CPEC projects: ECC agrees on speeding up work on two more SEZs

Source: Express Tribune

Date: 5th Feb, 2019


The federal government on Monday decided to fast-track work on two more prioritised Special Economic Zones (SEZs) being set up under the China-Pakistan Economic Corridor (CPEC) and directed  ministries to resolve issues hampering progress on earlier three prioritised zones.

The Economic Coordination Committee (ECC) of the cabinet directed the Ministry of Energy to prepare a plan for the provision of 740 megawatts of electricity and 170 million cubic feet of gas per day (mmcfd) to the zones to be set up under CPEC. The work on CPEC SEZs has remained stalled due to delay in finalisation of their administrative structures, incentive packages and availability of utilities.

The ECC also decided to amend the SEZ Act to give more powers to the provinces for approval of these zones.

These decisions were taken on the basis of a presentation given by Board of Investment Chairman Haroon Sharif, who highlighted all the pending issues that delayed operationalisation of the second phase of CPEC. The ECC agreed with the Board of Investment (BOI) proposals to fast-track the zone approval process, which would curtail the application processing time from 90 days to 45 days, said Sharif after the ECC meeting.

He said the ECC also decided to include the Islamabad SEZ and Bostan SEZ, Balochistan, in the list of priority zones.

In May 2017, Pakistan had submitted a list of nine prioritised zones to China, which would be built under the CPEC framework. Of these, three zones – Faisalabad, Rashakai in Khyber-Pakhtunkhwa and Dhabeji in Sindh – had been prioritised for the first phase of implementation.

The Rashakai zone requires 210MW of electricity and 30 mmcfd of gas. The BOI had conditionally recommended SEZ status for the Rashakai zone in 2018 subject to the provision of no-objection certificate by the provincial environmental protection authority. The concession agreement for the zone has not yet been signed. The Faisalabad CPEC industrial zone requires 330MW of electricity and 125 mmcfd of gas. The provincial government has allocated funds for its development but the master plan will not be ready before June this year.

Similarly, the Dhabeji zone needs 200MW of electricity and 15 mmcfd of gas. Work on this zone is moving at a snail’s pace, although the provincial government expects to hold international competitive bidding for selecting a developer this month. The Ministry of Energy will share a plan with the ECC for the provision of electricity and gas to the existing and planned SEZs within 30 days, according to a statement issued by the finance ministry after the meeting. The SEZs have been planned as part of CPEC to attract investment from China through the relocation of sunset industries. But Pakistan has remained unable to cash in on the opportunity due to usual bureaucratic snags.

The BOI chairman highlighted the cost of land, provision of utilities, governance structures and freight and mark-up subsidies as obstacles to the development of prioritised SEZs. The issue of approval of a tax and subsidy incentive package remains pending before the federal cabinet for approval amid reluctance on the part of provinces to provide financing.

Finance Minister Asad Umar asked the provincial governments to provide land with the objective of industrialisation instead of using it as a tool to make quick money from real estate transactions.

The ECC directed that the BOI should make certain changes to the SEZ Act to make it more investor-friendly. After these amendments, the role of the federal government will be restricted to providing utilities only. After the amendments, the provinces will also not be required to file applications with the BOI for approval of the economic zones.

However, it will not be an easy task for the government to get the law amended due to the charged political atmosphere.

The ECC also directed the authorities to first fulfil requirements of the existing seven SEZs, which were being developed outside of the CPEC framework. Punjab government representatives raised the issue of lack of availability of utilities in the province, which were hampering development of industries. The ECC accorded approval for the provision of funds to the tune of Rs833 million to Pakistan Machine Tool Factory for the payment of employees’ salaries and retirement benefits.


CPEC is about development, not property speculation

Source: Asia Times

Date: 29/1/2019

Author: Zamir Awan

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CPEC to bring prosperity, says PM Imran

Source: The Express Tribune

Date: 26/1/2019

Author: Mohammad Zafar


Prime Minister Imran Khan has said the China-Pakistan Economic Corridor (CPEC) project will bring prosperity for the people of Balochistan, vowing mega-development project in the future.

