Pakistan Railways: China to inject $3.5b into infrastructure development
A 23-member delegation of Chinese technical experts, led by Meng Wenli, Chief Engineer Alignment, will come on a trip to Pakistan at the weekend to pick the areas for an investment of $3.5 billion and complete the rehabilitation and replacement of tracks from Karachi to Peshawar.
The delegation, comprising representatives of China Railway Eeyuan Engineering Group Company, would arrive on October 25 and undertake a comprehensive study of a 1,400-km rail track with the technical support of the National Engineering Services of Pakistan (Nespak) and the Pakistan Railways Consultancy and Advisory Service, said an official.
The survey will also cover 2,340 bridges and 11 tunnels from Karachi to Peshawar via Hyderabad, Bahawalpur, Multan, Sahiwal, Lahore, Gujranwala, Gujrat, Jhelum, Rawalpindi and Attock.
Initially, the visit was scheduled for May this year, but was delayed and rescheduled for the last week of October. The team will prepare a report and submit it in February next year to the governments of China and Pakistan for further deliberation and reaching agreements.
China has expressed interest in pouring about $3.5 billion into infrastructure development for the railways. The areas where the money will be injected include replacement of rail tracks over 375 km, deep screening of ballast over 1,260 km, conversion of un-manned level-crossing into underpasses at 50 places, conversion of manned level-crossing into flyovers at 250 places, realignment of 40 big curves, strengthening of 500 bridges and doubling a 438km track at various places between Shahdara and Peshawar.
“This investment is, in fact, a loan being given by China at a concessionary interest rate of 1.5% under the Pakistan-China Economic Corridor,” the official said. “It will be released by the Export-Import Bank of China after receiving sovereign guarantees from the Pakistan government.”
The average speed passenger trains could run on this rail track is in the range of 85 to 105 km per hour, but they do not accelerate above 95 km per hour.
“After the replacement of tracks, the trains will run at the maximum speed of 120 km per hour for the next 15 to 20 years,” the official said.
According to the official, the Pakistan Railways complies with the Public Procurement Regulatory Authority (PPRA) rules, but in this particular case it will not be necessary to follow the rules as an agreement is being signed between the governments of Pakistan and China.
Only Chinese companies would participate in the bidding for contracts for all civil and engineering work. They would earn a profit of up to 20% to 25% on their investments and the Pakistan government would return the loan with interest payments to the financing bank, the official added.
“The management of Pakistan Railways was also asking China to undertake a project of electric traction over 1,400 km between Karachi and Lahore, but it refused,” said another official.
Published in The Express Tribune, October 22nd, 2014.
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COMMENTS (33)
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Looks like Pakistan has handed over its entire railway infra to China which will be used by China to milk it to its glory. Track improvement is something which Pakistan can do it itself by properly utilizing existing infrastructure, generating revenues and ploughing it back to improve tracks and locomotives further which will in turn help to increase the frieght income. This is a cyclic in nature. They also need to identify areas where revenue can be generated and strenghten them by avoiding corruption there. This will also help in generating employment locally instead of getting dictated by someone.
@IndianDude: We lack finances. We do not have the money or the infrastructure to develop these things at the moment. As for missiles and weapons, they have been our priority. Where as education should have been our priority.
But we are changing, we are realizing. Let's hope that we can materialize these dreams.
I can not believe that a nuclear power, full of talented engineers and scientists, that has claimed to have developed and built its own missiles and a modern 'better than US F-16', the JF-17 the bestest fighter plane in the world, can not themselves re-built a railway track that can run 100-120 kmh..?? What is wong with this picture?
@Tyggar: In my humble opinion, India has ALL of those: high volume high & low speed trains, some low volume high speed train, and now they are embarking on the dream to have bullet trains, ironically speaking, with the help of the Chinese and Japanese. India already has cooperation in the Railways with the Germans and built a fairly modern railway coach factory (RCF) with high output in Kapurthala, Punjab to supplement an aging RCF in Tamil Nadu, South India. Regardless, good wishes to Pakistan in building up its railway system which has been thrown back many decades by the lack of maintenance, innovation, and investment.
@Paki-Indi-Musafir: What high population poor countries like india and Pakistan need are high volume and high speed trains. If I wanted to go from Delhi to bombay I can as well take a flight.. Trains are mass rapid transport. Bullet Trains are not might end up becoming white Elephants.
What Pakistan needs are efficient engines that are reliable and can pull a large number of coaches built in Pakistan by transfer of technology model
so Pakistan will borrow money @ 1.5% to pay a chinese company that will be selected without competiotion, use chinese labour and earn 20-25% return. The money will not flow into pakistani economy or generate employment and pakistani government and most people are thrilled with this deal?????? WOW. Some friendship this is!!!
@Zubair: Can any govt ignore Punjab? It remains the biggest market and producer in Pakistan, so infrastructure like roads and railway lines are mandatory.
