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India refuses to endorse CPEC at SCO summit

India was the only country on Sunday not to endorse a high-profile Chinese project at the end of the 18th Shanghai Cooperation Organisation SCO summit in Qingdao even as Prime Minister Narendra Modi stressed that New Delhi’s priority was connectivity with the neighborhood and between the SCO countries.

All remaining seven members of the SCO summit bloc supported the China-Pakistan Economic Corridor (CPEC) project which is part of President Xi Jinping’s Belt and Road Initiative (BRI) – a multi-billion inter-continental connectivity mission. The 17-page joint Qingdao declaration said all other seven member countries had endorsed the project and agreed to work towards implementing it. India was not expected to endorse the BRI in the Qingdao declaration which was released soon after Prime Minister Narendra Modi speech at the plenary session.

The China-Pakistan Economic Corridor (CPEC) is one of the flagship projects of the BRI. India has stayed away from the BRI – the only SCO country to be opposed to it – saying the CPEC violates its territorial integrity.

Earlier on Sunday, Prime Minister Modi said India supports connectivity projects that are inclusive, transparent and respect territorial sovereignty.

Speaking at the plenary session of the summit, Modi said India’s priority was connectivity with the neighborhood and between the SCO summit countries in the region. “We have again reached a stage where physical and digital connectivity is changing the definition of geography. Therefore, connectivity with our neighborhood and in the SCO region is our priority,” he said and emphasized the need for inclusiveness and transparency in connectivity projects to be successful.

Published in Daily Times, June 11th 2018.

SOURCE: https://dailytimes.com.pk/252018/india-refuses-to-endorse-cpec-at-sco-summit/

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Colorful cultural exchanges between China and Pakistan

China and Pakistan are not only friendly neighbours but also two major ancient civilizations that have maintained close ties in cultural exchanges and mutual learning.

Since the establishment of diplomatic relations in 1951, the two countries have made great efforts to promote cultural exchanges and cooperation. The Cultural Cooperation Agreement between China and Pakistan was signed in March 1965. During her official visit to China in February 2018, Marriyum Aurangzeb, federal minister for Information, Broadcasting, National History and Literary Heritage, signed the Executive Programme of the Cultural Agreement for 2018-2022 with Luo Shugang, minister of Culture and Tourism of China, which outlines the overall framework for China-Pak cultural exchanges and cooperation in the next five years.

In 2018, the CPEC Cultural Caravan was implemented with the support of the Ministry of Information of Pakistan. Artists from China and Pakistan carried out a series of exchange activities along the ancient Silk Road and CPEC construction sites. This further strengthened China-Pak friendship and promoted the mutual understanding of our two peoples. Apart from that, artists from the two countries have visited each other frequently so as to learn from each other and enhance the oriental civilization jointly.

The Pakistani government attaches importance to the development of broadcasting and film industry. The programme has made it clear that the two sides will strengthen the mutual cooperation in the technology fields of radio broadcasting, films and television among the state radio, film and television organizations of both the countries. China and Pakistan are maintaining close communication and coordination and actively expanding exchanges and cooperation in this area. The film industry is booming in both China and Pakistan. China will adopt measures to further cooperate with Pakistan in this field, including introducing Pakistani films to Chinese film festivals, importing Pakistani films into Chinese cinema lines, and promoting the film companies of the two countries to jointly produce film and television programs.

The writer is Ambassador of the People’s Republic of China in Pakistan

SOURCE: https://dailytimes.com.pk/247261/colourful-cultural-exchanges-between-china-and-pakistan/ 

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Gwadar free zone’s industrial units to start working by year end

KARACHI: At least 10 industrial units will start working at Gwadar port’s free zone by this yearend as the first phase of the zone has been completed, a senior Chinese official said on Tuesday.

Zhang Baozhong, chairman of China Overseas Ports Holding Company Pakistan (COPHC) said six of the industrial units are from China, while four are local and they are setting up projects related to edible and palm oil processing and automotive and services industries.

