Momentum building behind CPEC again

Published March 14, 2019
A train approaches a populated area in Peshawar. The ML1 project is a key element of 
CPEC and seeks to upgrade the entire track from Peshawar to Karachi to allow speeds up to 120km per hour.
A train approaches a populated area in Peshawar. The ML1 project is a key element of CPEC and seeks to upgrade the entire track from Peshawar to Karachi to allow speeds up to 120km per hour.

• ML-1 reverts to EPC mode as China refuses BOT terms
• Work on Balochistan road project to begin soon
• List of projects in agri, health, education & other areas nears finalisation
• Agreement for Rashakai Special Economic Zone by 25th
• Gwadar International Airport groundbreaking by month end

ISLAMABAD: The government has decided to revert to the original plan of undertaking $8.2 billion Karachi to Peshawar Main Railway Line (ML-1) on engineering, procurement and construction (EPC) mode under previously agreed loan as part of the China-Pakistan Economic Corridor (CPEC).

Speaking to media persons after a meeting of the Cabinet Committee on CPEC, Minister for Planning and Development Makhdum Khusro Bakhtyar said the committee decided to undertake the ML-I project on the previously agreed terms of agreement, instead of Build, Own and Transfer (BOT) basis it considered earlier.

Mr Bakhtyar had announced in October last year that the PTI government would adopt a new model on the basis of financial viability of the ML-1 on BOT model so that its loan repayment did not become a responsibility of the government like the previous government which procured loans and built projects on EPC contracts.

Responding to a question, the minister said it had now decided that the project will be completed on EPC basis under the terms that had been agreed earlier. Regarding the mode and terms of Chinese loan, the minister said the final decision in this regard would be made in the light of the implementation committee recommendations.

The minister said an implementation committee on ML-I project headed by the railways minister was constituted to identify financial savings, phasing out the project, scope etc, within two weeks in order to fast-track the project.

Presided over by the planning minister the cabinet meeting was attended by members of the committee and secretaries of the federal ministries.

Originally, the previous government had agreed to China’s offer for a concessionary loan $8.2bn for ML-I project. China did not agree to change the ML-1 implementation model from EPC to BOT.

The minister further informed that the Cabinet Committee on CPEC has decided to launch an important road project of Western Route in Balochistan soon. He said previously no work was undertaken and people of those areas had developed feeling of deprivation.

Mr Bakhtyar said the committee also decided Sukkur-Hyderabad section on Eastern Route through built-operate and transfer (BOT) mode and National Highway Authority will complete its design as well as feasibility study and the project contract would be awarded within the current year with saving of around $2-2.5bn.

The minister said a team of Chinese experts that visited Pakistan a few days ago had discussions at different levels of the federal and provincial governments. List of the projects in agriculture, education, health, poverty alleviation, water supply and vocational training was being finalised and would be shared with China soon. A memorandum of understanding on socio-economic development would be signed to ensure early implementation of the projects with the cost of $400 to $500m in first phase, he said.

The minister also highlighted the significance of agricultural cooperation with China and said the newly established joint working group will meet in the first week of April in order to expedite cooperation for modernising the agriculture sector and utilise potentials for export maximisation.

It envisaged cooperation in meat, food supply chain, processing and co-branding, livestock and fisheries, enhancement of seeds quality, irrigations system and technology transfer, he added.

Bakhtyar said no headway was made in industrial cooperation sector over the last five years but the government prioritised this field by ensuring speedy implementation wherein concession agreement of Special Economic Zones at Rashakai, Khyber Pakhtunkhwa would be signed by March 25 while ground-breaking would be held next month.

He said the ground-breaking of New Gwadar International Airport would be made by end of this month for which arrangements were being finalised. The Cabinet Committee also accorded approval to CPEC Business Forum in order to create an interface with the business community.

The minister said that a link between government institutions and business community was missing since the inception of CPEC. “The newly established forum, comprising of leading businessmen from different sectors, would work as a bridge between the government and business sectors,” he added.

He clarified that none of the funds allocated for CPEC projects were diverted to any other purpose; rather allocation for other initiatives in Public Sector Development Programme (PSDP) were re-appropriated for sustainable development goals.

The minister, however, didn’t reply to the question of releasing SDGs funds only to the ruling coalition MNAs.

Published in Dawn, March 14th, 2019

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