November 26, 2001	Monday	Ramazan 10, 1422

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ISLAMABAD, Nov 25: Pakistan has put on hold as many as 17 multi-billion-dollars infrastructure and energy projects being developed by the Chinese companies mainly because of regional political situation.

Foreign office sources confirmed to Dawn that these projects would not come under discussion at least during the forthcoming visit of President Gen Pervez Musharraf to Beijing from Dec 20-24.

These sources said that a decision to this effect had been taken early this month at an inter-ministerial meeting presided over by foreign secretary Inamul Haq.

“The inter-ministerial meeting decided not to pursue these projects in the context of the President’s forthcoming visit”, another source quoting official documents said.

These also include some very important projects like $1.2 billion Pakistan-Iran Refinery and some crucial parts of Gwadar port project like Gwadar-Ratodero Road, Linking Gwadar Port with Railway Network.

Energy sector, particularly the mineral and natural resources, would be hard hit due to the decision. Mineral projects that have been put off include development of Duddar Lead-Zinc deposits, development and exploitation of Hematite in Chiniot Iron Ore Deposits, Jherruck/Sonda Coal Field, Magnesite Refractory, PVD Salt Plant, Exploitation of Nokkundi Iron Ore deposits and Wind Turbines at various coastal sites in Pakistan.

Large deposits of iron have already been discovered in these areas and in many cases developed as a exploration target for iron and base metal. Only in case of Chiniot, the evaluation of logs data has confirmed the existence of the low to high grade, massive hematite-magnetite ore body of limited extension under an alluvial cover ranging from 71-178 meters in Hachi Volcanics of Pre-Cambrian age near Chiniot.

Some other projects that have been shelved for the time being include Master Improvement Programme of Karakoram Highway, National Machinery Design Institute, Diversification of Heavy Electrical Complex Product-mix, Wind Turbines at various coastal sites in Pakistan, Telecom Foundation’s joint venture with some Chinese company for optical fibre manufacturing, Chinese assistance in Communication Satellite Manufacturing and launching, Chinese help in supplying rural telecom equipment and Chinese scholarships to Pakistani trainers in the field of Science and Technology.

Pakistan and Chinese government officials besides private sector have been looking into prospects of investments and joint venture partnerships.

Sources in the petroleum ministry, however, insisted that their projects (petroleum and natural resources) had not been shelved as such. They argue, however, that interaction and negotiations on these projects had not reached a stage where they could be pursued during the visit of the President.

Giving reasons these sources said that in some cases the Pakistani side was looking for finances to be raised by the Chinese companies that involved complicated issues of interest rates and repayments schedules.

These sources said that during such high profile visits, only those issues were raised where either the agreements were signed or disputes were so serious that top level input was required to put them in motion.

Accordingly, all the relevant ministries, divisions and public sector departments have been asked not to waste their time pursuing these projects in the next few weeks and instead concentrate only on those matters on which the two sides would sign agreements during the visit.

Subsequently, the economic agenda for the President’s visit to China finalised as of now include: first, rollover of three Chinese deposits worth $500 million, kept with the National Bank of Pakistan as balance of payment support for Pakistan for a further period of three years (beyond February 2002).

Second, establishment of Pakistan-China joint holding company with a paid up capital of Rs2 billion, to be equally contributed by Pakistan and China.

Third, a credit line of $50—100 million from the Chinese EXIM bank to a Pakistani bank for the purchase of textile machinery and equipment from China by the Pakistani importers.

Fourth, Development of Thar Coal Mine and setting up of a Coal-fired Power plant by Shenhua group of China. Fifth, Purchase of an Oceanographic Research Vessel from China.

Six and last, award of the contracts for three hydel power projects namely Allai Khwar, Khan Khwar and Duber Khwar to Dongfang Corporation on negotiation basis.