Kharian-Pindi motorway transaction gets green light

ISLAMABAD: The Public Private Partnership Authority (P3A) Board approves on Friday the transaction structure of Kharian-Rawalpindi Motorway project which would provide the fastest alternative route between Lahore and Rawalpindi/ Islamabad.

The 18th Board of Directors meeting of the Public-Private Partnership Authority was held here under the chairmanship of minister for Planning, Development, and Special Initiatives Asad Umar.

Board considered the transaction structure of the project proposed by the P3A and the commercial feasibility study undertaken by National Highway Authoirty (NHA).

Board approved the transaction structure of the project envisaging the project to be implemented on build-operate-transfer (BOT) user-charge basis at a cost of Rs79 billion with provision of the government support in the form of capital and operational viability gap fund (VGF) to make the project financially viable and bankable for the private sector.

The project entails the construction of a 117 km 4-lane (expandable to 6-lane) green-field access controlled facility in 24 months time-period.

The concession period of the project is 25 years including construction and 6 months financial close period.

The concessionaire, apart from being provided VGF support, will be given project tolling and commercial exploitation rights to cover its life-cycle costs and earn an adequate rate of return on its investment.

The board emphasized providing an optimal mix of capital and operational VGF in order to seek adequate investor interest in the project while ensuring a value for money solution is offered to the public sector.

Earlier, the board had approved the transaction structure and bidding documentation package of the project and successful bidders’ proposal in its meetings held in March and June, respectively.