“A sum of $300 million has already been invested in the mega-project, while another approximately $200 million would be spent on phase-II for which the feasibility report is already complete,” Baozhong said, speaking at the Federation of Pakistan Chambers of Commerce and Industry’s (FPCCI) event.

In January, former Prime Minister Shahid Khaqan Abbasi inaugurated the first phase of Gwadar Port’s free zone that would facilitate regional and global trade under the China-Pakistan Economic Corridor projects.

COPHC, the operator of Gwadar port, said more than 30 firms related to banking, fish processing and hospitality committed around $500 million of direct investments in the zone. The port was leased to China’s state-run company for 40 years.

Baozhong said Gwadar port is operational and the customs authorities have deployed manual one-customs clearing system to process import and export consignments. The web-based one customs system could not be installed at Gwadar port due to unavailability of interconnection infrastructure.

COPHC’s chairman said the port’s berth lengths would be increased to 1,500 meters from existing 600 meters while the approaching channels would be deepened to 17-23 meters through dredging, which would enable arrival of any type and size of vessel in the world. “Business community, government, local communities and chambers of commerce are extending support in the development of Gwadar, which is a popular investment destination for investors in China as well as in Pakistan,” he added.

Baozhong said Gwadar is the most efficient port in the country offering low handling charges, no demurrage, and infrastructure connecting to the rest of the country. “In five years, it will be the new economic hub in the region.”

Senior Vice Chairman FPCCI Syed Mazhar Ali said the apex trade body planned to set up a sub-office in Gwadar to serve as the information sharing platform for the business communities of China and Pakistan.

Balochistan government granted land for the development of FPCCI sub-office, while COPHC offered the body to set up a temporary office in their building in Gwadar.

SOURCE: https://www.thenews.com.pk/print/326039-gwadar-free-zone-s-industrial-units-to-start-working-by-yearend

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Pakistan, Russia set to sign $10b offshore pipeline deal next week

ISLAMABAD: In a major breakthrough, Pakistan and Russia are poised to sign a $10-billion offshore pipeline deal, a project planned by the latter to capture the energy market of Pakistan.

Sources told The Express Tribune that the cabinet had approved the signing of the gas pipeline laying deal and Pakistan ambassador to Russia had been authorized to ink a memorandum of understanding with Moscow.

The envoy is likely to ink the understanding in Moscow on Monday. Final cost of the project will be assessed following a feasibility study to be conducted by Russian energy giant Gazprom.

Russia has nominated Public Joint Stock Company Gazprom for implementation of the project. Pakistan’s cabinet has also permitted the company to conduct the feasibility study at its own cost and risk.

One-week deadline: Sindh warns cutting off gas supply to country

Inter State Gas Systems (ISGS) – a state-owned company of Pakistan established to handle gas import projects and is already working on gas pipeline schemes like Tapi, has been nominated by Pakistan to execute the offshore pipeline project along with Gazprom.

ISGS is also working on the $10-billion Turkmenistan, Afghanistan, Pakistan and India (Tapi) gas pipeline to connect South and Central Asia and construction work on the scheme in Pakistan will start in March next year.

These projects are called a game changer for Pakistan as they will not only lead to regional connectivity, but will also meet growing energy needs of the country.

Amid a long-running tussle with Europe and the United States over the annexation of Ukrainian region of Crimea, Russia is looking for alternative markets and wants to capitalise on the growing energy demand in South Asia.

Russia, which controls and manages huge gas reserves in energy-rich Iran, plans to export gas by laying an offshore pipeline through Gwadar Port to Pakistan and India, which are seen as alternative markets because Moscow fears it may lose energy consumers in Europe over the Crimea stand-off.

Russia has been a big gas exporter to European Union (EU) countries and Turkey since long and despite US anger the European bloc has continued to make imports to meet its energy needs.

Moscow receives gas from Turkmenistan and then exports it to EU states. Later, it has got gas deposits in Iran as well and is looking to gain a foothold in markets of Pakistan and India.

