Pakistan is considering self-financing the $1.8 billion Karakoram Highway project if further delays continue in securing Chinese funding, while also seeking greater participation for local construction companies in the project’s execution.
The proposal is expected to be discussed during a Joint Technical Working Group meeting in Beijing later this month as Pakistan and China work to accelerate the strategic infrastructure project under the China-Pakistan Economic Corridor (CPEC). Planning Minister Ahsan Iqbal recently reviewed the project’s progress and emphasized the need to move forward without unnecessary delays.
Pakistan also plans to request changes to the existing government-to-government framework, which currently limits bidding to three Chinese companies. Officials want leading Pakistani construction firms to be included in the competitive bidding process to improve efficiency and reduce costs.
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The planned 280-kilometre highway is considered essential because parts of the existing Karakoram Highway are expected to be submerged following the completion of the Diamer-Bhasha Dam by 2028.
The project is currently estimated to cost around Rs. 502 billion ($1.8 billion). However, Planning Ministry officials believe the first phase could be completed at a significantly lower cost if local construction standards, National Highway Authority rates, and domestic contractors are utilized.
Although Pakistan and China previously agreed in principle that China would finance 85% of the project, a final financing agreement has yet to be signed. Officials remain optimistic that progress will be made during the upcoming technical discussions, allowing one of CPEC’s most important transport projects to move forward.
