Ahead of Prime Minister Shehbaz Sharif’s visit to China next week, the Central Development Working Party (CDWP) has cleared the construction of approximately 241 kilometres of the high-altitude Karakoram Highway (KKH), under the China-Pakistan Economic Corridor (CPEC), at an estimated cost of Rs567.5 billion (approximately $2 billion).
This was one of two infrastructure projects worth Rs609.45 billion recommended by the CDWP to the Executive Council of the National Economic Council (Ecnec) for formal approval.
The KKH, part of the CPEC, is expected to receive Ecnec’s approval in a special meeting before the Prime Minister’s departure to Beijing on June 4.
“The project is proposed to be financed through a Chinese soft loan worth RMB 14.775 billion,” announced the Planning Commission.
The first phase of the KKH project involves upgrading, improving, and realigning the KKH from Thakot to Raikot Bridge. The road’s total length is 241.086 km, including 224.911 km of the mainline KKH and 16.175 km of link roads.
The project includes upgrading KKH from Thakot to Dasu with a 103-km bypass, relocating KKH at Dasu Dam by Wapda, upgrading the road from Sazin to Thor Nullah and R-1, and new construction of KKH after Basha-Thor Nullah.
The project is scheduled for completion in five years.
The entire KKH spans approximately 806 km from Hassan Abdal in Punjab near Islamabad to the Pak-China border, forming part of the historic Silk Route.
The Deputy Chairman of the Planning Commission, Dr Jehanzeb Khan, chaired the CDWP meeting. The CDWP approved another project of Rs42 billion, the 108MW Golen Gol Hydropower project in Chitral, Khyber Pakhtunkhwa, which will also be foreign-funded.
The financing sources include the OPEC Fund for International Development ($30 million), the Saudi Fund for Development ($97.8 million), the Kuwaiti Fund for Arab Economic Development ($52.5 million), and USAID ($35.6 million grant).
Under current financial rules, the CDWP is authorised to approve projects costing up to Rs7.5 billion, while Ecnec approves larger projects based on CDWP’s recommendations after technical clearance.
The meeting also recommended the Golen Gol Hydropower Project to Ecnec for approval. The project is estimated to generate 476 GWh annually.
Since its commissioning in 2019, it has generated a total of 730 million units as of February 28 this year. The project cost increased from Rs7 billion to Rs42 billion due to delays and other issues over 12 years, with an inquiry committee holding Wapda responsible last year.
