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Sukkur-Hyderabad Motorway Project

The Federal Government Ministry of Planning and Development on 22 April 2020 approved the construction of 306-kilometer Sukkur-Hyderabad Motorway Project as reported in news (https://timesofislamabad.com/23-Apr-2020/pakistan-government-approves-a-new-motorway-rs-50-billion-cheaper-than-the-similar-cpec-scheme). The Central Development Working Party (CDWP) recommended the Project to the Executive Committee of National Economic Council (ECNEC) to be under the public-private partnership (PPP) mode. The contractor will build the project on build, operate and transfer mode, known as BOT.

The Cost of the Project

Sukkur-Hyderabad Motorway Project will be undertaken at a cost of Rs182 billion in partnership with the private sector. The estimated cost is potentially Rs50 billion less as compared with a road scheme completed under the China-Pakistan Economic Corridor (CPEC).

The cost of Sukkur-Multan Motorway built under CPEC was Rs760 million per kilometer. The Sukkur-Multan motorway had been built under a government-to-government deal between China and Pakistan. The per-kilometer construction cost of the six-lane Sukkur-Hyderabad motorway is Rs596.4 million. The construction cost per-kilometer of this project is Rs164 million or 21.5% lower than CPEC project. In terms of total project cost, it translates into savings of Rs50 billion.

The Authority for the Project

The project will now be placed before the Public-Private Partnership Authority for approval. After being approved by the PPP Authority, the National Highway Authority (NHA) will float tenders for competitive bidding.

Revenue Sharing for the Project

NHA will get about 10% of the total project revenue, after the debt servicing period of 10 years.  The contractor will be allowed to earn revenue for 25 years to recover construction cost and profit. The Firm will build and operate the facility up to the full concession period as per concession agreement and will hand over to the NHA after expiry of the agreement. The federal government will provide 4% of the cost at Rs7.4 billion while the remaining Rs182.5 billion will be the responsibility of the private-sector investor.

Project Completes North South Link                                           

The project is planned to complete in two and a half years from the targeted date of commencement of work in November this year.

The completion of Sukkur-Hyderabad motorway will complete the missing link on the eastern corridor. The road will start from Hyderabad end of the Karachi-Hyderabad motorway and will end at the start of the Sukkur-Multan motorway, built under CPEC. On completion of the proposed project, the Motorway Link from Karachi to Peshawar will be complete.

STAR Marketing Assessment

It is expected that above stated Sukkur-Hyderabad motorway development project of federal government will boost the construction activity in real estate industry and add to job opportunity for the locals in a big way. The proposed spending will add into the GDP growth of the country. The Project on the completion will add the ease in the communication of the people and goods. Watch this video for benefits of motorway project https://www.youtube.com/watch?v=8Y6rP4kUcKU

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