ISLAMABAD:
The federal government on Wednesday approved the construction of the Sukkur-Hyderabad Motorway (M-6) at a cost of Rs395 billion — up by 138% — and set up a ministerial panel to find credible funding sources, bringing the project back in the public sector financing mode.
The Central Development Working Party (CDWP), in a meeting chaired by the Planning Minister Ahsan Iqbal, approved 10 different development projects, including the 306-kilometer-long Hyderabad-Sukkur motorway. The CDWP has referred the motorway project to the Executive Committee of the National Economic Council (ECNEC) for final approval.
It is the fourth time that the motorway project has gone to the federal government approval stage after the first three attempts to complete it under the public-private partnership mode failed.
The project had been approved for the first time in 2020 at a cost of Rs165 billion. Then the cost was revised up to Rs191 billion in 2021 and the third time it was approved at a Rs308 billion cost in 2022.
The fourth approval has been given at a total price of Rs395 billion, up by Rs229 billion or 138% compared to the five years ago’s first approval. The project has also been brought back in the fold of the Public Sector Development programme, although the CDWP has kept the private partnership option open.
Hyderabad to Sukkur motorway is the only remaining vital link of North to South connectivity and it is a top priority of the Pakistan Peoples Party. The PPP has linked its support to the budget with acceptance of all its demands, including the inclusion of the motorway in the federal PSDP.
The government has allocated Rs15 billion for the construction of the project in the next fiscal year, which is lower than the estimated Rs78 billion required for the first year of construction.
Iqbal directed the National Highway Authority and the Economic Affairs Division to ensure that confirmation of funding for the remaining sections of the project is submitted by the end of August.
Iqbal announced the formation of a high-level committee to be chaired by the Federal Minister for Finance for finalizing the credible funding sources.
The committee will include the Federal Ministers for Communications, Economic Affairs, and Planning, along with senior officials from the NHA and the Ministry of Communications.
The planning minister proposed exploring innovative modes of financing to expedite the project’s implementation and ensure its timely completion.
The government has been pitching the project at different forums including for funding under the China-Pakistan Economic Corridor, Azerbaijan and Islamic Development Bank. So far, the Islamic Development Bank has indicated their interest in financing potentially the last three out of five sections with a $475 million loan. The IDB is expected to approve the loan by September this year. The Chairman CDWP Iqbal instructed the authorities to find the funding avenues by August this year so that the project is timely completed.
The Islamic Development Bank has indicated that they will approach other financiers like the Arab Development Group and the Asian Infrastructure Investment Bank (AIIB) for financing the first two sections of M-6.
The National Highway Authority has proposed that the first two sections should be completed under the public private partnership mode. However, the Planning Commission has objected that the approval of the PPP Authority Board was not available, which was mandatory.
Due to the large size of the project and financial constraints, the NHA has planned to undertake the Motorway M-6 Project in sections and on hybrid financing mode. The remaining sections depending on their commercial viability will be offered for undertaken on the Private Investment Mode under the PPP Arrangement.
Iqbal stated that the execution of this project will bring substantial social benefits and hold great significance in promoting Pakistan’s economic development. He emphasized that, as part of the national programme to expand the country’s motorway infrastructure, this project will help stimulate growth in the areas along its alignment and improve regional connectivity.
Eastbay Expressway
The CDWP also recommended construction of Eastbay Expressway Phase-II project at a cost of Rs30.2 billion to ECNEC for further consideration. The project is proposed to be financed through foreign funding – Chinese Grant in Aid to the extent of 95% cost.
The project envisages construction of a 13.8km-long dual carriageway expressway to connect the New Gwadar International Airport (NGIA) with the endpoint of the existing Eastbay Expressway. This limited-access, high-speed road is designed to facilitate heavy cargo traffic between NGIA and Gwadar Port. The project also includes essential infrastructure such as a rainwater drainage system, toll plaza, security fence, watch towers, and street lighting.
Proposed under the CPEC, the project was discussed and prioritized during multiple Joint Cooperation Committee of the CPEC with the Chinese side emphasizing its importance for enhancing connectivity and operational efficiency at the port.
The CDWP also recommended construction of Zhob to Makhter road at a cost of Rs15 billion. The construction of a road for connecting to the Iran border was approved at Rs11 billion costs. The objective of this road construction project is to develop a safe, efficient, and durable transportation route that will connect key locations, improving the overall accessibility and mobility within the region.
