NHA Extends Financial Close Period for Hyderabad-Sukkur Motorway

The National Highway Authority (NHA) Executive Board approved the extension of time in the achievement of the financial close period for the construction of the Hyderabad-Sukkur Motorway (M-6) project on a Build Operate Transfer (BOT) basis.

According to official sources,  NHA Chairman Capt (Retd) Muhammad Khurram Agha presided over the meeting and considered the approval for the extension of time in achievement of the financial close period.

The Board approved the concessionaire’s request for an Extension of Time (EOT) for the achievement of Financial Close for a period of four months effective from June 01, 2023, to September 30, 2023, to the concessionaire TECMC (Pvt) Ltd (SPV formed by the successful consortium M/s Techno-CMC-ACC) for construction of Hyderabad-Sukkur Motorway (M-6) Project on Build-Operate-Transfer Basis.

NHA and Techno-CMC-ACC consortium signed the concession agreement for the construction of the Sukkur-Hyderabad Motorway (M-6) project, the largest Public Private Partnership (PPP) project in the country, at a total cost of Rs. 307 billion.

The Concession Agreement for the construction of the M-6 Project was earlier approved by the Public Private Partnership (P3A) Authority Board with a total cost of Rs. 307 billion.

Under the transaction structure approved by the P3A Board, the government of Pakistan will contribute only Rs. 9.5 billion over the construction period while the remaining project cost of Rs. 297.5 billion will be arranged by the private party through equity and commercial debt.

The private party will also pay a minimum of Rs. 408 billion to the NHA and estimated corporate taxes of Rs. 908 billion over the concession period. In addition, the project will be transferred to the NHA at no cost at the end of the concession period.

The motorway commonly known as M6 Motorway is the largest project under the PPP umbrella signed in the history of the country. The project was structured by the federal Public Private Partnership Authority (P3A) under the Build-Operate-Transfer (BOT) mode in collaboration with the NHA.

The motorway spanning a length of 306 kilometers will comprise six lanes. Designed to be constructed as a climate-resilient project, the private party shall construct and operate the project for 25 years commencing from the date of execution of the PPP Agreement.

Given the shrinking fiscal space and the prevalent economic crunch, the project is a landmark achievement in the PPP sphere. The P3A team closely worked with the NHA to make this project a success.