PM Imran orders authorities to expedite CPEC work

Strategic initiative came to almost a grinding halt during past one year due to reservations expressed by PTI cabinet

ISLAMABAD: Prime Minister Imran Khan on Monday directed authorities to expedite work on half a dozen projects of China-Pakistan Economic Corridor (CPEC) that have been facing significant delays, as he seeks to quell impression of abandoning the strategic bilateral initiative.

The premier took a detailed briefing on the delayed energy and infrastructure projects of the multi-billion dollar CPEC.

The strategic initiative came to almost a grinding halt during past one year due to reservations expressed by Pakistan Tehreek-e-Insaf (PTI) cabinet and enhanced fiscal controls under the $6 billion International Monetary Fund (IMF) programme.

The change in government's priorities has also put the jobs of around 50 employees at stake who are currently working under CPEC Support Secretariat Project and CPEC Centre of Excellence. Their fate hangs in balance after the government decided to setup a CPEC Authority.

The IMF has placed a ceiling on the amount of the stock of the government guarantees that cannot exceed Rs1.6 trillion by end of this fiscal year and there is also continuous ban on accumulation of external public payment arrears by the government.

These restrictions have affected the government's ability to contract a big project like mainline-I project of the CPEC, said sources in the Finance Ministry.

The premier was given a briefing on the status of 300MW Gwadar Power Plant, 1100MW Kohala Power Plant, $9 billion ML-I project of the CPEC, the Eastbay Expressway, Gwadar Master Plan and pending tax concessions for Gwadar Free Zone.

The sources said that the premier expressed a resolve to address all the pending issues that have delayed implementation of the CPEC and asked the bureaucracy to address the bottlenecks at the earliest.

In order to remove the hindrances in the construction of Kohala Hydel Project AJK, PM Imran asked the secretary power and secretary water resources to hold a meeting with the chief secretary AJK.

The final meeting will take place between PM Imran and Prime Minister AJK. The project is being delayed due to AJK government's reservations about its implications on water supply to the region.

Prime Minister Imran Khan again directed the Ministry of Planning to fast-track work on the much-delayed $9 billion ML-I project. The PC-I of the first phase of the project, valuing $2.4 billion, is currently pending with the Ministry of Planning for a decision.

However, the ministry has sought clearance from the Public Procurement Regulatory Authority and investigation agencies about the legal status of the ML-I Framework Agreement signed between Pakistan and China in 2017.

The bureaucracy is reluctant to move forward due to the ongoing investigations in two mega road projects of the CPEC by National Accountability Bureau (NAB).

The premier said that the planning and finance ministries should simultaneously address the issues of financing of the project and hiring of consultants. He also sought fresh commitments for the rail project.

It is yet to be seen whether the finance ministry can afford to take the $9 billion loans on its books during the three-year IMF programme period.

The prime minister directed Balochistan chief secretary, Ministry of Maritime Affairs and Ministry of Power to resolve all the outstanding issues that have caused a delay in the implementation of 300MW Gwadar Power Plant, the Eastbay Expressway and Gwadar Master Plan.

The National Development Council had proposed a new mechanism for Gwadar Master Plan, which PM Imran on Monday directed the planning ministry for further review.

The construction of Eastbay Expressway is the main artery of Gwadar Port through which the entire traffic of port will flow. There are serious issues hampering implementation of the Eastbay project.

The PC-I of the project had been approved by ECNEC in January 2015 and approved Rs12.9 billion for construction. However, the contract was awarded at Rs15.1 billion construction cost without securing approval of the revised PC-I from the ECNEC. The 17% increase in construction cost was also above all permissible limits.

The China Communication Construction Company (CCCC) that is executing the project also conducted the technical feasibility and design of the project and yet its cost estimates varied by 17%, according to the Planning Ministry's objections.

There is also no clarity whether China would increase the interest-free loan component as proportionate to the increase in the construction cost. The issues of provision of land to the operators of Gwadar port and Cost Guard also remained unresolved.

The ECNEC had approved to complete the project in 30 months, which has been increased to 42 months without securing the body’s approval.

The planning ministry has inquired whether the Ministry of Maritime Affairs has acquired approval of the Framework Agreement from the Public Procurement Regulatory Authority (PPRA).

The question has been raised after NAB decided to investigate Multan-Sukkur project of the CPEC that has also been implemented under the same framework agreement.

The National Electric Power Regulatory Authority has not yet approved a tariff for Gwadar coal-fired power plant project. The PM sought to expedite the process.

PM Imran also directed to prepare electricity demand and supply projections till 2040, while keeping in mind the economic growth projects for next 20 years.

The power secretary informed that China had shared a draft of demand-supply situation study till 2025.

PM Imran directed the Ministry of Finance to give concurrence to the proposal of hiring new staff for Motorway Police to make Multan-Sukkur motorway operational. He ordered to finalize a date for performing the groundbreaking ceremony.