URI-Mauripur Expressway & Interchange at ICI Bridge
Local Government & HTP Department – Government of Sindh
OBJECTIVE / OUTCOMES OF THE PROJECT
Mauripur Expressway: The project aims to boost the economic activity / tourism and improve the traffic management in the city. The construction of this corridor will alleviate the traffic pressure in the city as the expressway will also have its connectivity with Lyari Expressway. The Sindh Government is also planning to enhance the load carrying capacity of existing Lyari Expressway to allow for the inclusion of heavy traffic in the area. Once this expressway is constructed and merged with the Lyari Expressway, the overall traffic load of the complete area will be drastically improved and people of Karachi and business community will be overall benefited. Also, the project will support Pakistan Navy for their movement of their very important logistics timely at their destination which in today’s time and given the situation being developed in the region, is extremely important.
ICI Interchange: The project will facilitate Karachi port heavy traffic going/coming from all over country through the junction without stopping, also to facilitate city traffic using Lyari Expressway and Mauripur road for their ultimate destination. It will further resolve traffic congestion during evening peak on Jinnah Bridge, where currently more than one kilometer queue length of vehicles can be observed due to this signalized junction.
The Local Government Department after thorough procurement process, engaged transaction advisors through execution of Consultancy Services Agreement dated 2nd November 2020 with the consortium of consultants led by KPMG (Lead member & financial consultants) and consortium members including NESPAK (Technical consultants), Lex Firma (Legal Consultants) and Ali Khan Law Associates (Legal Consultants).
PROJECT BRIEF
The project includes the development of 08 km 2×2 lane of Mauripur Expressway and around 01 km 2 lane (one way) Interchange at ICI Bridge. Estimated construction timelines of Mauripur Expressway and Interchange at ICI Bridge are 24 and 12 months, respectively.
Operations & Maintenance (25 years from substantial completion of Construction)
The Concessionaire shall undertake toll operations and regular maintenance of the Project as per agreed standards.
PPP MODALITY
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.
Revenue Model (MRG)
The semi-annual payment (starting from commercial operations date (COD) upto 15th year of operation) that GoS has to make to the Concessionaire under the Concession Agreement that shall constitute:
- Triggered MRG
- Structured MRG
The MRG Payments are subject to deductions or holdbacks in the event of failure of Concessionaire to abide by the Concession Agreement.
Structured MRG:
Fifteen (15) years to cover costs of the private partner in the form of ‘structured MRG’ whilst demand risk of benchmark revenues is proposed to be shared between GoS and the private party in the ratio of 60:40. In this manner, the bidders need to assume risk of minimum 40% of the benchmark revenue and will bid for the project on the basis of risk sharing of more than 40%. According to the proposed structure, the private party will be entitled, for the first fifteen (15) years of the operations period, to an amount (the Structured MRG) equal to the difference between:
- the sum of the costs incurred on account of the operations and maintenance (O&M), the return on equity (ROE), debt servicing, the applicable taxes (the Expenses); and
- the benchmark revenues.
Triggered MRG:
In addition, the private party will be compensated for ‘Triggered MRG’ by GoS in case actual revenue in any year is less than the benchmark revenue, up to the level of quoted/proposed share of the benchmark revenue. The concession period of the project has been set as 25 years with MRG Period of 15 years and absolute demand risk is parked with the private party post MRG Period.
CURRENT STATUS
The procurement process to engage private developer under process