Senate seeks NHA debt restructuring plan over rising loans

Islamabad: The Senate Standing Committee on Planning, Development and Special Initiatives has raised serious concerns over the National Highway Authority’s (NHA) growing debt burden, questioning why public road projects are financed through heavy borrowing despite limited financial returns. The committee directed NHA to submit a complete debt restructuring plan within 10 days to address the issue.

The meeting was held at Parliament House, Islamabad, under the chairmanship of Senator Quratulain Marri. Senior officials from the Ministry of Planning, Ministry of Finance, Ministry of Communications and NHA attended the meeting.

During the meeting, senators questioned the increasing dependence on loans for building roads and highways. The committee observed that many roads are built as public service projects, especially in remote areas, and should not be treated like commercial businesses that generate enough income to repay loans.

The committee expressed concern that a large portion of funds allocated for road development under the Public Sector Development Programme (PSDP) is being used for debt repayment, especially interest payments. Members said this practice slows down new road projects and affects development activities.

NHA officials informed the committee that the authority’s debt includes both original loan amounts and accumulated interest. They explained that funding for infrastructure projects comes through Cash Development Loans (CDL) and foreign loans arranged through the Economic Affairs Division.

Officials informed the committee that NHA has already attempted four debt restructuring initiatives since 2018. The latest proposal seeks adjustment of outstanding interest payments on government and foreign loans until completion of the Asian Development Bank-supported State Owned Enterprise Transformation Programme.

The Finance Division has linked any future relief in debt payments with completion of debt assessment, evaluation of commercially successful projects, preparation of restructuring plans and approval from relevant authorities before December 31, 2026.

The committee also questioned why previous government decisions regarding NHA’s financial reforms had not been fully implemented. Members referred to the Federal Cabinet decision of January 2021, which called for preparing a business plan for NHA and converting non commercial road projects into grant-based funding.

Senator Quratulain Marri directed NHA to provide a detailed report within ten days, including the current debt position, implementation status of previous government decisions, classification of projects and future financing strategy.

NHA officials told the committee that the authority receives around Rs120 billion annually from toll collections. However, this revenue is mainly used for road maintenance, employee salaries and operational expenses.

Officials explained that only major motorways and commercially successful routes generate enough income, while roads built in areas such as Gilgit Baltistan, Chitral, Kashmir and other underdeveloped regions cannot recover their costs through tolls.

The committee was also briefed about ongoing motorway projects. NHA officials said work on the Hyderabad-Sukkur Motorway (M-6) has been divided into five sections. Financing arrangements have been completed for two sections, while construction work on additional sections is expected to begin by September 2026.

Officials also provided updates on the Sambrial Kharian Motorway, Rawalpindi Ring Road and improvement work on National Highway N-55. The committee directed NHA to submit a complete progress report on major highway projects, including funding arrangements, completion timelines and details of commercial and foreign loans.

Members stressed that Pakistan needs a sustainable financing model for road development instead of continuously depending on loans that increase financial pressure. The committee said that while infrastructure development is important for economic growth, the country must ensure that projects are financially manageable and do not create long-term debt problems.

NHA was instructed to present practical solutions for reducing its debt burden and ensuring that future road projects are completed without unnecessary financial delays.