Islamabad:
Azerbaijan has offered more than $ 1 billion in cash deposit loans in response to Pakistan’s request to finance the Sukkur-Hyderabad highway of $ 1.2 billion in the middle of a disagreement between several government departments on the loan mode.
Prime Minister Shehbaz Sharif had asked the Azerbaijan government to finance two infrastructure projects for a total of $ 1.8 billion during his recent visit to the State of Central Asia. These include $ 1.2 billion of the Sukkur-Hyderabad highway (M-6), and a new Hyderab-Karachi highway (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 request to finance highways, according to the officials of the National Highway Authority.
He has proposed that the State Petroleum Fund of the Republic of Azerbaijan can place an cash deposit with the State Bank of Pakistan and the Federal Government can provide money onwards to the National Road Authority for the construction of highways, they added.
The second option is that Azerbaijan in collaboration with the Islamic Development Bank can directly finance the Sukkur-Hyderabad highway, the missing link in the South-North National Moteoway Link, the officials said.
Azerbaijan had previously indicated making an investment of $ 2 billion in Pakistan, but the Pakistani authorities could not provide reaffirmed projects for investment.
The Sukkur-Hyderab highway has an estimated minimum cost of $ 1.2 billion and the government has recently hired the US firm, in Kearney, to prepare the highway feasibility study.
In addition to the Sukkur-Hyderabad highway, Pakistan has also offered Azerbaijan to finance another Hyderabad-Karachi M-9 highway, which he wants to build on a new route, far from the existing route.
The estimated cost of the new Hyderab-Karachi highway is $ 600 million, excluding the cost of the land, according to the NHA authorities.
Four countries, China, Saudi Arabia, United Arab Emirates and Kuwait, have already cumulatively placed $ 12.7 billion in cash deposits with the Central Bank to support the thin foreign exchange reserves of Pakistan. Islamabad is paying interest rates in these deposits, which are transmitted every year due to the inability to return debts.
The sources said there was no consensus among the various Pakistani departments about the Azerbaijan offer.
The Vice Primer Minister Ishaq also presided over another round of inter ministerial meetings on proposals for investment projects with Azerbaijan.
Dar directed that the proposals for investment in infrastructure, oil, trade and information technology services can be completed before April 3, according to an announcement of your office.
The sources said the Ministry of Finance was not in favor of taking the deposit in cash of $ 1 billion to build a road project and serve it from the budget. The Ministry of Finance is the opinion that the NHA must order Azerbaijan money directly instead of enruting the money through a cash deposit route.
According to the feasibility study conducted by M/S in Kearney, the Sukkur-Hyderabad project is divided into five sections. The project qualification proposal has been approved by the Labor Party of the Public Association Authority last month for subsequent approval by its Board.
After the approval of the project proposal by P3A, the bidding process for the first phase of Hyderabad-Dando Adam and the second phase: Tando Adam-Nawabshah will begin in the mode of Public Private Association. The IDB has indicated to finance these two sections, but the bank will make the final decision after a visit for its evaluation mission next month, officials said.
Azerbaijan indicated finance the three remaining sections as part of his second option.
In the event that the Government builds the M-6 highway under the mode of public-private association, it will take two and a half years for its completion. But if the project is financed from the public sector development program, the deadline will be much longer than this due to the limited fiscal space, according to the NHA authorities.
The Federal Government a few days ago decided to finance a new highway focused on Punjab at a cost of RS436 billion by ignoring the Sukkur-Hyderabad highway.
The NHA officials said the government also wanted to develop a new M-9 highway highway to improve connectivity between Karachi and Hyderabad, while integrated by Pakistan’s commercial corridors.
This project aims to reduce travel time, improve road safety and support industrial and commercial growth. They will provide quick uninterrupted access between Karachi and Hyderabad, they added.
The M-9, which is the Hyderab-Karachi highway, will cost more than $ 600 million. The NHA has hired the consultant services, M/S NESPAK, to carry out the feasibility study and the detailed design quickly.
The government has not been able to bring any new foreign investment in Pakistan due to unstable political, security and economic conditions.
