P3A Board Approves Transaction Structure of Kharian Rawalpindi Motorway Project.
P3A Board Approves Transaction Structure of Kharian-Rawalpindi Motorway Project, which will provide the fastest alternative route between Lahore and Rawalpindi/ Islamabad. The 18th Board of Directors’ meeting of the Public-Private Partnership Authority was held today in Islamabad under the Chairmanship of Mr. Asad Umar, Minister for Planning, Development, and Special Initiatives (MoPD&SI). The Deputy Chairman Planning Commission, Secretary MoPD&SI, nominee of Secretary Finance Division, Secretary Communications, Member Private Sector Development, Member Infrastructure & Regional Connectivity, Director General Debt Office of the Finance Division, Chairman National Highway Authority (NHA), Chief Executive Officer P3A and two private members of the Board, Ms. Huma Ejaz Zaman and Mr. Akbar Ayub Khan, also attended the meeting.
The Board considered the Transaction Structure of Kharian-Rawalpindi Motorway Project, proposed by the P3A and the Commercial Feasibility Study undertaken by National Highway Authority (NHA). The 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 PKR 79 billion with provision of Government of Pakistan (GoP) support in the form of capital and operational Viability Gap Fund (VGF) to make the Project financially viable & 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.