ISLAMABAD: The Asian Development Bank (ADB) has warned that a $360 million (Rs108 billion) loan allocated for Pakistan’s Central Asia Regional Economic Cooperation (CAREC) Corridor Development Investment Programme, Tranche III, could lapse if the project is not completed by the end of 2027.
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In a letter to the Economic Affairs Division, seen by Dawn, the ADB expressed serious concern over prolonged delays in launching the Tranche III road project, which involves widening key sections of the N55 Highway. The project has remained stalled for the past eight months due to disputes and scrutiny surrounding the bidding process, which were discussed in five parliamentary standing committee meetings.
The ADB cautioned that, based on current progress, there is a significant risk the approved funds under the Multi-tranche Financing Facility (MFF) will not be fully utilised before the firm deadline of December 31, 2027, which the bank says cannot be extended.
Although bids were opened in February 2025 and approved by the ADB, the process was challenged by parliamentary panels and the Public Procurement Regulatory Authority (PPRA). However, the Islamabad High Court (IHC) has since directed authorities to proceed with awarding the contract without further delay, warning that continued stalling could lead to loan cancellation, cost escalation and reputational damage to Pakistan.
The total cost of the project is estimated at Rs170 billion, including land acquisition, consultancy and taxes. The lowest bid received by the National Highway Authority (NHA) stood at Rs147bn. Of the total cost, the ADB is financing Rs108bn, with the remaining amount to be provided by the government.
Officials say rebidding is not a viable option, as securing fresh approvals from the ADB and the Executive Committee of the National Economic Council (Ecnec) would consume additional time. The ADB has urged the Economic Affairs Division to support the NHA in expediting implementation and completing pending procurements to ensure full utilisation of the loan.
Ecnec has already approved the award of contracts to a joint venture comprising NXCC, Dynamic Constructor and Rustam Associates, despite reservations raised by parliamentary committees and the PPRA. The NHA has defended the decision, stating that allegations against the lead partner did not reach legal finality and that the firm was never blacklisted.
The ADB has confirmed it has no objection to awarding contracts to the lowest evaluated bidder across four project lots, covering road sections from Rajanpur to Dera Ismail Khan. The IHC has also dismissed PPRA’s petition challenging the Rs172bn award, warning that regulatory actions could jeopardise the ADB financing facility.