OGDC finds new deposits of oil, gas in Sindh

Pakistan has been experiencing gas shortages, particularly in winter, for the past many years as domestic production has stood static with new additions being offset by depleting old deposits.

In a bid to tackle the crisis, the previous government of Pakistan Muslim League-Nawaz (PML-N) kicked off liquefied natural gas (LNG) imports from Qatar under a 15-year agreement two and a half years ago and is bringing supplies through other sources as well.

According to a government official, after signing the MoU for the offshore pipeline, work on the feasibility study will begin in an attempt to assess viability of the project. Russia is even ready to finance the study. Russian gas exports touched an all-time high in 2017. According to Gazprom, gas flows to Europe and Turkey, excluding ex-Soviet states, hit a new daily record at 621.8 million cubic metres.

Annual exports touched 179.3 billion cubic metres (bcm) in 2016, a significant jump from the previous high of 161.5 bcm in 2013 and well above the 2015 total of 158.6 bcm.

Published in The Express Tribune, June 3rd, 2018.

SOURCE: https://tribune.com.pk/story/1726303/1-pakistan-russia-set-sign-10b-offshore-pipeline-deal-next-week/?amp=1&__twitter_impression=true

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Businessmen ask parties to elucidate policy on CPEC

LAHORE – The Lahore Businessmen Front, the opposition group of traders and industrialists at Lahore Chamber of Commerce and Industry, has urged the political parties to elucidate their policy regarding China Pakistan Economic Corridor in (CPEC) their economic agenda to the business community before the forthcoming general elections.

FPCCI standing committee chairman and LBF senior leader Sardar Usman Ghani criticised the government for not taking into account the concerns of local businesses regarding the China- Pakistan Economic Corridor.

He said the corridor has a deep rooted implication for the region stretching from Pakistan, China, Iran, Central Asia to USA and India.

He said that the inflow of Chinese investment and business enterprises will adversely impact the interests of Pakistani business communities, urging the government to announce the same incentives to the local investors declared for foreign investors of China Pakistan Economic Corridor in  projects.

He said that successive past governments and present rulers had totally neglected the business and industrial sectors. He said that political parties besides convincing general voters should also give a clear road map to improve the falling exports and support the deteriorating economy.

He stressed that all political parties should develop a consensus on the economic roadmap to make Pakistan a strong economy.

He said the charter of the economy was absolutely necessary for achieving better economic growth and all political parties should rise above their political interests and develop a consensus on the economic roadmap and national economic agenda to put Pakistan on the path of sustainable economic growth.

SOURCE:https://nation.com.pk/03-Jun-2018/businessmen-ask-parties-to-elucidate-policy-on-cpec

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Karachi Expo Centre to be re-modelled for CPEC

Karachi: Federal government initiated remodeling and expansion of the Karachi Expo Centre (KEC) at the cost of Rs 8 billion within next four years to accommodate growing number of exhibitors and visitors.

The purpose of the expansion was to make the Expo Centre compatible with China Pakistan Economic Corridor (CPEC).

Groundbreaking ceremony of the project was performed by Secretary Commerce, Muhammad Younus Dagha in Karachi Expo Centre.

KEC is being expanded and re-modelled to incorporate new facilities. A total of three more exhibition halls would be added to the Centre. Presently, the centre has six halls.

Under the remodelling project, a convention centre for holding trade related conferences, a multi storey information technology (IT) tower for offices and other facilities including a parking lot would be constructed.

The master plan of the project has been designed by the National Engineering Services Pakistan (NESPAK).

“We studied studied all major expo centers existing around the world and came up with the most modern concept of the designing. The project will have its own parking plaza which will be able to accommodate around 5000 vehicles”, said NESPAK Managing Director Arif Chengezi while expanding on the remodeling project.

Federal Secretary said that the purpose of the expansion project was not only to modernize the present centre but also to create capacity for meeting the ever increasing trade related needs of the country.

He said that the remodelling project was in perfect conformity with the government’s trade objective of earning more foreign exchange for financing the developmental needs of the country.

