US$2 billion Pakistan highway project

Approval has been given for a US$2 billion highway project in Pakistan. Work is due to commence on the Thakot-Raikot stretch of the Karakoram Highway.  

China is providing a loan worth $2 billion for the project and is also supplying the construction machines that will be used for the work. Pakistan changed its bidding rules to allow bids for the work from China. Approval for the project came from Pakistan’s Economic Coordination Committee (ECC). Chinese contractors will deliver the project under an the engineering design, procurement, and construction (EPC) package.  

The work is needed as the existing stretch of the highway will become submerged once the Diamer-Basha, Dasu, Azad Pattan and Thakot dams are built along the route. The Thakot to Raikot stretch of the Karakoram Highway provides a key link between Pakistan and China and is essential for transport and trade between the two. The route is part of the China-Pakistan Economic Corridor (CPEC).  

The Chinese contractors have yet to be selected for the project. China is providing a list of recommended Chinese companies and Pakistan will select a winner or joint venture partners for the construction work.   

The Karakoram Highway links Kashgar (Kaxgar) in western Xinjiang Uyghur Autonomous Region, China, with Pakistan’s capital, Islamabad. The original road is around 800km long and was built between 1959 and 1978, crossing the Indus River. However, the route passes through some of the toughest terrain in Asia, passing through the Pamirs, Hindu Kush, Kunlun Mountains, and Karakoram Range.  

Construction of the highway was carried out jointly by Pakistan and China and presented major challenges due to mud slides, rockfalls, and avalanches. The tough terrain and high altitude of some stretches has meant it has required continuous maintenance to keep it passable.