Chinese firms to get contracts for two CPEC projects
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ISLAMABAD: The Economic Coordination Committee of the cabinet decided on Wednesday that contracts for construction of $3.5 billion road projects of the China-Pakistan Economic Corridor be awarded to Chinese companies through bidding.
A meeting of the ECC presided over by Finance Minister Ishaq Dar was informed that Article-II of the CPEC Framework Agreement required that bidding for such projects would be limited to Chinese firms.
The meeting was convened on the request of the ministry of communications to formally allow the bidding.
Two projects of the CPEC earmarked for early completion– $2.6bn Karachi-Lahore Motorway and $920 million Karakoram Highway Phase-II – have been included in the current year’s Public Sector Development Programme for their completion in 2017-18.
The projects, to be constructed on ‘build, operate and transfer’ basis, will be undertaken by the National Highway Authority. China will facilitate loans for them through its financial institutions led by the China Development Bank.
An official said that the procurement rules required award of contracts for public sector projects through international competitive bidding, but since the two projects were under the CPEC programme with most of the funding originating from China, the bidding would be limited to Chinese contractors.
The Chinese government will nominate its companies for bidding and will be responsible for their performance.
The government of Pakistan will ensure land acquisition, related infrastructure and security of Chinese contractors.
Published in Dawn, August 13th, 2015
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Comments (26) Closed
Aug 13, 2015 07:34am
Another loan on different name. Misleading masses. Mr Dar when are you going to say no to loan and say enough is enough?
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Aug 13, 2015 07:42am
Of course, only Chinese firms will get the contracts for all CPEC projects. That was the condition put in by China when they agreed to do the CPEC. So one hand, China lends money to Pakistan at a high interest rate & pegged to the dollar to construct the CPEC and on the other hand, that money is paid to Chinese firms to build the CPEC. That's a Sweet deal!
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Aug 13, 2015 07:44am
So Pakistan will provide infrastructure and do maintenance whilst Chinese companies make business?
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Aug 13, 2015 07:57am
They are they best and they bag all the contracts, nothing unusual about it.
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Aug 13, 2015 08:01am
We need a schedule of completion please and costs to complete. Is this a guaranteed contract? Talk is cheap
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Aug 13, 2015 08:09am
So China "invests" money in Pakistan & gets a high rate of return on it while Chinese companies get all the contracts to build the CPEC? India would've offered a better deal than that to construct the IPEC.
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Aug 13, 2015 08:37am
The same conditions were not made public before... its a monopoly and u never know how high chinese bid...
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Aug 13, 2015 08:38am
@Gurpreet Singh Sabharwal (USA)
Do you reall believe that????
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Aug 13, 2015 09:04am
Otherwise China doesn't make the deal.
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Aug 13, 2015 09:07am
@Anil .... Then Pakistan should not have a corridor?
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Aug 13, 2015 09:10am
@Gurpreet Singh Sabharwal (USA) .... Pakistan's only payoff will be in it's economic future.
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Aug 13, 2015 09:37am
I think the best thing in this CPEC is that Chinese will build all the projects. Money won't get transfered to Pakistan government and Pakistan government won't be able to grant contracts to its blue eyed boys. It means no corruption. $46 billion give whole of its value. For Pakistanies, there will be lot of jobs in this. Even if the top few managers, engineers and planner are chinese, rest of the work force will be hired locally. $46 billion investment meens at least 100.000 jobs for local people.
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Aug 13, 2015 09:47am
Chinese companies will bid for CPEC projects, China will use their own workers for construction, China will be financing the project through loans, so what Pakistan will be doing here? Only provide security to Chinese workers? No country accepts such a project.
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Aug 13, 2015 09:54am
@SHAHID
Add another 10,000 to the 100,000. Pakistan will have to maintain a security force of 10,000 for security of the Chines, the expenditure, which includes their pensionery benefits, would be borne by Pak. Contacts and profits all for China and expenditure earmarked on Pak. What a beautiful contract it is.
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Aug 13, 2015 09:54am
@Gurpreet Singh Sabharwal (USA) Sir you are right, may be the deal is not fair enough but firstly, India didnt offer such assistance to Pakistan and secondly, its better to have nothing so I would count it as a progress if all the projects will be completed on time. Besides this, I am also working in a Chinese company with the pay much higher than the market rate and there are around more than 1000 uneducated mens who are working and feeding their families. So overall I think its a good deal :) on the other hand I am also in favor of indo-pak trade and my suggestion is that india and pakistan should also work on lahore (Wagah border) to gwadar trade route as if anything happens like this it will not just strengthen Pakistan economy but also will benefit India in global trade.
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Aug 13, 2015 10:01am
China will finance, china will construct, china will operate, so there is no financial liability on part of Pakistan. In the end we will have an asset like Lahore-Islamabad motorway which was built and operated by Korean firm.
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Aug 13, 2015 10:09am
We are ready to bear this as long as kickbacks/commissions will be avoided by our corrupt officials in the project.
People should remember that even if we pay higher interest rate, we know that the money is fixed and will be utilized on project rather than going in corruption. We bear heavier costs in corruption than this, therefore Okay with that.
Even, China knows that Pakistani officials are corrupt therefore they thought of this deal. I appreciate Chine over this.
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Aug 13, 2015 10:37am
Most of money will be coming from Chinese banks. When no 1 is ready to invest in Pakistan at this time, it's still worth it. And btw its a business rule all over the world, why would some one spend money that huge by not facilitating its own people. Most of Chinese will sub let these contracts to local Pakistani firms, end of the day we will have required infrastructure through which we can have long term benefits. It's better to do this deal rather than waiting another 100 years for money to come and construct. being considered poor we still have one of the best road infrastructure in south Asia which through network of motorways Even India doesn't have it yet. Its always give and take.
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Aug 13, 2015 10:57am
Critics, please help find another investor willing to bet on our country's situation or live with what you are able to get in these difficult times.
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Aug 13, 2015 11:06am
Good move. This will ensure timely completion of the project as we have successful case studies of Chinese projects in GB vis a vis local contractors. Nevertheless, this will open job opportunities for the local communities.
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Aug 13, 2015 11:43am
So chinese money is going back to them only. as they will bring their engineer with them
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Aug 13, 2015 11:50am
I don't find anything bad in it. Most of the countries go after their own interests. China goes behind their and we go by ours. What's so critical about it?
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Aug 13, 2015 12:59pm
@Gurpreet Singh Sabharwal (USA) Chinese firms will also hire Pakistani labor, supervisors and engineers....Yes its true eventually money will come out of our pocket but still I believe its a win win situation for both....
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Aug 13, 2015 03:50pm
Obviously it's still win win situation for both. Pakistan currently doesn't have funds to construct infrastructure. the deal is similar to Lahore islamabad motorway which was built by Daewoo on same BOT (build operate and transfer) basis. China will build the motorway, will collect toll for a agreed period of time and after that handover to NHA. The added advantage of jobs and economic benefits would be additional advantage to Pakistan.
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Aug 13, 2015 05:25pm
@Optimistic : wish you all the best buddy!
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Aug 13, 2015 05:30pm
Pakistani friends, I was just mentioning the facts of the deal but if it helps Pakistan get out of its economic woes, all the best to you guys. I would like to see a prosperous, moderate & educated Pakistan.
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