China commits $6.5 billion for nuclear project in Pakistan

Published: December 24, 2013

File photo of a nuclear power plant. PHOTO: FILE

ISLAMABAD: China has committed $6.5 billion to finance the construction of a major nuclear power project in Karachi as it seeks to strengthen ties with its strategic partner, officials said.

Prime Minister Nawaz Sharif broke ground on the $9.59 billion project last month but officials have provided few details of how they plan to finance it.

Financing documents seen by Reuters showed China National Nuclear Cooperation (CNNC) has promised to grant a loan of at least $6.5 billion to finance the project which will have two reactors with a capacity of 1,100 megawatts each.

Two members of the government’s energy team and three sources close to the deal confirmed this. CNNC was not available for comment.

“China has complete confidence in Pakistan’s capacity to run a nuclear power plant with all checks in place,” said Ansar Parvez, chairman of the Pakistan Atomic Energy Commission which runs the civilian nuclear programme.

Parvez declined to give more details of the funding but said it would be completed by 2019 and each of the two reactors would be larger than the combined power of all nuclear reactors now operating in Pakistan.

As part of the deal, China has also waived a $250,000 insurance premium on the loan, said two sources in the Energy Ministry with knowledge of the project. They declined to be identified as they are not authorised to speak to the media about the financing.

Pakistan and China, both nuclear-armed nations, consider each other close friends and their ties have been underpinned by common wariness of India and a desire to hedge against US influence in South Asia.

Pakistan sees nuclear energy as key to its efforts to solve power shortages that have crippled its economy. The country generates about 11,000 MW of power while total demand is about 15,000 MW.

Blackouts lasting more than half a day in some areas have infuriated many citizens and sparked violent protests, undermining an economy already beset by high unemployment, widespread poverty, crime and sectarian and insurgent violence.

Under its long-term energy plan, Pakistan hopes to produce more than 40,000 MW of electricity through nuclear plants by 2050.

The United States sealed a nuclear supply deal with India in 2008, irking both China and Pakistan.

Pakistan wants a similar agreement with the United States but it is reluctant, largely because nuclear scientist Abdul Qadeer Khan admitted in 2004 to transferring nuclear secrets to North Korea, Iran and Iraq.

“There should be no double standards in terms of civilian nuclear deals,” Parvez said. “Pakistan has energy needs and the building of two new reactors should convince everyone that India’s embargos and restrictions won’t stop us.”

Proliferation fears

Pakistan carried out its first nuclear tests in 1998, soon after India conducted tests. Both refuse to join the Nuclear Non-proliferation Treaty, which would oblige them to scrap atomic weapons.

China has already helped supply two nuclear reactors at the Chashma nuclear power complex in Punjab, while another two are also under construction with Chinese assistance.

China’s nuclear cooperation with Pakistan has caused unease in Washington, Delhi and other capitals due to fears about commitment to nuclear non-proliferation rules.

China says its nuclear ties with Pakistan are entirely peaceful and come under International Atomic Energy Agency safeguards. It has not given details of the project’s financing but state media has put its total value at $9.59 billion.

“Bilateral cooperation in the energy sector is to help ameliorate Pakistan’s energy shortages,” Chinese Foreign Ministry spokeswoman Hua Chunying said on Monday. “This accords with the interests of the Pakistani people.”

Three prominent physicists recently raised questions about the safety, design and cost of the new reactors in Karachi, sparking a national debate.

“There is no official information about preparedness for a nuclear accident in Karachi that is available publicly,” said Zia Mian, a Pakistani-American physicist who directs the Project on Peace and Security in South Asia at Princeton University.

“The only real obstacle that may exist to the new reactors being built is if the citizens of Karachi decide they do not want to live with the risks these reactors create.”

But Pakistan’s new energy minister has dismissed the critics.

“Every 1,000 megawatts of electricity produced through nuclear energy saves you $1 billion in oil imports,” Khawaja Asif, the minister for water and power, told Reuters.

“If critics can give me alternatives and other platforms to raise money for low-cost, clean power, I’m willing to listen.”

