By Abdul Ghani

The government has earmarked Rs12.75 billion for six major infrastructure schemes under the PSDP 2026-27, including key infrastructure schemes in Khyber Pakhtunkhwa, according to an official document available with Wealth Pakistan.

The six schemes have a combined PC-I cost of about Rs1.065 trillion. Of the Rs12.75 billion allocation, Rs9.60 billion is in the rupee component and Rs3.15 billion in foreign aid.

The single largest allocation — Rs5 billion — has been proposed for relocation of the Karakoram Highway between Thakot and Raikot due to the construction of dams on the Indus, a 241-kilometre scheme shown in the document as China EXIM-funded. Its PC-I cost stands at Rs502.6 billion, with Rs4.5 billion in local funding and Rs500 million in foreign aid proposed for FY2026-27. The project is listed as requiring a fresh financing request for Phase IIA.

Another Rs2.5 billion has been earmarked for the revised Khyber Pass Economic Corridor (KPEC) project, which is shown as World Bank-funded. The scheme carries a PC-I cost of approximately Rs77.91 billion and cumulative expenditure of Rs214.38 million up to June 2026. Its physical progress is listed as “under procurement.”

The document also provides Rs2 billion for the Lowari Tunnel electrical and mechanical works plus bridges, against a PC-I cost of Rs33.25 billion. First-quarter releases amount to Rs199.4 million, while utilization is recorded at Rs53.48 million. The project is also at the procurement stage.

A further Rs2 billion has been proposed for the Lahore-Sahiwal-Bahawalnagar Motorway (295 km), including an 18-km link from the Lahore Ring Road to the Raja Jang interchange on the Kasur Road. The scheme has a PC-I cost of Rs435.72 billion. Its status, however, indicates that the revised PC-I is under approval, suggesting that substantial implementation may depend on completion of the approval process.

The Chakdara-Chitral Road Project (N-45), Section III: Kalkatak-Chitral (48 km) has been allocated Rs500 million, including Rs450 million in foreign assistance. The project, shown as EDCF/Korea-funded, has a PC-I cost of around Rs10.95 billion and is currently under procurement.

Meanwhile, Rs750 million has been allocated for land acquisition for relocation of the Karakoram Highway between Thakot and Raikot, linked to dam construction on the Indus. The land-acquisition component has a PC-I cost of around Rs4.13 billion and is listed as under process.

The figures also reveal an important implementation challenge. Despite the enormous combined project cost, first-quarter releases shown in the document total only Rs199.4 million, while utilization stands at Rs53.48 million. The six schemes also carry combined liabilities of about Rs155.68 billion.

For Pakistan, these projects are economically significant because they target major transport corridors and connectivity bottlenecks, but several remain at the procurement, financing, land-acquisition, or approval stages. The key test for FY2026-27 will therefore not simply be budgetary allocation, but whether financing and administrative approvals translate into faster execution on the ground.

Credit: INP-WealthPk