The Senate Standing Committee on Planning, Development and Special Initiatives, chaired by Senator Quratulain Marri, has expressed serious concern over the National Highway Authority's (NHA) mounting debt burden. The committee directed NHA to submit a comprehensive report on debt restructuring proposals and financing mechanisms for ongoing and future projects within 10 days.
Debt Servicing Eats into PSDP Allocations
The committee questioned the continued reliance on loans for public infrastructure projects that do not generate commercial returns. Senator Marri observed that roads constructed as a public service obligation should preferably be financed through grants rather than loans. The committee noted that although the Public Sector Development Programme (PSDP) allocates funds for road infrastructure projects, a substantial portion is deducted for debt servicing, particularly interest payments, resulting in delays in the execution of road projects.
NHA officials briefed the committee that infrastructure projects are financed through Cash Development Loans (CDLs) and foreign loans routed through the Economic Affairs Division. The debt portfolio comprises both principal liabilities and accumulated interest, with substantial deductions from PSDP allocations for debt servicing over the years, a significant portion of which is used for interest payments.
Restructuring Initiatives Since 2018
The committee was informed that NHA has undertaken four restructuring initiatives since 2018. The current proposal seeks capitalization of outstanding mark-up on CDLs and foreign loans until completion of the ADB-supported State-Owned Enterprise Transformation Programme. However, the Finance Division has linked any moratorium to completion of debt mapping, third-party evaluation of commercially feasible projects, restructuring proposals, and approval by the competent forum before 31st December 2026.
The committee observed that despite the federal cabinet's decision on 20 January 2021 to prepare a comprehensive business plan and convert non-commercial projects into grants, little progress has been made. Senator Marri directed NHA to submit within ten days a comprehensive debt restructuring proposal, the implementation status of Cabinet and Economic Coordination Committee (ECC) decisions, project classification, and the future financing mechanism.
Toll Revenue and Non-Commercial Roads
NHA officials informed the committee that toll revenue currently amounts to approximately Rs 120 billion annually, which is utilized for road maintenance, salaries, and operational expenses. They explained that only motorways and commercially viable corridors generate sustainable revenue, whereas roads in remote and mountainous regions—including Gilgit-Baltistan, Chitral, Kashmir, and other less-developed areas—are constructed as public service obligations and cannot recover their costs through toll collection.
Major Motorway Projects Reviewed
The committee also reviewed the progress of major motorway projects. NHA stated that work on the Hyderabad-Sukkur (M-6) Motorway has been divided into five segments, with financing arrangements completed for two segments and physical work expected to commence on additional sections by September 2026. Officials also briefed the committee on the progress of the Sambrial-Kharian Motorway, the Rawalpindi Ring Road, improvements on N-55, and other ongoing projects.
The committee directed NHA to present a comprehensive progress report on all major motorway and highway projects, including financing arrangements, implementation timelines, and the status of commercial and foreign-funded loans, in its next meeting.
Review of Prime Minister's National Health Programme
The committee subsequently reviewed the implementation of the Prime Minister's National Health Programme. Officials stated that under the 18th Constitutional Amendment, provinces are responsible for financing health services for their respective populations, while the Federal Government continues to support Islamabad Capital Territory (ICT), Azad Jammu and Kashmir (AJK), and Gilgit-Baltistan (GB).
