ECC accords approval for issuing Rs9.5b guarantee for Hyderabad-Sukkur motorway

The Economic Coordination Committee of the Cabinet has agreed to approve the issuance of Rs 9.5 billion GoP guarantee, for the construction of project Hyderabad-Sukkur motorway on a build-operate-transfer basis.

Finance Minister Ishaq Dar chaired the meeting of ECC on Monday.

As per the details, Communication division informed the ECC that the Executive Committee of the National Economic Council (ECNEC), in its meeting held on 06-07-2022, approved the project ‘Construction o Hyderabad – Sukkur Motorway Project, on Build – Operate Transfer (‘BOT’) basis at a cost of Rs 308 billion without Foreign Exchange Component (‘FEC”). This included the Government of Pakistan (“GOP”) share of PKR 10 billion and concessionaire share of RS 307 billion.

National Highway Authority (NHA) initiated the procurement of the approved project through a competitive bidding. A joint venture (JV) of M/s Techno Engineering Services (Pvt.) Ltd, M/s Cooperativa Muratori Cementisti (CMC), and M/s Associated Consultancy Centre (Pot.) Ltd. (ACC) were declared as successful bidders.

The JV registered M/s TECMC (Pvt) Ltd a Special purpose Vehicle Company (“SPVC”) with Securities & Exchange Commission of Pakistan (“SECP’) for implementing the Project Public Private Partnership Authority (“P3A”) in its 22nd Board meeting convened on March 31, 2022. The meeting approved the PPP Agreement negotiated between the NHA and M/s TECMC.

PPP Agreement further stipulates in section 6.5.5 that, “NHA shall establish and deliver to the Concessionaire the GOP Guarantee of financials close to the tune of Rs 9,500 million, backed by Sovereign Guarantee and acceptable to the financiers, on a prior basis.

In order to initiate the requisite process, ECC is requested to accord approval for issuance of the co Guarantee amounting to PKR 9,500 million to be issued by the Ministry of Finance for the comfort of commercial Lenders of the project so that concessionaire may achieve financial close on time.

The committee also deliberated on the subject of the Fixation of Maximum Retail Prices of 49 new drugs. ECC approved the fixation of Maximum Retail Prices (MRPs) of 49 new drugs on the basis of being on the lower side as compared to their prices in the neighboring countries.

These are drugs that are being introduced in Pakistan for the first time mostly at prices considerably lower than the region.

The Drug Regulatory Authority of Pakistan (DRAP) submitted recommendations of the 52nd meeting of the Drug Pricing Committee (DPC) of the fixation of MRPs of 54 new drugs before the federal cabinet on January 3, 2023.

The federal cabinet directed to place the cases for the fixation of MRPs of 54 new drugs before the ECC for detailed discussion.

While talking about the servicing of loans, the ECC also approved a technical supplementary grant (TSG) of Rs 402 billion in favor of the Ministry of Economic Affairs for debt servicing for foreign loans and credits.

EAD informed the ECC that the budget estimated for year 2022-23 was prepared on the basis of parity exchange rate of Rs186 per USD whereas actual payments have been made at average exchange rate of Rs 235 per USD due to the change in dollar prices.

Even though $7 billion for China SAFE deposit and Saudi Time deposit were also rolled over in recent months.

The ECC also approved Rs 839.129 million TSG  for “New Gwadar International Airport (NIGA), Rs 120.450 million TSG to meet shortfall of ERE and Non-ERE components, Rs 140 million TSG for Payment to Govt Departments for Services Rendered from various sources, Rs. 116.499 TSG  million for meeting the shortfall in essential expenditures in different organizations working under the Ministry,  Rs 700 million TSG to pay the salaries of APP and Radio Pakistan employees, Rs 48 million TSG for release of funds to HQ Frontier Corps (North) KP, for construction of FATA Levies Centre at Shakas Peshawar and Rs 470.827 million TSG for the payment of troops cost/subsistence allowance to personnel of Civil Armed Forces deployed in UN Peacekeeping Missions.

ECC also approved summary of Ministry of Interior for release of funds of Rs. 66.336 million as TSG  for the construction of Frontier Constabulary Training Center, Michni, Khyber Pakhtunkhwa. The funds have been granted in aid to Pakistan by the USA for capacity building of Civil Armed forces. It also approved a Rs. 347.99 million TSG to complete the raising process of 6th Battalion of Pakistan Post Guards for anti-smuggling purpose, RS 1.25 billion TSG for FATA Temporary Displaced Persons Emergency Recovery Project (TDP-ERP) of NADRA to serve the vulnerable families affected by military operations, Rs. 49.5 million as TSG for further disbursement of amount as financial assistance for the families of Shuhada and injured persons of Swat terrorism incident, Rs 9,145 million TSG for execution of 2×660 MW Coal fired Power project Jamshoro, Rs 110.653 million TSG  to strengthen NACTA within its current mandate and Rs. 5,252 million as TSG  in the favour of Ministry of Defence for meeting its ERE shortfall.