$360m Highway Loan At Risk Amid Project Delays

The Asian Development Bank (ADB) has warned that Pakistan’s $360 million Carec Tranche III highway loan could expire next year if project work does not start immediately.

The loan, approved under the Central Asia Regional Economic Cooperation program, is intended to widen major sections of the N-55 Highway, but delays have stalled progress for eight months.

Disputes over the bidding process, reviewed by parliamentary committees and the Public Procurement Regulatory Authority, have prevented project implementation and raised concerns about missing the December 31, 2027, deadline.

The Islamabad High Court directed authorities to award the contract without further delay, warning that continued stalling could lead to cancellation, increased costs, and reputational damage for Pakistan.

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ADB officials requested the Economic Affairs Division to support the National Highway Authority in expediting implementation, completing pending procurements, and ensuring full utilization of the loan funds.

The project’s total cost is estimated at Rs170 billion, with the ADB providing Rs108 billion and the federal government covering the remaining financing requirements for completion.

Officials have emphasized that swift action is essential to prevent cost escalation, protect Pakistan’s credibility with international lenders, and ensure the long-delayed highway project moves forward efficiently.