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Pakistan approves $2 billion project to upgrade Karakoram highway

by Haroon Amin
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Pakistan’s Economic Coordination Committee has confirmed a $2 billion project to re-establish a 241-km stretch of the celebrated Karakoram Highway in the northern region of Pakistan, from the source of Dawn. The road runs from the small settlements like Hamlets of Thakot to Raikot in the far north of the country.

It’s considered to be part of the $63 billion China-Pakistan Economic Corridor, and Chinese loans will be backing the whole of the project. China is also providing the contractors and construction machinery that will execute and implement the modernization have yet to be chosen and picked. China is also delivering a list of candidates that Pakistan will choose winners or joint venture partners.  

The Chinese side is anticipating delivering the project under an engineering design procurement and constructing the EPC package. The committee made its decision despite doubts as to whether the road would be capable of generating sufficient revenue to pay back the loan from China, especially as notably as it would need foreign exchange. The Karakoram Highway is, however, considered to be the main road route between Islamabad and the Chinese Autonomous Independent Region of Xinjiang, and is proven to have great strategic importance to both sides.  

It’s considered to be a two-lane road between Thakot and Raikot Bridge, one of the most key projects of the CPEC is to convert it into an all-weather highway over its entire 887-km length.  

The stretch to the south between Haveli and Thakot is already under process. Another consideration propelling the project onwards is the creation of four major dams on the upper Indus, including the $4.2 billion Dasu and the Dimer-Bhasha, which are anticipated to produce 4.8 GW and store some 10.5 km3 of water. When it gets completed, the reservoirs are anticipated to submerge the existing road.  

Read more: Karakoram Highway Is The WorldÂ’s Highest Paved Road And Eighth Wonder Of The World

The project is anticipated to facilitate the upgrading and realignment of the highway. The original road was established between 1959 and 1978 and passes through some of the toughest terrain in Asia, including the Kunlun Mountains, Karakoram Range, and Hindukush. Construction was executed collaboratively by Pakistan and China and became notorious for deaths among construction workers. After finalization, the road was susceptible to mudslides, avalanches, and rockfalls and needed continual care and management to keep it open. 

China-Pakistan CPEC Economic Corridor, the catalyst for economic development 

The Karakoram Highway is proven to have a more significant impact on the China-Pakistan Economic Corridor, a $63 billion infrastructure project that has the potential to improve economic cooperation and development between Pakistan and China. CPEC is considered to be a flagship initiative under the Belt and Road Initiative of China and focuses on building roads, railways, power plants, and infrastructure to improve economic growth and connectivity.  

CPEC aims to turn Pakistan into a regional trade hub by linking Xinjiang’s China region to the Arabian Sea via the Gwadar port of Pakistan. The Karakoram Highway appears as the backbone of this corridor, enhancing the movement of goods between the two nations, by upgrading the KKH, a key component of CPEC, guaranteeing that it has the potential to support heavier traffic and withstand the rigors of all-weather highways.  

From an economic perspective, CPEC is anticipated to produce massive benefits for Pakistan. It has the potential to create thousands of jobs, improving industrial growth, and making improvements to the transport sector. 

 The modernized Karakoram Highway is anticipated to enable safer, faster, and more efficient transportation of goods, cutting down the road costs, and minimizing the travel distance and time. This is probably to enhance the exports of Pakistan improve the trade volumes and attract foreign investment in the country.  

Furthermore, the highway is anticipated to deliver access to new markets in Central Asia and beyond, further integrating Pakistan into global trade networks. For China, CPEC by extending the Karakoram Highway provides a direct and secure trade route to the Arabian Sea, improving its ability to trade with the Middle East, Europe, and Africa. By modernizing the Karakoram Highway, both nations claim to benefit each other mutually. This will assist Pakistan to appear as an emerging critical hub in China’s Belt and Road Network. 

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