The construction of the Phase 3 of the Outer Circular Highway (OCH 3) will go ahead as planned, sans future expansions which would save costs, according to a communiqué by the Ministry of Highways.
“Minister Hashim ordered that the scope of work on OCH 3 be reduced. Under the new scope the Highways Ministry will reduce the cost of work by approximately Rs.24 billion (a 30 percent reduction from the original cost), eliminating financial waste.”
It said that the past government had planned for a 4-lane highway, with an expansion into 6 -lanes by 2027, which was based on exaggerated traffic projection reports. Therefore, it said that the expansion would not be necessary.
“According to the traffic forecasts prepared during the former regime, traffic was expected to increase by 14 percent on average per annum from 2017-2022 and by 10 percent on average per annum from 2022-2027. However, vehicle registration during that same period was expected to increase only by 6 percent on average per annum.”
The Ministry said that projected costs had been high due to the construction of viaducts and embankments to support the 6-lane expansion, and the construction material—to be provided by the contractor—being 20-30 percent above the market rate.
“Due to contractual obligations signed by the former regime, the government will obtain the loan of Rs. 66.7 billion from Exim Bank. The savings accumulated from the reduction of the cost of this project would be redistributed into upcoming road projects.”