“Pakistan to Push China for Local Bidding Rights on $1.8bn Karakoram Highway, Weighs Self-Financing Amid Delays”
Pakistan is set to request that China allow top local firms to bid for construction of the $1.8 billion Karakoram Highway project, and is also considering building the strategic road from its own resources if a loan agreement with China faces further delay, Pakistani authorities said, with the matter set to be raised at a Joint Technical Working Group meeting tentatively scheduled for late August in Beijing.
The Express Tribune reported that Minister for Planning and Development Ahsan Iqbal issued those instructions during a progress review meeting on China-Pakistan Economic Corridor (CPEC) projects held on Tuesday.
Under the government’s proposal, Pakistan will seek an amendment to the existing government-to-government framework, which currently limits bidding to three Chinese companies, a model used across all CPEC infrastructure projects for over a decade.
Iqbal said that Pakistan may propose including top Pakistani contractors in the bidding process during the upcoming meeting.
The existing 280-kilometre road will submerge by May 2028 due to the construction of the Diamer-Bhasha Dam. Pakistan and China had planned a new international-standard road with 85% Chinese financing, but no major progress has been made since 2024, despite Pakistan’s approval of the scheme.
The project is projected to cost Rs502 billion, or $1.8 billion, with the first phase estimated at Rs320 billion, or $1.1 billion, based on a joint feasibility study.
Planning ministry officials said the first phase’s cost could fall 35% to Rs208 billion if built to local standards, by local contractors, and at National Highway Authority rates.
Iqbal had instructed officials to prepare fresh cost estimates based on domestic standards in case China does not fund the project, and to review the self-financing option if no agreement is signed at the upcoming meeting.
He said he hoped a financing deal would be reached during the technical meeting, but that Pakistan may proceed with its own resources if delays continue, given the urgency of completing an alternative road before May 2028.
Pakistan and China agreed on the implementation plan in May 2025, setting the 85% Chinese financing principle, with China sharing the first phase’s cost breakdown in June last year.
Officials said the Ministry of Communications, the Ministry of Economic Affairs and the Ministry of Planning had sent multiple letters over the past year seeking finalisation of the financing deal, but China did not respond until last month, when it proposed a working group meeting.
Pakistan has also shared EPC bidding documents and pushed China to begin tendering, but Beijing declined until a funding agreement is reached.
Pakistan is seeking a concessionary loan, while China has indicated commercial financing instead; no final decision has been made. The technical meeting, originally expected earlier this month, has been rescheduled by mutual consent.