Islamabad:( The COW News Digital) –Pakistan announced on Friday that China will cover 85% of the financing for the realignment of the Karakoram Highway, a key route connecting the two countries. The decision was taken during the 14th Joint Cooperation Committee (JCC) meeting held in Beijing.
The highway, which is part of the China-Pakistan Economic Corridor (CPEC) requires a new alignment after sections were submerged by water due to the construction of major dams. Officials confirmed that the first phase will focus on an 82-kilometer stretch affected by the Diamer-Basha Dam.
Planning Minister Ahsan Iqbal, who co-chaired the meeting with Zhou Haibing of China’s National Development and Reform Commission (NDRC) said that bidding will begin in phases. The government has already approved the 241-kilometer Thakot-Raikot section at a cost of Rs. 576 billion (around $2 billion).
China had earlier advised Pakistan to manage its existing debt burden and look for new financing options instead of relying on concessional loans. However, Beijing agreed to make an exception for the Karakoram Highway project to ensure the road link between the two countries remains functional in harsh weather conditions.
Meanwhile, both sides also discussed the $7 billion Main Line-I railway project. Since China did not extend a $6 billion concessional loan, Islamabad will now seek support from multilateral lenders to move the project forward.
