NHA Board Approves 57% Increase in Construction Cost of Kharian-Rawalpindi Motorway

The National Highway Authority (NHA) Executive Board recommended the PC-I for the approval of the Central Development Working Party (CDWP)/Executive Committee of the National Economic Council (ECNEC) for the construction of the Kharian- Rawalpindi Motorway at the revised PC-I cost of Rs. 169.323 billion against the initial PC-1 cost of Rs. 108.41 billion i.e. increased by around 57 percent.

Official documents available with ProPakistani further revealed that the revised PC-I Cost of Rs. 169.323 billion including capital Viability Gap Funding (VGF) of Rs. 40 billion (Capital VGF 20 billion + Sub-debt VGF 20 billion) and operational VGF of PKR Nil upto KIBOR 10 percent whereas the government will bear financial subsidy, if KIBOR remains more than 10 percent during debt servicing period.

The meeting was presided over by Arshad Majeed Mohmand, Chairman, NHA which allowed the submission of a project qualification proposal (PQP) on similar lines to Public Private Partnership Authority (P3A) for soliciting their approval as per the P3A Act.

ECNEC had earlier approved the Kharian-Rawalpindi Motorway project in January 2022 with a total cost of the project was Rs. 108.41 billion including a government share of Rs. 36.112 billion [Capital – Viability Gap Funding (VGF): Rs. 7.5 billion, overhead costs: Rs. 16.012 billion, operational VGF): Rs. 12.6 billion], and the Concessionaire share is Rs. 72.298 billion.

Official sources revealed that three bidders were in the run to get the project. However, a consortium M/s Techno-Matracon (JV) in Association with M/s Powerchina Chengdu as Lead Constructor and M/s ACC as Design & Supervision Consultant was declared as the successful bidder and a letter of intent (LOI) was issued to build Kharian-Rawalpindi Motorway project.

Techno-Matracon JC and Power China Chengdu Engineering Corporation Limited were required to obtain confirmation from Power China Chengdu about its lead role and percentage share to substantiate the submission of the bidder. The bidder failed to address the key observations of the revocable LOI and therefore, the NHA executive board withdrew the LOI and annulment of the procurement process.

The Board directed that, in the future, the bidder be granted 15 day extension for another period of 15 days for clarification of observation in LOI to avoid the inordinate delay for execution of the project.

The project was supposed to be completed in two years and the total length of the motorway was 117.2 kilometers with 4-lane access-controlled from Kharian to Rawalpindi.

This new motorway facility will be an extension of the currently operational Lahore-Sialkot Motorway and under construction Sialkot-Kharian Motorway. The project initiates from the junction interchange near Kharian on Sialkot-Kharian Motorway and terminates at T-Chowk near Rawalpindi/Islamabad.

The proposed motorway traverses parallel to the N-5, passing the populous areas of Jhelum, Mangla, Dina, Sohawa, Gujar Khan, Mandra, and finally terminating near Rawat at T-Chowk (Junction of Islamabad

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