The Pakistani government has given the green light to over a dozen large-scale infrastructure projects worth Rs1.3 trillion, despite financial constraints and cost escalations. The Executive Committee of the National Economic Council (ECNEC) sanctioned these projects, covering sectors such as transport, railways, space technology, and flood rehabilitation.
Key Approved Projects
1. Lahore-Sahiwal-Bahawalnagar Motorway (Rs436 Billion)
One of the largest projects approved is the 295-kilometer-long Lahore-Sahiwal-Bahawalnagar Motorway. Initially estimated at Rs264 billion, the project’s cost has surged by 65% to Rs436 billion. While the National Fiscal Pact restricts federal funding for projects confined to a single province, the federal government plans to proceed with this project. The Punjab government may be asked to share 50% of the costs.
2. Pakistan Optical Remote Sensing Satellite (PRSS-O2)
ECNEC has approved the PRSS-O2 satellite project at a revised cost of Rs19.5 billion. Funded 85% through a Chinese concessional loan, this satellite will enhance Pakistan’s earth observation capabilities with high-resolution optical imaging.
3. Sindh Flood Emergency Rehabilitation (Rs88.4 Billion)
The Sindh Flood Emergency Rehabilitation Project, initially approved in 2022 at Rs66 billion, has seen its cost rise by 34% to Rs88.4 billion. The World Bank is financing this initiative, which aims to restore infrastructure and provide aid to flood-affected communities. An additional Sindh Flood Irrigation project worth Rs33 billion has also been approved.
4. Rawalpindi Ring Road (Rs33 Billion)
The Rawalpindi Ring Road project’s cost has risen by 40%, from Rs23.6 billion to Rs33 billion. The increase is due to design changes, including additional culverts, bridges, underpasses, and flyovers.
5. Railway Expansion (Rs71 Billion)
Pakistan Railways will receive Rs71 billion for procuring 820 bogie wagons and 230 passenger coaches. The cost has surged by 129% from the initial estimate of Rs31 billion. The project is expected to be completed by June 2027.
6. Multan-Vehari Road Rehabilitation (Rs12.9 Billion)
This project will upgrade a 93.5-kilometer road to improve connectivity in the region.
7. Green Line Bus Rapid Transit (Rs13.5 Billion)
ECNEC approved administrative clearance for the Green Line BRT in Karachi, enabling the Sindh Infrastructure Development Company to settle liabilities before transferring operations to the provincial government.
8. Public-Private Partnership Expansion (Rs28 Billion)
ECNEC has allocated Rs28 billion for public-private partnerships, urging Sindh to complete all projects by June next year to avoid further financial penalties on unused Asian Development Bank loans.
Financial Challenges and IMF Restrictions
With an already stretched Rs1.1 trillion development budget, the approval of new projects raises concerns about funding. Many of these projects have seen significant cost escalations, highlighting planning inefficiencies. Moreover, under IMF agreements, the federal government is restricted from funding projects that benefit only one province, as seen in the Lahore-Sahiwal-Bahawalnagar Motorway.
Conclusion
While these mega projects aim to boost infrastructure and economic growth, cost overruns and financial constraints remain major hurdles. The government will need to balance development needs with fiscal discipline to ensure sustainable progress.
