Islamabad:
Azerbaijan has offered a loan of more than $ 1 billion in cash in response to Pakistan’s demand for the Sukkur-Hyderabad highway of $ 1.2 billion in the midst of a disagreement between the various ministries on loan mode.
Prime Minister Shehbaz Sharif asked the Azerbaijani government to finance two infrastructure projects totaling $ 1.8 billion during his recent visit to the State of Central. These include $ 1.2 billion on the Sukkur-Hyderabad motorway (M-6) and a new Hyderabad-Karachi motorway (M-9), which will be built on a new route at a minimum cost of $ 600 million.
The Azerbaijan government has proposed two options in response to Pakistan’s demand to finance the highways, the National Highway Authority officials said.
He proposed that the Oil Fund for the State of the Republic of Azerbaijan could place a deposit in the long term with the State Bank of Pakistan and the federal government can then lend money to the National Highway Authority for the construction of the motorways, they added.
The second option is that Azerbaijan in collaboration with the Islamic Development Bank can directly finance the Sukkur-Hyderabad motorway-the missing link on the link of the South-Nord national motorway, officials said.
Azerbaijan had previously indicated an investment of 2 billion dollars in Pakistan, but the Pakistani authorities could not provide refreshed projects for investment.
The Sukkur-Hyderabad motorway has an estimated minimum cost of $ 1.2 billion and the government recently hired the American company in Kearney to prepare for the highway feasibility study.
In addition to the Sukkur-Hyderabad motorway, Pakistan also offered in Azerbaijan to finance another Hyderabad-Karachi M-9 motorway, which it wishes to build on a new route, far from the existing route.
The estimated cost of the new Hyderabad-Karachi highway is $ 600 million, excluding the cost of land, according to NHA authorities.
Four countries – China, Saudi Arabia, the United Arab Emirates and Kuwait – have already cumulatively placed $ 12.7 billion in cash deposits to the Central Bank to support the slim exchange reserves of Pakistan. Islamabad pays interest rates on these deposits, which are returned each year due to the inability to return the debts.
The sources indicated that there was no consensus among the various Pakistani departments on the offer of Azerbaijan.
Vice-Prime Minister Ishaq Dar also chaired this week another series of inter-ministerial meetings on investment projects proposals with Azerbaijan.
DAR has ordered that investment proposals in infrastructure, petroleum, commerce and information technology services could be finalized on April 3, according to an announcement by its office.
The sources have indicated that the Ministry of Finance was not in favor of taking cash deposit of $ 1 billion for the construction of a road project and serving it the budget. The Ministry of Finance is of the opinion that the NHA should borrow money directly from Azerbaijan instead of completing the money by deposit in cash.
According to the feasibility study carried out by M / S in Kearney, the Sukkur-Hyderabad project is divided into five sections. The project to qualify the project project was approved by the Public Private Partnership Authority work party last month for subsequent approval by its board of directors.
After the approval of the project proposal by P3A, the tender process for the first phase of Hyderabad-Tando Adam and the second phase: Tando Adam-Nawabshah will be launched on the public-private partnership mode. The BID said to finance these two sections, but the final decision will be taken by the bank after a visit by its assessment mission next month, officials said.
Azerbaijan said to finance the three remaining sections as part of its second option.
In the event that the government built the M-6 motorway under the public-private partnership mode, it will take two and a half years for completion. But if the project is funded by the public sector development program, the deadline will be much longer than this due to a limited budgetary space, according to the NHA authorities.
A few days ago, the federal government decided to finance a new highway centered on Punjab at a cost of 436 billion rupees by ignoring the Sukkur-Hyderabad motorway.
NHA officials said the government also wanted to develop a new M-9 highway at Six-lanes to improve connectivity between Karachi and Hyderabad, while integrating Pakistan’s commercial corridors.
This project aims to reduce journey time, improve road safety and support industrial and commercial growth. It will provide uninterrupted quick access between Karachi and Hyderabad, they added.
The M-9, which is the Hyderabad-Karachi motorway, will cost more than $ 600 million. The NHA hired the consultant services, M / S Nespak, for having undertaken the feasibility study and the detailed design on an accelerated basis.
The government has not been able to provide new foreign investments in Pakistan due to unstable political, security and economic conditions.
