Khyber Pass Economic Corridor (KPEC)

Khyber Pass Economic Corridor (KPEC)

Another corridor to development

Pakistan and Afghanistan continue to maintain upward trajectory of trade during last two years and has crossed US$ 2 billion mark in year 2017-18. Pakistan remains the largest export market for Afghanistan. On the other hand, Afghanistan continues to increase its imports from Pakistan, as Afghan imports increased from Pakistan by 18.33% for the period that was US$ 1,271 million in year 2016-17 to US$ 1.576 billion in year 2017-18. Improvements in security, infrastructure investments, and renewed regional economic cooperation provide hope for the revival of cross-border trade and bolstering of economic growth. So, in order to further boost Pak-Afghan trade ties, Pakistan decided to construct a four-lane expressway, titled Khyber Pass Economic Corridor, from Peshawar to the border post of Torkham. In 2018, the World Bank approved a loan of $460.6 million for this project. The $460.6-million KPEC Project will benefit consumers, producers and traders in Pakistan and across the border in Afghanistan and the Central Asian Republics through reduction in transport time and cost and private-sector investment.

As Pakistan is waiting to reap the benefits of $60 billion plus China-Pakistan Economic Corridor (CPEC), a silver lining has emerged for Khyber Pakhtunkhwa in the shape of World Bank-funded Khyber Pass Economic Corridor (KPEC).

Introduction

The project was approved on June 14, 2018 and is scheduled to be completed by June 28, 2024. The objective of the project is to expand economic activity between Pakistan and Afghanistan by improving regional connectivity and promoting private sector development. However, the KP and its newly-merged tribal districts (NMTDs) can benefit from the KPEC only if the project is expeditiously and seriously pursued, though present circumstances otherwise as a report released earlier this year suggests that “the project is pending effectiveness as the government’s internal approval was underway, and expected to be completed soon, hence physical activities have not commenced.” If worked on expeditiously, the project will have a far-reaching impact on the economy of the region because it has the potential not only of improving trade relations between Pakistan and Afghanistan, but also of reviving the historic trade link between Central Asia and South Asia.

Objectives

The Economic Corridor Development component aims, in conjunction with other projects, to facilitate the development of marble and horticulture industries to maximise the benefits of the expressway. The main constraints in development include insecurity (including for women workers), difficult access to markets (hard and soft infrastructure issues), land (unsecured mining rights, lack of irrigated and industrial land), utilities, skills and finance (the latter being largely a consequence of other constraints).

Major Components

The project has two components. The first component of KPEC — Expressway Development — includes the construction of a four-lane Peshawar-Torkham Expressway (PTEX) and associated administrative infrastructure facilities. This part also includes the laying of fiber optic cables in trenches along PTEX, land acquisition and resettlement, afforestation, and technical and independent reviews and studies for the preparation of new related projects.

The second component — Development of the Khyber Pass Economic Corridor — has several subcomponents. The anchor of the Peshawar-Torkham Economic Corridor is a new expressway which will provide a reliable and safe driving environment with higher travelling speeds. The existing Peshawar-Torkham road is a part of the National Highway N-5 that traverses the historic Khyber Pass. The 400-year old existing carriageway is a 6.0-meter-wide two-lane facility with earthen shoulders. Improvement to the existing highway is constrained by heavy population settlements on either side, a railway line running along the road, and steep gradients and sharp curves that are difficult for large multi-axle commercial trucks to negotiate. Geometrics are inadequate to cater for the modern high speed heavy vehicular traffic.

According to a study conducted by consultants for National Highway Authority, the implementing agency of the KPEC, alignment has been finalised under Component-I, while actual activities to be financed under Component-II are not clear at this stage. Therefore, hybrid approach is being followed where site specific Environmental and Social Impact Assessments (ESIA) for component-I and Environmental Management Framework for activities under component-II have been prepared.

The KPEC Component-II investments seek to facilitate improvements in the productivity of existing enterprises in tribal areas and encourage private investments in the area. Two target sectors are marble production, a sector in which NMTD has 446 processing units (which account for 20 percent of Pakistan’s total marble production); and horticulture. Both sectors have great potential for export. Although marble exports are currently limited, the mineral can fetch prices around five to ten times higher in international markets than in local markets. Fruits and vegetables, which may be further processed, already comprise a substantial share of export volume through Torkham. Both sectors have substantial participation by SMEs, and given their relatively high labour intensity, show great potential for employment of internally-displaced people (IDPs), women and youth.

Project Route

The proposed project starts from the end of Peshawar Northern Bypass at the Takhta Baig Bridge from tehsil Jamrud of Khyber District and ends at the Torkham border. It passes through Peshawar, Jamrud, Baghyari Post, Lala China, Ali Masjid, Kata Kashta, Gagra Sar, Char Bagh, Gurjura, Wali Khel, Landi Kotal and Torkham. The proposed alignment mostly follows the valleys and hilly slopes.

The KPEC route passes through the mountainous region which is a barren land with some dotted human settlements and cultivable area. Peshawar-Torkham area can be divided into two major geographical divisions: the rugged mountainous regions on the north and west, with one end touching the Afghan border, and the comparatively narrow strip of valleys.

The proposed expressway will be built on a new alignment and will be constructed as a dual highway facility with a 7.3-metre-wide carriageway on each side and 3.0-metre-wide treated shoulders. It could be an extension of the Karachi-Lahore, Islamabad-Peshawar Trans-Pakistan Expressway System as well as part of the Peshawar-Kabul (Afghanistan) Dushanbe (Tajikistan) Motorway. It will reduce transit time and costs for regional and international trade goods using Peshawar-Torkham corridor.

Importance

The KPEC is of significance because it passes through the ancient and legendary Khyber Pass, which has been the main route of entrance to India for traders, invaders and conquerors from Europe, Central Asia, Arabia and Afghanistan. Thus, the route has been instrumental in cross-regional and inter-regional trade and commerce. The KPEC fulfils the long-cherished dream of traders of sub-continent, Afghanistan and Central Asia of economically integrating Central Asia with South Asia and the greater Middle East and Persia.

The KPEC becomes even more important once CPEC routes traversing Pakistan reach Peshawar. Here it is important to note that KPEC is not part of CPEC. However, China has been desirous of making Afghanistan a part of CPEC — a flagship project of Beijing’s $900 billion plus, Belt and Road Initiative (BRI). So as soon as KPEC becomes functional, it would give a huge boost to CPEC and China’s BRI aiming to economically integrating the Afro-Eurasian landmass including nearly 60 countries.

Economic Prospects for KP

KPEC is not only a route or motorway, but a complete project of economic development. It would benefit Peshawar, KP and specifically the Khyber district extensively. Although Peshawar is a sizable city with satisfactory infrastructure, it severely lacks industrial establishment despite having colossal trading and consumption potential. Peshawar is an ancient Pakistani city which once used to be a hub of Central Asia, South Asia cross-regional commerce and trade. The KPEC could be instrumental in enabling Peshawar to realise its true economic potential.

Conclusion

Given the KPEC importance and its potential of economic growth, it would a historic mistake to let go the project and any laggardness and red-tape in this connection must not be allowed. Around $480 million for KPEC have already been approved by the World Bank and there is no hurdle in the swift implementation of the project.