"Administrative and financial arrangements are being worked out with the Pakistani authority to initiate the project as soon as possible, said sources with China's Assets Supervision and Administration Commission (ASAC) here on Thursday. Talking to newsmen, the sources said they had sent proposals to relevant institutions in Pakistan for a formal contract.
The two countries have already signed a memorandum of understanding to pave the way for practical operation of the project. The total estimated cost of the project is 794 million dollars.
It was suggested that 90 percent of the cost would be met by the balance of the preferential export buyer's credit ($500) committed by the government of China in November 2003, while the remaining 10 percent would be financed by the Government of Pakistan. Other potential sources will be sought in case of any shortfall.
As per understanding, the CRBC will be in-charge of the design and reconstruction of the highway as the general contractor. At the first stage, the 335-kilometre road between the Raikot Bridge and the Khunjerab mountain pass will be rebuilt and upgraded.
The two sides have agreed to complete the drawing of the blue print, listing the work items and signing commercial contracts by the end of October, and try to start working by the end of the year.
The Karakoram Highway is the only overland connection between China and Pakistan at present. The 809-kilometre highway, whose location is 600 to 4,700 meters above sea level, was built in 1978 for special geopolitical reasons. It is largely broken due to lack of maintenance and the earthquake in late 2005. During President Pervez Musharraf's visit to China in February this year, the two sides reached an agreement in principle to upgrade the Karakoram Highway.
According to the ASAC's sources, width of the highway will be expanded from 10 meters to 30 meters, and its transport capacity will be enhanced three times. Heavy-laden vehicles will be able to run on the road after the upgradation.