Reader Comments (58)

  • Sami
    Dec 24, 2013 - 1:54PM

    The Pakistan government seems very serious about resolving the electricity shortage in Pakistan. Not only are they signing agreements they are also quickly arranging financing for them. The Asian Development recently approved $900million for Jamshoro Coal plants and now financing for Karachi Nuclear planrs is also in Place. It seems the much criticized foreign trips of the PM are paying off. Well done PMLN.

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  • M.faisal
    Dec 24, 2013 - 2:25PM

    Great news…!Recommend

  • right direction
    Dec 24, 2013 - 2:28PM

    Country is in right direction! Well done Mian Sahib; nation has confidence over your leadership. Just focus for timely completion of these projects.

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  • Rajesh
    Dec 24, 2013 - 2:29PM

    Pakistan had to give a part of kashmir to china for their friendship. Now they will ask for a part of balochistan. I am sure pakistan will be very glad to give that as well for their generosity….

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  • Asad Khan
    Dec 24, 2013 - 2:54PM

    Long Live Pak-China Friendship.

    regards,

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  • 1947
    Dec 24, 2013 - 2:58PM

    Good move for future of Pak-China union if accomplished.

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  • Uza Syed
    Dec 24, 2013 - 3:02PM

    Yes, most likely the project is going to be larger than any so far in Pakistan, however we must be very careful and look at this with maximum prudence. As I understand that this technology which Chinese wish to oblige us with is pretty much in its infancy and has never been constructed and tried anywhere including China and as a citizen of Karachi this gives me reason to question the wisdom of this project for its untested safety. We the people of Karachi must raise questions and force our governments both in Sindh as well as in the centre to provide enough information dealing with what kind of evenmtual safety threats this ‘Nuclear Power Station’ mighgt cause to us the 20 million citizens living in and around Karachi. A nuclear power projecvt of this magnitude around Karachi seems very high risk considering the recent havoc nuclear power generation facilities have caused to the Japnese who certainly are technologically much more advanced and have more responsible government as oppose to what our fate has been. Unless, there are enough public debate by experts on pro and cons of this technology and location of such a project, the people of Karachi must resist its construction with all our ‘people power’.

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  • aaa
    Dec 24, 2013 - 3:02PM

    Let’s hope the implementation is as good as the talk.

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  • oton
    Dec 24, 2013 - 3:30PM

    @Rajesh; india should stop attrocities in occupied kashmire!

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  • Mystic
    Dec 24, 2013 - 3:38PM

    If this were an investment by USA, all would be singing praises of the great Uncle Sam.

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  • Abid
    Dec 24, 2013 - 3:42PM

    Great to see the will of govt here and I am honestly impressed by the way this govt of pmln is trying to improve their relations with Turkey, China, India, Russia, Japan and EU.

    Our economy will definitely improve in coming years. Best of luck Mian Saab.

    Regards,

    PTI voter

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  • aaa
    Dec 24, 2013 - 3:43PM

    @Uza Syed:
    We already live with the risk of a nuclear holocaust everyday. I am talking about the risk of a nuclear war with India. Keep in mind that, given the geographical proximity, it takes only a few seconds for an exchange to precipitate into all out nuclear war. But do you see people in Karachi worried about this? No. No one cares. So don’t talk about a civilian nuclear disaster. No one cares about that. We want electricity!

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  • powvow
    Dec 24, 2013 - 3:53PM

    And how much of this 6.5 Billion is going to line the pockets of the political and army junta?

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  • TypicalPakistani
    Dec 24, 2013 - 4:18PM

    China sensed the USA’s soft corner for Iran and apparently this project will cold the Iran-Pakistan gas pipeline.

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  • Sri Varahadev
    Dec 24, 2013 - 4:34PM

    Rather churlish of China to limit finance to 6.5 Billion dollars and not go the whole hog and finance the 9.59 Billion dollar project cost. With Pakistan being unable to finance her 2 Billion dollar share for the Iran Pakistan gas pipeline despite being liable for delays, it is a bit of a stretch to believe that Pakistan is capable of coming up with the 3 Billion dollar residual investment amount to finance these nuclear power plants.