The Commerce Secretary applauded the role of trade development authority of Pakistan in pursuing the project and completing its legal formalities diligently.

He said that the Ministry of Commerce through video conferences with missions abroad had achieved quite a lot. In these conferences, added the secretary, the hurdles were identified and removed through collective expertise to enhance trade.

Commerce Secretary also appreciated the role of business community in increasing exports of the country this year. In the year 2017-18, the exports increased from July to April by 14 percent.

The Secretary added that there was a broad based expansion, in terms of both product sectors and destinations, in the exports this year.

He added that over all from July to April this year, our textile and clothing export had shown a growth of 8 percent, agro food had grown by 30 percent and other sectors like mineral and metal, engineering goods and surgical instruments had also respectively grown by 12 percent, 13 percent, and 14 percent. Exports to the USA had also increased by 17% . There was also an 8% increase in exports to UK and China both.

The expansion of the Karachi Expo Centre was not an isolated effort of the government. Only last year, Ministry of Commerce had launched an initiative titled “Emerging Pakistan” with the aim of promoting various strengths of the country and dispelling negative stereotypes about Pakistan, abroad.

The secretary informed the gathering that the Economic Coordination Committee (ECC) of the cabinet had approved the three year expansion for the prime minister’s (PM) Export Enhancement package. He hoped that the same zeal would be shown to complete the project within the scheduled timeframe.

“The construction of IT tower is a special feature in the expansion and up gradation of the KEC, which will soon meet the needs of the service sector”, Secretary Commerce stated.

Secretary of Trade Development Authority of Pakistan (TDAP) Inam Ullah Khan while giving a brief overview of the Karachi Expo Centre said that many national exhibitions were held there. He explained that in these exhibitions, select buyers, from around the world, were shown the entire range of products made in the country.

Inam Ullah Khan said that KEC was being expanded and modernized in order to create a capacity for holding larger exhibitions for the country.

He also was of the view that the intended expansion of the KEC was in keeping with overall up-gradation of the infrastructure of the country under the CPEC.

He added that the expanded KEC would provide an export outlet to the series of special economic zones (SEZ) being established under the CPEC program in the country.

 

SOURCE: https://dailytimes.com.pk/247785/karachi-expo-centre-to-be-re-modelled-for-cpec/

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China signs deals worth USD 390 bn with ‘Belt and Road’ countries

China has inked trade deals worth USD 390 billion with the countries participating in its ambitious Belt and Road Initiative in the first four months of this year, the Chinese Ministry of Commerce has said.

China has inked trade deals worth USD 390 billion with the countries participating in its ambitious Belt and Road Initiative in the first four months of this year, the Chinese Ministry of Commerce has said.

The Belt and Road Initiative (BRI), a pet initiative of Chinese President Xi Jinping was proposed in 2013, and five years on, over 100 countries and international organisations have supported and got involved in this initiative.

The BRI aims to build trade and infrastructure networks connecting economies around the globe along the ancient Silk Route.

 “China and countries participating in the Belt and Road Initiative inked trade deals worth USD 389.1 billion in the first four months. It represented a growth of 19.2 per cent year on year,” Commerce ministry spokesperson, Gao Feng was quoted as saying by state-run Xinhua in a Global Times report.
 China’s non-financial investment in those countries increased 17.3 per cent from the same period a year ago to USD 4.67 billion, the spokesperson said, adding that business volume of outbound contract projects came in at USD 24.2 billion, up 27.7 per cent year on year.

China held the first round of free trade agreement (FTA) negotiations with Mauritius and the second round of FTA talks with Pakistan. It also signed an economic and trade cooperation pact with the Eurasian Economic Union. The FTA reached between China and Georgia has become effective.

“Construction of major projects have progressed well with a range of railways and infrastructures going smoothly,” Gao said.

By the end of April, China had built 75 economic and trade cooperation zones along the Belt and Road countries with accumulated investment of USD 25.5 billion, the report said.

