CPEC size to stay at $50 billion for now

ISLAMABAD:Size of the China-Pakistan Economic Corridor (CPEC) will remain unchanged at $50 billion, for now, as both the countries have decided to consolidate the already approved projects amid a hope to also achieve the financial close of $1.7 billion transmission line project.A meeting of the Joint Cooperation Committee (JCC) of the CPEC will take place on December 20 in Beijing, said the Ministry of Planning on Friday. Unlike Lahore-Matiari transmission line project that may reach the next level, the stalemate will continue on $8.2 billion mainline-I project of Pakistan Railways.The Cabinet Committee on CPEC on Friday approved agenda for the 8th JCC meeting, the highest decision-making body of CPEC. The committee also approved composition of Pakistani delegation and fixed date of the meeting (December 20), according to a handout issued by the Planning Ministry.

Federal Minister for Planning and Development Khusro Bakhtiar chaired the meeting.

The committee reviewed progress on Pakistan-China industrial cooperation and called for a special focus on promotion of this sector. The cabinet body gave the nod to signing of industrial cooperation framework with China and to encourage Chinese investors to relocate their industries.The committee instructed authorities to finalise a schedule for the groundbreaking of Rashakai Economic Zone at the earliest by removing all bottlenecks.All provincial chief ministers have been invited to participate in the JCC that would enable them to market their own industrial zones as well as negotiate their projects particularly new initiatives in the socio-economic development sector, said the Planning Ministry.CPEC – a pilot project of Belt and Road Initiative –had been launched four years ago with an initial size of the $46 billion. Over a period, the size grew to $50 billion, although the actual projects that have reached construction stage are $19 billion, according to Chinese estimates.Now, both the countries have decided to consolidate the earlier approved projects first, as most of them are already falling behind the scheduled timelines, said the Planning Ministry officials. The completion period for the early harvest projects was December 2018.The Planning Ministry officials said the agreement for financial close of the Lahore-Matiari project could be signed during the 8th JCC. The transmission line project is facing a three-year delay.

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The last Pakistan Muslim League-Nawaz (PML-N) government had given seven-month extension to the Chinese company for the start of construction work on the $1.7-billion scheme. But this deadline also lapsed on December 1.During Chinese President Xi Jinping’s visit to Pakistan, it was decided that the project would be operational by Sept 2017 while its financial close had been scheduled for Dec 2015. The project is aimed at evacuating 4,000 megawatts of power from coal based plants located at Thar, Port Qasim and Hub.But no breakthrough was expected on the $8.2-billion mainline (ML-I) project of Pakistan Railways. The officials said despite repeated deadlines the technical design of the mega scheme is not finalised yet that will further delay the scheme.

Austerity axe falls on CPEC, Gwadar projects

Only after completion of the technical design, Prime Minister Imran Khan will take a decision on the financing model of the scheme. The project’s initial cost of $8.2 billion was based on a joint feasibility study, which was not backed by a technical design study.Pakistan had launched CPEC four years ago without doing a proper homework. Against earlier expectations to add at least two hdyro projects in the CPEC portfolio, no new energy project will be added this time, said the officials.The cabinet committee decided to seek finances for KKH Thakot-Raikot project and upgrading of DI Khan-Zhob (Phase-1) project of the western route. Both schemes are also falling behind the schedule.Bakhtiar said the projects on the western route are a priority of the government as they would open and ensure uplift of less developed areas of Khyber Pakhtunkhwa and Baluchistan.The conveners of the Joint Working Groups on Energy, Infrastructure, Gwadar, Planning and Industrial Cooperation briefed the committee about the agenda of the forthcoming 8th JCC Meeting.It is also expected that the date for groundbreaking ceremony of the much-delayed New Gwadar International Airport will be finalised during the JCC meeting. This project too is falling behind the schedule.The committee reviewed progress on Gwadar projects and instructed authorities to complete all codal formalities for the early groundbreaking of Gwadar New Airport, Vocational Institute, hospital and 300 MW power plant not later the 1st quarter of 2019, said the official handout.Bakhtiar said the present government has expended base of CPEC by including socio-economic development and agriculture sector. The committee advised authorities to identify pilot projects in these sectors in consultation with the provinces and take up with the Chinese side. The committee discussed Transport Infrastructure Projects in detail including provincial as well as mass transit project.

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