| DEPARTMENT | PROJECT COST |
|---|---|
| Works & Services Department | PKR 33,000 Million |
The distance between Kandhkot and Ghotki via Guddu Barrage or Sukkur, is almost around 149 KM & 172 KM respectively. A bridge connecting Ghotki and Kandhkot will reduce this distance from 149 KM and/or 172 KM to 30 KM approximately. This will greatly reduce travel time and significantly boost economic activity in this region.
The PPP Policy Board in its 12th meeting held on 12th September, 2014 approved the Project Development Facility (PDF) funding for feasibility study & transaction advisory services for the Ghotki Kandhkot Bridge Project (the “GKB Project”). After thorough public procurement process, the Works & Services Department executed consultancy services agreement in August 2015, with the consortium of consultants led by EA Consulting (Pvt.) Limited (other members of consortium included EY Ford Rhodes financial consultants and Haidermota & Co. legal consultants). The feasibility study was completed in 2017.
Based on feasibility study & proposed transaction structure, the Works & Services Department after thorough public procurement process in pursuance to SPP rules, executed Concession Agreement on 28th May 2018, for GKB Project with Concessionaire i.e. Ghotki Kandhkot Road & Bridge Company (Pvt.) Limited being a Special Purpose Vehicle established by the successful bidder i.e. M/S Sachal Engineering Works (Pvt.) Limited.
The Works & Services Department, GoS intends to provide a direct link between Ghotki and Kandhkot by constructing a bridge over Indus River in the province of Sindh to improve traffic flows between these major cities. The Project is a Design, Build, Finance, Operate, Maintain and Transfer project (“DBFOMT”) through a Concession Agreement. A Concession Agreement is a PPP contract that gives the Private party the right to develop and operate & maintain this Project with certain conditions as laid down in the Concession Agreement.
Ghotki-Kandhkot Bridge Project total length is 35.489 KM with below break-up:
- 4 Lane bridge over River Indus of 12.2 KM length (original length was 03 KM, however, as per IRC decision in its meeting held in Nov 2022 the bridge length increased to 12.2 KM)
- 2 Lane approach road on Ghotki Side 10.40 KM (approx.)
- 2 Lane approach road on Kandhkot Side 8.341 KM (approx.)
- 2 Lane link road to Thull Road 4.548 km
Scope of work also includes:
• One (1) flyover on N-55 crossing
• Four (4) small bridges on canals
• Eighty Five (85) culverts
• One (1) Toll Plaza
• One (1) Administrative Building
• Two (2) Weigh Bridges
• Electronic Toll & Ticketing System (ETTM)
Revenue Regime:
Government-pay model i.e. Annuity model. The annual payment (starting from commercial operations date (COD) upto 25th year being the final year of operations) that GoS has to make to the Concessionaire on a quarterly basis under the Concession Agreement that shall constitute:
- a) Operation & Maintenance
- b) Debt repayment and servicing
- c) Return on Equity (ROE) on Equity of Class-A shares of Private party
The Annuity Payments are subject to deductions or holdbacks in the event of failure of Concessionaire to abide by the Concession Agreement.
Concession Term:
25 years O&M period
Hydraulic Model Study of bridge
One of the condition precedents (CP) of Concessionaire was to carryout hydraulic model study in order to establish the most appropriate location, length, skew angle of bridge, type and sizes and geometry of river training works and NOC of the same from Indus River Commission (IRC). The Concessionaire carried-out three hydraulic model studies in pursuance to IRC recommendations. The IRC in its 180th meeting held in August 2020 conditionally approved the hydraulic model study for bridge length of 03 KM with extensive river training works.
Funding of Construction Works
The GKB Project construction works commenced in August 2020, through equity funding by both parties on pari-passu basis due to delay in financial close. The equity funding was exhausted in November 2021. Keeping in view the delay in achievement of financial close from bank, the GoS arranged short term Bridge Finance Facility of PKR 5 billion for tenure of one year through project lenders i.e. HBL and Meezan Bank Ltd in July 2022 which was retired on 4th July 2023 as a stop-gap arrangement till achievement of financial close.
