CPEC faces setback as China halts funding; Pakistan may finance Karakoram Highway project…
Pakistan is reportedly considering funding the $1. 8 billion Karakoram Highway (KKH) realignment project on its own after China refused to move forward with financing due to security concerns. The project was. . .
Pakistan is reportedly considering funding the $1. 8 billion Karakoram Highway (KKH) realignment project on its own after China refused to move forward with financing due to security concerns. The project was originally planned under the China-Pakistan Economic Corridor (CPEC). However, worsening security in Balochistan, Khyber Pakhtunkhwa and Pakistan-occupied Kashmir (PoK) has reportedly made China reluctant to invest further until the situation improves. Pakistan May Build the Highway on Its OwnAccording to a CNN-News18 report, Pakistan is considering allowing domestic contractors to bid for the Karakoram Highway realignment project. The government is under pressure to complete an alternative route before a 280-km stretch of the existing highway is submerged by the reservoir of the Diamer-Bhasha Dam on the Indus River. Pakistani Companies May Join the CPEC ProjectThe report says Pakistan is planning to revise the existing government-to-government (G2G) framework with China. At present, bidding is limited to three Chinese state-owned companies. Pakistan now wants leading local construction firms to participate in the project to speed up the work. Funding Deal Between Pakistan and China Still PendingSources quoted in the report said Pakistan and China had reached a preliminary agreement on a financing structure in May 2025. Under the proposed plan, China was expected to provide around 85% of the funding for the project under CPEC. However, the final agreement has not yet been signed. Pakistan has repeatedly sought concessional loans from China over the past year, but Beijing has not approved the request. China Yet to Approve FinancingAccording to the report, China has reportedly offered only commercial loan terms and has refused to begin the tender process until the financing agreement is finalised. The project remains uncertain as both countries continue discussions over funding and implementation. First published on:Aug 05, 2026 07:26 PM ISTGet Breaking News First and Latest Updates from India and around the world on News24. Follow News24 onFacebook,Twitter. End of ArticleRelated Story