KARACHI: The federal government has removed all financial and technical hurdles in the way of the construction of the 306-kilometre-long Sukkur-Hyderabad motorway, which is being described as the biggest project in the development package announced by Prime Minister Imran Khan for Sindh last month.

A recent meeting of the Public-Private Partnership Authority chaired by Federal Minister for Planning, Development & Special Initiatives Asad Umar took up several matters, including the Sukkur-Hyderabad motorway project which was facing some issues to take off.

With the fresh development, sources said, the project could formally be launched in the current month for further proceedings.

Mr Umer in a tweet said: “Chaired meeting of public private partnership authority today in which we authorised the viability gap fund and transaction structure for the Sukkur Hyderabad motorway project. This motorway will be the biggest project in the Sindh development package announced by the PM.”

The 306-km-long motorway is part of PM’s Rs446bn Sindh development package

Meanwhile, a source privy to the development said that the project envisaged construction of a 306-kilometre-long green-field six-lane access controlled motorway on build-operate-transfer (BOT) basis at a cost of Rs191 billion.

“The federal government intends to supplement through capital and operational VGF [Viability Gap Fund], the financial viability and bankability of the project,” the source said citing financial and technical details of the project.

“The project’s construction period is three years including six months financial close and concession period is 25 years. The project is expected to be financed through debt-to-equity ratio of 70:30 after deducting government of Pakistan’s share of capital VGF in the project. The project is expected to provide 17 per cent equity IRR [internal rate of return] to the investor while generating NHA [National Highway Authority] revenue share amounting to Rs127 billion,” he said.

He said that since the project was proposed to be financed on a BOT basis, all the significant risks related to Sukkur-Hyderabad motorway construction and operations including arranging finances would remain with the private sector except change of law and political risk.

It would be the biggest project under the Sindh development package announced by the PM in April, he said and added that its commercial feasibility study along with transaction structure had been approved with high hopes that it would be floated in the market in May 2021.

Prime Minister Imran Khan had on April 16 unveiled a historic development package worth Rs446bn to develop backward areas of the PPP-led Sindh through power supply, irrigation, sports and communication projects.

The package features restoration of 200,000 acres of agricultural land, upgrading of 14 passports offices, construction of the Nai Gaj dam to irrigate around 28,800 acres, 306-kilometre Sukkur-Hyderabad motorway, gas supply to 160 villages and annual 30,000 new power connections in the neglected districts.

Under the package, Rs52bn would be spent on power and gas supply to the deprived areas and Rohri; and the Hyderabad’s railway stations would be upgraded. The federal government has also decided to complete the Nai Gaj dam project after the Sindh government refused to do its part. Similarly, some 100,000 youth in 14 preferred districts would be imparted skill training; and sports facilities would be developed for the benefit of 130,000 youth, 35,000 of them female.

The package would also ensure introduction of 3G and 4G internet services for 3.7 million people and optic fibre connectivity for 1.2m.

An official privy to the details of the Sukkur-Hyderabad motorway design, meanwhile, said the motorway was proposed to be a high-speed toll road facility for efficient and safe transportation, which would start from Hyderabad — end of the Karachi-Hyderabad motorway M-9 — and terminate at Naro Canal — start of the Sukkur-Multan motorway, M-5.

“The project alignment passes through Jamshoro, Tando Adam, Hala, Shahdadpur, Nawabshah, Moro, Dadu, Naushehro Feroze, Mehrabpur, Rasoolpur, Larkana, Khairpur and Sukkur,” he added.

Published in Dawn, May 3rd, 2021