More than 3,800 companies have joined the cooperation zones, paying nearly $1.7 billion in tax revenue and generating nearly 220,000 jobs, it said.

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How China’s Belt And Road Just Got A Big Boost From Europe’s TIR Convention

In 2016, China became a member of the UN’s TIR Convention, which enables transporters to ship goods through 73 partner countries by truck with just a single customs inspection, but it wasn’t until this month that their participation officially went into effect.

On May 18th, a caravan of trucks with large blue and white TIR plates departed in a ceremonial launch from Dalian in the northeast of China bound for Novosibirsk in Russia, 5,600 kilometers away. Having already undergone a customs inspection in the Dalian-bonded zone, these vehicles will not need to go through another for the duration of the journey, speeding up their transit time considerably. Why does this matter so much to China and its future economic prospects?

What is the TIR Convention?

Founded in Geneva in 1975, the Transports Internationaux Routiers (TIR) or International Road Transports convention is a multilateral treaty facilitated by the United Nations Economic Commission for Europe (UNECE) to improve road transportation throughout the continent by removing en route customs inspections and on-site duty payments for approved carriers departing from select locations. This essentially allowed trucks to traverse dozens of European countries without needing to be checked at each border, which greatly improved the speed and efficiency of trade, decreasing the lead time of a journey by up to 80%.

With the creation of the European Single Market in 1993, TIR was rendered moot for intra-European transit. However, as globalization kicked into high gear throughout the 1990s and 2000s, the TIR was expanded to include countries outside of the EU, eventually attracting 73 member states across Europe, Central Asia, the Middle East, North Africa, and East Asia, making it the go-to customs arrangement for international ground transport which is currently speeding up 1.5 million border crossings per year.

The TIR has also been adapted from its original vision of being solely for road transport and has become truly multimodal, allowing for rail, river and sea legs to be included if at least one part of a journey is done by truck.

Now that China is part of the TIR picture, goods can be shipped from some of the biggest manufacturing centers in the world more rapidly and cheaper. Going the other way, the TIR allows manufacturers from other member states to get their products to China’s booming middle-class market by land more efficiently than they ever could before–in theory, anyway.

“As well as opening up new, more efficient and cost-effective trading routes for China’s manufacturers to the rest of the world, the TIR Convention will open up reciprocal trading routes for external manufacturers into the country,” said Umberto de Pretto, the Secretary General of the IRU, a major international road transport organization with over 100 member countries.

Why this matters

Hard infrastructure—roads and rail lines and airports—mean little without the soft infrastructure which makes them viable. Countries don’t only need to “build it” but they need to come up with policies and agreements with other countries to maximize the potential of these new infrastructural offerings. Some of these agreements come in the form of trade organizations, customs zones and multinational economic areas, while others are along the lines of initiatives like China’s Belt and Road Initiative (BRI) or conventions like the TIR. As we previously covered on Forbes:

The first stage of China’s Belt and Road initiative, which aims to create a network of interconnected trade stations across Eurasia, is customs. Getting rid of the red tape to allow goods to traverse this massive land mass as efficiently as possible is key to making these routes sensible and profitable. The aim is to make land borders nearly as easy for goods to flow across as the open ocean, and this is being done step-by-step.

Later this month, the Shanghai Cooperation Organization (SCO) is going to have its summit in Qingdao, and it should not go without notice that every member of the group has already ratified TIR.

How the TIR Convention helps China’s Belt and Road

IRU press photo

Truck with TIR plates departing from Dalian.

China’s Belt and Road Initiative (BRI) is a large-scale endeavor to create and enhance economic and political corridors across Eurasia and Africa, and programs such as the TIR Convention ultimately provide a major boost towards these ends. According to the IRU, the TIR convention has the potential to increase the volume of total trade between China and the other countries of the Belt and Road by $13.6 billion.

It currently takes between 8-12 days to transport products door-to-door by truck between an inland city in China and Europe. This is roughly four times faster than shipping by sea and around 50% faster than rail. Now with China being a full-fledged member of the TIR, shipping overland between China and Europe becomes an increasingly attractive option for manufacturers looking to get their products to the other side of Eurasia.

