that after obtaining necessary approvals, bidding would commence in April 2025 and contracts would be awarded by October. NHA has also pitched the project to various foreign countries and international financial institutions (IFIs), including Azerbaijan and the Islamic Development Bank.
It was decided that the Ministry of Communications and NHA would pursue all possible financing options for the M-6 project, including the public-private fund (PPF), G2G, IFIs and others while ensuring that PC-1 had the flexibility to adopt the most suitable financing approach for each project section.
This hybrid financing model will help overcome delays in transitioning between financing modes and ensure smooth implementation.
It was noted that end-to-end connectivity of motorways, particularly with Karachi Port, was critical. To enhance the viability of the project, the NHA should plan M-6 and M-10 (New Karachi-Hyderabad Motorway) as an integrated concept, ensuring seamless connectivity and efficient logistics movement.
NHA will make all-out efforts to comply with the October 2025 timeline for awarding contracts, regardless of the financing mode finalised.