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  • Pakattack
    Dec 24, 2013 - 4:48PM

    @ AAA, Untrue. Any fallout at this reactor would occur due to geological reasons. Pakistan sits on a fault line, and has had some horrific earthquakes. Another serious one, with the epicenter nearer Karachi… Then these powerplants, and anyone living in their vicinity is in big trouble. Nuclear weapons are nowhere near as dangerous in the long run. As its mutually assured destruction with them. Geological distasters can strike at any time.

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  • Shakir Lakhani
    Dec 24, 2013 - 4:50PM

    @Uza Syed: Karachi has had a nuclear power station on the sea shore since the 1960s. Whether you have this project near Karachi or anywhere else on the coast, the danger to people will always be there (although nuclear power accidents have been very few so far). If the station is under IAEA safeguards, I’m sure the authorities will take every step to ensure safety.

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  • Saad
    Dec 24, 2013 - 5:02PM

    Any nuclear accident near Karachi would force migration of millions of people. Yes build it, but build it in an unpopulated region. No technology is safe from human error!

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  • Mobeen
    Dec 24, 2013 - 5:05PM

    It is a positive step. Pakistan-China nuclear cooperation does not violate NSG or any other non-proliferation norms. One, the 1986 Agreement was signed once China had not become a participant in the NSG. Hence, Beijing has no obligation towards NSG but it is bound more by its bilateral agreement with Pakistan.Pakistan is an energy-deficient country, and so need a non-discriminatory, criteria-based proceed to entrance chief technology. Pakistan contingency be given equal rights and responsibilities in this regard, as a knowledge in a chief appetite programme supposing an portentous sourroundings to serve rise chief appetite era capacity.

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  • Dec 24, 2013 - 5:16PM

    Nuclear plants are no safe for environment and safety measured can’t be there any other way to produce electricity other then nuclear.

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  • yasir
    Dec 24, 2013 - 5:18PM

    1st it is very important to know that Pak-China nuclear deal meet the standards of IAEA and the nuclear power plants will run Under IAEA safeguards.

    2nd , If Pakistan does not start to work on comprehensive plan to meet energy demand, then after 5 years it will decline economically. Because the industries needs uninterrupted power supply and current situation is worse.

    3rd,, Most of the industries have quit to other places due to energy shortfall which resulted into the massive unemployment.
    It is dyer need of Pakistan to invest in power sector otherwise in coming years it will be difficult to run a state with massive energy-cuts.

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  • Shayan
    Dec 24, 2013 - 5:19PM

    @Sri Varahadev, Thanks for your concern
    Pakistan will InshAllah be able to arrange $3b over the next 6 years.

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  • Dec 24, 2013 - 5:24PM

    @Rajesh:
    you are wrong, Pakistan never gave an inch of Kashmir to China permenently, b ut India gave part of Kashmir Aksai chin permenently to Chinese controlRecommend

  • Dec 24, 2013 - 5:27PM

    @Sri Varahadev:
    yeah Pakistan was ready to finance Iran Pakistan gas pipeland but the int’ sanction on Iran were not allowing to to invest 2 billion dollar on the Pakistan Iran gas pipeline project i’m sure they will be ready the day sanctions will be lifted on Islamic Republic of Iran.Recommend

  • FYI
    Dec 24, 2013 - 5:44PM

    I remember operation Trident and Operation Python of 1971. It is not a wise decision of Pakistan to get nuclear reactor in Karachi.
    Karachi Port was destroyed by Indians in 1971, they can do it again. Imagine that if they target this Reactor !!

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  • kumail
    Dec 24, 2013 - 5:58PM

    This is not about the money. The people of Karachi are being used as guinea-pigs for an untested nuclear device which exists only on paper. Karachi can have a disaster much worse than Fukushima. There are much efficient, safer and cost-effective alternative available.

