SIFC resolves payment dispute between NHA and contractor over motorway project

The Special Investment Facilitation Council (SIFC) has intervened to mediate an out-of-court settlement between the National Highway Authority (NHA) and contractor Bina Puri, resolving payment issues concerning a motorway project, according to a news report.  

As part of the settlement, the NHA is committed to releasing the agreed payment of Rs1.29 billion from the road maintenance account within 60 working days. If the payment is delayed beyond the deadline, a 10% interest will be applied from the date of signing the settlement agreement.

Despite having sufficient time for document approval, the NHA faced delays in securing timely approvals from the relevant forums. 

During a pre-Central Development Working Party (CDWP) meeting on March 9, 2025, it was pointed out that a revised PC-1 for the project was unnecessary, as no previous PC-1 had been approved, and no administrative nod had been given. 

Additionally, the NHA combined the pending liabilities for two M-9 contracts—one with Bina Puri and the other with SCORE—against the directives of SIFC, which had only dealt with Bina Puri’s liabilities.

SIFC noted that the NHA had proposed payment through the Public Sector Development Programme (PSDP), which was seen as an inappropriate solution, given that the project was originally approved under a public-private partnership (PPP) model. Moreover, SIFC was not fully briefed on the available payment options.

The Ministry of Communications assured SIFC that the payment would be made from the road maintenance account within the stipulated timeline.

Additionally, the M-6 (Sukkur-Hyderabad) project was also discussed at the SIFC meeting. NHA’s chairman informed the council that the project’s feasibility study had been reviewed by international consultant AT Kearney, leading to the division of the project into five sections. 

The revised project cost was estimated at Rs399 billion under a PPP model. The Public-Private Partnership Working Party (P3WP) approved the project qualification proposal on February 14, 2025, with the P3A board set to approve the project structure before bidding begins for the first phase, covering sections from Hyderabad to Tando Adam and from Tando Adam to Nawabshah.

The NHA chairman confirmed that once the necessary approvals are obtained, bidding will commence in April 2025, with contracts expected to be awarded by October 2025. The project has also been pitched to various foreign countries and international financial institutions (IFIs), including Azerbaijan and the Islamic Development Bank.