Production moving deeper inland

The impact of the TIR convention and China’s participation in it is magnified many-fold by the geographic redistribution of manufacturing to inland areas throughout Eurasia.

Beginning in the early 2000s, China’s “Go West” policy saw the all-out rebuilding of the country’s transportation infrastructure and the large-scale migration of companies inland from the prosperous cities of the east coast to then-backwaters like Chongqing, Chengdu, Zhengzhou, Wuhan and Xi’an.

Chongqing City, China. (Photo by: Prisma Bildagentur/UIG via Getty Images)

This movement has gained momentum in recent years with the Belt and Road Initiative, and even cities in China’s far west, such as Horgos and Kashgar, have been primed to become major manufacturing centers.

These development gave new relevance to overland trans-Eurasian transport, as the places where goods were being manufactured in China were suddenly very far from any seaport and significantly closer to their target markets in Europe, so it no longer made any logistical sense to truck products thousands of kilometers east in order to ship them back west again.

It is no coincidence that most of the TIR gateways in China are emerging BRI transport hubs:

Dalian: a major multimodal transport hub on the Pacific.

Erenhot: a new city and trade station on the border of China and Mongolia that sits at the heart of the China-Mongolia-Russia Economic Corridor.

Horgos: a massive conurbation of development that extends across the China/Kazakhstan border.

Manzhouli: a major BRI hub on the China/Russia border.

Suifenhe Port: another China/Russia trade hub.

When you add to this picture the emerging special economic zones in other parts of Eurasia–such as those on the Kazakhstan side of Khorgos, Alyat in Azerbaijan, Malaszewicze in Poland, and dozens of others–along with mega-transportation projects like the Western Europe-Western China Expressway, which runs from the east coast of China all the way to the Baltic Sea at St. Petersbur–it is looking as if the the geospatial distribution of manufacturing and the way goods are moved across Eurasia could have the potential to be significantly altered in the near future.

SOURCE: https://www.forbes.com/sites/wadeshepard/2018/05/31/how-chinas-belt-and-road-just-got-a-big-boost-from-europes-tir-convention/#34ab6f8a2517

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BRI to promote regional connectivity and prosperity: Masood

Islamabad – Sardar Masood Khan, President Azad Jammu and Kashmir has said that Belt and Road Initiative (BRI) is truly a milestone in the history of mankind which will pave the way for promoting regional connectivity and shaping up a new civilization of coexistence.
The President – as the keynote speaker – made these remarks while addressing the 2nd International Maritime Symposium on the “Impact of the Belt and Road Initiative (BRI) on the Geo-economics of the Indian Ocean Region (IOR), Prospects for Pakistan, the Region and Beyond” organized by the Institute of Maritime Affairs here in Islamabad. The event was graced by the Prime Minister of Pakistan Shahid Khaqan Abbasi as the chief guest. The event was presided and hosted by Chief of the Naval Staff Admiral Zafar Mahmood Abbasi.
The President during his address congratulated the Institute of Maritime Affairs and the Bahria University for organizing this timely and substantive seminar which he said would help shape the mindset relating to maritime trade unleashing Pakistan’s full potential.
President Masood Khan said that the BRI is a global initiative not just restricted to Pakistan or the Indian Ocean. He added that BRI encompasses 68 countries, 62 percent of the world population and one-third of the world’s GDP spanning three continents – Asia, Africa and Europe – launching a new wave of connectivity and inclusive economic prosperity.
Highlighting the importance of Pakistan in the project, he said that due to the China-Pakistan Economic Corridor we assume a position of centrality and pre-eminence in the project as we will provide China direct land access to the warm waters of the Indian Ocean. The BRI will have huge transformative effects that will propel economic and social development activities in and around the Indian Ocean Region.
The BRI project, said the President, will inject fresh impetus to global growth creating new supply chains in the Indian Ocean by accelerating the pace of economic activity in and around the Indian Ocean. He said under this initiative, plans are underway to invest US $ 1 trillion in infrastructure, energy and industrial projects on an unprecedented scale.
President AJK said that the Indian Ocean will no longer be considered by India as its exclusive domain where previously it would give limited and conditional access to other nations. Now, he said, the Indian Ocean will be shared by all for use of marine resources, enhanced economic activity, investment, trade and maritime security.
President Masood Khan highlighting the importance of maritime trade, said that our seaports are a great asset towards making Pakistan a focal point of commercial and transit trade activity in the region. He added that Pakistan is passing through a phase of economic transformations that will revolutionize national and international trade, development and generate huge employment opportunities throughout Pakistan.
Underscoring the priorities of Pakistan in the general backdrop of these developments, the President said that, firstly, we must formulate a comprehensive long-term foreign policy on the Indian Ocean region which should be an integral part of our current foreign policy. IOR, he said, will face existing and new threats that include piracy, terrorism, proxy wars and spying. He said that global warming and heating up of the Indian Ocean must be tackled which threatens biodiversity in these waters and the evident fear that smaller island states in the Indian Ocean risk extinction.

