Planning Commission terms Khyber Pass project ‘road to nowhere’

Updated September 23, 2019

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The Central Development Working Party (CDWP) has solicited a clear decision at the government level following the Planning Commission’s strong opposition to Rs41bn Khyber Pass Economic Corridor (KPEC), which is part of the ambitious Peshawar-Dushanbe motorway project.  — AP/File
The Central Development Working Party (CDWP) has solicited a clear decision at the government level following the Planning Commission’s strong opposition to Rs41bn Khyber Pass Economic Corridor (KPEC), which is part of the ambitious Peshawar-Dushanbe motorway project. — AP/File

ISLAMABAD: The Central Development Working Party (CDWP) has solicited a clear decision at the government level following the Planning Commission’s strong opposition to Rs41bn Khyber Pass Economic Corridor (KPEC), which is part of the ambitious Peshawar-Dushanbe motorway project.

The project’s estimated cost has been revised to about Rs37bn from Rs40bn.

The project envisages construction of 47.55-km-long, four-lane, 7.3- metre wide dual carriageway, a high speed access controlled motorway, from Peshawar to Torkham. The project is part of Peshawar-Kabul-Dushanbe Motorway.

The Planning Commission describes the project as “road to nowhere” because the matching road infrastructure beyond Torkham is non-existent and is unlikely to develop given the current security situation in Afghanistan. As such, the commission considered the high cost project an economically unviable project at this stage.

Because of strong interest of some influential lenders, the CDWP has referred the matter to the executive committee of the National Economic Council for a decision.

CDWP refers matter to National Economic Council

In a correspondence with communications minister and the NHA, the Planning Commission said. “There is no development on the construction of Torkham-Kabul Motorway by the Afghan side,” the Planning Commission has put on record. It insisted that an MoU/agreement must be signed among Pakistan, Afghanistan and Tajikistan for construction of motorway/expressway from Peshawar to Dushanbe via Kabul before taking up the KPEC to ensure connectivity and accessibility of Pakistan trade with Central Asian states.

The Afghan government, informed sources told Dawn, was not ready to sign the agreement for Torkham to Tajik border motorway to facilitate Pakistan’s trade to Central Asian states unless it was given a seamless trade access to and from India through Wagha border. Pakistan-India tension becomes another hurdle.

The Planning Commission has also opposed the project on technical and economic basis. It said the road facilities were warranted and upgraded on the basis of traffic demand.

The existing Peshawar-Torkham two-lane single carriageway, it said, was carrying about 7,817 vehicles per day (VPD), including 52pc car traffic, which included only 1,177 VPD of freight traffic.

The Planning Commission has argued that in the absence of connectivity till Kabul and further to Dushanbe, there will be very minimal traffic available. “If the existing facility is dualised, which is less costly proposition, it can accommodate 50,000VPD and would suffice the traffic demand for next many years”.

As such, keeping in mind the limited freight traffic, the “construction of four-lane motorway on new alignment is not justified having very high unit cost of Rs871.5 million per kilometre, which is more than the unit cost of Rs655 million per km for six-lane Lahore-Abdul Hakeem Motorway recently completed, Rs435.82 million per km for four-lane Hakla to Yarik (D.I. Khan) motorway and Rs510m per km for four-lane Sialkot to Lahore motorway”.

Also, based on the traffic data reported in the project’s papers, “the project is economically not viable,” the Planning Commission said.

However, the project sponsors – Ministry of Communications has calculated the internal economic rate of return, which the Planning Commission has called for examination.

On top of that, the National Highway Authority – the proposed executing agency – had a throw-forward of Rs1.166 trillion with an allocation of Rs155bn under the PSDP 2019-20. Keeping the yearly allocations fixed at Rs155bn, about 7.5 years would be required to complete NHA projects, those including in the PSDP 2019-20.

“With already constrained fiscal space and very low traffic volumes at present, taking up the project at a very high cost and with such rich specifications on loan basis is not justified,” the Planning Commission wrote.

Taking up this unviable project on foreign loan with very low returns that will add further to the foreign debt of the country, is against the spirit of recent initiative of the government to combat the prevailing debt crisis.

On the other hand, the Ministry of Communications and the NHA have defended the project. They said the project’s unit cost was high because of the difficult terrain and a new virgin alignment. They conceded that traffic demand was low, but said road specifications had been proposed on future traffic demand and that “as and when the link to Tajikistan side would be fully developed the traffic is expected to increase manifolds”.

Regarding the construction of complete link, the Tajikistan side has developed a road to its border with Afghanistan and similar link is being proposed in Pakistan. They conceded that “missing link” was in Afghanistan for which the World Bank is giving $5 million grant to Kabul for preparation of feasibility and design.

Published in Dawn, September 23rd, 2019