Govt to allocate Rs55b for CPEC

Proposed budget far less than funds needed to finance Rs1.6-tr portfolio

Shahbaz Rana May 30, 2021
For Havelian-Thakot section of CPEC, Rs1.5 billion has been proposed against the remaining need of Rs18.8 billion. The total cost of the project is nearly Rs137 billion. PHOTO: FILE


The government has proposed an allocation of Rs55 billion for the China-Pakistan Economic Corridor (CPEC) projects in the next budget, which does not match with the needs to finance a portfolio of Rs1.6 trillion.

Slightly over Rs305 billion have already been spent on these schemes over the years and except the Rs1.1 trillion Mainline-I project, which will take about eight years to complete, rest of the schemes have to be completed by now.

About 25 CPEC related schemes have been included in the Public Sector Development Programme (PSDP) 2021-22, according to officials of the Ministry of Planning and Development. The story is based on schemes that have been mentioned either as CPEC projects in the official documents or are already known CPEC schemes.

The government has proposed Rs55 billion to finance the development work in the next fiscal year. Majority of these infrastructure projects had been initiated few years ago and should have been completed by now.

The Mainline-I project of Pakistan Railways has again been retained in the PSDP, although no progress could be made during the past two years despite making it part of the national development plan.

The total cost of this scheme is estimated at Rs1.12 trillion but the government has made an allocation of only Rs10.6 billion in the next budget, starting July. Efforts would be made to launch Railways ML-I project in FY2021- 22, according to the Annual Plan Coordination Committee meeting working paper.

The total cost of CPEC projects has increased to Rs1.6 trillion, of which Rs305 billion has already been spent on these schemes. The remaining financing for these projects is estimated at Rs1.3 trillion, according to the Ministry of Planning officials.

The preliminary design of Mainline-I scheme would get Rs500 million in the next fiscal year against the remaining requirement of Rs1.3 billion.

The ML-I project is facing delays due to lack of consensus between China and Pakistan over the financing modalities for $6 billion loan.

While responding to a question on the CPEC allocations, Planning and Development Minister Asad Umar said on Friday that the next phase of CPEC projects relate to the private sector and there would be less burden on the public sector.

The government has included three schemes for provision of gas facilities for CPEC Special Economic Zones in Rashakai, Faisalabad and Bostan. It has allocated about Rs1.8 billion to cover the full cost of these schemes.

For the next fiscal year 2021-22, the Pakistan Tehreek-e-Insaf (PTI) government has proposed Rs900 billion for federal development spending.

The government faces fiscal challenges that have limited its ability to allocate sufficient funds for the ongoing schemes. Despite the scarcity of resources, it has decided to add about 215 more schemes to the PSDP, further thinning out available resources.

However, Umar said that it has long been the practice to add about 20% to 30% of the PSDP to the new projects.

Gwadar’s water treatment plant project will again remain underfunded in the next fiscal year despite the urgent need to complete the project on priority. The project, approved in March 2018, got Rs500 million allocations against the remaining requirements of Rs2.3 billion.

The water treatment plant project had been initiated to provide five million gallons of clean water per day to the Gwadar city. The total cost of the scheme is Rs3 billion.

The land acquisition project for Sukkur-Multan section of CPEC’s eastern route would be financially closed in the next year and Rs4.6 billion has been allocated for meeting the remaining requirements.

For the construction of Hakla-Yarik-Dera Ismail Khan motorway of CPEC’s western route, it has proposed Rs10 billion. The total cost of this scheme is Rs110.2 billion. The project’s remaining financing requirement is estimated at Rs16.5 billion.

For Havelian-Thakot section of CPEC, Rs1.5 billion has been proposed against the remaining need of Rs18.8 billion. The total cost of the project is nearly Rs137 billion.

The Zhob-Kuchlak road project, which the government approved in 2019 will get Rs5 billion financing. The total cost of the project is Rs63 billion.

The New Gwadar International Airport has been given Rs2.1 billion allocation against the total need of Rs20.6 billion. The project had been approved in 2015.

The Eastbay Expressway will get Rs3.1 billion against the remaining need of Rs3.4 billion, according to the planning ministry officials.

The Gwadar smart environment project has been given Rs400 million allocation against the remaining requirement of Rs1.7 billion. This project is under implementation since March 2018.

The Rs17-billion worth of Shandur-Gilgit road project will get Rs2 billion against the requirements of Rs17 billion.

The government has proposed Rs784 million against requirement of Rs1.1 billion PERN-III optical fibre between China and Pakistan.

For academic collaboration under CPEC universities Rs150 million has been proposed. The intelligence bureau office compound will get Rs100 million against the requirement of Rs331 million. The CPEC support project for Gwadar Port Authority will get Rs9.7 million and Pak-China Technical and Vocational Institute has been given Rs38.5 million.

The CPEC centre for excellence will get Rs150 million, CPEC support project Rs100 million and CPEC support project for Pakistan Railways Rs100 million.

Published in The Express Tribune, May 30th, 2021.

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