Senator Quratulain Marri calls for greater use of domestic resources as the committee reviews Rs8.1 trillion in foreign-funded projects under PSDP 2026–27 and raises concerns over delays in the M-6 Sukkur–Hyderabad Motorway.
ISLAMABAD: The Senate Standing Committee on Planning, Development and Special Initiatives has called for a review of Pakistan’s reliance on foreign loans for development projects, questioning the need for dollar-denominated borrowing when domestic resources and rupee allocations are available.
Chairing the committee meeting at Parliament House on October 12, 2026, Senator Quratulain Marri emphasised that the financial implications of foreign borrowing, including interest payments and repayment obligations, should be carefully assessed. She urged the government to explore more effective use of local resources to reduce unnecessary dependence on external financing.
The committee reviewed allocations for foreign-funded development projects under the Public Sector Development Programme (PSDP) 2026–27, focusing on rupee cover, project completion timelines, foreign borrowing and the utilisation of domestic resources.
Rs8.1 trillion allocated to foreign-funded projects
Officials informed the committee that 98 foreign-funded projects, with a combined estimated cost of Rs8,099.94 billion, had been included in PSDP 2026–27. These projects involved foreign assistance of Rs4,649.2 billion.
Against a demand of Rs537 billion for rupee cover, the Economic Affairs Division (EAD) had proposed Rs425 billion following consultations with the relevant ministries, divisions and donor agencies.
However, the National Economic Council (NEC), while approving PSDP 2026–27 on June 10, 2026, allocated only Rs255 billion for these projects.
The NEC had approved a development programme of Rs1,000 billion against an overall demand of Rs2.9 trillion, citing fiscal constraints and the government’s commitment to domestic financing.
The chairperson sought details of projects expected to be completed during the current financial year. Officials said projects that had achieved more than 80 per cent physical progress were expected to be completed during the year.
Marri stressed the importance of effective monitoring and timely implementation to achieve the projected targets.
The committee underscored the need to provide adequate rupee cover for foreign-funded projects to prevent implementation delays. It also called for transparency, accountability, prudent financial management and better coordination with donor agencies.
M-1 project completion targeted for early 2027
The committee reviewed an M-1-related project and was informed that completion was targeted for December 2026 or January 2027.
Members stressed the importance of adhering to the proposed schedule and ensuring the timely utilisation of allocated funds.
Senate committee raises concerns over M-6 motorway delays
The committee also expressed serious concern over prolonged delays in the M-6 Sukkur–Hyderabad Motorway Project, which has been under consideration since 2017.
Officials informed members that Sections I and II were being processed under the public-private partnership (PPP) model, with the concession award targeted for February 2027. The Asian Development Bank (ADB) was providing transaction advisory services for these sections.
Financing arrangements with international development partners had been secured for the remaining sections. The Islamic Development Bank (IsDB) had committed financing of $475 million for Sections IV and V, while the OPEC Fund had secured financing of $230 million for Section III.
Bids for Sections III and IV were under evaluation, while bids for Section V were expected to open in October 2026. Officials indicated that contract awards for the three sections were expected in November and December 2026.
The chairperson questioned repeated postponements despite the project’s strategic importance. Senator Afnanullah Khan also raised concerns over missed deadlines and the continued delay in implementation.
The committee discussed the participation of foreign and domestic companies in the bidding process and sought clarification on the reasons for the delays and the status of proceedings before the Grievance Redressal Committee.
Marri called for a definite timeline for groundbreaking and directed the relevant authorities to avoid further extensions. Responding to a question about whether groundbreaking for all three relevant sections could begin in the coming year, officials said the timeline would depend on the completion of the necessary approvals and formalities.
The committee stressed timely decision-making, transparent procurement and effective coordination to prevent further delays in the motorway project.
The meeting was attended by Senators Shahadat Awan, Saadia Abbasi, Dr Afnanullah Khan and Jam Saifullah Khan, along with the Secretary Planning and other relevant officials.