ISLAMABAD, Aug 27 (APP): The Board of Directors’ meeting of Public-Private Partnership Authority (P3A) Friday approved signing of Rs 27.8 billion Sialkot-Kharian Motorway Project.
The approval under 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 first project using innovative financial structure using Viability Gap Fund (VGF). This will open a major new development financing instrument”.
He said the worth of the development projects in pipeline had now crossed the Rs 1 trillion mark.
The Board of P3A considered approval of the Public-Private Partnership (PPP) agreement for the construction of Sialkot-Kharian Motorway on a Public Private Partnership (PPP) basis.
Earlier the Board had approved transaction structure and bidding documentation package of the project and successful bidder’s proposal in its meetings held in March 2021 and June 2021 respectively.
The project envisages the construction of a 69 km green-field 4-lane toll road on a Build-Operate-Transfer (BOT) basis, at a cost of Rs 27.8 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 and the consortium of Frontier Works Organization and Sultan Mehmood & Co.
Besides, aforesaid agenda item, Malik Ahmad Khan, CEO P3A 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.
Deputy Chairman Planning Commission, Secretary MoPD&SI, the nominee of Secretary Finance Division, Secretary Communications, Member Private Sector Development, Chairman NHA, and two private members of the Board also attended the meeting.