Amendment in project scope in pursuance of IRC decision
The IRC in its 187th meeting held in November 2022 decided that all bridges over River Indus shall be bank-to-bank including GKB Project. The matter was discussed in 39th PPP Policy Board meeting held on 24th January 2023, wherein it was decided to increase bridge length from 03 kms to 12.2 km bank-to-bank in compliance of IRC decision along with the revised project cost. The same was approved by the Sindh Cabinet in its meeting held on 9th March 2023. Subsequently, in order to proceed with the financial close, the project financing from project lenders was approved by PPP Policy Board in its 40th meeting held on 8th June 2023. The revised project construction completion date as verified by the Independent Engineer is 19th July 2027.
Major impediment to Construction activities (Law & Order situation at project site)
The project construction activities right from start have been badly affected due to extreme law & order situation at project site. The dacoits and miscreants in the project area threatened the workers and staff of Concessionaire and Independent Engineer, from time to time during the last three years, which resulted in temporary closure of construction works which were resumed due to intervention of GoS with security measures. The law & order situation got worsened on 25th May 2023, when three workers of Concessionaire were kidnapped by the dacoits and heavy firing was made to rest of the staff and machinery that resulted in complete closure of construction works till 25th January 2024. Though, the kidnapped workers were safely recovered by Sindh Police later in June 2023. The matter was brought to the knowledge of PPP Policy Board by Works & Services Department in its 40th meeting held on 8th June 2023. The Policy Board directed Chief Secretary Sindh to hold meetings with relevant stakeholders including Sindh Rangers, IG Sindh Police to chalk-out plan to provide security to Concessionaire workers to undertake construction works on priority basis. The Chief Secretary Sindh held several meetings with the said stakeholders and necessary directives were issued accordingly.
The Concessionaire is presently constructing total 16 police pickets under additional works. Initially, four police pickets have been constructed and handed over to Sindh Police & Rangers for necessary deployment of security forces at project site. The remainder shall be handed-over when the demarcation of remaining pickets will be provided by DC Kashmore @ KK.
Project funding and construction works status
The Works & Services in compliance of cabinet decision and 40th PPP Policy Board, executed amendment Concession Agreement and amendment Equity Funding & Utilization (EFU) agreement on 30th November 2023, in order to include provisions related to increased project scope and funding through equity by both of the parties. Subsequently, the GoS funded its additional equity amounting to PKR 2,507,405,466/- in December 2023, in equity escrow account. The financial close is expected by May 2024.
The suspended work in wake of the improved law & order resumed on 26th January, 2024. As of 27th March 2024, the progress is as under:
• 12.2 Km bridge over River Indus (Overall 3.52% works completed)
- 144 Pier Piles executed
- 114 Pier Shafts are cast &
- 25 Pier Transoms constructed
• Section-I: 10.4 Km from Ghotki side (Overall 50% works completed)
Due to the delayed/disagreed disbursement of Land Compensation (PKR 380,127,150/- released on 15th December 2022) against the acquired lands for the construction of Highway, the landowners are obstructing the on-going site activities. The construction activities are suspended at Section-I (Ghotki Approach Road) since 18th July, 2023. Whereas, Commissioner Sukkur issued a letter dated 15-2-2024 for the resumption of works at an earliest under intimation to his office, the same was shared with the concessionaire for compliance. The land compensation amount has not been released yet to landowners.
• Section-III: 8.34 Km from Kandhkot side (Overall 74% works completed)
Due to the delayed/disagreed disbursement of Land Compensation (PKR 504,246,010/- released on 15th December 2022) against the acquired lands for the construction of Highway, the landowners are obstructing the on-going site activities. The construction activities are suspended at Section-III (Kandhkot Approach Road) since 13th April, 2023. The land compensation amount has not been released yet to landowners.
• 4.5 Km Thull-Link road (81% completed).
Deputy Commissioners, District Ghotki and Kashmore @ Kandhkot, may be asked to finalize the LA proceedings, along with the re-issuance of relevant Sections of LA (if any) and hand over the project site to the Project Director W&S Department.
08-Nov-2021
