PPP policy board calls for fresh bidding on BRT Yellow Line project

Karachi (HRNW): A meeting of the Public Private Partnership policy board chaired by Chief Minister Syed Murad Ali Shah took important decisions for expediting the procedures of BRT Yellow and Blue Lines, Malir Expressway and establishment of 50MW power plant for the K-IV project. The meeting was attended by provincial ministers Saeed Ghani, Imtiaz Shaikh, Nasir Shah, Adviser Murtaza Wahab, MPAs Ghulam Qadir Chandio, Awais Qasir Shah, Chief Secretary Mumtaz Shah, concerned provincial secretaries, head of PPP unit Khalid Shaikh and others. The meeting was told that the Transport and Mass Transit Department (TMTD) launched the Bus Rapid Transit (BRT) Yellow Line through international competitive bidding process under PPP mode.

The TMTD signed the concession agreement with Chinese firm for the project on 9 September, 2016. However, the Chinese firm was unable to raise financing from Chinese banks and the project was delayed. The PPP Act requires the private party to achieve financial close within twelve months, and failure to do so must be reported to the PPP policy board. The board ultimately decided to terminate the existing procurement and called for fresh bidding on the project. The solicitation process for the project was initiated as international competitive bidding under the PPP mode on 12 February, 2018 and two bids by technically and financially qualified firms were received. However, one of the private partners made complaints which placed the project in contravention. The board on the advice of the chief secretary constituted a committee to address the grievances of the bidder consortium. The board also directed the PPP unit to take all decisions in time so that project could be started.

The Malir Expressway project was approved with the investor solicitation through a two stage bidding process. The first stage on 13 February 2018 saw technical bids received from seven bidders which were evaluated thoroughly and based on the feedback from interested parties some changes were being proposed in the project structure. This includes permission for using Malir river bed as construction material from may be used for construction of embankment and structures, but this may also result in desilting of the river which has been banned by Supreme Court. The second suggested change was that the proposed road should have three lanes each way instead of two. The current structure envisaged construction of two lanes, but due to expected increase in traffic in future it was suggested that the scope of project should be increased to construct three lanes.

The third change was start point should be extended backwards by 700 metres so that traffic from Korangi and DHA Phase VII and VIII can approach the Malir Expressway directly without coming to the KPT interchange. The policy board approved amendments in the second stage bidding on the condition of honouring the orders of the Supreme Court. The Greater Karachi Sewerage Plan (S-III) is being undertaken to address the sewage disposal problems, and 77MGD plant is already operational which can be used for the first tertiary treatment plant. The proposed treatment plant will employ different treatment processes to treat the effluents and use the sewerage for different purposes. The policy board approved to hire transaction advisers and to carry out detailed feasibility study for the project.

The pumping complex serves as the backbone for Karachi’s water supply. It comprises of six pump houses, in which four are operating beyond their useful lives and require heavy financial outlay. The outlived equipment along with frequent power breakdown has reduced pumping capacity of the entire complex by 14pct to 450 MCGD from installed capacity of 520 MCGD. The project entails the need to replace the pumps, upgrade and maintain the complex capacity. It is expected that the project would result in additional 70MGD water being supplied to Karachi, and will also yield additional revenue of Rs 3.6 billion per annum to Karachi Water and Sewerage Board (KWSB).

The board approved hiring of technical and financial advisers for carrying out the feasibility study for upgrading, development and maintenance of the pumping complex. The first phase of K-IV project requires s a 50MW power supply for smooth operation of water supply, the power complex must be able to provide uninterrupted power supply of 50 MW at competitive rates. Although detailed technical and financial feasibility is currently underway, it is expected that most of the generation will be based on thermal sources. The policy board decided to coordinate with the federal government to seek approval for required gas allocation at domestic gas pricing structure for the project.

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