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  • Lailomah
    Dec 24, 2013 - 6:18PM

    Nuclear cooperation between China and Pakistan is a good and an innovative step on part of both governments. The N-cooperation between both states is majorly for the energy generation and to make pakistan get relieved of the energy crisis. Both states are responsible nuclear powers and are well aware of the rules and regulations of international non proliferation regime. Both states have committed themselves that this cooperation will solely be for civilian purposes and will not be diverted for military activities. China’s optimism idicates the level of confidence it has on pakistan.. This cooperation will further strengthen the bilateral ties between both states and will open up new ways of opportunities.

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  • unbelievable
    Dec 24, 2013 - 6:56PM

    “The only real obstacle that may exist to the new reactors being built is if the citizens of Karachi decide they do not want to live with the risks these reactors create.”

    Lets not forget that your at least $3 billion short of funding which isn’t a small thing to a country which is essentially bankrupt. Also — these days nobody builds nuclear power plants near big cities – safety trumps the cost of transmission lines. Lastly – many apparently don’t know that your existing nuke power plants are off line half the time which maybe a sign that you don’t have the talent to operate them and/or don’t have the funds to maintain them – not a great endorsement for more nuke power.

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  • Rabia
    Dec 24, 2013 - 7:13PM

    China attaches great importance to the peaceful use of nuclear energy and both the countries are going in the right direction. The work eases Pakistan’s electricity shortage and is in the interest of the people. Also such cooperation is entirely for peaceful purposes, in line with the international obligations, and subject to the safeguards of the International Atomic Energy Agency.

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  • ABKhan
    Dec 24, 2013 - 8:14PM

    @Rajesh:

    Dont worry, Pakistan will never give a female diplomat to China for strip search. Why are you so interested in Pakistan’s matters? Seems like you guys are having some sleepless nights

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  • water bottle
    Dec 24, 2013 - 8:36PM

    well sir,

    Hoodbhoy was arguing in a TV show that the technology that China is implementing in Pakistan is never implemented before.

    aren’t you Pakistanis afraid that China is experimenting on the lives of you people?

    what if something goes wrong?

    how can your government show the irresponsibility of agreeing to implement a technology that only exists in blue prints?

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  • Javed
    Dec 24, 2013 - 8:43PM

    @unbelievable:
    who gave u the info about our nuclear plants? you must know more than us!

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  • F Khan
    Dec 24, 2013 - 8:54PM

    “Every 1,000 megawatts of electricity produced through nuclear energy saves you $1 billion in oil imports,” Khawaja Asif, the minister for water and power, told Reuters.
    “If critics can give me alternatives and other platforms to raise money for low-cost, clean power, I’m willing to listen.”

    Will Shehri, Project on Peace and Security in South Asia please respond to the Minister’s query? Can we look at hydel power from the Northern Areas?

    FYI: We are dealing with “politicians” who are only interested in responses that have $$$ signs. They are incapable of conceiving what would happen to the “citizens”, in the event of, God forbid, any disaster — and we cannot even blame them. After all, they are neither capable of thinking that much or that far as illustrated by the Minister’s response.

    Thank you!

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  • Stellar
    Dec 24, 2013 - 9:30PM

    This project is ‘too close for comfort’ for a mega city like Karachi. The paradise point, where Kanupp 1 is located is hardly 30 kilometer from downtown.
    The plant should be located at a distance of 200 kilometer from Karachi. The safety standard of Kanupp 1, was good so far(Canadian tech.). The new operational plants Chasnupp 1 and II are Chinese and are working for the last two years, with two more to commission soon.

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  • Netizen
    Dec 24, 2013 - 9:33PM

    Germany is doing away with nuclear power plants. All the plants will be dismantled by year 2022. Many European countries are planning to completely put an end to nuclear power plants. Chernobyl, Russia and Fukishima, Japan, disasters are enough to open our eyes. Japan is also ending nuclear power generation in near future.
    Hydel, coal, solar, wind and other renewable energy resources need to be developed to make this world a safe place.

    http://digitaljournal.com/article/358394

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  • sum
    Dec 24, 2013 - 9:41PM

    I don’t trust Pakistanis they lie all the time , Until Chinese confirm it in Proper words.
    i doubt it that china giving so much money out of pocket.Recommend

  • unbelievable
    Dec 24, 2013 - 9:48PM

    @Javed:

    @unbelievable:who gave u the info
    about our nuclear plants? you must
    know more than us!