Talking to Pakistan Tehreek-e-Insaf (PTI) Balochistan chapter President Sardar Yar Muhammad Rind in Islamabad on Friday, the prime minister said the PTI-led government will rectify the injustice committed with the resource-rich but impoverished province during previous regimes.

PM Imran said: “People of Balochistan are more patriotic as people of other provinces, without justice the country can’t be developed and our government is serious to develop Balochistan”.

In the meeting, the provincial political situation, Kachi Canal Project and the party’s affairs were discussed. The prime minister also lauded the performance of PTI’s provincial leadership

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Pakistan, China to observe 2019 as year of industrial cooperation, says Ambassador Yao Jing

Source: Pakistan Today

Date: 28/12019

Author: Mian Abrar

ISLAMABAD: Chinese Ambassador Mr Yao Jing has said China and Pakistan would observe the year 2019 as a year of industrial, socioeconomic and agriculture cooperation which would take the Sino-Pakistan friendship to the next level.

He expressed these views while addressing the participants of reception to commemorate the new Chinese lunar year hosted by Chinese embassy here to honour the services of Pakistan, China Alumni.

The Chinese ambassador said that both the countries would expedite projects by promoting joint ventures and export-led growth under CPEC this year.

Referring to the decisions taken at the Joint Working Group meeting, the ambassador said all deliverables were achieved at the meeting and the scope of the cooperation was expanded to new avenues.

He said that the MoU on Industrial Cooperation signed during 8th JCC provides a framework to promote communication across key industries such as textile, petrochemical and iron and steel, thereby encouraging Chinese investors to relocate and explore opportunities of investment in Pakistan.

He said that the Ministry of Interior has been doing wonders for the security of Chinese nationals working on the China, Pakistan Economic Corridor (CPEC).

Addressing on the occasion, Zamir Ahmed Awan said that there are 28,000 Pakistani students studying in China while 20,000 engineers have already graduated from various Chinese institutions.

“We need to involve our engineers graduated from China in CPEC projects. They better understand the cultural strengths and norms of both countries. They can better serve the CPEC projects. We will request the government of Pakistan to involve Pakistani scholars with CPEC projects,” he added.

Awan said it was a pity that there are almost negligible percentage of Chinese-Pakistani scholars working on CPEC projects. “We need to enhance the number of our scholars who have graduated from Chinese institutions. This would help take Sino-Pakistan cooperation to the next level,” he concluded.

On the occasion, various Chinese companies held several lucky draws and guests were given away gifts to make New Year celebrations memorable.

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China’s Belt and Road Initiative will add US$117 billion to global trade this year, a new study shows

Source: South China Morning Post

Date: 23/1/2019

Merchandise trade between China and the countries targeted by its “Belt and Road Initiative” is predicted to grow by US$117 billion this year, according to new analysis.

For China, this will mean US$56 billion in additional exports, while it will import an extra US$61 billion worth of goods from the 80 countries named in the Chinese government’s official manifesto, research from trade credit insurer Euler Hermes shows.

The report estimates that this will add 0.3 per cent to global trade and 0.1 per cent to global growth, at a time when fears are mounting about a slowdown across the world economy, but most notably in China.

The belt and road strategy is Chinese President Xi Jinping’s flagship investment programme that was launched in 2013, and aimed at building infrastructure in countries accounting for 68 per cent of the world’s population and 36 per cent of its gross domestic product (GDP).

Not all of the countries targeted have welcomed Beijing’s overtures; some have rejected investment, notably India and latterly Malaysia.

Others have yet to agree to any China-funded projects, such as South Korea, but have expressed interest in receiving investment through the belt and road plan.

However, Euler Hermes said that these nations will see higher trade volumes as a result of the initiative, even if they have yet to receive any direct investment from China.

Mahamoud Islam, senior economist at Euler Hermes in Hong Kong, said that this is because of the effect of better connectivity and infrastructure along the belt and road network, as well as better trade relations between China and target markets.

Given that a huge part of the belt and road plan is domestic, international companies could expect to benefit from infrastructural improvements in China too, Islam said.

“Other countries benefit from demand from China. You can argue about politics and the supply chain being controlled by China. But at the end of the day, this is bringing demand to markets that benefit from that demand.

