Transparency needed

When there are billions of dollars involved in any project, there are bound to be concerns on how the money would be used, especially in a country like Pakistan where investment is on the lower side. The China-Pakistan Economic Corridor (CPEC) is said to be a $46-billion project, which is more than three times the reserves held by the State Bank of Pakistan. No one denies the potential of the CPEC to be a game changer for an investment-starved Pakistan. The corridor is slated to run along many underdeveloped areas and can provide employment for thousands. But when the governor of the country’s central bank says he is unaware of the debt and equity components of the billions that are to be invested in the CPEC, eyebrows are bound to be raised. Then comes the news of the government giving the go-ahead to CPEC projects at a higher cost than was originally planned, and more scepticism follows.

The Central Development Working Party, which usually does not act in haste in giving a thumbs-up to projects, swiftly cleared three CPEC-related infrastructure projects for the final approval of the Executive Committee of National Economic Council. It is not the clearance, but the cost at which these projects are getting the green light that is causing discomfort. On the one hand, the government is citing low tax revenue and imposing additional taxes to meet the shortfall; on the other hand, it continues to spend a bit too lavishly in other areas. Pressure from investors and contractors could be one reason for this, but the government needs to realise that the CPEC isn’t important just for Pakistan. China is slated to gain sufficiently from the project too, and this is not a favour we are being bestowed with. Why, then, is there a lack of a competitive bidding process, with awards being contracted to companies of just one country? It is time that the government revealed details of the share of debt and equity components of the CPEC. The last thing we need is billions of dollars of supposed investment leading to piles of debt with the returns on projects restricted to a handful. There is a clear need for more transparency here.

Published in The Express Tribune, December 18^th,  2015.

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