Islamabad: The construction of the Sukkur-Hyderabad Motorway (M-6), a significant project with an estimated cost of Rs307 billion, has encountered a setback as the National Highway Authority (NHA) terminated the concession agreement with M/s Techno-CMC (TECMC) Private Limited. The decision was made after TECMC failed to secure financial closure within the extended deadline, thereby inviting potentially further delays to what is considered the largest Public-Private Partnership (PPP) initiative in the nation.
An initial deadline was set for TECMC to achieve financial closure six months post the effective agreement date of December 2, 2022. However, despite an extended period of four months granted in good faith, the company remained unable to meet financial obligations by September 30, 2023. In response to their failure, the NHA issued a preliminary notice on October 16, 2023, offering a 43-day cure period. Even so, TECMC did not rectify the breaches indicated in the notice, leading to the agreement’s termination as per various sections of the PPP Agreement.
The M-6 project, approved by the Public Private Partnership (P3A) Authority Board, envisioned a 306-kilometer, six-lane motorway that TECMC was to build and operate for 25 years before transferring ownership to the NHA at no cost. The arrangement was unique as the government’s contribution was set at a mere Rs9.5 billion, with the private party expected to cover the rest through equity and commercial loans. Furthermore, the private entity was to remit at least Rs408 billion to the NHA and an estimated Rs908 billion in corporate taxes over the concession period.
Economic zone of 5,000 acres to be established in Rawalpindi.