History & Success Story of Deokjae Board of Directors Senior Management Regulatory Framework for PPP Maiden project of DCCL: Dualisation of

History & Success Story of Deokjae Board of Directors Senior Management Regulatory Framework for PPP Maiden project of DCCL: Dualisation of Hyderabad

Mirpurkhas road a PPP Project Project Summary Current Snaps of Hyderabad Mirpurkhas Dual

Carriage Road

TABLE OF CONTENTS

Deokjae Construction Company (Pvt.) Ltd.

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Mr. Jaffer Ali Naqvi, who is Country Head of Deokjae is also a well known and reputable entrepreneur in auto parts industry. Bringing his expertise into play and keeping in view the current economic, political and liquidity situation of Pakistan he found some scope and charm toward infrastructure development.

As a result of Mr. Jaffer’s long term vision, Deokjae Construction Company (Pvt.) Ltd. with technical collaboration of Deokjae Construction Company Limited, Korea came into existence on March 13, 2009 as a Private Limited Company.

HISTORY & SUCCESS STORY OF DEOKJAE


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Deokjae’s mission is to explore construction opportunities in South Asia possessing Public-Private Partnership (PPP) nature.

Short term objective of Deokjae was attainment of “Hyderabad Mirpurkhas Dual Carriage Road’ project. This was the 1st time that Government of Sind (GoS) had announced a PPP project. The company bid successfully, and was awarded the contract.

Concession agreement was signed b/w GoS officials and Deokjae on November 11, 2009.



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53.59% of work has been completed till August 31, 2011, which includes completion of Earthwork 98%, Road & Pavement 44%, Drainage work 82% and Bridge work 61%.

State-of-the-art equipment is being used and Korean technical team is also monitoring the whole project. Four Koreans are employed for this purpose.

The company has contracted with Korean Expressway Corporation (KEC) for Operations & Maintenance (O&M) for Dual Carriage Road that has the credit of constructing renowned expressways in Korea.

Global Infra Fund (GIF), Korea are interested to invest in Deokjae Construction.



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Mr. Kim Sun Ho (Chariman) Syed Masood Raza (Chief Executive Officer) Mr. Sang Yool Lee (Director) Mr. Syed Ameer Haider (Director) Mr. Hassan Mahmood (Director)

BOARD OF DIRECTORS


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Syed Jaffer Ali Naqvi (Country Head) Syed Mujahid Hussain Naqvi (CFO) Mr. Kim Kyu Nam (Technical Director)

SENIOR MANAGEMENT


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The strength of Pakistan’s PPP program is that substantial groundwork has already been done. Framework and guidelines have been prepared and a national PPP Centre has been developed.

The overall structure of PPP program comprises of PPP policy, Viability Gap Fund, Risk Management Framework, a Financing facility and Infrastructure Project Development Facility (IPDF).

The PPP policy was approved in November 2007 with a revised version approved by Cabinet in January 2010.

GoS have their own PPP Law.

REGULATORY FRAMEWORK FOR PPP


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Deokjae has entered into several agreements with different kinds of parties. Names of those agreements are:

REGULATORY FRAMEWORK FOR PPP

• Direct Agreement (Concession Agreement) • Share Pledge Agreement

• Project Funds Agreement • BOT Concession Agreement

• Minimum Revenue Funding Agreement • HMDCR PPP Project Contract No. HM-01 (Construction Contract)

• Debt Payment Amount Funding Agreement • Developer Assignment Deed

• EPC Price Escalation Agreement • Developer Special Power of Attorney

• Subordinated Debt Agreement • Special Power of Attorney

• Senior Facility Agreement • Construction Direct Agreement

• Security Trust Deed • Project Assessment Deed

• Project Letter of Hypothecation


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The project includes the construction of a dual carriageway of Sind. This includes reconstruction, improvement and rehabilitation existing single carriageway of approximately 60 km road in accordance with international design standards along with the conversion into dual carriageway with a design speed of 100 km/hr.

The current existing highway is only 7.3 meters wide and is used for dual carriageway.

MAIDEN PROJECT OF DCCL:DUALISATION OF HYDERABAD MIRPURKHAS ROAD A PPP PROJECT


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PROJECT COST Pak Rupees 6.2bn

PROJECT NATURE Public Private Partnership (PPP)

CONSTRUCTION TENURE 30 months inclusive of 6 months designing period

LENGTH OF ROAD 60 km

FINANCING STRUCTURE Public-Private support:Private support: 1.85bn (Equity: 1.75bn & Loan: 0.1bn)Public support: 1.85bn (Govt. of Sind – subordinated debt)Banking consortium: 2.5bn (Commercial Debt)

FINANCING STRUCTURE % Equity: 59.7% & Debt: 40.3%

PROJECT STATUS 53.59% completed (Till August 31, 2011)

GUARANTEES by GoS Built-in MRG: Rs. 1.69bnProjected revenue shortfall covered: 10%MSG: 0.81bn

BREAKEVEN In the 9th year of operations

PROJECT SUMMARY


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CURRENT SNAPS OF HYDERABAD MIRPURKHAS DUAL CARRIAGE ROAD


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Thank You for your precious time!


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History & Success Story of Deokjae Board of Directors Senior Management Regulatory Framework for PPP Maiden project of DCCL: Dualisation of