Pakistan’s federal government has delayed a decision on the Khyber Pakhtunkhwa government’s offer to provide Rs 4 billion in bridge financing for the long-pending Peshawar Northern Bypass project
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ISLAMABAD — Pakistan’s federal government has delayed a decision on the Khyber Pakhtunkhwa government’s offer to provide Rs 4 billion in bridge financing for the long-pending Peshawar Northern Bypass project, even as the crucial infrastructure initiative continues to face setbacks. Despite the provincial government stepping forward with financial support to push the project ahead, the Centre has indicated that the 30-km road project will not meet its June 30 completion deadline this year, according to local media reports.
Originally planned to complete the ring road around the provincial capital, Peshawar, the Northern Bypass has remained stalled for the past 17 years due to slow fund releases from the federal Public Sector Development Programme (PSDP) and other issues.
Last year, the KP government proposed to the federal government to arrange the bridge financing for the project to ensure its completion by June 30.
Speaking to Pakistani daily Dawn, KP finance minister Muzzammil Aslam said that the provincial government’s representatives met officials of the National Highway Authority (NHA) and the Prime Minister’s Inspection Team on Monday to discuss the issue. He said they were informed that the Northern Bypass project could not be completed by June 30, as it was not among 16 priority projects the Centre had directed them to be completed by the end of the current fiscal year.
The minister said that the 30 km road project could be completed by the end of June, adding that federal officials indicated that it may instead be completed by next September.
Aslam said that the KP team highlighted that it had obtained the chief minister’s approval for Rs4 billion in bridge financing through bank guarantees to complete the project on time, but despite that, the Centre was “dragging its feet” on the crucial initiative.
“We have conveyed to the Centre that treating the province in this manner is unacceptable,” Dawn quoted him as saying.
The project, now in its 17th year of execution, has seen its cost rise from Rs 3 billion to Rs 27 billion due to limited fund releases from the federal government.
Citing documents, Dawn reported that the project, launched in November 2010, has undergone three PC-I revisions and missed several deadlines.
Earlier in January, the KP government expressed concerns that reduced revenue transfer from the centre during the first half of 2025-26 has jeopardised the province’s ability to meet its annual budget surplus target agreed with the International Monetary Fund (IMF).
The provincial government further warned that the delays and reductions in federal transfers were straining its finances, especially impacting the delivery of essential services in the merged districts of the former Federally Administered Tribal Areas.