Summary Under the Government-to-Government (G2G) Framework Agreement, work is being advanced on the Thakot-Raikot Project as part of the Karakoram Highway (KKH) realignment programme.
ISLAMABAD (APP) - The China-Pakistan Economic Corridor (CPEC), a flagship initiative of the strategic partnership between Pakistan and China, continues to play a pivotal role in enhancing connectivity, infrastructure development and regional economic integration, according to the Economic Survey 2025-26 released on Thursday.
The survey stated that CPEC, anchored in mutual trust and shared economic objectives, was contributing to reducing trade and transit costs, improving logistics efficiency and strengthening Pakistan’s integration into regional and global value chains, thereby promoting investment, economic growth and inclusive development.
Under the Government-to-Government (G2G) Framework Agreement, work is being advanced on the Thakot-Raikot Project as part of the Karakoram Highway (KKH) realignment programme.
According to the survey, Phase-II(A) of the project involves relocation of the KKH from Thor Nullah to Raikot over a total length of 102 kilometres, including 88 kilometres of new alignment and 14 kilometres of link roads. Phase-II(B) comprises the upgradation of 139 kilometres of the existing highway, including sections from Thakot to Dasu, Sazin to Thor Nullah and associated link roads.
Both Pakistan and China have agreed on a phased implementation plan and an 85:15 financing arrangement, while efforts are underway to finalize the financing agreement at the earliest, the survey added.
The survey highlighted that the Eastbay Expressway has significantly improved connectivity to Gwadar Port by providing a dedicated signal-free corridor linking the port, Free Zones and the Makran Coastal Highway, resulting in reduced congestion, lower transportation costs and improved cargo movement.
To further strengthen connectivity, Phase-II of the Eastbay Expressway has been proposed under Chinese Grant-in-Aid on EPC mode.
The project aims to connect the New Gwadar International Airport (NGIA) with Gwadar Port and Free Zones, enabling integrated sea-air logistics services.
The survey noted that financing proposals and a draft framework agreement had already been shared with the Chinese side, with further progress expected during upcoming high-level engagements.
It said that the upgradation of Main Line-1 (ML-1) remained a strategic priority under CPEC 2.0 for railway modernization and development of an integrated transport corridor.
Third-party financing negotiations for the Karachi-Rohri section are currently underway, while a detailed financial proposal has been prepared for the Rohri-Peshawar sections to explore potential Chinese financing for the remaining portions of the project.
The survey further revealed that four Memorandums of Understanding (MoUs) covering the upgradation of D.I. Khan-Zhob Road (N-50), Mirpur-Mangla-Muzaffarabad Expressway, M-10 Motorway and Babusar Tunnel were being advanced through the Joint Working Group on Transport Infrastructure.
Both countries have also agreed to establish a Joint Technical Working Group (JTWG) to conduct feasibility studies for these projects.
In addition, transport infrastructure projects proposed by the Government of Khyber Pakhtunkhwa, including the Peshawar-D.I. Khan Motorway and Dir Motorway, are also being progressed under the CPEC portfolio.
The survey said mining cooperation under CPEC 2.0 was also contributing to the development of transport infrastructure, particularly through the proposed Mining Corridor from Nokundi to Gwadar Port.
The corridor is expected to improve connectivity between mineral-rich regions and export hubs, enhance logistics efficiency, facilitate the transportation of minerals and support mining-led economic activity in Balochistan.
