Centre delays decision on KP’s Rs4bn bridge financing for Peshawar Northern Bypass

PESHAWAR: The federal government has yet to move forward on the Khyber Pakhtunkhwa government’s offer to provide Rs4 billion in bridge financing for the long-delayed Peshawar Northern Bypass project, while provincial officials have been told the 30-kilometre scheme cannot be completed by June 30 this year.

The Northern Bypass was planned to complete the Ring Road around Peshawar, but the project has remained delayed for years because of limited releases under the federal Public Sector Development Programme (PSDP) and other issues. The project is now in its 17th year of execution.

Last year, the KP government offered bridge financing to help ensure completion of the project by June 30. KP Finance Minister Muzzammil Aslam said the provincial government’s representatives met officials of the National Highway Authority and the Prime Minister’s Inspection Team on Monday to discuss the matter.

According to Aslam, federal officials told the provincial team that the Northern Bypass could not be completed by June 30 because it was not included among 16 priority projects the Centre had directed them to complete by the end of the current fiscal year. He added that the same officials said the project could instead be completed by next September.

Aslam said the KP side informed the meeting that the chief minister had already approved bridge financing of Rs4 billion through bank guarantees so the project could be finished on time, but the Centre was still not finalising the arrangement.

"We have conveyed to the Centre that treating the province in this manner is unacceptable," he said, adding that federal departments were citing a shortage of funds and pressure on the PSDP while also delaying the bridge financing proposal.

The minister said that by the end of what he described as a tense meeting, federal officials asked the provincial side to take up the issue with higher authorities. He added that they also sought one day to arrange another meeting with the head of the Prime Minister’s Inspection Team.

Project cost and timeline revisions

Documents cited in the report show the project was launched in November 2010 and has undergone three PC-I revisions while missing several deadlines. Its cost has risen sharply from Rs3 billion to Rs27 billion.

Package I, a 7.6km section from the motorway interchange to Charsadda Road, was initially due for completion in 2011, but the deadline was later revised to 2014.

Package II, which stretches more than 12km from Charsadda Road to Mulazai Chowk, began in 2015 and was stated to have been scheduled for completion in 2012. Its deadline was later revised to Dec 31, 2025. Work on this section has reached 64 per cent.

Package 3A, a 5.1km stretch from Mulazai Chowk to Nasir Bagh Road, has been under construction since 2013. It was originally scheduled for completion in 2014, but the deadline was later revised to Dec 31, 2025. Work completed on this phase stands at 86.5 per cent.

Package 3B, measuring 5.47km from Nasir Bagh to the Takhta Baig checkpost in Khyber district, was launched in December 2023. It had been scheduled to open in June this year, but its deadline was later revised to February 2026.

According to the documents, the project’s original PC-I cost was Rs3.07 billion. This was later revised to Rs9 billion, then Rs21.3 billion, and finally Rs27.05 billion in the third revision.

The same documents show that although the project is in its closing stages, it received a PSDP allocation of Rs500 million for the current fiscal year against a requirement of Rs4.27 billion. They also stressed the need to revise the current year’s PSDP allocation to Rs5.3 billion, including Rs4.27 billion as the actual estimate and Rs1.1 billion for cost escalation.

The funding requirement outlined in the documents includes Rs0.37 billion in the first quarter, Rs2 billion in the second and third quarters, and Rs1 billion in the fourth quarter.

In 2013, then Peshawar High Court chief justice Dost Mohammad Khan took suo motu notice of the delay in the project’s completion.