NationalVOLUME 16 ISSUE # 08

The Khyber Pass Economic Corridor

Recently, the Executive Committee of the National Economic Council (ECNEC) approved a key project, the Khyber Pass Economic Corridor (KPEC), paving the way for the commencement of work and its early completion. The KPEC is a project of extreme economic and strategic significance for Pakistan, particularly Khyber Pakhtunkhwa and its merged tribal districts. However, KP and its newly merged tribal districts could only take advantage of the KPEC, if the project is expeditiously and seriously pursued, unlike the deliberately abandoned Reconstruction Opportunity Zones (ROZs).

The ROZs was a project by the United States to establish industries in the terror and war-affected areas of KP and erstwhile Federally Administered Tribal Areas (FATA), now referred to as MTDs, and provide the products of the proposed industries tariff-free access to American markets. But the sluggishness and mala fide intent of certain members of the federal bureaucracy sealed the fate of the ROZs and deprived the region of one of the potential projects of a complete economic turnaround.

The KPEC basically has two components. The first component of the KPEC, which is expressway development, includes the construction of a four-lane Peshawar-Torkham Expressway and associated administrative infrastructure facilities. This part also includes the laying of fiber optic cables in trenches along the expressway, land acquisition and resettlement, afforestation and technical and independent reviews and studies for the preparation of related projects. The second component, the 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 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. Improvements to the existing highway are constrained by heavy population settlements on either side, a railway line running adjacent to 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. The proposed expressway will be built on a new alignment with much improved geometry and would be constructed as a dual highway facility with a 7.3-meter-wide carriageway on each side and 3-meter-wide treated shoulders. The expressway will provide a reliable and safe driving environment with higher travelling speeds, resulting in reductions in the transit time and costs for regional and international trade goods using the Peshawar-Torkham corridor. The proposed expressway 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.

The proposed KPEC route passes through the mountainous region which is barren land with some dotted human settlements and a cultivable area. The 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 project starts from the end of the Peshawar Northern Bypass at the Takhta Baig Bridge from Jamrud tehsil of Khyber district and ends at the Torkham border.

The KPEC is of massive significance because it passes through the ancient and legendary Khyber Pass, which has been the main route of entrance for the traders, invaders, conquerors from Europe, Central Asia and Afghanistan to India. Thus, the route has been instrumental in cross-regional and inter-regional trade and commerce. So, the KPEC potential could be understood in the context of the long-cherished dream of traders of the 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 having enhanced potential once CPEC routes traversing entire Pakistan reach Peshawar. Here, it is important to note that the KPEC is not part of the CPEC and they are two different projects. The first financed by the West-US dominated WB and the CPEC entirely by Beijing. However, it is important to note that China has been desirous of making Afghanistan part of the CPEC as noticeably the latter project is a flagship part of Beijing’s $900 billion plus, Belt & Road Initiative (BRI). So as soon as the KPEC becomes functional it would give a huge boost to the CPEC and China’s BRI aiming to economically integrate the Afro-Eurasian landmass, including nearly 60 countries.

As the KPEC is not only a route or motorway but a complete project of economic development and its benefits would be extensive for Peshawar, KP and specifically the Khyber district. Although Peshawar is a sizable Pakistani city with satisfactory infrastructure, yet it severely lacks industrial establishment despite having colossal trading and consumption potential. Peshawar is an ancient 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 realize its true economic potential. On the other hand, the adjacent Khyber district would benefit unprecedentedly if the KPEC is successfully completed.

The socio-economic development indicators in the KPEC catchment area are worst as illiteracy is prevalent and poverty widespread and abject. The KPEC would fundamentally change the social and economic complexion of the area by giving the inhabitants of the Khyber district constant and easy connectivity to Peshawar and the down country as well as to Afghanistan and Central Asia. The KPEC component-II investment seeks to facilitate improvements in the productivity of existing enterprises in ex-FATA and encourage private investment in the area. Two targeted sectors are marble production, a sector in which MTDs have 446 processing units (which account for 20% of Pakistan’s total marble production); and horticulture. Both sectors have great potential for export. For instance, although marble exports are currently limited, the minerals 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 the export volume through Torkham. Further, both sectors have substantial participation by SMEs, and given their relatively high labor intensity, show great potential for employment of internally displaced people, women, and youths.

Given the KPEC’s importance and potential of economic growth of KP and Pakistan, it would be a historic mistake to ignore the project and any laggardness and red-tape in this connection must not be tolerated, especially when Prime Minister Imran Khan has a vision for the development of the MTDs.