China has offered $378 million builders/suppliers loan to Pakistan for upgradation and relocation of 615 km Karakoram Highway on 'turnkey basis', official sources told Business Recorder here on Saturday. They said that the government-controlled Chinese National Overseas Engineering Corporation (COVEC) has approached National Highway Authority for undertaking KKH project on 'turnkey basis' ie design , construction and maintenance, for an agreeable period.
Sources said that COVEC has offered for arranging 80 percent loan of total cost of the project ($300 million) against soft guarantee from government of Pakistan and 20 percent ($76 millions ) as grant to be arranged by COVEC from Chinese government. The term of loan will be 12 years, excluding construction time.
Sources said that government of Pakistan is actively considering the offer as it would facilitate construction of the much-needed Bhasha Dam on Indus River
National Highway N-35, KKH, starts from Hassan Abdal near Islamabad and after passing through Abbotabad, Mansehra, Batgram, Chilas, and Gilgit crosses over to China at Khunjerab.
The KKH, which passes through the most difficult hilly terrain along River Indus in Gilgit and Hunza, has been identified as part of Asian Highway, AH-4, to provide regional connectivity between Pakistani ports and Central Asian States.
The existing metalled width of KKH is 6 metres and formation width 7 to 7.5 metres with TST surface, being maintained by Frontier Works Organisation (FWO) ever since it was constructed.
Sources said that National Highway Authority has completed rehabilitation of critical sections of KKH at a cost of Rs 550 million. Another major ongoing project is the construction of five bridges and a landslide area, by a Chinese contractor under a grant of Rs 350 million.
KKH has completed almost 30 years of operation and now requires major rehabilitation.
Sources said that one aspect which requires consideration by the government of Pakistan, before taking up the widening and rehabilitation of KKH, is the construction of Bhasha Dam which would require relocation of about 140 km length of the road, as the existing road would be submerged in the 'reservoir' of the dam.
The estimated cost of upgradation of 476 km and relocation of 140 km length is about Rs 22.6 billion ($378 million).
According to the recent 24-hour traffic count on KKH is: Hassan Abdal-Havelian 7282; Havelian-Abbotabad 8651; Abbotabad-Mansehra 8101; Mansehra -Shinkiari 6146; Shinkiari-Thakot 2958; Thakot-Gilgit 1500-1800; and Gilgit to Khunjerab 300-800.
Sources said that as Pakistan will soon be a hub of international trade and commercial activity, KKH is going to play a pivotal role in the regional economic co-operation.
KKH has been described as the eternal symbol of deep-rooted and sincere friendship between Pakistan and China and an example of good neighbourly relations.