Pakistan’s Economic Coordination Committee has approved a PKR 567.5 billion (US$2 billion) project to reconstruct, upgrade, improve, and realign a 241 km stretch of the Karakoram Highway in northern Pakistan.
It is part of the US$60 billion China–Pakistan Economic Corridor (CPEC), and Chinese loans worth RMB 14.775 billion (US$ 2 billion) will finance the whole of the project. China is also supplying the contractors and the construction machinery that will build it. The Chinese side will deliver the project under an engineering design, procurement and construction (EPC) package. The Karakoram is a two-lane road between Thakot and Raikot Bridge and the main road route between Islamabad and the Chinese autonomous region of Xinjiang. It is one of the key CPEC projects that aims to upgrade the entire 887 km route into an all-weather highway. The section between Havelian and Thakot is already under construction.
Another consideration propelling the project forward is the building of four major dams on the upper Indus, including the US$ 4.2 billion Dasu and the Diamer–Bhasha, which will generate 4.8 GW and store some 10.5 cubic kilometers of water. When complete, their reservoirs will submerge the existing road that was built between 1959 and 1978.
Construction was carried out jointly by Pakistan and China. After completion, the road was susceptible to mudslides, rockfalls and avalanches, and required continual maintenance to keep it open. The contractors that will carry out the modernization have yet to be selected. China is providing a list of candidates and Pakistan will select winners or joint venture partners.
