Government allocates Rs. 328 billion for transport infrastructure in federal budget 2025-26

ISLAMABAD: Pakistan’s government has earmarked Rs. 328 billion for transport infrastructure development as part of the Rs. 1,000 billion Public Sector Development Programme (PSDP) for the fiscal year 2025–26. The announcement was made by Minister of Finance and Revenue Muhammad Aurangzeb on Tuesday during the presentation of the federal budget, which has a total outlay of Rs. 17.573 trillion.

A central highlight of the transport infrastructure allocation is the construction of the Sukkur-Hyderabad Motorway (M-6), a six-lane, 306-kilometer expressway and a critical missing link in the country’s north-south motorway network. The project, part of the China-Pakistan Economic Corridor (CPEC), is to be developed under a Public Private Partnership (PPP) framework.

“Funds of 15 billion rupees have been allocated for the six-lane Sukkur-Hyderabad Motorway to achieve the goal of completing and enhancing connectivity in the North-South Motorway Network,” said Finance Minister Aurangzeb during his speech in the National Assembly.

The M-6 will close the last gap between Karachi and Peshawar via motorway, enabling seamless travel along Pakistan’s main economic corridor. Approved by the Public Private Partnership Authority (P3A) Board in February 2022, the project was inaugurated by Prime Minister Muhammad Shehbaz Sharif during his first tenure in December 2022. However, construction work could not be initiated due to subsequent delays.

In a parallel development, to enhance the country’s energy and logistics capabilities, the government has allocated Rs. 7 billion for the “timely completion of the Thar Coal Rail Connectivity Project.” The rail link will integrate Thar’s vast coal reserves with the national railway network, enabling transportation of indigenous coal to power plants and reducing reliance on costly imported coal.

Highlighting the strategic importance of the western trade route, the finance minister also announced an allocation of Rs. 100 billion for the 813-kilometer-long N-25 highway. The road serves as a vital artery connecting Karachi to Quetta, Chaman, and onward to Afghanistan. “As per the directive of Prime Minister Shehbaz Sharif, Rs. 100 billion have been allocated for 813-km long N-25 which connects Karachi with Quetta, Chaman and beyond to Afghanistan,” said Aurangzeb.

Meanwhile, funding continues unabated for infrastructure development at Gwadar Port, a flagship CPEC project. “Funding from PSDP for Gwadar Port infrastructure projects continues uninterrupted,” Aurangzeb told the lower house of Parliament.

According to the Pakistan Economic Survey 2024–25, several Gwadar-related projects under the Federal PSDP are expected to reach completion either in the current or the upcoming fiscal year. These include the land acquisition as per the Gwadar Port Master Plan covering 750 acres, with a total project cost of Rs. 3,920 million; the development of ancillary facilities at the GPA Housing Complex in Gwadar, with a project cost of Rs. 225.35 million; and the survey and feasibility study for the construction of Eastbay Expressway Phase-II, with a cost of Rs. 93.7 million.