Rs307 billion agreement for construction of Sukkur-Hyderabad Motorway Project signed


ISLAMABAD-The concession agreement worth Rs307 billion for construction of Sukkur-Hyderabad Motorway Project (M6) was signed here on Friday.  The concession agreement for construction of Sukkur-Hyderabad Motorway Project M6, which was earlier approved by the P3A Board, with total cost of Rs 307 billion was signed here between National Highway Authority (NHA) and the contractor M/s Techno-CMC-ACC consortium. 

Under the transaction structure approved by the P3A Board, GoP will contribute only Rs 9.5 billion over the construction period while the remaining project cost of Rs 297.5 billion will be arranged by the private party through equity and commercial debt.  The private party will also pay minimum Rs 408 billion to the NHA and estimated corporate taxes of Rs 908 billion over the concession period. In addition, the project will be transferred to the NHA at no cost at the end of the concession period.

The motorway commonly known as M6 Motorway is the largest project under the PPP umbrella signed in the history of the country. The project was structured by the federal Public Private Partnership Authority (P3A) under the Build-Operate-Transfer (BOT) mode in collaboration with the NHA. The motorway spanning over a length of 306 kilometers will comprise of six lanes. The 306km long motorway will also have 15 interchanges, 19 overpass bridges, 82 bridges on canals, 6 flyovers and one major bridge on the Indus River. This motorway will pass through the districts of Jamshoro, Hyderabad, Matiari, Benazirabad, Nowshehro Feroze, Khairpur and Sukkur.

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The motorway is designed to be constructed as a climate resilient project, the private party shall construct and operate the project for 25 years commencing from the date of execution of the PPP Agreement. 

Given the shrinking fiscal space and the prevalent economic crunch, the project is a landmark achievement in the PPP sphere. The P3A team closely worked with the NHA to make this project a success. The project will complete the missing link of north-south (Peshawar-Karachi) motorway network. The project is expected to bring economic benefits in terms of saving significant travel time, travel costs, and lifting socio-economic profile of the region.