ADB provides $1.15b for roads & reforms
By Asad Cheema

ISLAMABAD—The Asian Development Bank (ADB) will provide Pakistan US $1.15 billion new loan to expand its key north-south highway network and for public sector reforms in Punjab.
"Both of these programmes will boost the economy, which generates new jobs and reduces poverty," said Sean O'Sullivan, Deputy Director General of ADB's Central and West Asia Department. Up to US $900 million is to rehabilitate and expand key sections of the country's main highway network, which starts at the port city of Karachi and runs northward.
"With trade flows concentrated along one major north-south transport corridor, this programme will make road traffic more efficient and reduce transport costs," said Ms Cleo Kawawaki, a Senior Investment Specialist with ADB. "Low tran portation costs will increase private sector productivity, which will help deepen and diversify the industrial base, both of which are necessary to provide jobs for the growing population," she said. According to an ADB press release received here on Tuesday, the US $900 million will go toward a $5.36 billion investment plan by Pakistan's National Highway Authority, which includes upgrading the highway from Karachi to the city of Peshawar, as well as links to the port of Gwadar and the People's Republic of China.
Once the road improvements have been completed, travel times between Karachi and Peshawar, a distance of 1,700 kilometres, will be cut from 72 hours to 36, it added. The upgrade is also crucial for regional trade flows and will allow Pakistan to act as a transit artery for goods moving between Arabian Sea ports in the south and Central Asia and the People's Republic of China in the north. Funds from the first tranche, $545 million, will be used for two road projects: a 184 kilometres stretch from Faisalabad to Khanewal, as well as a separate 34 kilometres expressway from Torkham, on the Afghan-Pakistan border, to Peshawar, it said.
For the subsequent tranches, depending on the appetite from private sector, structures such as guarantees and equity financing can be used under the programme to foster public private partnership in the road sector. In addition to the $900 million, ADB will provide Pakistan with $260.65 million in loans and grants to assist Punjab province pursue reforms that will improve efficiency in the public sector. "The province needs continued infusion of public and private investments to keep pace with the growth requirements of the economy, while at the same time ensuring sound maintenance of the investments made," said Ramesh Subramaniam, Director of ADB's Central and West Asia Department.