ISLAMABAD: The Board of Directors’ meeting of the Public-Private Partnership Authority (P3A) Friday approved the signing of the Rs27.8 billion Sialkot-Kharian Motorway project.
The approval under the first of its kind innovative transaction structure is a major breakthrough in development financing, Minister for Planning, Development and Special Initiatives Asad Umar said while chairing the meeting.
Meanwhile, in a tweet, the minister said “It is the first project using innovative financial structure using Viability Gap Fund (VGF). This will open a major new development financing instrument.”
He said that the worth of the development projects in the pipeline had now crossed the Rs1 trillion mark.
The board of P3A considered approval of the Public-Private Partnership (PPP) agreement for the construction of the Sialkot-Kharian Motorway on a public-private partnership basis.
Earlier, the board had approved the transaction structure and bidding documentation package of the project, and the successful bidder’s proposal in its meetings held in March 2021 and June 2021 respectively.
The project envisages the construction of a 69km green-field 4-lane toll road on a build-operate-transfer (BOT) basis, at a cost of Rs27.8 billion. The project is expected to be constructed in a period of 24 months following the achievement of the financial close.
The concession period of the project is 25 years including the construction period. The government of Pakistan is supporting the financial viability and bankability of the project through the provision of capital and operational Viability Gap Funding (VGF) totaling Rs 10.94 billion.
The project is expected to supplement the existing Lahore-Sialkot and future Kharian-Rawalpindi Motorway to take the motorway network up to the city of Rawalpindi.
The Board approved the PPP agreement of the project for its execution between the National Highway Authority (NHA) and the consortium of Frontier Works Organisation (FWO) and Sultan Mehmood & Co.
Besides the aforesaid agenda item, P3A CEO Malik Ahmad Khan sought approval of the board to consider ratification of the earlier decisions taken by the board’s executive committee and the decisions taken through circulation. The board also approved revised budget estimates of the P3A for the ongoing financial year.
Planning Commission deputy chairman, the nominee of Finance Division secretary among other officials attended the meeting.
