Pakistan has allocated Rs. 5 billion in the Fiscal Year 2026-27 Public Sector Development Program (PSDP) for relocating a 102-kilometer section of the Karakoram Highway between Thakot and Raikot. The project has an estimated total cost of Rs. 502.6 billion and aims to maintain uninterrupted connectivity along the Indus corridor.
Why the Karakoram Highway Is Being Relocated
The relocation is required because sections of the existing Karakoram Highway are expected to be affected by major dam projects being developed along the Indus River.
The project will realign vulnerable sections of the N-35 route to ensure the highway remains operational as reservoir construction changes the surrounding landscape.
The Karakoram Highway is a key transport route connecting northern Khyber Pakhtunkhwa and Gilgit-Baltistan with the rest of Pakistan.
Importance of the Project
The highway plays a vital role in passenger movement, freight transportation, fuel supply chains, tourism, and access to essential services in northern areas.
The relocation project is expected to improve the long-term reliability of the route and maintain connectivity for communities that depend on the highway.
The corridor is also important for trade activities and movement towards the Pakistan-China border.
Rs. 5 Billion Allocated Under PSDP
The government has allocated Rs. 5 billion for the project in FY2026-27, while the total estimated cost stands at Rs. 502.6 billion.
Since the allocated amount represents only an initial portion of the overall cost, the project will require funding over multiple years.
The scale of the project includes complex mountain construction work involving road realignments, bridges, and tunnels.
Part of Northern Infrastructure Development
The Thakot-Raikot relocation project is part of broader efforts to upgrade and protect the Karakoram Highway as hydropower projects expand along the Indus Valley.
The government has linked the initiative with the infrastructure goals under URAAN Pakistan, focusing on long-term connectivity, trade, and regional development.
The project aims to ensure that northern Pakistan remains connected even in areas where the existing highway route becomes unusable due to development activities.
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