NA panel questions Rs164 billion cost of Lyari Elevated Freight Corridor, urges local funding

The National Assembly Standing Committee on Economic Affairs on Tuesday raised concerns over the estimated Rs164 billion cost of the Lyari Elevated Freight Corridor (LEFC) proposed under Korean Exim Bank financing and asked the government to execute the project using domestic resources through the Public Sector Development Programme (PSDP).

The committee was briefed that the Korean Exim Bank had proposed financing the project at an estimated construction cost of Rs164 billion, while the National Highway Authority (NHA) had assessed that the same project could be executed locally for Rs88.6 billion.

Although the Korean lender offered a 40-year loan at an interest rate of 1%, the committee observed that PSDP financing would reduce the overall project cost and limit long-term fiscal liabilities.

Members were informed that the Korean proposal involved a heavier design, including imported steel bridges costing about Rs61 billion. In comparison, the NHA said similar bridges could be constructed using concrete at an estimated cost of Rs23 billion, resulting in significant savings.

The committee recommended that the LEFC be executed through PSDP using a cost-efficient local design and suggested that the total cost could be spread over three years, with allocations of around Rs40 billion annually.

The panel also reviewed progress on projects under the Central Asia Regional Economic Cooperation (CAREC) programme financed by the Asian Development Bank. Members were told that work on Tranche-I and Tranche-II had progressed well, while Tranche-III was under implementation and Tranche-IV had yet to begin, pending completion of Tranche-III.

The committee was informed that delays in Tranche-III were due to land acquisition issues, procedural delays, and weaknesses in procurement and contract awards. Taking notice of the slow pace, the panel urged authorities to resolve outstanding issues and accelerate implementation.

Briefings were also given on World Bank-financed infrastructure projects, including the Khyber Pass Economic Corridor Project, which is at the design stage but facing procedural delays, and the Karachi Mobility Project aimed at improving urban transport.

The committee emphasized timely execution of all donor-funded projects and called for improved coordination, streamlined procedures, and stronger monitoring to avoid delays and ensure intended economic outcomes.