According to the Public Private Partnership Authority (P3A), the government’s corporate taxes and revenue share income from four approved mega projects will total more than Rs. 1,500 billion and Rs. 850 billion, respectively, over the life of concession contracts, which typically extend to 25 years, and in some cases beyond 30 years.
Senior Authority officials revealed that the transaction structures optimized by the P3A and later approved by the P3A Board aimed to minimize the government’s liabilities while stretching them over longer periods to avoid the government’s immediate cash outflow. This has resulted in over Rs. 80 billion in subsidy savings.
The four mega-approved projects, totalling Rs. 637 billion, include the Sialkot-Kharian Motorway for Rs. 27 billion, the Sukkur-Hyderabad Motorway for Rs. 307 billion, the Kharian-Rawalpindi Motorway for Rs. 86 billion, and the Karachi Circular Railway for Rs. 217 billion.
Moreover, the Viable Gap Fund (VGF) for these projects is Rs. 122.94 billion. On the other hand, the KCR project is now proposed to be undertaken under the CPEC framework, and the ECNEC has approved the revised PC-I of the project at the cost of Rs. 292 billion.
The Sialkot-Kharian Motorway, nearing a financial close, is expected to generate a revenue share of Rs. 8.5 billion, the Sukkur-Hyderabad Motorway, which is nearing completion, is expected to generate a revenue share of Rs. 408 billion, and the Kharian-Rawalpindi Motorway, which is currently in the tender process, is expected to generate a revenue share of Rs. 113 billion.
According to documents, one $135 million project was awarded in 2022, and two projects worth around $2 billion are yet to be awarded.
Officials told the media that the government had limited resources to fund development projects. The participation of the private sector is actively sought to introduce innovative financing solutions as well as the transfer of project risks to the private sector, which is best able to manage and bring efficiencies in the delivery of public services.