ISLAMABAD, July 8: The National Assembly Standing Committee on Economic Affairs Division, chaired by Acting Chairman Dr. Mirza Ikhtiar Baig, on Wednesday expressed serious concern over delays in major development projects, particularly the K-IV Water Supply Project and the Lyari Elevated Freight Corridor (LEFC), while emphasizing the need for financially prudent and transparent implementation.During the meeting, the committee noted that only Rs.10 billion had been allocated for the K-IV Water Supply Project against its estimated requirement of Rs.78 billion, warning that the funding shortfall could significantly delay the project and adversely affect the provision of safe and adequate water to Karachi.
Recognizing the strategic importance of the project, the committee directed the Ministry of Water Resources and the Project Director of K-IV to present a comprehensive briefing in the next meeting on the project’s current status, financial requirements, implementation timeline, and measures to overcome existing challenges.The committee also raised reservations over the substantial difference in the estimated cost of the Lyari Elevated Freight Corridor (LEFC) under the proposed financing arrangement with the Korean Exim Bank compared to the estimate prepared by the National Highway Authority (NHA). Members stressed that the government should adopt the most cost-effective financing model in the national interest and suggested that the Karachi Port Trust (KPT), as the principal beneficiary, actively explore financing options, including implementation through the Public-Private Partnership (PPP) model.Following detailed deliberations, the committee recommended that the Secretary, Economic Affairs Division, convene consultations with the NHA, Ministry of Planning, Development and Special Initiatives, and Karachi Port Trust to develop a mutually agreed and financially sustainable financing framework. It further emphasized evaluating all available financing options, including PSDP and PPP, to ensure the project is completed at the lowest possible cost.
The committee was also briefed on the progress of CAREC Tranche-III, where members were informed that after nearly three years of litigation, the National Highway Authority has awarded the project contract with completion targeted for December 2027. While welcoming the resumption of work, the committee expressed concern over the prolonged delay and urged strict adherence to the revised timeline, recommending timely negotiations with financing partners if an extension becomes necessary.During a briefing on international and regional economic developments, the Ministry of Economic Affairs informed the committee that Pakistan entered 2026 with stronger macroeconomic fundamentals, including improved foreign exchange reserves, moderating inflation, and a better sovereign credit rating.However, the ministry noted that the recent Middle East conflict and temporary closure of the Strait of Hormuz disrupted global energy markets, increased oil prices, and created inflationary pressures.
Pakistan’s weekly oil import bill rose significantly during the crisis, while inflation reached 11.7 percent in May 2026, prompting the State Bank of Pakistan to increase the policy rate by 100 basis points to 11.5 percent.The committee was informed that although international oil prices have eased following the ceasefire and the Islamabad Memorandum of Understanding, regional uncertainties continue to pose risks to Pakistan’s economy through higher energy costs, inflation, external financing pressures, and slower economic growth.Members also received a briefing on Pakistan’s participation in international and regional economic organizations. The Economic Affairs Division informed the committee that it serves as the government’s focal institution for coordinating United Nations development programmes under the UN Sustainable Development Cooperation Framework (2023–2027), while Pakistan continues to actively engage in regional and global forums promoting sustainable development, climate action, trade facilitation, disaster risk reduction, digital transformation, and regional connectivity.
The committee was further informed that Pakistan remains a founding member of the Colombo Plan, benefiting from technical cooperation, human resource development, and capacity-building initiatives.The meeting was attended by committee members including Dr. Mirza Ikhtiar Baig, Muhammad Tufail, Muhammad Khan Daha, Saba Sadiq, Akhtar Bibi, Huma Chughtai, Muhammad Jawed Hanif Khan, Neelam, and Zeb Jaffar, Parliamentary Secretary for the Economic Affairs Division, along with the Secretary of Economic Affairs and senior ministry officials.
