Rs. 465 Billion Motorway Plan Moves Forward Despite Cost and Funding Concerns

The federal government has given conditional clearance to a Rs. 465 billion Lahore- Bahawalnagar motorway project, even though key questions about funding, design and policy compliance remain unresolved, according to official records.

The project, proposed by the Ministry of Communications and to be built by the National Highway Authority (NHA), was recommended this week by the Central Development Working Party (CDWP) for final approval by the Executive Committee of the National Economic Council (ECNEC). The approval is subject to the completion of formal procedures and revisions to the project’s cost and route.

Planning officials have objected that the motorway is mainly a provincial project but is being put forward for federal funding through the Public Sector Development Program (PSDP). This, they say, conflicts with the National Fiscal Pact and earlier instructions from the Prime Minister’s Office that Punjab should contribute at least 50% of the cost.

The estimated cost has risen to Rs. 465.1 billion, more than 75% higher than the Rs. 264 billion approved in 2023. Officials say the increase is based on older construction rates and that updated pricing could lower the figure.

The project includes two parts: a six-lane, 220-kilometre motorway from Lahore Ring Road to near Kassuwal on National Highway N-5, and a four-lane, 75-kilometre section from near Depalpur to Bahawalnagar.

Officials warn that the scheme could put heavy pressure on federal development funds and delay other major projects such as the Karakoram Highway upgrade, the Sukkur–Hyderabad motorway and the Diamer-Bhasha dam. The NHA already faces funding needs of over Rs. 2.5 trillion for ongoing projects, while its yearly federal allocation is limited.

One official said adding another large project without a clear financing plan could slow down many existing schemes and raise costs because of delays.

There are also concerns that the motorway could weaken the case for the Mainline-I railway upgrade under the China–Pakistan Economic Corridor, which is considered a key transport project.

Earlier, ECNEC and the CDWP had asked the NHA to revise the route, split off the first construction package as a separate project, and find other sources of funding for the remaining sections. Officials say these instructions were not fully reflected in the latest proposal.

Despite these concerns, the Communications Ministry pushed for clearance, promising to resolve technical and financial issues later.

The project will now be reviewed by ECNEC, which will decide whether the funding plan, provincial contribution and design issues have been properly addressed.