Transparency needed in the nature of finance for CPEC projects


CPEC Monthly Monitor – April 2018

(Click here to read complete monitor – PDF)

Amid several CPEC projects in execution on ground, at least two continue to be in standstill. Both Main Line-1 (ML-1) and Karachi Circular Railways (KCR) are critical, not only for economic uplift but also internal connectivity. Government should focus on overcoming delays in these projects, besides prioritizing others in less-developed areas.

These were some of the key developments occurring in April 2018. The findings have been shared in CPEC monthly monitor, released by CPEC Watch, an initiative of Pak Institute for Peace Studies (PIPS), an Islamabad-based think tank.

Every month, CPEC Watch releases a monthly monitor summarizing key development occurring around China-Pakistan Economic Corridor. Below are the salient ones for April 2018:

  • Government officials have been enthusiastic about the CPEC potential to accelerate regional and global trade and has been vowing that regional disparities will be overcome through CPEC.
  • However, concrete steps are yet to be taken. Even the incoming Chief Minister Balochistan wondered if there is anything for the province. The recently-passed national budget did not allay their concerns.
  • In GB, traders have abandoned trade with China through Khunjerab pass due to the introduction of online goods clearance system at Sust dry port, an area with limited internet access.
  • The government has allocated around Rs198 billion for CPEC in budget of the fiscal year 2018-19. But the budget allocated for few projects under CPEC was not in compliance with the estimated cost of those projects.
  • Under the “development portfolio”, sufficient funds will be provided to CPEC projects that were awarded on Engineering Procurements and Construction Contract (EPC) due to lack of funding.
  • Chinese investors have refused to complete Ratodero-Gwadar Motorway, because of delay in issuance of NOC (No Objection Certificate) by the government. Another road, Khuzdar to Basima, will be based on Pakistani funds than the CPEC.
  • The nature of finance for projects like Mainline-1 (ML-1) and Karachi Circular Railway (KCR) are unclear. Above all, government postponed the 2nd phase of Free Trade Agreement (FTA) with China mainly due to the local business community’s concerns.
  • Various international organizations have cautioned Pakistan about the debt burden under CPEC.
  • To endorse the positive image of CPEC, All Pakistan Newspapers Society (APNS) and Guangming Daily (a Chinese daily newspaper) joined hands to promote CPEC.
  • Punjab government has launched intelligence survey system to control the unauthorized movement of Chinese nationals. Meanwhile, Sindh Counter Terrorism Department (CTD) has arrested two suspects along with their affiliate who confessed their involvement to sabotage CPEC and Chinese workers in 2016 and 2017.
  • In the wake of a brawl between Chinese engineers and Special Protection Unit at Khanewal, government declared five Chinese “persona non grata.”
  • To monitor the execution of CPEC, China will launch two remote sensing satellites for Pakistan in June 2018.
  • On the geostrategic front, China remained indifferent towards continued Indian opposition to the Belt and Road Initiative (BRI) including CPEC.
  • A global shipping firm is keen to explore potential business opportunities of CPEC in Pakistan and a huge shell of London is interested to establish 100 new fuel stations along the CPEC route.

Read complete “CPEC Monitor – April 2018” (PDF)