Kharian-Rawalpindi Motorway project backfires as consortium disintegrates

Fate of Sukkur-Hyderabad Motorway project also becomes doubtful

ISLAMABAD  -  The shrinking fiscal space and economic uncer­tainty in Pakistan has haunted a multibillion Khar­ian-Rawalpindi Motorway project as its successful contractor could not keep its consortium intact to complete the said project. After failure on part of the contractor to fulfill its obligations for the proj­ect, the fate of another Sukkur-Hyderabad motor­way project has also become doubtful as its con­tract was also won by the same lead company but it has yet to flex its financial muscles to complete the project, which is called ‘financial close’.

It is pertinent to mention here that the ground­breaking of Kharian-Rawalpindi Motorway proj­ect was carried out by former prime minister She­hbaz Sharif in the last days of his government. 

Earlier, a total of three bidders were in the run to get the project including Frontier Works Orga­nization (FWO)- ZEERUK, ZKB-SMC-SMADB- KA­SIB and Techno-Matracon – Power China Cheng­du-ACC. However, a consortium of four companies Techno-Matracon–Power China Chengdu-ACC was declared as successful bidder and a letter of intent (LOI) was issued in August last year to build Kh­arian-Rawalpindi Motorway project on build-op­erate-transfer (BOT) basis under Public Private Partnership Mode. According to reliable sources, the said letter of intent has now been withdrawn by the National Highway Authority after failure of the contractor to keep its consortium intact.

When questioned, one of the senior officers of NHA dealing with the project confirmed that the LOI has been withdrawn as the Power Chi­na Chengdu Engineering Corporation Limited was no longer a part of the consortium and they did not verify their credentials, besides repeat­ed requests of the road authority. He explained further as the Power China Chengdu Engineer­ing Corporation Limited was the lead contractor having required qualifications of building mo­torways, after its cold response the consortium would no longer be technically and legally fit to proceed on this project.

Replying to the fate of the project, he said that NHA would have ultimately construct this motorway but a final decision regarding next step has yet to be taken. He however confirmed that the bank guar­antee given by the contractor has been encashed by the road authority. Kharian-Rawalpindi Motorway is a third and final part of the Lahore-Rawalpindi Motorway—a 100km shorter motorway route be­tween Lahore and Islamabad as existing Lahore-Is­lamabad Motorway (M-2) is 375km long but the new route Lahore-Rawalpindi would be around 290km long. It is pertinent to mention here that out of these 290km, a 103km long Lahore-Sialkot Motorway was constructed by Frontier Works Or­ganization and operational while 70km long Si­alkot-Kharian Motorway has also been awarded to FWO and work on it is underway.

The NHA’s spokesman Mr. Umair was contact­ed and also sent written questions but he was un­available to respond.

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