The Asian Development Bank (ADB) has raised concerns over a $360 million loan earmarked for the Central Asia Regional Economic Cooperation (Carec) Corridor Development Investment Programme’s Tranche III, warning that it could lapse next year if the associated road project is not expedited. The loan, which is part of a Multi-tranche Financing Facility (MFF), is intended to fund the widening of key sections of the N55 Highway, a critical infrastructure corridor connecting southern and northern regions of Pakistan.
ADB officials have highlighted that the project has been significantly delayed, with construction yet to commence due to controversies surrounding the bidding process. The delays have been discussed across five parliamentary standing committee meetings, adding to administrative hurdles and raising concerns about timely fund utilization. Without immediate intervention from the National Highway Authority (NHA), the loan risks expiration by the firm deadline of December 31, 2027.
According to a letter obtained by Dawn, the ADB stressed that the current progress of the Tranche-III project poses a substantial risk to fully utilizing the $360 million allocation. The project has been stalled for nearly eight months, even though bids were opened in February 2025 and initially approved by the ADB. Further scrutiny by parliamentary committees and the Public Procurement Regulatory Authority (PPRA) contributed to the prolonged delay.
The Islamabad High Court (IHC) has intervened, ordering the NHA to award the contracts without further delay. The court noted that continued stalling could not only lead to cancellation of the loan but also escalate project costs and cause “serious reputational damage” to the national exchequer. The total project cost is estimated at Rs170 billion, covering land acquisition, consultancy, and taxes. The lowest bid submitted by a joint venture of NXCC, Dynamic Constructor, and Rustam Associates was Rs147 billion, with the ADB financing Rs108 billion and the government covering the remaining balance.
Officials acknowledge that rebidding is not a viable option, as seeking fresh approvals from the ADB and the Executive Committee of the National Economic Council (Ecnec) would further delay the project. The ADB has emphasized that the 2027 deadline is non-negotiable and urged the Economic Affairs Division (EAD) to assist the NHA in expediting implementation, completing pending procurements, and ensuring full utilization of the loan within the MFF period.
Ecnec has already approved the bids for four specific lots: Rajanpur to Jampur (57.5 km) for Rs23.5 billion, Jampur to Dera Ghazi Khan (64 km) for Rs29.1 billion, Dera Ghazi Khan to Tibi Qaisrani (111.7 km) for Rs52 billion, and Tibi Qaisrani to Dera Ismail Khan (96.2 km) for Rs42 billion. Despite parliamentary and regulatory concerns regarding the lead partner’s performance history, the NHA defended the selection, clarifying that the company was never blacklisted.
The IHC dismissed the PPRA’s petition challenging the Rs172 billion Tranche-III award, warning that continued regulatory interference could jeopardize Pakistan’s access to the ADB finance facility. The decision underscores the urgent need for swift project implementation to secure international funding and support national infrastructure development.
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