Press Release

VIS Assigns Initial Entity Ratings to Malir Expressway Limited

Karachi, October 12, 2023: VIS Credit Ratings Company Ltd. (VIS) has assigned initial entity ratings of ‘A-/A-2’ (Single A Minus/A-Two) to Malir Expressway Limited (‘MEL’ or ‘the Company’). Medium to long Term Rating of ‘A-’ reflects good credit quality; protection factors are adequate. Risk factors may vary with possible changes in the economy. Short Term Rating of ‘A-2’ signifies good certainty of timely payment. Liquidity factors and company fundamentals are sound. Access to capital markets is good. Risk factors are small. Outlook on the assigned ratings is ‘Stable’.
MEL is a publicly limited unlisted company established on March 22, 2020, under the regulations of the Companies Act, 2017. It was established with the primary objective of constructing the Malir Expressway (ME), a three-lane dual carriageway that runs alongside the Malir Riverbed, spanning approximately 38.75 kilometers. In April 2020, the Company entered into a 25 year long Concession Agreement with the Government of Sindh (GoS). The ratings take into account sound profile of shareholders. ‘Class A’ shareholding of the Company is vested with JN & Co., Habib Construction Services Limited (HCS) and Niaz Muhammad Khan & Brothers (NKB) while ‘Class B’ is issued to GoS. Engineering, Procurement and Construction (EPC) agreement has been signed with NKB and HCS.
ME project is one of the two major infrastructure initiative in Karachi currently under development, connecting the Jam Sadiq Bridge to the Kathore Bridge. Developed through a Public-Private Partnership (PPP) arrangement and following the Design-Build-Finance-Operate-Transfer (DFBOT) model, the project aims to improve traffic flow, reduce travel time, and enhance connectivity in the region. The project successfully achieved financial closure on May 10, 2022, and promptly initiated construction on May 12, 2022. It has been scheduled for completion within a 30-month period, with Segment-I (spanning from Jam Sadiq to Quaidabad) anticipated to be operational by mid-November 2023. The ME project not only aligns with the Concession Agreement, GoS agreements, applicable laws, environmental standards, and National Highway Authority (NHA) standards but also complies with international benchmarks, including the American Association of State Highway and Transportation Officials (AASHTO) and the American Society for Testing (ASTM).
The ME project's capital structure includes contributions from sponsors, commercial loans, and government equity, reflecting a well-balanced financing strategy that mitigates risks and ensures timely completion. During the construction period, GoS commits to funding cost overruns for escalable items (cement, bitumen, steel, and Petroleum, Oil, and Lubricant (POL), while sponsors share the responsibility for overruns pertaining to non-escalable items. In terms of financial sustainability, the ratings derive strength from the presence of Minimum Revenue Guarantee (MRG) commitment from GoS, ensuring that the Concessionaire receives minimum payments equivalent to due financing, O&M cost, and taxes during the period from substantial completion until debt repayment. This guarantees the project's financial viability even amid challenging economic conditions. The ratings are dependent upon timely completion of the project, availability of financing and GoS’s & Sponsor’s support as built in the Concession Agreement.
For further information on this ratings announcement, please contact Ms. Tayyaba Ijaz, CFA (042-35723411-13, Ext. 8001) and/or the undersigned at 021-35311861-64 (Ext. 201) or email at

Javed Callea
Applicable Rating Criteria: Industrial Corporates (May 2023)

VIS Rating Criteria: Toll Roads (September 2023)

VIS Issue/Issuer Rating Scale

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS , the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2023 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .