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Bus Rapid Transit - Yellow Line (InfraStructure) - BRTY

PROJECT BRIEF

Project Cost PKR 15.85 Billion
Length 26 Km
Tenor 12.5 Years
Expected financial close by March 2018
GOS has finalized the Concession Agreement with the preferred bidder i.e. China National Import & Export Corporation (the CUEC).
Offers have been received from leading banks


PROJECT DESCRIPTION

Background:
The BRTS - Yellow line is one of the priority corridors identified by JICA. The project start point is Dawood Chowrangi whereas the service start point is Manshera Colony and the project end point is Numaish via People's Roundabout. The three priority corridors (Red, Yellow and Green) are integrated at this roundabout.

Objective:
The GoS is seeking to implement the BRTS Yellow Line corridor on a priority basis. The GoS plans to shrink the time it takes for people travelling between the city centre and the densely populated Korangi industrial Area via a dedicated BRT corridor.

The salient features of the Yellow Line corridor are:

  • Corridor length: 26 km (Dedicated Portion 22km with Elevated section of 4 km and Semi Dedicated section of 4km)
  • Overhead pedestrian bridges: 24
  • Proposed flyovers: 3
  • Proposed stations: 24
  • Ridership 2013: 150,000 Passenger per day
  • Average speed of system: 25 km/hr


Land/Right of Way:
The Right of Way for the BRTS Yellow Line has no land encroachment or resettlement issues.

TRANSACTION ADVISOR

KPMG / NESPAK / Mohsin Tayebaly & Co. (MTC)

CURRENT STATUS

The Government of Sindh ("GoS") wishes to implement the BRTS Yellow Line on a priority basis in order to ease the traffic congestion in Karachi. At present, the GOS has finalized the Concession Agreement with the Preferred Bidder i.e. China National Import & Export Corporation (the CUEC) and is awaiting the opinion of the law department on the finalized concession agreement. The CUEC has already furnished the revised bid security as its previous bid security had expired.

1) Incentives
Right of way and Land availability
Access to the project site is guaranteed by the GoS.

2) Technical Assistance
Project will be receive assistance from Transport & Mass Transit Department, Public Private Partnership Unit, KMTC and KMC. Independent consultants may also be engaged for detailed studies and designing as well as supervision by the investor.

3) Risk Sharing
The GoS will share all risks based on its shareholding in the project. A similar arrangement was successfully executed by Deokjae Construction Company of Korea for the construction of a dual carriage way from Hyderabad to Mirpurkhas Road. Moreover, the GoS will take on itself the complete demand risk associated with the Green Line project. The private party will be entitled to a payout based on the services rendered.

4) Explicit
Budgetary support The counterpart funds to be provided by GoS will be allocated in the Viability Gap Fund (VGF) of the Public Private Partnership Unit.

Financials:
The financial assistance sought by SMTA for the BRTS Yellow Line Project is PKR 18bn. A Special Purpose Vehicle (SPV) will be incorporated under the Companies Ordinance, 1984. The SPV will be responsible for construction, implementation and operation of the project. The company will be regulated by the laws of the Companies Ordinance, 1984 as well as the SMTA.

The Project Company is expected to raise a loan of 69% of the infrastructure cost from local as well as international banks. Whereas, the remaining 31% will be in the form Public and Private Equity of 15% and 16% respectively. The CUEC plans to raise financing from the EXIMP Bank.

The loan provided by the Bank will be used by the Project Company to construct, implement and operate the BRTS Yellow Line Project. The SMTA envisages repaying the EXIMP Bank through the annual budgetary allocations in the provincial budget for the BRTS Yellow Line as well as the fare and non-fare revenue accumulated in the Escrow account of the BRTS Yellow Line. Furthermore, the GoS may also utilize the VGF to pay the Debt and Return on Equity (RoE) associated with the Yellow Line project.

Project Milestones:
- Signing of Concession Agreement
- Financial close
- Construction
- Implementation
- Operation

LAST UPDATE ON:

30-Nov--0001

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