Azerbaijan has principally agreed to invest $2 billion in Pakistan to improve roads infrastructure and to construct longstanding Sukkur-Hyderabad (M-6) Motorway project, Secretary Communications informed a Parliamentary body on Thursday.
Islamic Development Bank (IDB) also agreed to partially invest in said missing south motorway link. The Bank will get sanction of its Governing Board by September this year most probably.
Secretary Communications Ali Sher Mahsud said this while giving briefing to the Senate Standing Committee on Planning, Development and Special Initiatives on Sukkur-Hyderabad (M-6) Motorway project.
Mahsud stated that the IDB will fund for two sections of said road-section-IV (Naushehro Feroz-Ranipur) and Section-V (Ranipur-Sukkur).
The M-6 is only missing link in the country, according to the sources at National Highway Authority (NHA). In a development, Prime Minister Shehbaz Sharif had inaugurated the project in December 2023.
After fulfilling the required coddles formalities, the NHA had awarded the project to a consortium M/s Techno-CMC-ACC. Under the project a construction of 306 km long green-field six-lane access controlled motorway has been planned on build-operate- transfer (BOT) basis. The concession period of was set 25 years. As per plan, it would lead from Sukkur to Hyderabad. Originally, the NHA signed a PPP Agreement, late in 2022, with M/s TECMC (Private) Limited (a project company duly incorporated with SECP by M/s TECHNO-CMC-ACC), as concessionaire. However, despite given extended period to the company, it could not show financial close. Subsequently, the contract was cancelled by the road authority due to this failure of the company.
Now, after intervention of Sindh government- the M-6 is extended to Karachi by dividing it into two parts-Sukkur to Hyderabad and Hyderabad to Karachi (M-9).
It will facilitate port traffic as well. As per official statement, both have decided to explore the possibility of constructing the motorway through a public-private partnership (PPP) or a consortium to be formed by the provincial and federal governments.
Communications Minister Aleem Khan and other authorities of NHA have been seen stating on many occasions about the M-6 by saying that this road is among top priorities of the government.
A couple of months ago, PM Shehbaz Sharif along with communications minister Aleem Khan and other paid a visit to Azerbaijan and put the matter of this road with Azerbaijan government.
As per available information, the premier had requested the Azerbaijani government to fund two infrastructure projects totaling $1.8 billion during his. These include $1.2 billion Sukkur-Hyderabad motorway and a new Hyderabad-Karachi motorway, to be constructed on a new route at a minimum cost of $600 million.
After the visit, the Azerbaijan government has offered over $1 billion loan in cash deposit. The government of Azerbaijan has proposed two options in response to Pakistan’s request to fund the motorways.
It has proposed that the State Oil Fund of the Republic of Azerbaijan may place a term cash deposit with the State Bank of Pakistan and the federal government then can lend the money onwards to the National Highway Authority for construction of motorways, the sources privy to the matter said.
The second option is that Azerbaijan in collaboration with the IDB may directly fund the Sukkur-Hyderabad motorway. Azerbaijan had earlier indicated making a $2 billion investment in Pakistan but the Pakistani authorities could not provide firmed-up projects for the investment.
The Sukkur-Hyderabad motorway has a minimum estimated cost of $1.2 billion and the government has recently engaged the American firm, AT Kearney, for preparing the feasibility study of the motorway.
In addition to the Sukkur-Hyderabad motorway, Pakistan has also offered Azerbaijan to finance another motorway Hyderabad-Karachi which it wants to build on a new route, away from the existing route. The estimated cost of the this motorway is $600 million, excluding the cost of land.
The committee met with Senator Quratulain Marri in the chair at the Parliament house.