ADB, Pakistan Sign Loan Agreement For New Section of M-4 Motorway

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The FINANCIAL — The Asian Development Bank (ADB) signed a loan agreement with the Government of Pakistan on October 22 in Islamabad to fund the section of the M-4 motorway connecting Gojra to Shorkot in Pakistan’s Punjab province.

Werner E. Liepach, ADB’s Country Director for Pakistan and Muhammad Saleem Sethi, Secretary Economic Affairs Division, Government of Pakistan, signed the loan agreement. The project agreement was signed by Arshad Mahmood Chaudhry of the National Highway Authority.

The four-lane motorway will boost the flow of trade and travel, while reducing transportation costs and time from Pakistan’s textile producing hub in Faisalabad towards Multan, the major trade center in southern Punjab. It will provide a more direct connection between central Punjab and the port cities of Karachi and Gawadar, and will open up new opportunities for the residents of Faisalabad, Jhang, Toba Tek Singh and Shorkot, by providing faster access to bigger markets, according to ADB.

ADB is providing a project loan of $178 million and will administer a $92 million grant from the Government of the United Kingdom’s Department for International Development (DFID). The government will provide counterpart support of $46 million. 

“The project demonstrates ADB and DFID’s commitment to the wellbeing of the people of Pakistan by assisting the government to promote equitable growth and livelihood opportunities through investment in vital transport infrastructure,” said Mr. Liepach. “Once complete, the project will not only facilitate faster and more efficient transportation of goods and people across key business centers, it will also enable the National Highway Authority to build and maintain quality roads and ensure better road safety.”

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The M-4 motorway is part of a number of investments to upgrade and decongest the country’s overburdened transport infrastructure.  The Faisalabad to Gojra section of the M-4 was recently completed with funding from ADB and is now open for traffic.    

“The UK’s partnership with ADB and the Government of Pakistan will help improve road safety and enhance local and regional trade,” said DFID’s acting Head of Office, Judith Herberston.

An efficient network of highways is crucial to avoid transport bottlenecks, boost competitiveness and attract private sector investment, which in turn is essential for growth and sustainable development. The M-4 is also a step towards positioning Pakistan to act as a transit artery for goods moving between the port city of Karachi in the south to Torkham on the northern border with Afghanistan via the country’s major business and population centers. The 1,800-kilometer route will also eventually link Pakistan’s ports with the land locked regions of Central Asia, and allow Pakistan to reap dividends of its active membership in the Central Asia Regional Economic Cooperation (CAREC) Program. 

The Gojra to Shorkot M-4 section is expected to be completed by November 2019, and the project will also support the National Highway Authority (NHA) to improve road management, maintenance and procurement. It will help the NHA enhance road safety through training, capacity development and by improving operational frameworks. 

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members – 48 from the region. In 2014, ADB assistance totaled $22.9 billion, including cofinancing of $9.2 billion.

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