BEIJING, Nov 14: A contract was signed here under which China will supply 69 locomotives and 175 passenger coaches worth $200 million to Pakistan to modernize its railway system.

The decision to this effect was taken during the meeting between President Pervez Musharraf and Chinese premier Zhu Rongji in Islamabad in May.

Pakistan Railways Board Chairman Saeeduz Zafar signed the contract for Pakistan and Vice Minister Foreign Trade and Economic Affairs Vice-Minister Hu Cheng represented the China at the ceremony at the Great Hall of the People.

Under the agreement, Exim Bank of China will meet 87.5 per cent of the financial requirements on supplier credit basis, while the rest of the amount will be arranged by Pakistan Railways. The repayment period for the credit is 15 years. The grace period will be three years and the interest rate will be about five per cent.

“The agreement also envisages transfer of technology and training of Pakistani manpower for producing the same engines and coaches in the country,” Mr Zafar told APP after signing the contract.

The supply of the engines and coaches will start in 2002.

The first 15 engines and 40 coaches will be manufactured in China, while the rest will be manufactured in Pakistan, for which railway workshops will be updated.—APP