In recent weeks, an expansive corruption case has surfaced from the Kohistan region of Khyber Pakhtunkhwa, with estimates of public loss exceeding Rs 40 billion. The scandal centers around allegedly fake and incomplete road projects, where funds were sanctioned, released, and reportedly siphoned off without physical execution on the ground. While the region’s rugged topography has long made development both necessary and expensive, the abuse of its remoteness to mask fiscal mismanagement represents a far deeper concern than the incident itself. It raises structural questions about the efficiency of public financial management, the failure of controls at various institutional layers, and the lack of accountability that continues to make Pakistan’s development framework fiscally vulnerable.
The Kohistan episode should not become another forgotten line item in an audit report.
The model of corruption observed in Kohistan is neither new nor isolated. It follows a known cycle: inflated project estimates, absence of real-time verification, weak internal audit mechanisms, and delayed post-facto accountability that rarely results in meaningful institutional correction. According to available information, multiple contractors were paid against works that were either not executed or were only partially completed. The payments were processed by concerned departments without adequate physical verification. This exposes critical lapses in Pakistan’s procurement governance, especially in provincial infrastructure development.
At the core of the issue lies the failure to integrate technology and independent oversight into the public expenditure system. Despite substantial investment in ERP systems, e-procurement portals, and digitized accounting systems over the past decade, most provincial projects continue to be executed under manual or semi-automated frameworks, where human discretion and collusion can override process integrity. The Kohistan scandal highlights the vulnerability of decentralized spending in the absence of centralized monitoring. The 18th Amendment devolved spending powers to the provinces, but the corresponding strengthening of internal controls, capacity building, and data-driven project tracking has lagged far behind.
From a financial governance standpoint, the cost of such failures goes beyond the Rs 40 billion headline. It distorts macro-fiscal discipline by inflating development expenditure figures without delivering actual economic returns. In fiscal year 2024-25 alone, the combined provincial development budget exceeded Rs 2 trillion. If even 10% of that is compromised due to ghost projects, misreporting, or leakages, the country could be losing Rs 200 billion annually – equivalent to nearly 30% of its federal health budget or twice its higher education allocation. The opportunity cost of corruption, therefore, is not only financial; it directly undermines human development, private investment prospects, and future productivity.
Institutional failure is visible across three tiers. At the planning level, project appraisals are often hurried and politically influenced, with cost-benefit analyses either absent or poorly modeled. The development of roads in topographically challenging regions like Kohistan should be subjected to geospatial feasibility assessments, seasonal viability studies, and cost realism benchmarks based on regional engineering norms. Yet most PC-1 documents are often approved on the basis of paper estimates, often without third-party validation. Secondly, at the implementation level, the absence of real-time monitoring tools – such as satellite imagery, geo-tagged progress reports, and digital contractor logs – leaves vast room for fraudulent certifications. Thirdly, on the accountability front, ex-post audits remain delayed and under-resourced. Departmental audit teams often rely on vouchers and signatures rather than verifiable, on-ground metrics, making detection difficult and delayed.
It is also important to note that the procurement chain remains opaque in many such projects. While the Public Procurement Regulatory Authority (PPRA) provides a federal framework, each province operates its own version with varying levels of enforcement. Single-bid contracts, limited tendering, and repeated use of the same pool of contractors – often linked informally to decision-makers – are red flags that recur across multiple scandals, not just in Kohistan. Without procurement transparency, the risk of recurring fiscal leakages remains structurally embedded.
In economic terms, unproductive public spending such as this not only undermines service delivery but worsens Pakistan’s already tenuous fiscal position. With interest payments absorbing over 50% of federal revenues and external debt repayments climbing past $23 billion this fiscal year, the government’s margin for developmental spending is increasingly constrained. Wasteful expenditures like ghost roads exacerbate the resource deficit and require even more borrowing to maintain budgetary optics. As the IMF, multilaterals, and credit rating agencies increasingly scrutinize the efficiency of public spending, repeated episodes of subnational corruption further diminish Pakistan’s credibility as a fiscally responsible borrower.
This scandal must also be analyzed within the broader context of institutional deterrence. While anti-corruption agencies have taken cognizance of the Kohistan case, their long-term success depends not on arrests alone but on system reform. The most effective deterrent is not prosecution after the fact, but a preventive environment where the cost of corruption outweighs the benefits. This can only be achieved by digitizing workflows, publicly disclosing project progress in real time, involving third-party monitoring firms, and empowering citizen feedback mechanisms in development areas. Fiscal decentralization cannot succeed in a vacuum; it must be coupled with accountability decentralization and data transparency.
In this context, the introduction of technologies like blockchain-based tendering, satellite-driven construction monitoring, and centralized dashboards accessible to both provincial assemblies and the public can play a transformative role. Budget utilization data, physical progress reports, contractor performance history, and audit flags should be made available in machine-readable formats for all Tier 1 and Tier 2 development projects. Such openness not only builds trust but crowdsources oversight. Countries like Estonia, Rwanda, and Georgia have implemented similar systems with measurable reductions in procurement-related fraud.
Additionally, there is a need to review the budgeting process itself. Many development projects are funded under the Annual Development Programme (ADP) without linkages to medium-term impact evaluations. Projects that receive budgetary approval without being subjected to a rolling public investment management assessment (PIMA) risk becoming fiscal black holes. Introducing a tiered evaluation mechanism – wherein high-value projects like roads, dams, or hospitals above a certain threshold are automatically subjected to PIMA and periodic performance reviews – could help prioritize value-for-money initiatives.
Finally, institutionalizing a national “Corruption Impact Report” as part of the Economic Survey or budget documents could create both pressure and visibility. If each year’s budget documents clearly disclosed the volume of funds recovered from misappropriated development schemes, number of suspended or blacklisted contractors, and percentage of budget audited within real time, it would force the bureaucracy and implementing agencies to recalibrate their internal controls. This is not just a technical solution; it is a governance necessity.
The Kohistan scandal is not merely a provincial embarrassment. It is a national case study in why Pakistan remains trapped in a low-efficiency, low-trust governance cycle. It reflects the inability to match fiscal authority with procedural integrity. More than that, it highlights the economic costs of letting corruption go unchecked in frontier development zones, where the state’s visibility is already minimal and citizen dependence is maximal.
No amount of debt restructuring, IMF assistance, or donor funding can compensate for institutional decay at the grassroots level. Until public money is spent with verifiable outcomes, and until those misusing it face credible deterrents, Pakistan’s path to sustainable development will remain blocked – not by geography, but by governance.
The current moment offers a rare opportunity. With digital infrastructure in place, a growing focus on fiscal efficiency, and the political space to undertake structural reform, there is little excuse not to act. The Kohistan episode should not become another forgotten line item in an audit report. It must become a turning point. If roads are to be built, they must lead to development, not deception. The first step on that road is accountability – not just of individuals, but of systems.
The writer is a financial expert and can be reached at jawadsaleem.1982@ gmail.com. He tweets @JawadSaleem1982