By Staff Reporter
ISLAMABAD: The Asian Development Bank has warned Pakistan that a $360 million loan for a key highway project risks going unspent and expiring next year amid persistent delays tied to a contentious bidding process.
The Manila-based lender flagged the issue in a letter to Pakistan’s economic affairs division, highlighting a “significant risk” that the funds, approved under a multitranche financing facility, won’t be fully utilised by the Dec. 31, 2027, deadline. The money is earmarked for Tranche III of the Central Asia Regional Economic Cooperation Corridor Development Investment Program, which involves widening sections of the N-55 highway.
Without swift action from the National Highway Authority to kick-start the work, the project could stall indefinitely, the ADB said, urging support to expedite procurement and ensure the loan is drawn down in time. The road upgrade has been mired in controversy for eight months, with bids opened in February 2025 but then subjected to scrutiny in five parliamentary standing committee meetings and by the Public Procurement Regulatory Authority. Even after the ADB cleared the bids, administrative roadblocks kept the contracts from being awarded.
Islamabad High Court stepped in recently, ordering the authority to proceed without further holdups. The court cautioned that ongoing delays could trigger loan cancellation, drive up costs and inflict “serious reputational damage” on the national treasury. It also rejected a petition from the procurement regulator challenging the Rs172 billion award to a joint venture, declaring the filings moot and warning that the authority’s decisions “may also lead to the refusal of the finance facility agreed by the ADB.”
The total project tab is pegged at Rs170 billion, covering land acquisition, consulting fees and taxes, with the ADB footing Rs108 billion and Islamabad picking up the rest. The lowest bid came in at Rs147 billion from a consortium led by NXCC, alongside Dynamic Constructor and Rustam Associates — a choice approved by the Executive Committee of the National Economic Council despite pushback from lawmakers and the regulator.
National Highway Authority officials say they’re caught in a bind: restarting the bidding would require fresh nods from the ADB and the economic council, eating up precious time. The ADB, for its part, has made clear the 2027 cutoff is non-negotiable. “We seek EAD’s support in assisting NHA to expedite implementation, complete pending procurements, and ensure full utilisation of the loan proceeds within the MFF period,” the lender wrote.
In defending the joint venture, the highway authority argued that allegations of underperformance against the lead partner “did not reach finality in accordance with the procedure and rules,” and that the firm has never been blacklisted by any oversight body.
The ADB has signed off on awarding the work to the lowest bidder across four segments: the 57.5-kilometer Rajanpur-to-Jampur stretch for Rs23.5 billion; the 64-kilometer Jampur-to-Dera Ghazi Khan section for Rs29.1 billion; the 111.7-kilometer Dera Ghazi Khan-to-Tibi Qaisrani portion for Rs52 billion; and the 96.2-kilometer Tibi Qaisrani-to-Dera Ismail Khan leg for Rs42 billion.
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