Competition among Chinese companies

The desire to win over contracts by using legal and illegal means could pose another challenge to CPEC execution

The competing commercial interests of Chinese conglomerates working in Pakistan have posed a new challenge to China-Pakistan economic relations. Two news stories in the last one week have sparked concerns about business ethics of the Chinese companies.

In the first case, the K-P government engaged China Road and Bridge Corporation (CRBC) for the development of prioritised Rashakai Special Economic Zone (SEZ) in a non-transparent manner. The provincial government signed two pacts — a memorandum of understanding and an engagement agreement — in a span of 24 hours, which raised transparency concerns in the deal. The provincial government entered into an engagement agreement with CRBC in spite of the fact that CRBC did not conduct feasibility study on the Rashakai SEZ. In January 2017, the K-P government had engaged China National Electric Engineering Company Limited (CNEEC) for the development of the Rashakai priotised SEZ. CNEEC had done the feasibility study but according to some reports CRBC edged out CNEEC by using other than known legal means.

Now another story has surfaced. It stated that a multibillion rupees strategic project that had been conceived to secure Quetta from terrorism and smuggling has become a turf war between two Chinese contractors. The story claimed that former chief minister Sanaullah Zehri had approved the award of the contract to the ‘lowest evaluated bidder’ — Huawei consortium. But the new CM, Abdul Quddus Bizenjo, has issued a letter of intent to the ZTE consortium, which quoted the lowest price but was not the lowest bidder. This project is not part of CPEC.

The desire to win over contracts by using legal and illegal means could pose another serious challenge to CPEC execution, as the forces that are trying to sabotage the pilot project of OBOR initiative may exploit this for their own benefits. We urge the Chinese embassy to immediately intervene and reprimand the firms for using unethical business practices. Otherwise, the negativity could create more serious problems for both the countries.

Published in The Express Tribune, February 6^th, 2018.

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