ISLAMABAD, Aug 18: The Asian Development Bank on Friday agreed to provide $1 billion for the National Trade Corridor (NTC) project that would link Karachi to Gwadar and Khunjrab in Northern Areas.

The World Bank and other lenders have already agreed to provide $1.8 billion for the Karachi-Gwadar-Khunjrab section which is estimated to cost $2.8 billion.

The overall cost of the NTC programme is estimated at $6 billion. The programme envisages improving all sectors of communications, including ports, shipping, aviation, etc.

The World Bank will provide $300 million a year.

ADB’s team leader for NTC investment programme Sean O. Sullivan discussed salient features of the project with Adviser to Prime Minister on Finance Salman Shah and authorities of the National Highway Authority on Friday.

Mr Shah said the highway would be made commercially viable by encouraging commercial and industrial activities and the revenue generated by these activities would contribute towards the cost of the NTC project. He stressed on selection of strategic locations for revenue generating activities.

The NTC project was approved by President Gen Pervez Musharraf a few days ago following its technical clearance and funding commitments from the World Bank.

The six-year plan is being undertaken to meet domestic transportation requirements and provide transit facilities to Central Asia, western China, Afghanistan and Iran.

The programme has been prepared after a year-long consultations with various ministries and corporations, and the World Bank, Asian Development Bank and Japan Bank for International Cooperation.

It will cover ports and shipping, trade facilitation, highways and trucking modernisation, railways improvement and aviation and air transport modernisation.

The investment plan will be fully implemented in about six years and it is estimated to save $5 to 7.5 billion per annum currently being lost owing to low performance of railways, highways, ports and airports.

“The existing infrastructure capacity cannot support 7-8 per cent of sustained economic growth,” says a planning commission report on the NTC improvement plan

An incentive package was announced in this year’s budget for the trucking industry through tax and duty-free import of big trucks for replacing obsolete vehicles with introduction of modern trucks to turn Pakistan into a hub for international trade.