[CPEC] Chinese Government asked to support Phase 1 (Thakot-Raikot Section) of the Karakoram Highway (KKH) Realignment Project

Project narrative

On February 19, 2014, China Road and Bridge Corporation (CRBC), a subsidiary of China Communication Construction Co. Ltd., and the Pakistan Ministry of Communications signed a memorandum of understanding on the Phase II Reconstruction and Expansion of the Karakoram Highway (Raikot-Islamabad). Shortly thereafter, CRBC submitted the engineering feasibility study report and preliminary design for the project to Pakistan’s National Highway Authority. Due to the large amount of project and the high total cost of the 487-kilometer Raikot-Islamabad project, China and Pakistan have decided to divide the project into three sections. The first section is Thakot-Havelian section, the second section is the Havelian-Islamabad section, and the third section is the Thakot-Raikot section. According to the Belt and Road Initiative website's Karakoram Highway page, "In December 2017, China stopped funding for construction of the section Raikot-Thakot, with referring to high-level of corruption." It is unclear whether this means a financing agreement was signed and then cancelled or whether China simply verbally pledged to finance the road section and then changed their mind. The project was seemingly shelved but later revisited because, according to an older version of the CPEC website, a feasibility study was completed in November 2018, a Letter of Intent (LOI) had been forwarded to the Chinese side, and "procedural formalities to be completed shortly). This archived page also lists the estimated total project cost as USD 719.8 million for the 136 km road section.) According to the current CPEC website, a "[Government-to-Government] technical working group has been constituted" for this pipeline project and the total length was expanded to 250 km. This road section is part of the Western Corridor Route. According to the Pakistan Ministry of Finance's Economic Survey 2017-2018 report, as of April 2018, the project was still in initial planning stages and the "[Chinese] loan arrangement is under process" (p. 189, 191). On March 26, 2021, the Pakistan National Highway Authority (NHA) help a pre-proposal meeting to discuss the tendering of consultancy services for the feasibility study and design. The tender for this study closed on February 5, 2021. As of October 2021, AidData has not identified any evidence that works are underway or that a Chinese entity has signed a financing agreement for this project.