“It improves competitiveness. That’s not surprising, you’re building railroads, ports and airports, connecting countries,” Islam said, adding that for China, the belt and road strategy was a way to push out excess capacity in industries such as coal and steel, to internationalise its companies and to help liberalise the yuan by lending in Chinese currency.

In 2018, the trade gains were estimated to be higher still, at US$158 billion, with South Korea, countries in Southeast Asia, India and Russia the greatest beneficiaries.

The belt and road plan has been billed as a means of improving trade and was roundly welcomed when it was started in 2013. Initially marketed as a revamp of the old Silk Road trade route connecting Eurasia, Euler Hermes estimates that it saw US$460 billion invested between 2013 and 2018.

The investment has continued this year. From January 2 to January 15, the value of new belt and road projects was US$4.5 billion, according to RWR Advisory Group, a Washington-based research house, with the highest proportion of this going to Sub-Saharan Africa.

The largest funding package, however, was in Pakistan, which received US$2.21 billion for the Mohmand dam project, to be built by a joint venture that includes China Gezhouba Group.

Pakistan’s strategic location has made it one of the primary targets of China’s belt and road spend and has been earmarked to receive more than US$60 billion in debt and equity investment.

At the centre of this is Gwadar, a port on the Arabian Sea, which is being turned into a transshipment hub by China, allowing its remote westerly regions to access the energy markets of the Middle East.

However, Pakistan is also one of the most controversial hubs on the network. Many analysts claim that its debt exposure to China is unsustainable.

Indeed, there has been a notable backlash against the initiative in recent months, with the Malaysian Prime Minister Mahathir Mohamad warning last year of a “new version of colonialism” stemming from China’s outbound lending.

A report last year from the Center for Global Development, an American think tank, implied that countries are concerned about being stuck in a debt trap, unable to repay loans and forced to cede assets such as commodities or infrastructure instead.

“The primary concern is that an US$8 trillion initiative will leave countries with ‘debt overhangs’ that will impede sound public investment and economic growth more generally,” the report read.

These fears were fanned by reports in December that Kenya may have to hand over control of its largest port of Mombasa, paid for by China, if it was unable to repay the debt. The claims were denied by the Kenyan President, Uhuru Kenyatta.

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Russia’s Interest In Pakistani Power Projects Could Portend CPEC Investments

Source: EurasiaFuture

Date: 17/1/2019

Author: Andrew Korybko

Reports are circulating in the Pakistani press that the Russian company is interested in several power projects in the country, which could pave the way for Moscow to unofficially invest in CPEC without angering its Indian partners.

Many Pakistanis are excited by the news that Russian company Inter RAO Engineer is interested in several power projects in the country, potentially willing to commit the whopping sum of $2 billion worth of investments if their counterparts are receptive. While nothing has been officially confirmed, these reports are plausible enough given the fast-moving rapprochement between Russia and Pakistan over the past couple of years, which aims to establish a strategic partnership that the author coined with the catchphrase of “Rusi-Pakistani Yaar Yaar”.

It evidently appears as though Russia is diversifying its outreaches with Pakistan from their former Afghan-related anti-terrorist centricity to a more robust partnership that’s now taking on important energy dimensions. It shouldn’t be forgotten that Russia already committed to building the North-South gas pipeline and signed a memorandum of understanding for constructing a $10 billion offshore one between Iran, Pakistan, and possibly even India too one day. In a sense, it can be said that Russia’s “traditional diplomacy” with Pakistan evolved to “military diplomacy” and now “energy diplomacy”.

Attention should be paid to the latest report’s claims about how Inter RAO Engineering is supposedly interested in the proposed Mohmand Dam along the Swat River in the former mountainous Afghan-bordering region of what used to be called the Federally Administered Tribal Areas (FATA) prior to its merger with Khyber-Pakhtunkhwa last year. This is highly symbolic because the words “FATA” and “Swat” remind many Westerners of the country’s War on Terror during the mid-2000s, so it says a lot about the overall sub-region’s newfound stability that Russia would consider investing there.

Importantly, $2 billion worth of potential investments in Pakistan’s power industry would signal that Russia wants to get in on the country’s CPEC-related Chinese-driven construction boom but is doing so without openly attaching itself to the CPEC “brand” out of concern for its Indian partner’s political sensitivities. New Delhi is dead-set against CPEC because of its stance that the series of megaprojects transit through territory that India claims as its own per its maximalist approach to the Kashmir Conflict, and the renaissance of relations between it and Russia would be ruined if Moscow invested in CPEC.

