Pakistan, China agree to expand CPEC scope

Islamabad reinforces its decision to fence Pak-Iran border

Shahbaz Rana November 06, 2019

ISLAMABAD: Pakistan and China on Tuesday agreed to set a new direction of the China-Pakistan Economic Corridor (CPEC) for future cooperation in high economic impact areas by largely shifting away from infrastructure projects, except the $9 billion Mainline-1 projects.

Islamabad reinforced its decision to fence the Pak-Iran border after the Pak-Afghan border aimed at securing the CPEC from external threats and consolidating internal security gains.

Minister for Planning Khurso Bakhtiar announced to perform the groundbreaking ceremony of the $9 billion ML-I project, which had been facing a four-year delay.

The decisions to expand the CPEC scope to copper, gold, oil, and gas sectors were taken during the 9th Joint Cooperation Committee (JCC) meeting that was co-chaired by Planning Minister Makhdoom Khusro Bakhtiar and National Development and Reform Commission (NDRC) Vice-Chairman Ning Jizhe.

"The JCC meeting was fruitful, discussions successful and the agreed framework is promising", Chinese Ambassador Yao Jing said, while addressing a joint press conference along with the planning minister.

The Chinese ambassador said that the JCC had set a new direction for the CPEC.

He said that the discussions also took place to shift the Chinese manufacturing unit to Pakistan and providing Chinese financing facilities for future projects.

“If we could put all energies and Pakistan could provide enabling environment, the newly agreed framework has the potential to transform Pakistan from low-income to a middle-income country in the next five to six years,” Bakhtiar hoped.

He said it was decided to expand the CPEC to copper, gold, oil, gas and affordable housing sectors.

Bakhtiar said that only the oil and gas sectors have the potential to attract $8 to $10 billion Chinese investment in the next three years.

The planning minister stated that copper and mineral development would benefit both the countries as China remained one of the largest copper importers.

He maintained that the revival of Pakistan Steel Mills with the help of China could also reduce the import bill by $4 billion.

The minister said that a joint committee for finalising the financing modalities of ML- I was approved by the JCC. He said that the Karachi Circular Railways project remained the priority of the government.

Bakhtiar noted that CPEC could not be the replacement of public sector development and Pakistan Tehreek-e-Inasf (PTI) government would focus only on those projects that had a high impact on Pakistan's economy.

He observed that the modalities of using Chinese currency would be finalised in an expert group that would comprise officials of central banks from both the countries.

The minister declared that Pakistan's security challenges had roots in its neighbourhood and to meet the challenges, there was a need to completely fence the country's borders with Afghanistan and Iran.

He said that border fencing with Afghanistan would be completed by next year, while the Iran border would be fully fenced in two to three years.

“Until there is 100% border fencing, Pakistan's security cannot be 100% guaranteed,” Bakhtiar said.

During the proceedings, a ceremony was held wherein Multan-Sukkur Motorway of the eastern corridor was inaugurated and Gwadar Master Plan was approved and signed.

The ceremony also witnessed the signing of two MoUs - one between the All-China Federation of Trade Unions (ACFTU) and the Ministry of Planning for further strengthening the worker exchange and another on Healthcare between Ministry of Health and Research Development International (RDI).

In his opening remarks, Khusro Bakhtiar said that Pakistan appreciated the Chinese leadership for the support it had resolutely extended for the cause of Jammu and Kashmir.

“The CPEC will be a gateway of progress and prosperity for a bright future. 2019 was a significant year for China-Pakistan Economic Corridor as several significant milestones were achieved or will be achieved by the end of the year,” he added.

The minister said that the Government of Pakistan had taken several important decisions during the current year that paved the way for finalisation of the Gwadar Master Plan and preliminary design of ML-1 project, operationalisation of Gwadar Port and free zone.

“We made steady progress in the resolution of matters regarding finalisation of tariffs for the completed energy projects, Gwadar Port concession agreement, and Kohala hydropower project,” he said.

Bakhtiar reiterated that the remaining portion of the eastern corridor from Sukkur to Hyderabad (M6) would be completed in BOT (built, operate and transfer) mode under the umbrella of public-private partnership and urged Chinese companies to take an active part in the bidding process.

He recommended that JCC accorded priority to the remaining portion of the western corridor and the provincial projects proposed in previous JCCs.

“This year in March, the Zhob–Quetta section of the western corridor was inaugurated and now the remaining portion of DI–Khan–Zhob is a priority for the Government of Pakistan,” he said.

He highlighted that ML-1 was a top priority for Pakistan and the stage was set to take the discussion to the next level and formulate a joint project financing group.

“The government has established CPEC Authority which will serve as a one-window for all CPEC-related issues so that we can fasten the pace of the projects and remove all bottlenecks for efficient implementation of the projects,” Bakhtiar observed.

The minister expressed optimism that the huddle would have a meaningful consultation to formulate the roadmap for cooperation in the second phase of CPEC and hoped it would yield tangible progress towards a shared goal of making CPEC a resounding success.

NDRC Vice-Chairman Ning Jizhe said that the delegation from China for 9th JCC was the biggest as compared to previous ones which proved China’s commitment to take cooperation with Pakistan to new heights.

He stated that high consideration would be given to socio-economic and industrial cooperation in the second phase of CPEC.

Jizhe underscored that bilateral economic cooperation would proceed as planned for the mutual benefit of both the brotherly countries.


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