    Thanks for making my point. Not only are your current nuke power plants down much of the time you don’t even have the money to safely decommission them. Much of the World has discovered that nuclear power isn’t the cheap/safe energy source that many thought it would be – most economic analysis leave out things like decommissioning cost and long term disposal issue of nuclear waste. Like it or not accidents happen – ask the Japanese, Russians or the American’s and your not close to being in their league when it comes to talent/resources to handle emergencies.

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  • usman786
    Dec 24, 2013 - 10:33PM

    why donot we ask China to build Basha dam?
    The gap of 3 billions will be arranged by Swiss banks on behalf of AAZ and NS etc
    This is beacuse of Chinese interest in eneergy sector not as a reputation of NS. May be partly bcz of their long term friendship with this land.
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  • Rafi Ka Deewana
    Dec 24, 2013 - 11:39PM

    I am surprised that no one has thought of this so far! Let us add one more feather to the friendship. All-power friend.

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  • usman
    Dec 24, 2013 - 11:44PM

    I can’t imagine pakistanis commenting on indian newspaper articles on their internal energy matters…. we just don’t care.

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  • touseef
    Dec 25, 2013 - 1:33AM

    @Rajesh:
    China got figt from pakistan but they snatched some area from india in northen areas and India is looking happy to cooperate in trade.

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  • polpot
    Dec 25, 2013 - 2:44AM

    “Two unnamed members of the government’s energy team and three unnamed sources close to the deal confirmed this.”
    ++++++++++++++++++++++++++++++++++
    Pakistanis obviously believe that Santa comes down the chimney……of the nuclear plant.

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  • Sexton Blake
    Dec 25, 2013 - 4:16AM

    @unbelievable:
    Dear unbelievable,
    For once we are in agreement. Nuclear power plants are not low cost, and they are certainly not safe. Chernobyl in the Ukraine and Fukushima in Japan should have convinced everybody in the world as to how dangerous they are. Fukushima is particularly dangerous. It is constantly emitting high levels of lethal radio-activity, and is polluting the world, After two years of constant emissions it has become obvious that the Japanese do not have any idea at all in regard to fixing the problem, or decommissioning their rogue nuclear plants, which are spreading dangerous pollutants around the world oceans, and ensuring that fish in many areas are not suitable for human consumption. It would be irresponsible to create such a future scenario near Karachi, the largest city in Pakistan.

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  • Retired Engineer
    Dec 25, 2013 - 6:37AM

    The cost of the nuclear plants is at least $1.5Bn more than than I would expect. The Chinese will be able to go it for much less as their will cut corners and their labour is cheaper. The Chinese get their reactor technology from the French, Americans and Russians. So what kind of second-hand technology are we getting ?Recommend

  • SHB
    Dec 25, 2013 - 7:49AM

    @Rajesh:
    Does it give you any stomach ache? Please.
    You should mind your own business.

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  • aaa
    Dec 25, 2013 - 8:59AM

    @Pakattack:
    Well you don’t spend nearly $10 billion and not prepare for something like that.

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  • Puppet Guy
    Dec 25, 2013 - 10:55AM

    @ABKhan:

    Yeah right…Pakistan will request them to come to their own soil and kill Pakistanis just like in the case of Raymond Davis and the Drones attacks are allowed inside Pakistan.

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  • Xnain
    Dec 25, 2013 - 1:06PM

    More than the news, I am thoroughly enjoying the desperation and dismay of the Indians.

