CDWP clears Rs5bln health project, refers motorway plan to ECNEC

ISLAMABAD: The Planning Commission’s Central Development Working Party (CDWP) on Monday cleared one health project worth Rs5 billion and recommended Hyderabad-Sukkur motorway project with revised cost of Rs191.47 billion to the Executive Committee of National Economic Council (ECNEC).

The CDWP was presided over by Deputy Chairman Planning Commission Jehanzeb Khan. Projects related to health and transport and communications were presented during the CDWP meeting.

A project related to health namely “Strengthening of Existing DHQs, and selected THQs, RHCs, BHUs in District Awaran, Washuk, Khuzdar, Lesbela, Panjgur, Gwadar and Kech (Less Developed areas of Balochistan)” worth Rs4,996.60 million was approved in the meeting.

The project envisages strengthening of seven districts in south Balochistan through provision of civil infrastructure, medical equipment, machinery and ambulance.

A project related to transport and communication, namely “Construction of Hyderabad-Sukkur (306km), 6 Lane Divided Fenced Motorway on BOT Basis” worth Rs191.471 billion was also presented. The project was also discussed in the last CDWP on April 12, when CEO P3A was directed to present report on Viability Gap Funding (VGF). The said information was shared with the forum and apprised that the Public Private Partnership Authority (PPPA) board on April 22 approved the provision of Rs92 billion from the budget, and toll charges to make the project financially viable and attractive for private parties.

The P3A presented the financial model approved by its board before the CDWP. The CDWP recommended the financial model for consideration of the ECNEC, which stated that the project would be implemented on a BOT – user-charge basis with the provision of capital and operational VGF to improve the financial viability and bankability of the project.

Provision of capital VGF would be limited to Rs43 billion during the construction period of the project; and provision of operational VGF would be limited to Rs7 billion per annum for the first 7 operational years of the project. It would total Rs49 billion, commencing from the commercial operations date of the project, provided that the actual amount of VGF would only be determined at the bidding stage.

Adequate arrangements would be made to ring-fence cashflows of Sukkur-Multan Motorway to fund operational VGF payment obligations. Operational VGF would be paid by the National Highway Authority through its own resources.