Rs465b Lahore-Bahawalnagar motorway faces scrutiny over unmet guidelines, resource concerns

Recommends Punjab road scheme for approval, proposes funding via PSDP

ISLAMABAD:

The federal government has conditionally recommended a Rs465 billion provincial project, named Lahore-Bahawalnagar motorway, for approval in violation of the National Fiscal Pact and instructions of the Prime Minister's Office, as well as without securing funding and firming up design.

The cost is Rs201 billion, or 76%, higher than the original price tag set two years ago, and the road project "jeopardises the viability, need and up-gradation of Mainline-I project" of the China-Pakistan Economic Corridor, reveals official documents.

The Central Development Working Party (CDWP), which has the mandate to clear development schemes, on Tuesday recommended the Lahore-Sahiwal-Bahawalnagar motorway project, costing a total of Rs465.1 billion, for final approval of the Executive Committee of the National Economic Council (Ecnec).

The project has been approved to the extent where codal formalities have been completed, and the remaining components have been approved in principle and with the condition of meeting the codal formalities, said a spokesman for the Ministry of Planning.

Sources said that the project had been cleared in breach of the National Fiscal Pact, which bars financing of provincial-nature projects, and was also in breach of Prime Minister Shehbaz Sharif's instructions, who had directed to get at least 50% funding from the Punjab government.

The project has been given the go-ahead without any viable financing plan, and there is no final design, though the PM Office and Ecnec had suggested changes in its design.

Despite being the provincial scheme, the documents showed "the project is proposed to be financed through PSDP" and would be completed in five years.

"The implementation of this project will jeopardise the viability, need and up-gradation of the ML-I project. This aspect should also be considered by the CDWP," said the observations made by the technical section of the Planning Commission.

The observations revealed that the revised PC-I with a total cost of Rs465.1 billion was based on the Composite Schedule of Rates (CSR) 2024. The National Highway Authority (NHA) has already formulated CSR 2025, which is less expensive; therefore, the cost of the updated project "needs to be rationalised".

The project envisages the construction of two sections of the Lahore-Sahiwal-Bahawalnagar motorway. The first section consists of a six-lane motorway with a length of 220 km, starting from Lahore Ring Road and terminating at National Highway N-5 near Kassuwal. The second section, a four-lane motorway spanning 75 km, starts from the first section near Depalpur and terminates on the Michanabad–Bahawalnagar road near Bahawalnagar.

The Express Tribune contacted Secretary of Communications Ali Sher Mehsud for an official version. But his response was not received till the filing of the story.

Sources said that during the CDWP meeting, the planning minister raised many questions. But the communications ministry, which is the sponsoring ministry, requested to clear the project, promising to address those observations in due course of time.

"The revised PC-I is submitted by the Ministry of Communications for Rs465 billion, as per the original alignment violating the instructions, directions and decision of Ecnec dated July 8, 2023, PM Office directions dated 20-01-2025 (CDWP decision 27-01-2025), Ecnec decisions dated 25-03-2025 and CDWP decision dated 21-05-2025," showed the working paper submitted to the CDWP.

The PM Office had instructed that the NHA would reconsider the alignment to connect the proposed alignment with the existing motorway, and the NHA would submit a revised PC-I for consideration of the CDWP/Ecnec by incorporating all the changes in scope and cost.

Funding constraints

Sources said that the biggest concern in the CDWP meeting was the implications of the Rs465 billion project for other strategic and mega initiatives like the Karakoram Highway expansion, Sukkur-Hyderabad motorway, Kharian-Rawalpindi motorway, Lowari Tunnel and foreign-funded schemes.

The inclusion of the Lahore-Bahawalnagar motorway means the NHA will require Rs600 billion annually to simultaneously complete all its existing projects. The addition will further thin out the Public Sector Development Programme (PSDP) and could impact projects like the Diamer-Bhasha dam due to the diversion of resources. The CDWP was informed that, considering the NHA's total PSDP allocation of Rs227 billion in fiscal year 2025-26, the sponsors should indicate whether the NHA had the capacity to undertake the project without affecting other ongoing schemes.

"In case the NHA proceeds with this project, it appears that implementation of other important projects may be delayed or halted," said the Planning Commission.

The communications ministry proposed the project despite its total throw-forward amount – the cost needed to complete the ongoing projects – for the NHA currently standing at Rs2.5 trillion. "This project costing Rs465 billion will add to the burden on the PSDP and all the ongoing projects; investments will result in time and cost overrun," said the commission.

The CDWP had considered the project in July 2023 and recommended it for ECNEC's approval for Rs264 billion. It directed that the NHA would ensure that the cost was based on proper site surveys, investigations and a detailed design. Any increase in the cost, including the package, will be borne by the NHA through its own resources, other financing sources, but it will not be funded through the PSDP. But these instructions have not been implemented.

In 2023, Ecnec gave the go-ahead for Rs34 billion worth of two components and directed that the NHA would also explore alternative means of financing for the remaining portion. Accordingly, the Position Paper was considered by Ecnec in its meeting held in March 2025, and it directed that the NHA may start work on package-1 from Lahore Ring Road to Raiwind Kasur Road Interchange through PSDP funds as per the original approved PC-I.

Ecnec referred back the remaining project to the NHA for reconsideration of the alignment beyond package-1 to connect the proposed alignment with the existing motorway as per the discussion held in a meeting chaired by the prime minister in January last year. It also instructed to engage with the government of Punjab for a 50% share of the total cost.

In May last year, the CDWP decided that the Ministry of Communications and the NHA would prepare a separate PC-I for the construction of Package-1. But the ministry submitted the PC-I for the complete project.