ADB gives positive evaluation to Pakistan’s two motorway projects

The Asian Development Bank (ADB) has given a positive evaluation to two motorway projects in Pakistan that received additional financing of $590 million from the bank and other sources.

With a validation report by the Independent Evaluation Department (IED), the ADB has lauded the “National Motorway M–4 Gojra–Shorkot Section Project and National Motorway M–4 Gojra–Shorkot–Khanewal Section Project – additional financing” as relevant, effective, and successful. 

The project, funded at $590 million, aimed to enhance north–south connectivity, bolster road transport services’ quality, and foster inclusive economic growth. The validation report praised the completion of a four-lane motorway between Gojra and Shorkot (section II of M-4) and the extension to Khanewal (section III), marking the fulfillment of the national motorway M-4.

However, while the project achieved its intended outcomes and surpassed several targets, concerns about sustainability loom large. The Project Completion Report (PCR) identified key issues, notably the lack of detailed financial analysis for sustaining the motorway.

The PCR highlighted that despite significant progress in infrastructure development and improved road conditions, the absence of a clear financial plan for maintenance raises uncertainties. Specifically, the report highlighted the absence of a comprehensive financial cost-benefit evaluation and the failure to calculate the financial internal rate of return (FIRR), crucial in determining the project’s long-term financial viability.

The validation report emphasized that without a robust FIRR and a clear funding strategy for maintenance, concerns persist regarding the motorway’s future sustainability and operational standards. It cautioned that inadequate evidence might pose risks of insufficient maintenance and potential operational deficiencies.

The PCR also cited challenges in monitoring certain aspects of the project, such as the E35 expressway section connecting Hasan Abdal and Havelian, due to a lack of available data.

The ADB’s validation acknowledged the project’s success in achieving its immediate objectives but underscored the need for meticulous financial planning and sustainability analysis for continued operational effectiveness.

The National Highways Authority’s (NHA) strategy of passing maintenance to toll concessionaires for both physical and financial sustainability was commended, yet concerns about the broader financial outlook remained a focal point in the evaluation.

While the project received praise for its positive impact on transportation and economic growth, the ADB’s assessment stressed the imperative need for comprehensive financial evaluations to ensure the sustained success and viability of Pakistan’s motorway infrastructure in the years to come.