@Tyggar:: As I have said before also and I do agree with you and disagree with PrasadDeccani, that this is not eve a close to a win-win situation for Pakistan. On the contrary, it a win-win deal for China for delivering an obsolete and out-of-date product that Pakistan should be capable of building it themselves. It not something that a top speed 120km train track has not been built by Pakistan. Now if this was a high speed train being built by China that Pakistan neither has the capacity nor the expertise to build it, then it would have been a different story. Said in my humble opinion.
@Asad: Saad Rafique is doing a far better job then his predecessors, Pakistan Railways has been turned profitable and cargo service has resumed.
The passengers on this new rail will enjoy comforts of flying.... +++++++++++++++++++++++++ And also pay similar fares.
"They would earn a profit of up to 20% to 25% on their investments and the Pakistan government would return the loan with interest payments to the financing bank, the official added."
The Chinese would charge an interest rate of at least 8 to 10% on the $3.5B. Pakistan wouldn't even be able to pay the interest on this loan.
@PrasadDeccani: If it was just a loan then it would have been fine without the strings. Assume you get loan from ADB then you run a tendering process where one of the preconditions is that local labor is used.. This would ensure that the lowest cost bidder will be selected plus the money paid for labor goes back into the Pakistani economy. And employment is generated.
Here the Chinese can just jack up the price with no quality benchmark since there is no competitor and all the money paid goes to China and not reinjected into the Pakistani economy plus employment generation from this huge project is zero for Pakistan
Now do you think this is a win win situation?
@S Khan: Then you must first get rid of your leagues of muslims Governments and replace them with National Governments, National institutions all around removing the entire colonial set up. The sharifs should be responsible for their five rivers area and the people of the north and the south be responsible for their deserts and mountains and the unexploited gold buried under ground.
Rex Minor
@Tyggar: It is a win-win deal for Pakistan and China. China is getting close to 0% interest when it buys USA fed bonds. Pakistan is coughing up 6 to 7% interest to raise debt in international market. 3.5 Billion $ at 1.5% is a good offer from China. Trust me, 20 - 25% profit margin in infra project is very reasonable.
We are hearing about big investment plans for the last 6+ years and so far seen nothing. I mean nothing. These are pipe dreams. Stop making your countrymen fool you PML-N.
Everything is about Punjab and lahore in PMLN government...Its disgusting.,,,Why the route has to go "through the length of Punjab" excluding the "length of KP" when the option of KP igives the shortest route...Same is applicatble to new motorway that unecessarily has to go through Punjab when the option of "through KP" gives shortest route.
@nahmed: Since there shall be no tendering process so the work will go the Chinese company on which they may earn 20 to 25 % profit on project implementation.
@Tyggar: Government of Nepal shouldl payback this loan.
@S Khan:
Dude you understand that bullet trains cost more? (like 10-15 times more)
We don't want 120 KM /hrs train we WANT BULLET TRAIN
The good news start pouring in Pakistan when the dhanra is dislodged and democracy & rule of law are ensured for continuity of Pakistan's progress.
So let me get this right... China is going to give Pakistan money which Pakistan will pay back to China plus some more for building the railways with Chinese labor at the cost that China will decide since there is no tendering process.
And then Pakistan will also have to repay the loan with interest. Great!!
At one place it is said that 3.5 billion dollars is the investment where China will earn 20% to 25% profit. Then it is said that 3.5 billion dollars will be a loan on concessionary rate of 1.5% interest. What is correct. Why Government is befooling its people please ???
+ve step and we hope GOV will up the pace of work and show it can deliver.
In my youth, Pakistani experts from Pak Railways, construction industry and power sector used to provide consultancy to other developing countries, but, alas, now even mundane jobs like garbage collection requires foreign expertise.
It is welcomed, but I fear what Saad Rafique would do with his zero knowledge?
Good initiative to imporve railway infrastructure...this government is working on important infrastuructute projects across Pakistan whereas Imran Khan is sitting in container wasting his and nations time
A requirement to use local man power and contract out portion of civil works to local contractors would have been great. Nevertheless, we need infrastructure.
Our real friends. Long Live Sino-Pak!
What? delegation of Chinese technical experts, led by Meng Wenli, Chief Engineer Alignment? Not led by CSP officer who has got license of doing corruption. Who knows nothing what is railways when he becomes head of some department. China must learn something from our bureaucratic structure.
Not a very lucrative deal for Pakistan and a very lucrative deal for China. With 20-25% profitability, the Chinese must be raising the glasses and having a great party. In return Pakistan will get a sub-par train with a top speed of 120 km (75 miles) as opposed to high speed trains in major countries travelling at 350 km (220 miles) that includes trains made by China CNR Corporation. This is not progress. It is regress in today's age.
This goes to show that all that talk about Chinese train engines being of low quality was a drama to make more money by the corrupt railway and government officials
Revival of rail freight, sharp increase in passenger traffic and upgradation of services all around. Well done Khawaja Saad Rafique. You're the best Railways Minister Pakistan has ever had.