That explains why Russia might reportedly be considering investing in CPEC without formally doing so, following the strategy that the author previously suggested in his piece last summer about “Creative Non-CPEC Marketing Strategies For Pakistan”. So long as Russia abstains from officially endorsing CPEC and attaching its investments to that “brand”, then its relations with India won’t suffer no matter how many billions of dollars it eventually pours into Pakistani projects. With that being the case, the latest reports are an encouraging sign of Russian intent and could portend more unofficial CPEC investments.

DISCLAIMER: The author writes for this publication in a private capacity which is unrepresentative of anyone or any organization except for his own personal views. Nothing written by the author should ever be conflated with the editorial views or official positions of any other media outlet or institution.


‘CPEC economic zones will help bridge trade deficit of $9b’

Source: The Express Tribune

Date: 20 -1- 2019

LAHORE: Planning and Development Minister Khusro Bakhtiar on Sunday said that Pakistan facing a trade deficit of $9 billion.

He said the deficit would reduce with the economic zones being set up after the China Pakistan Economic Corridor (CPEC) becomes operational.

The economic zones would help increase exports, which would in turn decrease the trade deficit, he said while talking to the media persons at the Press Information Department regional office

The minister maintained that 19 per cent reduction in the trade deficit was recorded last month because the volume of exports had jacked up and that of imports receded.

He said China and Pakistan would also start working jointly on the agriculture sector in next month.

China, he said, would also provide $1 billion grant to Pakistan in next three years, while around 100 Chinese investors would soon visit the country to explore investment opportunities in various sectors.

Khusro said Pakistan and China had signed a Memorandum of Understanding (MoU) on industrial cooperation on December 20, 2018.

The PTI-led government, he said, had decided to take CPEC into a new phase by widening its scope. Prime Minister Imran Khan’s visit to China was focused on strengthening of Pakistan’s economy, he added.

He told that the government was also taking effective measures to reduce the current account deficit, besides prioritising facilitation to the export-oriented industries.

The minister said initially the agriculture sector was not included in CPEC. However, the incumbent government convinced China to also extend its cooperation in the vital sector.

“China has a share of $7 billion in the global trade of agriculture and livestock, and $3 billion in fisheries, but Pakistan has none in the two sectors”, remarked Khusro.

Pakistan, with the cooperation of China, was working on elimination of poverty as latter had successfully pulled 700 million people out of poverty.

A pilot project on the Chinese pattern would be initiated, which definitely would help to reduce poverty substantially, he hoped.

To a question, he said Saudi Arabia and the United Arab Emirates had shown keen interest in the establishment of an oil city in Gwadar.



Pakistan, China agree to make 2019 a year of economic cooperation under CPEC

Source: The News

Date: 15th Jan, 2019

ISLAMABAD: Chinese Ambassador in Islamabad Yao Jing called on Minister for Planning, Development and Reform Makhdum Khusro Bakhtyar on Tuesday.

During the meeting, matters of mutual interest including progress on China Pakistan Economic Corridor projects came under discussion.

Ambassador Yao Jing appreciated that 8th Joint Cooperation Committee (JCC) meeting held successfully in a cordial atmosphere where all deliverables were achieved and the scope of the cooperation was expanded to new avenues.

Both sides agreed to expedite work by promoting joint ventures and export led growth under CPEC by declaring 2019 as “year of industrial, socioeconomic and agriculture cooperation”.

Minister for Planning, Development & Reform, Makhdum Khusro Bakhtyar said that the MoU on Industrial Cooperation, signed during 8th JCC, provides a framework to promote communication on key industries such as textile, petro-chemical and iron & steel, encourages Chinese investors to relocate and explore opportunities of investment in Pakistan.

The minister highlighted that Pakistan can become an ideal destination for investment in different sectors. He said that Ministry of Planning would facilitate Chinese investors looking for opportunities under CPEC and create a pull effect.

