Govt Issues Clarification on Lahore–Sahiwal Motorway Project

Federal Planning Minister Ahsan Iqbal issued a clarification on Friday after media reports claimed the federal government had conditionally recommended a costly provincial motorway project in violation of fiscal rules and prime ministerial directives.

The clarification followed reports stating that the Central Development Working Party had recommended a Rs. 465 billion Lahore–Sahiwal–Bahawalnagar motorway project for approval despite concerns over funding, design, and compliance with the National Fiscal Pact.

The reports also claimed the revised cost was Rs. 201 billion higher than estimates made two years ago and could undermine the viability and upgrade plans of the Mainline-I railway project under the China–Pakistan Economic Corridor.

In his statement, Iqbal said the issue was discussed during a meeting of the Central Development Working Party held on January 6, 2026. He clarified that the forum only recommended the already approved 18.5 kilometer section of the project, from Lahore Ring Road at Hallok to Raja Jhang Interchange on Kasur Road, for consideration by the Executive Committee of the National Economic Council.

He said the CDWP did not grant full approval to the remaining 276.5 kilometer alignment. Instead, it directed authorities to carry out detailed technical feasibility and economic viability studies before any further consideration.

Iqbal added that the CDWP instructed the Ministry of Communications and the National Highway Authority to explore alternative financing options, including public private partnership models, due to limited fiscal space under the Public Sector Development Program. He said the directive aimed to ensure that funding for other priority infrastructure projects was not compromised.

These projects include the Sukkur–Hyderabad Motorway, realignment of the Karakoram Highway, dualization of the N-55 connecting Sindh and Khyber Pakhtunkhwa, electrical and mechanical works of the Lowari Tunnel, the Khyber Pakhtunkhwa Economic Corridor, the Pakistan Expressway linking Karachi and Chaman, and the Hoshab–Khuzdar Road.

According to the minister, the CDWP granted only in principle approval for the remaining motorway components after the NHA assured the forum it would seek financing through public private partnerships and provincial contributions. He said final approval would depend on compliance with codal requirements, finalization of the alignment in line with the prime minister’s directives, and completion of feasibility studies.

The earlier report had alleged that the project was cleared despite being a provincial scheme and proposed to be financed through federal PSDP funds, in breach of the National Fiscal Pact. It also cited internal Planning Commission observations warning that the project could affect the viability of the ML-I railway upgrade and that the revised cost was based on outdated construction rates.

Responding to criticism over regional development priorities, Iqbal reiterated that the federal government remained committed to balanced and equitable development across all provinces. He said Balochistan received the largest allocation under the current PSDP at Rs. 206 billion, followed by Sindh with Rs. 154 billion.