Chinese Government pledges loan for the Havelian Dry Dock Port Project

Project narrative

In November 2016, a request was made for Chinese funding for the $65 million Havelian Dry Dock Port. The request came as the result of a joint feasibility study of the Main Line 1 ML1 and this project in August 2014 during the third Joint Cooperation Council (JCC) in Beijing. To meet the demand of containerized future freight traffic in connection with Pak-China Economic Corridor, the dry port will be established at Havelian by utilizing the railway land, railhead facilities, high speed / capacity stock, and potential of well established off-dock terminal for handling bonded import / export containers. In January 2017, the Pakistani government's Railway Division contributed 28 million Pakistani rupees for a comprehensive feasibility study for upgrading Main Line 1. According to the 2016 Government of Pakistan Bond Prospectus, the project cost is $65 million. Expected completion is in 2018. The Government of Pakistan intended to finance this project with a government concessional loan (GCL) from China Eximbank. A project framework agreement was signed in May 2017 and a groundbreaking ceremony was scheduled for 2018. However, the project has faced major delays. In mid-2019 the Government of Pakistan announced that it would pursue this project on a Public-Private Partnership (PPP) basis or a Build, Operate, and Transfer (BOT) basis if the project was declared feasible after the completion of commercial and financial feasibility study. As of October 2022, this project is still facing significant delays. In 2018, the proposed acquisition of land from villages of Baldhair, Bagra No.2, Dobandi and Kholian was rejected by villagers due to the below market rates they were offered. Then, Chinese engineers left the site in February 2020 due to Covid-19. The Chinese and Pakistani consultants have revisited the site multiple times and deemed it unfeasible for establishment of the port.