He highlighted that government is working on policies that will improve ease of doing business in early time frame. Minister said that the first meeting of the JWG on Socio economic development was a major milestone and the action plan discussed therein will support uplift of less developed area.

Pakistan side has already forwarded invitation letter to China for visit of the expert team.

“Both side to work out for speedy implementation of initiatives in already identified six areas including agriculture, education, medical treatment, poverty alleviation, water supply and vocational training projects” he intimated.

The minister hoped that JWG on Agriculture meeting, scheduled for 15th February this year, would provide an opportunity to broaden CPEC Cooperation.

He emphasized that Chinese investors should explore investment opportunities in agriculture sector of Pakistan for input supplies as well as food production, processing, logistics, marketing and exports in a vertically integrated way on their own or in joint ventures (B2B) with Pakistani companies.

Both sides agreed to ensure that this year Gwadar Projects such as New International Airport, Hospital and Vocational Institutes will hit ground within three months as these projects are beneficial for the local population and will therefore gain the support and trust of the local population.

 Ambassador Yao Jing appreciated the efforts of Government of Pakistan for facilitating Chinese investors and informed that a large number of Chinese investors would visit Pakistan soon that would further strengthen the bonds of economic and bilateral cooperation.

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CPEC a blessing for both Pakistan and China

Source: China Daily

Date: 15th Jan, 2019

Author: Yasir Masood

The China-Pakistan Economic Corridor has emerged as a boon both for Pakistan and China. And not surprisingly, the peoples of the two countries have great expectations from the CPEC in terms of economic growth and regional development.

True, the provincial government of Balochistan in Pakistan has voiced concerns over the CPEC, saying its share of CPEC investment is very low. But the Pakistani planning, development and reform minister’s recent allocation of $1 billion for social development in Balochistan has assuaged those concerns.

To further redress Balochistan’s grievances, the Pakistani finance minister said industrialization would be expedited in Balochistan, in order to alleviate poverty and improve the living standards of the local people.

Gwadar can help boost Balochistan economy

Balochistan, which has a population of more than 12 million, is a crucial factor for the CPEC because the Gwadar port is situated there. The province covers 347,190 square kilometers, comprising about 44 percent of the total area of Pakistan. It may be a dry and arid region, but in terms of natural resources, it is Pakistan’s richest province. Still, more than 53 percent of the people in Balochistan live below the poverty line, and the province has a poor literacy rate of about 29 percent, and an unemployment rate of almost 33 percent.

Despite being rich in natural resources, Balochistan lacks both skilled and unskilled workers, as well as the necessary capital to build an industrial base to achieve the much-wanted economic breakthrough to lift the poor out of poverty and improve their living standards.

So what measures should be taken to turn around the fortunes of Balochistan?

To begin with, the CPEC has the potential to change the situation thanks to the eagerness of the Chinese government and enterprises to invest in Balochistan, especially in Gwadar port, road connectivity projects and industrial zones. Within a few years, the CPEC’s projects would facilitate massive economic activities, which would create jobs and help proliferate businesses that in turn would improve the living standards to the local people.

Gateway to Central Asia and the Persian Gulf

Gwadar is situated on an isthmus in the Arabian Sea on the southwestern coast of Pakistan. As such, it is a gateway to both the Persian Gulf and Central Asian countries, which would eventually connect 64 countries in Asia and Europe. No wonder it has been called the “standalone pillar” of the CPEC-and the China-proposed Belt and Road Initiative.

With its perfect geographical location, economic and geostrategic importance, Gwadar has all the features to transform into a regional hub of trade and transport, and an international seaport. The proposed planning and development term for Gwadar is from 2017 to 2050, with the short-term plan being between 2017 and 2025, the medium-term between 2026 and 2035, and the long-term between 2036 and 2050.

According to the Pakistani government’s plans, Gwadar port will further flourish with the “blue economy” through committed spending of more than $824 million on 12 projects. And Saudi Arabia has promised to spend another $6-10 billion in the proposed Gwadar Oil City project and petrochemical chain to be developed under the CPEC.

As for road connectivity, some roads have already been built while others are in the pipeline. China has also vowed to build a 1,320-megawatt coal power plant in Gwadar by 2020 at a cost of $1.9 billion, and proposed to build a 300-megawatt coal-fired plant.

