A.Rafay
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LAHORE:
The 48-kilometre Southern Loop of the Ring Road will be built via a public-private partnership, it was decided at a meeting chaired by Chief Minister Shahbaz Sharif on Friday.
Sources privy to the meeting said that the Punjab government did not have the money to build the Southern Loop and so it had been decided that it would be built by a private company on a build, lease and transfer basis, that is, the private company would build the road and the government would then lease it from that company.
Ring Road Authority Chief Engineer Javed Ilyas said that the Southern Loop would have four sections and work on all four could start simultaneously, but this would depend on the developers chosen for the project.
The sources said that nine companies had expressed interest in the project and four had been shortlisted. These are the Frontier Works Organisation (FWO), Saadullah Khan and Brothers (SKB), China Constructions and Albarak of Turkey.
Ilyas said that it was too early to say when work on the project would start. Under the terms being offered by the government, the successful bidder would build the road and, 2.5 years after its completion, begin receiving annual payments for the next 15 years.
He said that a BLT model had been chosen for the project rather than a build, operate and transfer because the road tolls would not generate sufficient revenue. The government would pay three times the cost to the developer.
The first zone, SL-1, of the Southern Loop will start at Package 17, the terminus of the Northern Loop, and run for nine kilometres. This section will cost around Rs11 billion to build, and another Rs2 billion to operate and maintain. The government would pay the developer a total of Rs39 billion within 17.5 years of the completion of the section.
The 13-km second section, SL-2, would run till Raiwind and cost around Rs18.5 billion to build, operate and maintain. The government would pay around Rs55.5 billion to the developer.
The 8-km SL-3 would end at Maraka on Multan Road and cost Rs11-12 billion to build, operate and maintain, meaning the government would pay Rs34-36 billion. SL-4, the longest section of the Southern Loop at 18 km, would terminate at Babu Sabu, completing the Ring Road. The cost including operations and maintenance would be around Rs21 billion, meaning the government would have to pay Rs63 billion within 17.5 years of its construction.
Officials said that SL-1 would be the first to be opened for bidders, with request for proposals to be floated by the end of the year. They said that the concession agreement was not yet final as it needed vetting by the Law Department.
They said that the bidders would be given three months to table their proposals on the basis of the concession agreement, two months for financial closure and six months for design.
They said that the design and financial closure wok could also be done simultaneously. They said that under this timeframe, work on SL-1 could start in around nine months, while it would take another two years to build.
They said that if the government had decided to build the entire Southern Loop on its own in one go, it would cost around Rs58 billion.
No-go zone
Sources involved with the project said that the Punjab government had shelved a plan to buy Rs7 billion worth of agricultural land around SL-2 and SL-3 in order to develop commercial, residential and industrial zones. It had been estimated that the zoning plan could generate Rs70 billion for the government.
Ilyas, the chief engineer, said that government did not have the money to buy the land.
The source said that it was likely that the commercialisation of the road would happen along the same lines as the Northern Loop: private parties would set up shops and so on, and later be granted commercialisation permission.
The sources said that two private land developers stood to make a lot of money via the construction of the Southern Loop.
They said that the two companies were developing housing schemes in khaddar (flood-prone) areas. The Southern Loop would pass through these areas, leaving the housing schemes on the inside. This would mean they would no longer be classified as khaddar areas and thus rise in value.
The sources said that some private investors had bought around 2,000 kanals of agricultural land where they were planning to build a freight terminal called Jinnah Terminal. They said that this land too would be converted from an agricultural area to a commercial area after the construction of the Southern Loop.
Southern Loop to be built in four sections – The Express Tribune
The 48-kilometre Southern Loop of the Ring Road will be built via a public-private partnership, it was decided at a meeting chaired by Chief Minister Shahbaz Sharif on Friday.
Sources privy to the meeting said that the Punjab government did not have the money to build the Southern Loop and so it had been decided that it would be built by a private company on a build, lease and transfer basis, that is, the private company would build the road and the government would then lease it from that company.
Ring Road Authority Chief Engineer Javed Ilyas said that the Southern Loop would have four sections and work on all four could start simultaneously, but this would depend on the developers chosen for the project.
The sources said that nine companies had expressed interest in the project and four had been shortlisted. These are the Frontier Works Organisation (FWO), Saadullah Khan and Brothers (SKB), China Constructions and Albarak of Turkey.
Ilyas said that it was too early to say when work on the project would start. Under the terms being offered by the government, the successful bidder would build the road and, 2.5 years after its completion, begin receiving annual payments for the next 15 years.
He said that a BLT model had been chosen for the project rather than a build, operate and transfer because the road tolls would not generate sufficient revenue. The government would pay three times the cost to the developer.
The first zone, SL-1, of the Southern Loop will start at Package 17, the terminus of the Northern Loop, and run for nine kilometres. This section will cost around Rs11 billion to build, and another Rs2 billion to operate and maintain. The government would pay the developer a total of Rs39 billion within 17.5 years of the completion of the section.
The 13-km second section, SL-2, would run till Raiwind and cost around Rs18.5 billion to build, operate and maintain. The government would pay around Rs55.5 billion to the developer.
The 8-km SL-3 would end at Maraka on Multan Road and cost Rs11-12 billion to build, operate and maintain, meaning the government would pay Rs34-36 billion. SL-4, the longest section of the Southern Loop at 18 km, would terminate at Babu Sabu, completing the Ring Road. The cost including operations and maintenance would be around Rs21 billion, meaning the government would have to pay Rs63 billion within 17.5 years of its construction.
Officials said that SL-1 would be the first to be opened for bidders, with request for proposals to be floated by the end of the year. They said that the concession agreement was not yet final as it needed vetting by the Law Department.
They said that the bidders would be given three months to table their proposals on the basis of the concession agreement, two months for financial closure and six months for design.
They said that the design and financial closure wok could also be done simultaneously. They said that under this timeframe, work on SL-1 could start in around nine months, while it would take another two years to build.
They said that if the government had decided to build the entire Southern Loop on its own in one go, it would cost around Rs58 billion.
No-go zone
Sources involved with the project said that the Punjab government had shelved a plan to buy Rs7 billion worth of agricultural land around SL-2 and SL-3 in order to develop commercial, residential and industrial zones. It had been estimated that the zoning plan could generate Rs70 billion for the government.
Ilyas, the chief engineer, said that government did not have the money to buy the land.
The source said that it was likely that the commercialisation of the road would happen along the same lines as the Northern Loop: private parties would set up shops and so on, and later be granted commercialisation permission.
The sources said that two private land developers stood to make a lot of money via the construction of the Southern Loop.
They said that the two companies were developing housing schemes in khaddar (flood-prone) areas. The Southern Loop would pass through these areas, leaving the housing schemes on the inside. This would mean they would no longer be classified as khaddar areas and thus rise in value.
The sources said that some private investors had bought around 2,000 kanals of agricultural land where they were planning to build a freight terminal called Jinnah Terminal. They said that this land too would be converted from an agricultural area to a commercial area after the construction of the Southern Loop.
Southern Loop to be built in four sections – The Express Tribune
