MORE news trickling out of the recent meeting between Pakistani and Chinese delegations to thrash out the future shape of CPEC points to an important trend. We now have four separate projects that the Pakistani side has been advancing during the seven meetings of the Joint Cooperation Council whose fate is either sealed or hangs in the balance as the seventh round concluded. Those four are: Diamer-Bhasha dam, the Main Line 1 (ML1) upgradation of the Peshawar to Karachi railway line, the Karachi Circular Railway, and three road projects.
Let’s take a close look at one of these, the ML1 project. This was raised in the first JCC meeting held on August 27, 2013, only months after the formation of the new PML-N government. The proposal talked of a high-speed rail line from Karachi to Peshawar, with a design speed of 250 kilometres per hour and length of 1,681 km. When the Chinese side expressed concerns about the cost, they were told that the project could be implemented in ‘build, operate, transfer’ basis in public-private partnership mode. The Pakistani side was keen to attract a private investor from China for the purpose, offering tolls as well as revenue from service areas along the route as incentives.
Exactly one year later, on Aug 27, 2014, in the third JCC meeting held in Beijing, a Chinese consultant was named to conduct a joint feasibility study of the ML1 and Havelian dry port project. It was recommended that both sides sign a framework agreement for conducting this study and the study itself be complete four months after the agreement is signed. “The committee appreciates Pakistan’s commitment for providing entire financing support for the joint feasibility study”, the minutes from that meeting state.
That framework agreement was signed during the April 20-21 visit of President Xi Jinping to Pakistan, during which 49 agreements and MoUs were entered into between both governments.
Once the costs are known, we will have a clue as to how much Chinese plans for CPEC are aligned with Pakistani hopes.
By November of that year, the draft feasibility was complete and phased implementation was decided. Three sections of the line were identified to start work with, that ran from Keamari in Karachi (where the port is located) to Lahore, divided into three sub-sections each requiring different upgradation work. The work was supposed to be finished by Dec 2017, “based on the availability of funding”.
“It was considered important to accurately determine the costs to avoid issues at implementation stage” the minutes from that meeting note.
Then, after an interval of one year, came the sixth JCC meeting in December 2016. The meeting minutes describe ML1 as a “crucial and strategic component of CPEC” and go on to note that it is “imperative that the project is implemented on a fast track”. The Pakistani side confirmed their willingness to sign a commercial contract of the design “at the earliest”.
A senior working group was created “to discuss the modalities and terms of financing” of the project. “Both sides agreed to have extensive communication in the first fortnight of January 2017 so as to achieve quick progress and finally reach a consensus within three months.”
Notice two things emerging from this dialogue. The first is the repeated invocations by the Chinese about the costs, and how due care must be taken to assess these, and how there is a lot to discuss regarding the costs before moving ahead with implementation. Second, notice that at least one party in this dialogue is in a hurry.
Then came the seventh JCC meeting on Nov 22, 2017, where financing for the project was supposed to be approved. Everything was in place, the design, joint feasibility, an implementation and coordination mechanism, and a whole 11 months had elapsed since all this was agreed in the last JCC meeting, giving both sides ample time in which to “reach a consensus”.
News coming out of the seventh JCC says that the approval of the project now awaits cost estimates which are to be generated in the next three months. Presumably these cost estimates will be in line with Pakistani expectations, and the project will be able to move ahead by early 2018.
The ML1 is one of the most important components of CPEC, because the rail transport of goods is badly needed in Pakistan. In the early discussions, there was talk of extending the project beyond Peshawar to Herat in Afghanistan as well. The joint feasibility includes a dry port at Havelian, which is also the terminus for the upgraded Karakorum Highway coming from the north. Where the two link, an essential joint in the logistic infrastructure will be created.
But the costs are key to this, as the Chinese have been pointing out from the very beginning. Once the costs are known, and assuming the government shares them with the rest of us, we will have a clue as to how much Chinese plans for CPEC are aligned with Pakistani hopes.
At the moment, the sub-sections identified for priority implementation run from Lahore to the Karachi port. If the level of interest evinced by the Chinese side ends at this, we will have an indication that the level of their interest extends only to the agro-industrial heartland of Pakistan. But if the final project is indeed extended out to Peshawar, we will know that northern Punjab and KP are also to be linked to the emerging centres of dynamism under CPEC. If the line is extended even further out to Herat, we have a truly impressive ambition at play that seeks to connect the region together.
In a sense, the ML1 project and how it shapes up is a crucial metric for measuring CPEC progress. Since it will be the logistic spine of the corridor, how far the Chinese are willing to build it, and how much resource they are willing to invest in it, will be important to watch.
The writer is a member of staff.
Published in Dawn, December 7th, 2017