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  • Proletarian
    Dec 25, 2013 - 1:09PM

    Thank the Atheist Chinese Communists and grovel before them like good Pakistanis

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  • Uza Syed
    Dec 25, 2013 - 1:33PM

    If many Europeans are closing down their nuclear power plants due to their realization about the safety threats it imposes to their people then why should we at all embark on such a route, I fail to see the wisdom of this here. I’m not for strengthening of relationship with China or anyone else for that matter at the cost of existential threat to our people, remember there are 20 million of us living in Karachi. The least anyone can expect from those who take such important decision is consultation and consent of the people. Participative democracy expects that people have a say in matters that are as important as this one. People of Karachi particularly and the people of Sindh generally must resist this imposition of life threatening project and demand the those in power to immediately provide adequate details and start public debate. The political parties which claim to be representing us and seek our support must come forward and actively display our sentiments and concerns about safety issues of this monstrous project. Failing this, the people must organize themselves and be prepared to stop this threat even if it means physical resistance. This is how the people of Europe got their governments to start closing down the nuclear power stations over there and this is how we also must stop it.

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  • Lala Gee
    Dec 25, 2013 - 3:59PM

    I am told that China will build 6 more such 1000 MW Nuclear reactors inside Pakistan and Pakistan will be able to repay the loan by exporting electricity to China’s border areas.

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  • polpot
    Dec 25, 2013 - 6:13PM

    @Lala Gee: “Pakistan will be able to repay the loan by exporting electricity to China’s border areas.”
    +++++++++++++++++++++++++++++++++++++++++++++++
    China is not seeking a repayment of the loan. Thats why Himalayas……………

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  • SHB
    Dec 26, 2013 - 1:24AM

    @Uza Syed:
    Please name those plants which has been closed in Europe as of today.
    France gets 70% of its electricity from the nuclear plants and FYI, France is in Europe.
    USA has more than 100 nuclear plants.
    I hope moderator will let my response go thru
    Thanks for reading it

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  • Adnan
    Dec 26, 2013 - 11:37AM

    Great news….I pray that this plan goes and get implemented without interruption from state enemies – Ameen

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  • Bakhtiyar Ghazi Khan
    Dec 26, 2013 - 12:37PM

    Indians have no right to complain about Pakistan’s alliance with China. What has India ever done for the betterment of Pakistan? They only invaded us, attacked our people, and funded bombers in our cities. China has always been a great ally and friend in every hour. Long live Pakistan China friendship.

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  • Uza Syed
    Dec 26, 2013 - 5:38PM

    @SHB: Germany the most advanced country leading Europe and industrial hub of Europe has already decided and announced closing down the rest of the 6 or 7 nuclear power generation facilities, reducing its dependence on nuclear source to nil. Yes, there are some 100 such nuclear power plants opeartiing in the US but compare to what their governemnet and industry planned, there were plans to construct 1000 such plants in the Us by year 2000. These plans had to be abandoned due to anti-nuclear movements and people’s pressure. And France! Check this out in A French Nuclear Exit? published in ‘Science Daily’ : Jan. 7, 2013 — France has been held up, worldwide, as the forerunner in using nuclear fission to produce electricity. However, a third of the nation’s nuclear reactors will need replacing in the next decade, and public opinion has shifted toward reducing reliance on nuclear power.

    Nuclear Power is no good at any financial cost considering safety and health issues and storage / disposal of the nuclear waste. People of Karachi must unite and oppose this plan and if need arises must resist their construction by all means including blocking of access and physical occupation of the proposed construction sites.

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  • Reply
    Dec 26, 2013 - 7:19PM

    @Uza Syed:

    You are an enemy of Pakistan. DPC must track you down, Pakistan and China must form a Union like EU or USSR.

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  • Uza Syed
    Dec 26, 2013 - 8:38PM

    @Reply: On the conrary, I’m a true friend who loves and cares much too much to let Pakistani people, a whole 20 million of them, be forced into a testing laboratory for a nuclear technology which has never been built so far or tested for its safety. Moreover, I don’t wish that my people be endangered by close proximity of this proposed untested & unsafe plant, most of the populace of Karachi lives within 100 KM of this site. Lives of Pakistani people, twenty million of them, living in and around Karachi is much more valuable to be risked to please some greedy industrialists and moneyed gangs for who we don’y count, anywaas! It is the responsibility of each and everyone of us to do whatever we can to stop this madness from becoming a reality in the midst of our habitat. The political parties who represent Karachi must have the moral courage to raise this issue on every forum and bring awareness to our people. We must unite and oppose this monster from threatening our safety. Togethr we can and together we must.

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