ISLAMABAD: The Asian Development Bank (ADB) approved on Tuesday $800 million multi-tranche financing facility to help enhance regional connectivity and trade in the Central Asia Regional Economic Cooperation (CAREC) corridors in Pakistan.
Under the CAREC corridor development investment programme, the National Highway Authority will rehabilitate and upgrade the road network of 747 kilometres, constituting the CAREC Corridors mainly in Sindh, Punjab, and Khyber Pakhtunkhwa (KP).
The investment programme will expand Pakistan’s regional connectivity links while helping to improve road traffic efficiency. Road networks in Sindh, Punjab, and KP will be rehabilitated and upgraded with the multi-tranche financing facility (MFF) first tranche, worth $180m in 2017. The second and third tranches, worth $260m and $360m, respectively, are expected to be approved in 2019 and 2021.
In 2013, the CAREC transport corridors were extended to Pakistan to provide Afghanistan, Central Asia, and China with connection to Gwadar and Karachi port at the Arabian Sea. The CAREC Transport and Trade Facilitation Strategy 2020 endorsed by the CAREC ministers at the ministerial conference in 2013 proposed $5.6 billion of investment projects to build the extended CAREC corridors.
The country’s national highway N-55 offers the shortest north-south bound CAREC spin-off transport corridor through Pakistan to link landlocked Afghanistan, Central Asia, and Xinjiang province of China with the Arabian Sea ports at Karachi and Gwadar.
ADB says that the upgrading of selected sections of N-55 into 4-lane dual carriageway through this MFF will be an important step to enhance national and regional connectivity and trade via the CAREC Corridors 5 and 6, by improving the efficiency for road traffic along the CAREC corridors in the country.
Highway N-55 starts at M-9 near Petaro in Sindh, traverses through southern part of Punjab and terminates at N-5 near Peshawar. Currently N-55 is mostly a two-lane single carriageway, which is in very poor condition and requires upgrading to 4-lane dual carriageway to sustain the presumed future traffic loads from CAREC countries.
“Pakistan’s unique geographic location – at the crossroads of Central Asia, China, and South Asia – provides a unique potential and opportunity for the country to become a regional transport and trade hub,” said Dong-Soo Pyo, ADB’s Director, Transport and Communications Division, Central and West Asia Department.
“The investment programme will help the government realise this potential, improving trade and connectivity in the CAREC corridors with the long-term goal of achieving inclusive growth and sustainable development in mind,” he said.
Pakistan joined the CAREC programme in 2011 and its transport corridors offer the shortest route to the sea for landlocked Afghanistan, Central Asia, and Xinjiang province. Pakistan’s accession to the CAREC will enable sub-regions in Asia and Europe to be virtually integrated and seamlessly connected from East Asia through South Asia and Central Asia to Europe.
Pakistan’s trade has been centered on sea traffic while transit trade through the country remains limited as poor and costly transport and cross-border infrastructure and services hinder the realisation of this untapped potential. Upgrading the country’s current 263,000km of road, while ensuring transport safety, will be critical to the country’s export competitiveness as well as overall economic growth.
In the context of Afghanistan’s exploiting markets in South and Southeast Asia for their agricultural products, China’s exploring access to the Arabian Sea, and India’s pursuing connection to Central Asia, all through Pakistan, completing the CAREC corridors and serving the needs of surrounding countries will benefit Pakistan not only for the growth of the economy and trade but also for deepened regional integration and resultant stable geopolitics, and ultimately help achieve the vision of the CAREC, ADB says.