MUSHTAQ GHUMMAN

ISLAMABAD: The Executive Committee (EC) of the Special Investment Facilitation Council (SIFC) has decided to construct the M-12 (Sialkot-Kharian) Motorway and M-13 (Kharian-Rawalpindi) Motorway as six-lane motorways from the outset. Necessary approvals are being acquired from the relevant forums, sources told Business Recorder.

At a recent meeting of the EC of SIFC, the chairman of NHA informed that the realignment of the road from the original RFP, caused by the Hydraulic Model Study for the bridge at the Chenab River, led to delays in land acquisition for the realigned portion. This, along with a change in scope by the Ministry of Defence and an unprecedented increase in inflation/KIBOR, prompted the Concessionaire to submit a request to NHA for renegotiation of the PPP Agreement in November 2023. The P3A Board referred the matter to the SIFC in October 2024.

According to the Chairman of NHA, due to the aforementioned factors, the construction cost of the project increased from the initial cost of Rs22.5 billion in 2021 to Rs61.523 billion (for 4 lanes) and Rs71 billion (for 6 lanes) by December 2024.

On December 12, 2024, the Working Group at SIFC recommended that the Sialkot-Kharian Motorway be constructed as a six-lane facility from the outset and directed NHA to submit a position paper through the Ministry of Communications to the Planning Commission for approval from relevant forums.

In pursuance of the WG decision, a traffic study was conducted to ascertain the traffic volume, which identified the need for two additional lanes in 2027, with an additional expenditure of Rs20.7 billion. However, constructing six lanes from the outset will cost Rs9.5 billion more, resulting in savings of approximately Rs11 billion.

Accordingly, P3A, NHA, and FWO deliberated upon three options on February 27, 2025, including the six-lane option proposed by NHA, with a base construction cost of Rs77 billion and a total project cost of Rs81.97 billion (based on the revised financing cost).

After detailed discussion, the meeting took the following decisions; (i) SIFC-EC endorsed the proposal for construction of 6 lanes from the outset. Ministry of Communication/NHA to submit a position paper involving 6-lane option for M-12 (Sialkot-Kharian) and other changes in the scope to MoPD&SI for approval from relevant forums; (ii) NHA shall submit the revised financing structure to P3A and seek P3A Board approval; (iii) NHA to submit revised PC-l of the project for approval from CDWP/ ECNEC; (iv) NHA and FWO to execute amendment in the PPP Agreement in line with the  approved financing structure by the end of current month; (v) in future, any technical study that may impact on the execution of the project should be included as part of the feasibility study to ensure comprehensive planning and avoid delays; (vi) NHA to deliver a comprehensive presentation to Minister PD&SI on its priority PSDP projects; (vii) NHA to develop a holistic Master Plan for planned Motorways and highways, ensuring end-to-end connectivity rather than isolated, fragmented development in bits and pieces; and (viii) considering the strategic and socio economic importance of N-25, NHA should undertake fast track construction of Karachi-Quetta section followed by Quetta-Chaman section, with completion timeline of three years. Additionally, NHA to ensure establishment of service areas and rest areas at suitable locations to ensure safety and convenience for road commuters.

M-13: (Kharian-Rawalpindi): NHA has been directed to reevaluate and resubmit the financing structure and proposal for the Kharian-Rawalpindi Motorway, ensuring that the project is designed as a six-lane motorway from the outset. This revision must be completed and resubmitted by April 30, 2025. Additionally, NHA to pursue the approval of the PC-1 from the relevant forums to facilitate the project’s development,

M-6 (Sukkur-Hyderabad): Chairman NHA informed that review of feasibility study was carried out by  international consultant M/s A.T Kearney which led to division of the project into five sections, The overall  revised project cost on PPP mode is Rs399 billion. The Project Qualification Proposal (PQP) was approved by P3WP on February 14, 2025.

Moreover, P3A Board has to approve the project structure  before initiation of bidding of first phase for Section 1:- Hyderabad -Tando Adam and Section II:- Tando Adam - Nawabshah.

The chairman NHA also informed that after obtaining necessary approvals, bidding will commence during the current month and the contracts will be awarded by October 2025. NHA has also pitched the project to various foreign countries/IFIs including Islamic Development Bank and Azerbaijan.

The meeting decided that Ministry of Communications/NHA to pursue all possible financing options for the M-6 project, including PPP, G2G, IFIS, and others, while ensuring that the PC-l retains flexibility to adopt the most suitable financing approach for each project section. This hybrid financing model will help overcome delays in transitioning between financing modes and ensure smooth implementation.

End-to-end connectivity of motorways, particularly with Karachi Port, is critical, To enhance the viability of the project, NHA should plan M-6 and M-10 (New Karachi-Hyderabad motorway) as an integrated concept, ensuring seamless connectivity and efficient logistics movement. 

The NHA to make its best efforts to comply with the October 2025 timeline for awarding contracts, regardless of the finalised financing mode.