Karachi: The VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Ghotki Kandhkot Road and Bridge Company (Private) Limited (GRBC) at 'A/A-2', reflecting good credit quality and a stable outlook. This rating assessment comes as GRBC plans to expand its infrastructure project, which now includes a significant bridge construction over the River Indus.

According to VIS Credit Rating Company Limited, the ratings reflect GRBC's strong business risk profile, supported by minimal demand risk and solid financial backing from both the Government of Sindh (GoS) and Sachal Engineering Works (Private) Limited (SEWL). The long-term 'A' rating signifies that GRBC has adequate protection factors, while the short-term 'A-2' rating suggests a sound likelihood of timely repayment of short-term obligations. Furthermore, VIS has assigned a preliminary bank loan rating of 'AA (blr)' to GRBC's secured bank loan facility, which is intended for the construction of the bridge and approach roads.

The project, originally planned as a 30.2 kilometer highway with a 2 kilometer bridge, has been expanded to include a 12.20 kilometer bridge across the River Indus and additional roads totaling 30.941 kilometers. This expansion is part of GRBC's design, finance, build, operate, and transfer (DFBOT) model. The project also includes a 4.58 kilometer Thul Link Road, enhancing the infrastructure's scope significantly.

Ratings also benefit from the strengthened security structure, including a continuous, unconditional, and irrevocable debit authority on the GoS Non-Food Account No. 1 and the Provincial Guarantee covering 50% of the debt. Additionally, the company is secured through advance quarterly annuity payments by the GoS, which cover operation and maintenance costs, taxes, debt obligations, a fixed return on equity, and equity redemption.

The assigned ratings are sensitive to the timely financial closure of the project, achievement of construction milestones, and the avoidance of significant cost or time overruns. The implementation of the Environment Management Plan (EMP) within an Environment, Sustainability Governance (ESG) framework also positively influences the ratings.