ADB gives final one-month extension for $360 million CAREC project loan

The Asian Development Bank (ADB) has granted a final one-month extension for the disbursement of a $360 million loan linked to the Central Asia Regional Economic Corridor (CAREC) Tranche-III project, asking Pakistan’s National Highway Authority (NHA) to complete the contract award by April 5, Dawn reported. 

In a letter to the NHA, the bank approved the extension of bid validity from March 6 to April 5, describing it as the last opportunity to finalise the procurement process.

The ADB said the NHA must complete the contract award within the extended period and provide any material information explaining the delay. It warned that failure to do so could be treated as a potential non-compliance case affecting financing and future procurement actions.

The project has been delayed for nearly a year due to disputes surrounding the bidding process for the N-55 road scheme under CAREC Tranche-III.

Separately, the Supreme Court dismissed a petition filed by the Public Procurement Regulatory Authority (PPRA) challenging the procurement process under which a joint venture of NXCC, Dynamic Constructor and Rustam Associates was declared the lowest bidder.

While disposing of the petition, the court upheld earlier findings of the Islamabad High Court regarding the procurement process conducted by the NHA.

The IHC had previously rejected the PPRA challenge to the Rs172 billion project award, stating that the regulator’s objections could risk the financing arrangement with the ADB.

The NHA has maintained that the bid evaluation was carried out in accordance with the prescribed criteria and that financial and technical documents, including construction turnover, tax returns and bank statements, were properly verified.

The total cost of the CAREC Tranche-III project is estimated at about Rs170 billion, including land acquisition, consultancy services and taxes. The lowest bid submitted by the joint venture stands at approximately Rs147 billion.

The Executive Committee of the National Economic Council (Ecnec) has already approved the bids for the project, and the ADB has confirmed that it has no objection to awarding the contracts to the lowest bidder for all four project lots.

Officials said the delay in starting construction has raised concerns that the ADB loan could lapse if the project is not finalised within the extended deadline.