New Pakistan motorway routes

Pakistan is expected to construct the Karachi—Hyderabad – Sukkur motorways of about 500km through a public-private partnership (PPP) in the south of the country. This development follows the alleged withdrawal of an Italian joint venture from the M6 project due to specific financial closure issues and the initiating of talks with the Sindh government, the project’s major beneficiary.

Sindh Chief Minister Syed Murad Ali Shah and federal minister of communication Aleem Khan met in Karachi recently to discuss the delay in the M6 Motorway project. They agreed to build the motorway from Karachi to Sukkur via Hyderabad, demonstrating a collaborative approach between the provincial and federal governments. The Sindh Chief Minister’s commitment to studying the options and finding ways to make this project a reality is a reassuring sign of progress.

The federal minister proposed to the Sindh Chief Minister that the M6 be started from Karachi via Hyderabad to Sukkur instead of being initiated from Hyderabad to Sukkur to facilitate the port traffic. The CM agreed to the proposal and discussed the mode of its construction.

During the discussion, it was agreed that the M6 would be constructed in a public-private partnership from Karachi to Hyderabad and Sukkur. Finally, another proposal was discussed, under which the federal and provincial governments may form a consortium to construct the road in an equal partnership. At this, the CM said that his team would study the proposal and get back to the ministry.

It may be recalled here that the M6 project was awarded to M/s TECHNO, CMC, and ACC (TECMC) joint venture on December 2, 2022, on a build-operate-transfer (BOT) basis. The M6 Motorway project envisaged the construction of a 306km-long, six-lane wide, access-controlled Hyderabad-Sukkur Motorway, a vital link from north-south motorways.

According to the NHA, the concessionaire (M/s TECMC) could only achieve financial closure six months after signing. The concessionaire requested that the financial close period be extended for four months until September 30, 2023. Unfortunately, the concessionaire failed to achieve financial close even in the extended period.

However, the TECMC JV reported to the media that it had met all its commitments and obligations. It managed the financial close by providing a term sheet showing its equity contribution of Rs183bn and a bank loan of Rs120bn. Under the agreement, the viability gap funding was only Rs9.5bn, which the NHA was to bear, but it did not happen.

Meanwhile, consultations between Pakistan and China are underway to include the Sukkur-Hyderabad Motorway (M-6) in the China-Pakistan Economic Corridor (CPEC). The National Highway Authority (NHA) chairman recently briefed the National Assembly Standing Committee on Planning, Development and Special Initiatives.