ISLAMABAD: The Asian Development Bank (ADB) has given a last one-month extension for the disbursement of a $360 million loan linked to the Central Asia Regional Economic Corridor (Carec) Tranche-III project, which has faced nearly a year of delays mainly due to issues involving the National Highway Authority (NHA).
In a recent letter, the ADB approved an extension of bid validity from March 6 to April 5, 2026, giving the NHA 30 additional days to finalise the contract award. The bank stressed that this would be the final extension and urged the authority to complete the process within the new deadline.
The lender also asked the NHA to submit any fresh and significant information explaining the delay for its review during the same period. It warned that if the contract is not awarded within the extended timeframe, or if adequate justification is not provided, the case may be treated as a potential non-compliance issue that could impact financing and future procurement actions.
Supreme Court clears bidding process
Meanwhile, the Supreme Court of Pakistan dismissed a petition filed by the Public Procurement Regulatory Authority (PPRA) challenging the bidding process through which a joint venture of NXCC, Dynamic Constructor and Rustam Associates emerged as the lowest bidder.
While disposing of the petition, the apex court upheld the earlier findings of the Islamabad High Court regarding the procurement process carried out by the NHA for the N-55 project. The court ruled that the verification of the joint venture’s bids and credentials had been properly conducted and required no further scrutiny.
Previously, the Islamabad High Court had also rejected the PPRA’s objections to the Rs172 billion Carec Tranche-III contract award to the same joint venture. The court cautioned that the regulator’s decisions could risk the financing facility committed by the ADB.
Concerns over loan lapse
The bidding process had drawn criticism from several parliamentary standing committees, but the NHA maintained that all issues had been addressed and that the evaluation was carried out according to established criteria.
According to the authority, the bidders’ construction turnover, tax records and bank statements were thoroughly verified during the evaluation phase, making additional checks unnecessary. It also pointed out that the same joint venture had already secured contracts for Lots 2 and 3, raising questions about why further verification was being demanded for Lots 1 and 4.
In earlier correspondence, the ADB had warned that the $360 million loan allocated under the Carec Development Investment Programme’s Tranche-III could lapse next year if the project failed to progress.
Officials say there is growing concern within government circles that Pakistan should not risk losing the ADB financing, particularly amid the current global oil and economic pressures. Losing the loan, they fear, could also weaken the bank’s confidence in Pakistan’s institutions.
The delay in utilising the funds largely stems from disputes over the bidding process that stalled the launch of the Tranche-III road project. Although bids were opened in February 2025 and approved by the ADB soon afterward, the process came under scrutiny from parliamentary committees and the PPRA.
The total cost of the project is estimated at around Rs170 billion, including land acquisition, consultancy services and taxes. The lowest bid submitted by the joint venture stands at Rs147 billion.
The Executive Committee of the National Economic Council (Ecnec) has already approved the bids submitted by the NXCC-Dynamic Constructor-Rustam Associates consortium, while the ADB has confirmed it has no objection to awarding contracts to the lowest bidder across all four project lots.