SOURCE: https://pakobserver.net/bri-to-promote-regional-connectivity-and-prosperity-masood/

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Cost of CPEC coal power projects per MW 40pc higher

ISLAMABAD: The lowest ever price for one megawatt in the International Competitive Bidding (ICB) for Jamshoro coal power project of 1320MW headed by ADB has exposed the bitter fact how costly Port Qasim and Sahiwal coal power projects under CPEC coal projects, reveals the latest official document available with The News.

This has questioned the ability of authorities concerned who negotiated the PPAs (Power Purchase Agreements) at higher prices with Chinese contractors for said coal power plants installed under CPEC umbrella.

The EPC per MW cost through recently held ICB for first phase of 660MW of Jamshoro power plant has been achieved at $0.578 million whereas the EPC cost of Port Qasim and Sahiwal coal power project per MW under CPEC coal projects is $1.21 million per MW showing that the cost of one MW of the said coal power plants under CPEC is 40 percent higher than that of Jamshoro coal power plant. The EPC cost is reflected in the final tariff.

This means that the said two coal power plants of 1320MW each under CPEC coal projects are getting unjustified Rs60 billion ($550 million) per annum due to over pricing of these projects, a senior official at Power Division told The News.

Nepra had extended the upfront tariff of 8.3 cents per unit for both Port Qasim and Sahiwal based on the inputs provided by PPIB (private power infrastructure board) and central power purchase agency (CPPA).“So, Nepra cannot be blamed for such a higher tariff.”

However, the expected tariff of Jamshoro coal power plant keeping its EPC cost of $0.578 million per MW will be around at 6.3 cents per unit. The official said the total production of Port Qasim and Sahiwal coal power plants stands at 18.7 billion unit in a year that will cost the consumers of Pakistan Rs231 billion.

Managing Director of PPIB Shah Jahan Mir, when contacted, said that Nepra has provided the upfront tariff of 8.3 cents per unit to both Port Qasim and Sahiwal coal power projects which was higher even than the tariff PPIB had proposed.

He said the PPAs cannot be reviewed unless and until the regulator feels that tariff needs to be reviewed based on new tangible facts. Former member Energy Planning Commission Shahid Sattar said that authorities in Pakistan needs to review the power purchase agreements (PPA) with the top management of both Port Qasim and Sahiwal coal power plants and bring down the tariffs of the said two projects as per international standards. He said that Pakistan’s authorities and the regulator should keep in view that country needs to bring down the cost of down business for competing the products of other economies in the international market.

The official said that the government of China holds competition in the country and then nominates the lowest bidding company for projects in Pakistan. Now, the National Electric Power Regulatory Authority (Nepra) has also made competition a necessary condition. Competition either under Nepra conditions or under Chinese government supervision, however, has not yielded required results of reasonable and fair costs.

 SOURCE: https://goo.gl/kb7frt