Foreign-funded projects: Senate panel seeks tighter scrutiny

ISLAMABAD: A parliamentary panel on Friday took aim at the country’s Rs90 trillion debt and liabilities burden, demanding tougher scrutiny of foreign-funded projects and warning against treating loans as assistance while the country struggles under mounting financial pressure.

The Senate Standing Committee on Economic Affairs, chaired by Saifullah Abro, examined foreign-funded development projects, including road infrastructure, flood rehabilitation and irrigation schemes in Khyber Pakhtunkhwa, amid concerns over debt accumulation, project priorities and contract distribution.

Abro criticised the continued rise in external borrowing, saying borrowed resources were not always being utilised where they were most needed.

READ MORE: USD4.6bn foreign-funded projects: Senate panel orders report on delays, cost overruns

He told the committee that the country’s debt had increased from around Rs40 trillion in 2022 to approximately Rs90 trillion at present, warning that the surge posed serious economic challenges.

Officials from the Khyber Pakhtunkhwa Communication and Works Department briefed the committee on road projects and flood rehabilitation schemes, as lawmakers questioned the criteria used for allocating funds in flood-affected districts.

Members pointed out discrepancies in project distribution, noting that Mardan had received the highest number of road projects despite not being among the worst flood-affected districts, while areas such as Upper Dir, Lower Dir and Chitral received comparatively fewer schemes.

Rubina Khalid said Mardan had received 16 road projects, whereas only 12 kilometres of roads had been constructed in Dir despite extensive flood damage.

Senator Hidayatullah questioned why nine roads had been built in Peshawar, which was not among the flood-hit districts, and sought details of the selection criteria.

Members also expressed concern that donor agencies might have received inaccurate assessments of project priorities.

Officials told the committee that most district road projects in KP had been completed, with 63 schemes nearing completion across the province.

The total length of completed or ongoing roads stood at around 488 kilometres.

Kamil Ali Agha stressed that future infrastructure planning should account for climate change risks, particularly in the design of storm-water drainage systems.

Abro also questioned the concentration of construction contracts among a few firms, while officials said other companies had not participated in the bidding process.

He said the situation suggested that open competitive bidding might not have been fully ensured and directed officials to provide complete details of the Notice Inviting Tender (NIT).

During a separate briefing on the Khyber Pakhtunkhwa road rehabilitation and upgradation project, officials said the agreement with the Asian Development Bank (ADB) had been signed in 2018.

The committee was informed that rehabilitation and upgrading of 249.5 kilometres of roads had been completed under the project, while all 10 schemes under the KP provincial roads project had been completed and opened to traffic.

Officials said water-sector projects worth USD 387 million were being implemented in Khyber Pakhtunkhwa with ADB assistance, while additional projects worth USD 295 million were being carried out with World Bank financing.

The ADB-supported Flood Emergency Rehabilitation Project remains under implementation, with completion targeted for June 2027.

Separately, the committee examined concerns over alleged interference by the World Bank’s local representative in the Sindh Water and Agriculture Transmission Project.

Abro questioned the role of the World Bank representative, saying the lender could approve or reject financing but could not determine how projects were implemented.

He said project execution remained the responsibility of Pakistani authorities, while the lender’s role was limited to financing and recovery of loans.

Officials informed the committee that the project cost had doubled.

Abro said Pakistan should not accept unnecessary external pressure and claimed that Sindh could save around Rs14 billion by resisting changes to the project.

He directed the Economic Affairs Division headed by Ahad Cheema, to engage with the World Bank to resolve the matter and ensure that implementation remained within the authority of Pakistani institutions.

Copyright Business Recorder, 2026