Ring Road: FWO to win Southern Loop construction contract

FWO submitted lower bid than China Works, decision to be announced in 2 weeks.

LAHORE:

The Frontier Works Organisation (FWO) is likely to win the contract for building three sections of the Southern Loop of the Lahore Ring Road, The Express Tribune has learnt.

China Works and the FWO submitted technical and financial bids for the project, worth around Rs50 billion, on September 30. Both companies technical bids qualified, upon which their financial bids were opened on October 24.

Officials of the Lahore Ring Road Authority (LRRA), speaking on the condition of anonymity, said that the FWO had submitted the lowest financial bid, so it would win the contract, barring any last minute hitches.

The officials said that the FWO had demanded an annuity of Rs13.4 billion, while China Works had sought Rs16.2 billion. The company winning the contract will be paid annuity for 15 years after the completion of the project. In these 15 years, it must maintain the road and re-carpet it twice. It must also install surveillance cameras and smart traffic signals as part of a broader ‘intelligent transport system’, said the officials.

The LRRA’s financial advisor for the project, Grant Thornton, is currently going over the bids to make sure that there are no hidden clauses or conditions. The advisor is expected to approve the FWO bid in two weeks, with the notice of award to the FWO to be issued around the third week of November. The concession agreement with the company would be signed on December 10.

According to the request for proposal for the project, the contractor will have until June 10 to make sure all finances are in place and to start construction work on the ground. It would have two years to finish construction. Both the FWO and China Works have deposited Rs50 million with the LRRA. Should the successful company fail to arrange finances by June 10, it would forfeit the deposit.

Meanwhile, the Planning and Development Department has approved a PC-1 (plan) for land acquisition for the three sections of the Southern Loop, but the funds for it are yet to be released. The Southern Loop would start where the Northern Loop ends, at Package 17 of the Lahore Ring Road, at Defence. Package 1 of the Southern Loop, about 9.35km, would run to Ferozepur Road. Package 2 from Gajju Mata on Ferozepur Road to Adda Plot would be about 13km, while Package 3 from Adda Plot to Maraka, Multan Road, would be about 8km. Lahore Commissioner and LRRA Chairman Rashid Langrial declined to comment on the contract, saying that it would be improper to speak about it until the financial adviser made a final decision.

Published in The Express Tribune, November 5^th, 2013.