Islamabad:
Pakistan announced on Friday that China will provide 85% financing for the realignment of the Karakoram road and has also supported Islamabad plan to seek financing of multilateral lenders for a strategically important railway link after Beijing refused to extend concessional loans.
Beijing has long recommended that Pakistan considers the solution of the existing debt and the search for ways to finance new projects without accumulation of more public debt.
But despite his concerns about the situation of Pakistan’s debt, China agreed to finance 85% of the Karakoram road project as a special case to maintain the link between China and Pakistan open in extreme climatic conditions.
Both parties also agreed that approximately $ 7 billion of line II project of the Chinese-Pakistan economic corridor should now be funded by multilateral banks after Beijing did not extend a concessional loan of $ 6 billion.
The discussions about the past and the future of CPEC took place during the 14th Meeting of the Joint Cooperation Committee (JCC) that was held in Beijing. Zhou Haibing, vice president of the National Development and Reform Commission (NDRC) and Ahsan IQbal, Minister of Planning, co -presided.
We have agreed to start offering on the Karakoram road in phases and the Chinese team confirmed the 85% financing for the project, Iqbal said after the meeting while talking with the Express PAkGazette.
The road needs realignment after parts immerse themselves in water due to the construction of main dams. The government approved the 241-kilometer project section of Thakot-Raikot at a cost of RS576 billion or $ 2 billion.
The sources said that in the first phase the implementation of the Realineration Project of 82 kilometers of the submerged section due to the Diamer-Basha dam will be addressed and the work in the formulation of an innovative financing plan will also continue.
Both parties did not end the minutes of the JCC meeting, which still remain open for discussions.
According to the proposed records that have not yet been examined by Pakistan, the Chinese authorities suggested that Pakistan should thoroughly consider the elimination of existing debts. In addition, he recommended that loan requirements for new projects are also reviewed and the government should find ways for financing that do not add more public debt.
Iqbal said that the question of the Pakistani debt was not discussed on Friday at the JCC meeting.
Public debt increased both in terms of economy size in the last fiscal year, with RS80.5 billion or just over 70% of GDP.
China is in favor of formulating a practical and feasible financing plan without further increasing Pakistan’s sovereign debt, the sources added.
Beijing also expected the Pakistani authorities to strengthen communication to coordinate the progress of Realineration N35 and the Diamer-Basha dam. He had suggested that Pakistan should not store water in the dam, until the realignment project is completed and opens to traffic to avoid the interruption of the road.
ML-I
Iqbal said that China and Pakistan agreed to proceed with the ML-1 project through multilateral financing by the Asian Development Bank and the Asian Infrastructure Investment Bank. The ADB has already sent your team for field surveys.
Pakistan and China also agreed to advance in the project of updating and reconstruction of the main line 1 (ML1) of Pakistan in phases in the premise of guaranteeing security.
The two parties had discussed the terms of financing of the ML1 project on multiple occasions, agreed to accelerate research on the financing plan for the test section (Karachi – Hyderabad) and subsequent consultations, and initiated the tender and construction process after reaching an agreement on the financing plan.
“I want to emphasize the urgency that we have agreed for the ML-I project and the realignment, necessary by the main hydroelectric dams, will preserve uninterrupted connectivity between our nations and the early implementation of both projects will generate high-range economic and strategic dividends for the entire region,” Iqbal said in his closing comments.
Iqbal said it has been agreed that China would help Pakistan prepare a plan of resilience and climatic preparation and that both countries would coordinate their efforts to revitalize the port of Gwadar.
The Chinese also agreed to launch a new round of discussion on the review of the China Free Agreement in Pakistan to provide tariffs to Pakistani products along with the countries of the ASEAN to allow better access to the market for the promotion of Pakistani exports to China, said the Minister of Planning.
Iqbal stressed that exports should serve as the main driver of economic growth in the following phase. Noting that China’s annual imports exceed $ 2 billion, while Pakistan exports to China are only $ 3 billion, urged Pakistani products to receive the same access to the market as the countries of the ASEAN.
He requested the development of two special economic areas of government to government (Sezs) in Karachi and Islamabad as export -oriented model centers, where China’s industrial relocation could be prioritized in textiles, engineering, electronics, pharmaceutical products and electric vehicles.
The planning minister also proposed the establishment of an industrial relocation fund of Pakistan-China to eliminate investors and accelerate foreign direct investment.
The minister continued to say that in the light of geopolitics and to counteract the negative propaganda of the Anti-Cpec forces, the minutes of the 14th JCC meeting of the meeting will be agreed so that the JCC remains conclusive, decisive and oriented to the results.
LTP
Both parties also discussed the second phase of CPEC to align the growth of the five CPEC runners (5cs), innovation, green, openness and sustenance with the framework of Uraan (5ES) of Pakistan, the understanding of exports, e-pakistan and innovation, energy and infrastructure, the environment and climate change, and equity, ethics and empowerment.
IQBAL said that to provide a clear strategic direction, he proposed the publication of an updated CPEC updated plan within 45 days, aligning the Uraan 5ES frame of Pakistan with the five CPEC 2.0 runners of President XI.
The two parties agreed to continually deepen the alignment between the five CPEC runners with the Uraan Pakistan framework based on 5ES.
The two parties agreed to jointly maintain the stability of the electricity price policy for energy projects under CPEC, resolve disputes through friendly consultations, and none of the parties will seek to change the status quo through unilateral actions.
The Chinese side expected the Pakistani side to establish a circular account for the payment of the electricity bill as soon as possible according to the Agreement on the Cooperation of the Energy Project under CPEC signed by the governments of two sides in 2014.
Recognizing the special importance of Gilgit-Baltistan as the physical entrance door of CPEC, IQBAL proposed a 300 megawatt solar project to end the daily blackouts from 18 to 20 hours in the region and transform its economy.
He also emphasized that the future of CPEC should turn from government cooperation to government to company to business associations.