Potential of becoming a world tourist site

Balochistan has an unexplored seacoast with the potential of emerging as a global tourist attraction, which would attract bulk foreign direct investment. Balochistan’s mineral resources are lying untapped for want of capital while some exposed mineral deposits are wasted because of “rat-hole” mining.

According to primary geological surveys, the region could have deposits of rare earth, precious and semi-precious metals, industrial minerals and a variety of stones including onyx, which can provide a huge base for setting up processing and manufacturing plants to produce export-quality value-added products.

Despite some grievances of the people of Balochistan, the construction of Gwadar port and infrastructure facilities such as road networks would boost the local economy and thus improve the living standards of the people not only in the province but also elsewhere in Pakistan. It is important here to emphasize that there is a consensus among all the stakeholders of the CPEC on the construction of the Gwadar port.

However, it is not unnatural that some people-either because of their naivety or due to their lack of understanding about the results-would raise questions on the need for a colossal economic project such as the CPEC.

CPEC and BRI face external opposition

The CPEC and the Belt and Road Initiative face opposition also because some external forces are misleading some people into believing the projects won’t do them any good, because they don’t want to see the Gwadar project completed. But the governments of Pakistan and China, media outlets, civil society, think tanks and academics have been quashing such misleading narratives.

The Pakistani government is also keen to provide a level playing field for the local business community by implementing necessary reforms in taxation to develop the region. Still, immediate interventions by the government would help a great deal to dispel the fears of local businesses. Also, timely reforms in different sectors coupled with the acceleration in CPEC projects would assuage the fears of local businesses and attract more international investment.

After the meeting of the 8th Joint Cooperation Committee of the CPEC in Beijing on Dec 20, when the Pakistani planning, development and reform minister announced the allocation of $1 billion development fund for Balochistan, the Chinese government said it was committed to expediting work on Gwadar international airport, and establishing vocational and technical training centers for the white-and blue-collar workers in the region.

At the training centers, the local workers can hone their respective skills, acquire management skills, learn to take capacity building measures, and explore agricultural and remedial measures to overcome the local challenges so as to ensure “all-inclusive” and “all-around” economic development.

Many countries eager to invest in Gwadar

Five years on the CPEC has given Pakistan so much leverage on the economic front that countries such as Saudi Arabia and the United Arab Emirates are eager to invest in Gwadar and elsewhere in Pakistan. And countries such as Malaysia, Turkey, Russia, and Central Asian and European states are looking forward to investing in the CPEC.

But people in Balochistan should realize that economic projects take time to bear fruits, so they must be patient and stay united. They should also know that the CPEC umbrella, which covers the Gwadar project, alone has the potential to turn Balochistan into an economic success story for Pakistan.

It is also important to emphasize that the malicious propaganda of some external forces that are using Balochistan’s “depravity” to prompt some local people to question the CPEC’s positive effects must be foiled both by the Pakistani and Chinese governments. The Pakistani government must also strategize a mass media campaign to educate the people by highlighting the eventual benefits of the CPEC and emphasizing the need for a peaceful and prosperous Balochistan without which the CPEC’s “all-inclusive” slogan may lose its substance.

The author is working as a Deputy Director Media and Publications at CPEC-Centre of Excellence, Islamabad. He is also an Academician and a TV analyst of CPEC and International Relations.

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CPEC: govt seeks more joint ventures

Source: Dawn

Date: 14th Jan,2019

Author: Khaleeq Kiani

China and Pakistan have made strides — particularly in electricity and infrastructure projects — in the first three-year phase of their cooperation under the multi-billion-dollar China-Pakistan Economic Corridor (CPEC). Both countries have had good and not-so-good experiences and are learning about each other’s strengths and deficiencies as they try to build upon lessons learnt.

At the conclusion of the recently held eighth meeting of the Joint Cooperation Committee (JCC), they agreed to conduct at least five in-depth sector studies for future investment cooperation under the framework as Islamabad pursues more financial support and Beijing seeks increased facilitation, improved security and a smooth repayment mechanism. In addition, “both sides agreed to make joint efforts to improve the overall media environment for CPEC cooperation”.

