ISLAMABAD: The Asian Development Bank (ADB) has warned that a $360 million loan for the Central Asia Regional Economic Cooperation (CAREC) Corridor Development Investment Programme’s Tranche III could lapse next year if the project is not expedited. The loan, intended for widening sections of the N55 Highway, has faced significant delays due to controversies in the bidding process.
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The project has been stalled for eight months despite bids being opened in February 2025 and approved by the ADB. Parliamentary standing committees and the Public Procurement Regulatory Authority (PPRA) scrutinized the process, slowing implementation. The ADB cautioned the Economic Affairs Division that the funds risk expiring by December 31, 2027, without project completion, stressing that no extensions would be granted.
Asian Development Bank calls for expedited action on NHA’s stalled road project to avoid loan expiration and potential cost overruns
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The total cost of Tranche III is estimated at Rs170 billion, including land acquisition, consultancy, and taxes, with the ADB covering Rs108 billion and the Pakistani government funding the balance. Officials said rebidding is impractical, as new approvals from the ADB and ECNEC would further delay the project.
The Islamabad High Court recently ordered work to proceed without delay, noting that continued stalling could lead to loan cancellation, cost escalation, and reputational damage to the national exchequer. The approved contractor is a joint venture comprising NXCC, Dynamic Constructor, and Rustam Associates. The ADB has no objection to awarding contracts to the lowest evaluated bidder across four lots: Rajanpur to Jampur, Jampur to Dera Ghazi Khan, Dera Ghazi Khan to Tibi Qaisrani, and Tibi Qaisrani to Dera Ismail Khan.
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The NHA has defended its selection, saying allegations against the lead partner “did not reach finality” and the firm is not blacklisted. The ADB urged swift action to complete pending procurements and ensure full utilisation of the loan within the MFF period.