Motorway Crisis

The recent cancellation of the Hyderabad-Sukkur (M-6) Motorway proj­ect contract by the caretaker government is a significant setback for the Special Investment and Facilitation Council’s (SIFC) investment plans. This move not only jeopardizes the 306km motorway’s progress but also raises the project’s cost by more than 100%, straining the national budget.

The terminated contract involved a joint venture of Techno, ACC, and CMC, investing over Rs300 billion in the project. They sought only Rs 9.5 billion in viability gap funding (VGF) from the National Highway Author­ity (NHA). Surprisingly, after termination, the NHA submitted revised cost estimates of Rs400 billion to the SIFC, excluding the VGF, potentially push­ing the total project cost to Rs700 billion. This decision raises concerns about a significant increase in project costs, estimating a potential loss to the national budget. The decision has sparked worries about a poten­tial loss of over Rs300-400 billion to the national budget due to the rise in the cost. The project’s cost is set to shoot up to Rs700 billion, with the NHA expected to provide a VGF share of around Rs300 billion. Such a sig­nificant financial burden on the national budget demands a critical evalu­ation of the decision’s impact on the economy of our country.

The abrupt halt to the investment of over Rs300 billion from a local in­vestor not only halts progress but also undermines investor confidence. In the fragile economic situation of the country, attracting both local and foreign investment of Rs700 billion for the M6 project becomes a chal­lenging task. This setback not only jeopardizes the SIFC’s efforts but also raises questions about the government’s ability to facilitate and sustain investor confidence in critical infrastructure projects.

Moving forward, the National Highway Authority’s commitment to call­ing fresh bids and making arrangements for the project’s continuation is essential. However, it is important to address the concerns raised by the terminated joint venture, ensuring transparency and fairness in the bid­ding process. The government must take proactive measures to rebuild investor confidence by fostering a conducive environment for private in­vestments in infrastructure projects.

The government must navigate this situation carefully, prioritising transparency, fairness, and investor confidence for the successful and timely completion of this critical motorway project.

ePaper - Nawaiwaqt