Ghotki-Kandhkot Bridge Project
Works & Services Department – Government of Sindh
OBJECTIVE / OUTCOMES OF THE PROJECT
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.
Design & Construction (03 years)
Total project length is 34.7 Km with below break-up:
– 4 lane Bridge 2 Km
– 2 Lane approach road on Ghotki Side 12.8 km
– 2 Lane approach road on Kandhkot Side 15.2 km
– 2 Lane link road to Thull Road 4.5 km
Scope of work
– 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)
The Concessionaire shall commence construction work from 90 days of IRC approval (Scheduled Commencement Date).
Operations & Maintenance (25 years from substantial completion of Construction)
The Concessionaire shall undertake toll operations and regular maintenance of the Project Highway as per agreed standards.
Concession Period
– 28 years including 3 years of construction
PPP Modality
Design, Build, Finance, Operate, Maintain and Transfer (“DBFOT”)
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.
project description
The distance between Ghotki & Kandhkot via Guddu Barrage is 152 KM and via Sukkur it is around 170 KM. After the construction of this project the distance between Ghotki and Kandhkot will be reduced upto only 30 KM instead of 152 KM (via Guddu Barrage) & 170 KM (via Sukkur). This project comprises of 2 – Lane Bridge over Indus River between Ghotki on N-5 and Kandhkot on N-55 through Public Private Partnership Mode. Objectives of the Project:
- Construction of the bridge will greatly reduce travel time and significantly boost economic activity in this region.
- Ghotki and Kandhkot together host one of the largest oil and gas fields, power projects and fertilizer plants.
- These districts serve an entry points into Sindh for all traffic coming from the populous upcountry and headed for the port city of Karachi.
PPP POLICY BOARD APPROVAL
The PPP Policy Board in its 27th meeting approved the project.
PROJECT FINANCING
Equity
30% equity (16% private partner and 14% of GoS)
Class-A Shares (Private Party): Share capital issued to the Concessionaire (excluding the GoS) and shall be the main recipient of Dividends (Equity IRR).
Class-B Shares (GoS): Share capital issued to the GoS which shall not be liable for non-performance by the Concessionaire. Any revenue raised from advertising and utility shall exclusively form Class-B dividends.
Debt
70% debt
PROJECT SPONSOR
Sachal Engineering Works (Private) Limited
SOCIAL IMPACT OF THE PROJECT
- Significantly reduce travel time and fuel from Ghotki to Kandhkot i.e. The distance between Kandhkot and Ghotki via Guddu Barrage, is 151 km. A bridge connecting Ghotki and Kandhkot will reduce this distance from 151km to 30 km approximately.
- Significant boost in economic activities. Better road access will Ghotki and Khandkot together host one of the largest oil and gas fields, power projects and fertilizer plants in the country.
- Opportunities for local communities for jobs and businesses due to ease of road access as well as better law & order situation in the area
- Uplift of surrounding land values
- Uplift of local agriculture sector especially for women farmers and workers.
PROCUREMENT PROCESS
The Project was launched for investor solicitation in November 2017 in pursuance to SPP rules 2010.
Three (03) bids were received. The procurement process was concluded in February 2018 by Technical & Financial Evaluation Committee (TFEC). M/S Sachal Engineering with Project Cost of 14 billion & Bid Price of 18 billion (annuity payment in PV terms) declared as the preferred bidder.
TRANSACTION ADVISOR
EA Consulting Pvt. Ltd. / Ernst & Young / Haidermotabnr & Co.
INDEPENDENT MONITORING
- Independent Engineer: Loya Associates and Techno Consult International
- Independent Auditor: Riaz Ahmed & Company, Chartered Accountants
PROJECT PROGRESS
- The Independent Engineer (IE) Agreement and Independent Auditor (IA) Agreement executed on 26th June 2019 and 23rd December 2019 with IE and IA, respectively.
- Equity Funding & Utilization (EFU) Agreement and Annuity Amount Payment Agreement executed on 23rd December 2019.
- The Hydraulic Model Study from Nandipur lab approved by IRC on 20th August 2019.
- Upon satisfaction of condition precedents, the Commencement Certificate was issued by IE and IA on 20th July 2020.
- The construction works commenced from September 2020 through equity funding by both parties.
CURRENT STATUS
– The contractor has been fully mobilized and camps have been established at both the sides of project i.e. Ghotki and Kandhkot.
– Approach roads construction activities on the main alignment are in full swing at almost 22 kms out of 30 kms (approx.)
– The construction activities on Thull Link Road are in full swing.
– Piling and shafts of two (02) out of two (02) bridges at Kandhkot are completed. However super structure activities of the same are in progress. Moreover, piling works on the Main Bridge over River Indus started on 31st May 2021 and are under construction.
– The construction cost amounting to PKR 3.8 billion have been incurred as of 30th September 2021 through equity.
– The financial close is under process.