Staff Report
ISLAMABAD: The National Highway Authority (NHA) declared a consortium of two local and one Italian firm as the ‘most advantageous’ bidder for the construction of Hyderabad-Sukkur Motorway (M-6).
The 306-kilometer long 6-lane access-controlled greenfield motorway is the last section of the Western alignment of the China-Pakistan Economic Corridor (CPEC) initiative.
The key connectivity project will be executed on Build-Operate-Transfer (BOT) basis under Public-Private Partnership (PPP) model. NHA will provide land for the construction of the motorway free of cost. The government had approved Rs 43 billion as capital viability gap fund (VGF) during the construction period and Rs 7 billion per year as operational VGF during the first seven years after completion of the motorway for ensuring the financial viability of the project.
According to the final evaluation report of NHA, the Techno-CMC-ACC consortium offered to build the missing link in the Karachi-Peshawar motorway at a cost of Rs 307.7 billion. The consortium demanded Rs 9.5 billion as capital VGF during the construction period, against the Rs 37 billion sought by rival firm Zahir Khan and Brothers (ZKB).
The consortium demanded zero operational VGF while the lone competitor ZKB sought Rs143 billion under the head. NHA had announced to provide net toll revenue from the M-5 motorway as operational VGF for the first 7 years of construction of the M-6 motorway.
Also, Techno-CMC-ACC offered an Rs 73.6 billion share to NHA in revenue against Rs 20 billion offered by ZKB.
Statistics suggest that the government will save over Rs 82 billion in project costs by awarding the contract to the Techno-CMC-ACC consortium, and also earn Rs 73.5 billion in revenues.
Techno and ACC are Pakistani companies while Cooperativa Muratorie Cementisti (CMC) is an Italian firm.
According to the Public Procurement Authority rules, government organizations issue final evaluation reports 15 days before the award of a contract. The development has raised hopes for the completion of the Western alignment of CPEC. After completion, the Peshawar-Karachi motorway will connect port cities of Karachi and Gwadar with China, Afghanistan, and Central Asian states, according to NHA.
