ISLAMABAD, Nov 18: Pakistan and China are likely to sign a contract during the forthcoming visit of Chinese president Hu Jintao to upgrade and expand the Karakuram Highway.

Under the agreement, the Chinese government will initially provide $40 million to meet immediate requirements.

The China Road and Bridge Corporation (CRBC), a state-owned construction firm, has completed a feasibility study for the purpose. Administrative and financial arrangements have been worked out with the Pakistani authority to initiate the project as soon as possible.

According to China’s Assets Supervision and Administration Commission (ASAC), it has sent proposals to relevant institutions in Pakistan for a formal contract.

Earlier, the two countries signed a memorandum of understanding to pave the way for practical operation of the project.

The estimated cost of the project is $794 million. It has been suggested that 90 per cent of the cost will be met by the balance of the preferential export buyer’s credit committed by the government of China in November 2003 and the remaining 10 per cent will be born by 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 pass will be rebuilt and upgraded.

The two sides have agreed to complete the drawing of the blue print, listing work items and signing commercial contracts by the end of October and try to start working by the end of the year.

According to ASAC sources, the width of the highway will be expanded from 10 metres to 30 metres and its transport capacity will be enhanced three times. Heavy vehicles will be able to run on the road after the upgrade.—APP