Federal Government approves Rs395b for M-6 Motorway project

ISLAMABAD: The Hyderabad–Sukkur Motorway (M-6) has once again received federal approval, this time with a revised cost of Rs395 billion, marking a 138% increase from its initial estimate in 2020.

The decision was made during a meeting of the Central Development Working Party (CDWP) chaired by Planning Minister Ahsan Iqbal. The project, spanning 306 kilometers, is now forwarded to the Executive Committee of the National Economic Council (ECNEC) for final approval.

The project was first approved at Rs165 billion in 2020. Its cost increased to Rs191 billion in 2021, and then to Rs308 billion in 2022. It has now reached Rs395 billion. Earlier attempts to complete it under the PPP model failed. The government has shifted it back to public sector development, though PPP may still be used for some parts.

Strategic Importance and Budget Allocation

The M-6 motorway is regarded as the only remaining critical link in Pakistan’s north-south motorway network. The Pakistan Peoples Party (PPP) has strongly supported the inclusion of this project in the federal Public Sector Development Programme (PSDP) and has reportedly tied its budget support to this demand.

The government has allocated Rs 15 billion for the project in the upcoming fiscal year. This is much lower than the Rs78 billion needed for the first year of construction. Minister Ahsan Iqbal directed the NHA and Economic Affairs Division to confirm funding sources by August 2025.

A high-level committee led by the Federal Finance Minister is being formed to explore credible financing sources. Members will include ministers from Communications, Economic Affairs, and Planning, along with senior NHA officials. The planning minister also proposed using innovative financing methods to ensure timely project execution.

The government is looking for external funding for the project. It has approached partners through CPEC, Azerbaijan, and the Islamic Development Bank (IDB). The IDB is interested in funding the last three of five sections with a $475 million loan.

This loan may be approved by September 2025. The bank may also seek support from the Arab Development Group and the Asian Infrastructure Investment Bank (AIIB) for the remaining sections.

Challenges in PPP Implementation

While the NHA proposed completing the first two sections under the PPP model, the Planning Commission raised concerns due to the lack of required approvals from the PPP Authority Board. Due to financial constraints, the NHA now plans to implement the project in phases, using a hybrid financing model. Sections with commercial viability will be offered under private investment arrangements.

Minister Iqbal highlighted the economic and social benefits of the M-6 motorway, stressing its role in boosting regional development, enhancing connectivity, and stimulating economic activity in areas along its route.