Developers allowed to construct interchanges on motorways: Get the details!

The news is out and it has left many developers and investors in Islamabad ecstatic. National Highway Authority (NHA)’s approval for private entities to build interchanges on motorways means better connectivity for various projects. And that’s just not limited to housing societies.

Here are the details.

The approval

NHA has allowed private entities to construct interchanges on highways and motorways under its control. This will make the process of arranging for right-of-way for a number of projects easier. These include medical cities, commercial centres, theme parks, factory outlets, industrial area projects and many housing schemes.

Construction of interchanges on motorways was previously possible only through approvals from the federal government, routed via the Public Sector Development Programme. The new policy, however, comes with certain terms and conditions attached to it.

The terms & conditions

The terms defined in the approved policy for construction of interchanges are as follows:

• Land will be provided by the entity
• Mutation of land to NHA
• Issuance of NOC subject to NHA’s approval
• NHA approved designs only
• One interchange in 10 km area
• Minimum area requirement of 4,000 kanals for a housing scheme
• Minimum area of 2,000 kanals for an educational/medical city
• Minimum area of 2,800 kanals for industries/factory-outlets
• Minimum area of 1,600 kanals for a theme park

The cost

For constructing an interchange, the private bodies will pay PKR 5 million (non-refundable) to NHA as processing fee. Payment of additional charges for procuring an NOC also apply. The prices vary as per area and land use;

• PKR 60,000 per kanal for a housing scheme
• PKR 50,000 per kanal for education/medical city
• PKR 60,000 per kanal for industrial-unit/factory-outlet

Determining feasibility

The feasibility report on the proposed interchanges will be carried out by NHA-approved consultants. This includes a Traffic Impact Study, Highway Safety Audit, and a Geometric Study. The sums required for preparation of these reports will be provided by the applicant. The issuance of final approval will still be based on various aspects of the findings. Conflicts on the basis of strategic reasons, road safety measures and factors disturbing traffic-flow can result in the rejection of the proposal.

Ownership and control

The approved policy states that the interchanges constructed by private entities will be owned by the NHA. The authority will also be solely responsible for operating them. Furthermore, NHA will collect and keep the toll tax, with no exemption in toll being granted.

The policy also clarifies that private parties will provide the additional funds if the management cost of the toll plaza is higher than the toll collected.

Societies eager to set up their own interchanges

Construction of a dedicated interchange is deemed indispensable by many housing schemes in and around Islamabad and Rawalpindi. These include Mont Viro on Murree Expressway, Capital Smart City Lahore-Islamabad Motorway M-2, B-17 and Faisal Town on Islamabad-Peshawar Motorway M-1.

The NHA approval is likely to be followed by the launch of new projects along highways across the country. This will also make land along road networks more lucrative for investment. Not to mention that many real estate developers will also start showing interest.

While we wait to see the impact of this announcement, you can share your feedback with us by leaving a comment below.