ISLAMABAD: Pakistan is seeking foreign investors for a $1.7 billion road project, a senior official said, as the South Asian nation looks to public-private partnerships (PPPs) to help fund badly needed infrastructure projects.

Pakistan is embarking on the biggest road-building programme in its history, with Prime Minister Nawaz Sharif putting infrastructure projects at the heart of efforts to expand trade and speed up economic growth.

Officials say road projects worth Rs850bn ($8.1bn) are due to be completed in the next three years, which they expect to boost growth by 1-1.5 percentage points per year.

A consortium of Pakistani banks has raised $1.5bn for several motorway projects and the government is seeking investors for a $1.7bn public-private concession to build and operate a 296-km highway between Hyderabad and Sukkur.

Shahid Ashraf Tarar, chairman of the National Highway Authority, said Pakistan wants to do more public-private deals which do not add to government debt due to a constitutional limit on borrowing.

“We have to find creative investments in road infrastructure,” Tarar told Reuters in Islamabad. “We are trying to make this road infrastructure self-sustainable over a period of time...and not a burden to the government of Pakistan.” Tarar said Chinese investors and a Euro-Asian consortium have expressed interest in the $1.7bn Hyderabad-Sukkur project but the concession will first have to be advertised.

He said public-private projects in Pakistan would see investors build the highway, operate it and make money mostly through tolls, before returning it to the government. The life span of the concession is expected to be 20-30 years.

Pakistan’s economy is growing at the fastest rate in eight years but foreign investors have remained wary about taking the plunge in a nation which has been racked by economic turmoil and Islamist attacks over the past decade.

The economy is also likely to receive a boost from a $46bn China-Pakistan Economic Corridor project, including about $4.5bn towards road infrastructure.

Tarar said local banks investing $1.5bn in PPP projects should intrigue foreign investors.

“If it’s profitable for local banks...that should be a good enough incentive for foreign investors to look at our projects with interest,” he said.

About 95 per cent of freight in Pakistan is moved by roads as the colonial-era rail network has crumbled due to chronic under investment. Roads also account for 90pc of passenger traffic in the country of 190 million people.

Published in Dawn, June 25th, 2016