An international consortium led by SNC Lavalin of Canada has received a letter of intent for the estimated $500 million first corridor of a mass transit system to be built in Karachi on a build-operate-transfer (BOT) basis. France’s Interinfra received a similar award for corridor two in January, but suspended negotiations in May because of difficulties with the financial arrangements (MEED 27:1:95).

SNC Lavalin is acting as leader of the consortium, the Indus Mass Transit Company, and holds the majority of shares. Other partners include Adcon Engineering, part of the local Adamjee Group, and Turkey’s Sezai Turkes- Feyzi Akkaya (ST-FA).

The letter of intent gives the group exclusive rights to negotiate with the government and with the National Mass Transit Authority about the establishment of a 17-kilometre long elevated light rail mass transit system in the city. The operating franchise will be for 30 years.

SNC Lavalin says that financing will come from the consortium, the Pakistani government and export credits, including funds from the Export Development Corporation of Canada.

The Interinfra deal, valued at about $400 million, involves 12.5 kilometres of surface and overhead line. Its negotiations were broken off because of a failure to reach agreement with the World Bank about financing. The bank is not involved in the SNC Lavalin scheme. Interinfra says it will watch closely how the Canadian-led team progresses with its discussions, before deciding if it is feasible to resume its own negotiations.