Pakistan made a formal request to the JCC — the highest decision-making body on the CPEC — for “more grant, investment, joint ventures and concessional loan arrangements to strengthen and fast track” transport infrastructure, industrial cooperation and socio-economic development. Beijing is annoyed at the Sindh government for slow progress on Karachi Circular Railway, which it considers critical for the city’s prosperity

China’s focus during the meeting that ended on Dec 20 was more on putting in place a mechanism that ensures smooth repayments given Pakistan’s financial constraints. It expects Islamabad to further strengthen the security structure and take targeted measures to reduce the threat of terrorism by speeding up the building and deployment of Special Security Division-South. Beijing is also pushing more vigorously for the removal of irritants in the implementation of existing projects.

Led jointly by Ning Jizhe, vice chairman of the National Development and Reform Commission of China, and Makhdoom Khusro Bakhtiar, minister for planning, development reforms, meeting participants appreciated that the CPEC had achieved important milestones of early-harvest projects (EHP) and was now entering a new development stage.

The in-depth studies will be on Pakistan’s power market, a cascade study for hydropower projects all along the Jhelum River, optimisation of overall energy mix, an oil and gas industry development plan and a five-year action plan for cooperation on the highway between China and Pakistan as part of the joint traffic density study.

“(The) results of a joint study on power market of Pakistan will be fundamental for deciding the next step of energy cooperation.” The working on the study has just begun. Pakistan has committed to putting into operation all transmission lines required for the evacuation of energy well before CPEC projects achieve commercial operations to avoid penalties.

The payment of outstanding tariffs for the operational energy projects is a source of irritation for China. The two sides agreed to have scientific planning and amicable negotiations to address the issues arising from energy cooperation and create a common panel under the joint working group on energy for monthly formal and informal communications and consultations.

Pakistan promised a timely recovery of bills from consumers as part of the ongoing campaign to reduce line losses and improve collection through reforms and new technology. But Pakistan also wanted Chinese technical support with respect to technology. A comprehensive technical study will also be carried out to increase the production capacity of the surface mine in the Thar coalfield.

Pakistan has demanded that a major 1,320-megawatt Rahimyar Khan project under CPEC be scrapped on the ground that its next-stage priority was using domestic sources of energy. Hence, the need for maximum benefits from the Jhelum River flows by optimising the combined operation of all cascade projects there.

On the industrial side, China asked Pakistan that the Board of Investment should act as lead agency for industrial development and ensure land, energy, taxation, customs, law and other services from the relevant departments to deal with land prices, park development models and infrastructure services.

Rashakai in Khyber Pakhtunkhwa, Dhabeji in Thatta and M3 in Faisalabad have been selected as special industrial zones for the first phase of development. They will promote Chinese investments in key industries, like textile, petro-chemical and iron and steel.

In infrastructure, both sides are happy with the progress on two big projects: $8.2 billion Mainline (ML-1) from Karachi to Khyber and $2bn Karachi Circular Railway (KCR) besides Eastbay Expressway Gwadar and security arrangements for them. Pakistan has promised to ensure timely land acquisition and demolition for the project implementation.

The preliminary design of ML-1 will be ready this month. The project will be implemented in line with the framework agreement signed in May 2017. This means China will provide up to 85 per cent of the project cost as a loan as opposed to a “build-operate-transfer” model proposed by the PTI government to shift financial responsibility on to the private sector and keep government loans on the lower side.

Beijing is annoyed about slow progress on KCR by the provincial government despite the project being critical and feasible for the growth and prosperity of the country’s largest city. Mass transit projects for Quetta and Peshawar have been put on the back burner for the time being because of a lack of preparedness. These will be taken up once their PC-1s are approved by the relevant government forums.

Noting full operational capability of the Gwadar Port, the two sides agreed to continuously pay high attention to it. Weekly container liner services are calling the port as coal trans-shipment and clinker export take place. The JCC appreciated progress on the Gwadar Free Zone. It agreed to jointly make more efforts to attract qualified companies to invest in the area.

Pakistan was required to provide agreed tax and tariff mechanisms to create a good investment environment leading to the next phase. The two sides have failed so far to finalise the Gwadar Smart City Master Plan, but promised to hold the groundbreaking ceremony for the New Gwadar International Port before March 2019.