By Ijaz Kakakhel

A committee reviewing the Central Asia Regional Economic Cooperation (CAREC) Corridor Development Investment Programme has recommended completing the 329-kilometre Rajanpur-Dera Ghazi Khan-Dera Ismail Khan highway project by December 2027, with strict adherence to the approved implementation schedule.

The project, being undertaken under Tranche-III of the CAREC programme, involves dualisation and rehabilitation of the Rajanpur-D.G. Khan-D.I. Khan section of the N-55 highway and has been divided into four construction packages.

According to project documents available with Wealth Pakistan, the committee recommended that Tranche-III be completed within the stipulated timeframe of December 2027 to avoid further delays and cost escalation.

In case the project cannot be completed within the stipulated period, the ministry concerned has been advised to initiate timely negotiations with the financing partner for an extension of the financing period under the existing terms and conditions.

The committee also recommended that any additional financial burden arising from delays should, as far as possible, not be borne by the Government of Pakistan.

Implementation has advanced further on two of the four packages. Lots 3 and 4, covering the 111.7km D.G. Khan-Tibbi Qaisrani and 96.245km Tibbi Qaisrani-D.I. Khan sections, respectively, have received letters of commencement dated July 6, 2026, and contractors have been mobilised for both packages.

For Lots 1 and 2, covering the 57.5km Rajanpur-Jampur and 64km Jampur-D.G. Khan sections, letters of acceptance were issued to contractors on May 4, 2026. Award of the contracts is subject to approval of the relevant Land Acquisition and Resettlement Plans (LARPs) by the Asian Development Bank (ADB).

The documents show that LARPs for Lots 3 and 4 have already been approved by ADB. The LARP for Lot 2 was resubmitted to the bank on September 11, 2026, after addressing observations, while the draft for Lot 1, prepared by NESPAK, was under review for submission to the ADB by September 20.

Land acquisition has also progressed at different stages. The process for Lot 4 has been completed, while funds for Lot 3 have been deposited and land acquisition is underway, with the award awaited.

Around Rs3.21 billion is required to complete the land acquisition process for Lot 1 and Rs3.705 billion for Lot 2.

The project estimates that Rs9.7 billion will be required during the first and second quarters of FY2026-27 for implementation of LARPs across the four lots. This comprises Rs3 billion each for Lots 1 and 2, Rs2.5 billion for Lot 3 and Rs1.2 billion for Lot 4.

Another Rs1.47 billion is required for relocation of utilities, including Rs400 million for Lot 1, Rs360 million for Lot 2, Rs460 million for Lot 3 and Rs250 million for Lot 4.

The documents identify financing as an issue requiring attention as implementation moves forward. The ADB loan amounts to $360 million against an estimated $531 million required for execution of the entire CAREC Tranche-III project.

The ADB's multitranche financing facility for CAREC is scheduled to close on December 31, 2027, while the documents indicate that financial progress at the closing date may be around 50%. Financial arrangements for execution of the remaining works after closure of the facility will therefore need to be addressed.

Project authorities have also identified the tendering process, LARP approvals, availability of funds for land acquisition and timely implementation of resettlement plans among factors affecting the pace of work.

The committee's recommendation places emphasis on maintaining the approved implementation schedule and completing the 329km corridor within the December 2027 timeframe.

Credit: INP-WealthPk