CPEC — where do we stand?

In the previous two columns, we laid out the agreed framework of China-Pakistan Economic Corridor (CPEC), trying to clear perceptual fog around this vital project, and recalling its immense scope and expanse. This column discusses the on-ground progress, vis-à-vis the ‘eight core areas’ of CPEC.

First, the integrated transportation system. There are five road projects and two rail projects under this core area. The roads are: a) The 118-km Thakot-Havelian (an early harvest project) almost complete and operational; b) The remaining portion of 136-km stretch of KKH between Thakot-Raikot (N-35), awaiting completion of feasibility study for project alignment; c) The 392-km Peshawar-Karachi Motorway (Multan-Sukkur Section), almost complete and operational; d) N-30, Khuzdar-Basima Road (110 km), physical work underway; e) Phase-I of high priority, 210-km, N-50 connecting DI Khan (Yarik)-Zhob, land acquisition for upgradation in implementation phase.

In railways, the 1,830-km strategic existing Main Line-1 (ML-1) would be expanded and reconstructed. It includes doubling the track, improving rail speeds, computerised signaling, added safety, and freight trains speed enhancement upto 120 km/h. The project is in advanced stages of planning; feasibility is complete and loan is being negotiated. It would be completed in the third phase (by 2025) as planned. Second project is Havelian containerised dry port; feasibility is complete and project is put on fast track.

Inner-city mass transit schemes include the metro bus system in Rawalpindi and BRT Peshawar, both in operation; the Lahore Orange Metro Train, almost complete; Karachi CCircular Railway and Quetta Mass Transit, past the feasibility stage.

The four provincial projects under CPEC comprise: a) The Keti Bunder seaport development; b) Road Naukundi-Mashkhel-Panjgur connecting highways M-8 and N-85; c) Chitral CPEC link road from Gilgit-Shandur and Chitral-Chakdara and; d) Road Mirpur-Muzaffarabad-Mansehra connecting with CPEC route. All projects are in PC-1 stage. Additionally, there are 32 projects across Pakistan with a whooping outlay of Rs1,394 billion under CPEC and Public Sector Development Program (PSDP) 2018-19.

In the Gwadar Master Plan (financed mostly through Chinese grant and interest-free loans), the eight projects include construction of Gwadar East-Bay Expressway, New Gwadar International Airport, construction of breakwaters, dredging of berthing areas and channels, development of free zone, Pak-China Friendship Hospital, Pak-China Technical and Vocational Institute and Gwadar Smart City. These are in various stages of development and completion.

There are six infrastructure projects under the much publicised ‘Western Route’ in different stages of development. The project includes: a) Hakla-DI Khan Motorway (completion this year); b) high priority DI Khan (Yarik)-Zhob Road (N-50); c) Road Zhob-Quetta (N-50); d) Khuzdar-Quetta-Chaman Section of N-25; e) N-85, Sorab-Hoshab (completed) and; f) Road Gwadar-Turbat-Hoshab (M-8) which is already operational.

The second core area is the information network infrastructure. This comprises the 820-km cross-border optical fibre cable connecting Gilgit-Baltistan (GB) and K-P, commissioned already in 2018. The pilot project for Digital Terrestrial Multimedia Broadcast (DTMB) is complete. The DTMB standard (adopted by China, Hong Kong, and Cuba) would upgrade the PTV terrestrial network from analogue to digital transmission. The Rebroadcast Station (RBS) at Murree is complete.

Third is the energy sector, the most significant core area. Its portfolio included 17 ‘priority projects’ cumulatively generating around 11,000 MW of electricity; four ‘actively promoted projects’ (upto 2,000 MW); and two ‘potential projects’ (180 MW). In the 17 priority projects, the last completion date (Thar-Coal Gassification) is 2022.

Around 11,000 MW has already been added to the national grid in a span of four years. It has eased load shedding and power outages besides providing added benefits like altering fuel mix, reducing import bill and boosting industrial production etc. CPEC power plants have substituted older plants operating at a minimal (28%) energy-efficiency-factor (EEF) with those having a higher (61%) EEF.

Electricity outages were costing the economy 1.5-2 percentage points of GDP resulting in diminished export and buyers walking out of Pakistan. Today, in a pleasant surprise — notwithstanding the media negativity and the pandemic — industrial units in Faisalabad, Karachi and elsewhere are operating at full capacity.

If load shedding persists especially in summers, this is mainly due to the antiquated transmission and distribution network, which cannot efficiently transmit the generated electricity to the end user without interruptions. This systemic weakness has also been agreed to be fixed under CPEC Long-Term Plan (LTP), if Pakistan stays the course. Moreover, internally we have to mull over options like either privatising the DICSCOs (electricity distribution companies) or hand these over to WAPDA, making the power distribution sector more efficient and control circular debt.

The fourth area is trade and industrial parks… to be completion by 2030. In line with the industrialisation and urbanisation objectives of CPEC, a total of nine economic/industrial Zones (E/IZ) and special economic zones (SEZ) are planned across Pakistan. These comprise a) Rashakai EZ (REZ) at Nowshera; b) Dhabeji SEZ near Karachi; c) Bostan IZ near Quetta; d) Allama Iqbal Industrial City, Faisalabad; e) ICT Model Industrial Zone, Islamabad; f) Industrial Park Pakistan Steel Mills Port Qasim; g) Mirpur Industrial Zone, AJK; h) Mohmand Marble City; i) and Moqpondass SEZ G-B.

Rashakai EZ is comparatively fast-paced and its industrial potential includes garment and textile products, home building materials, general merchandise, electronics and electrical appliances, automobile and mechanical equipment. Bostan IZ would include fruit processing, agriculture machinery, pharmaceutical, motor bikes assembly, chromite, cooking oil, ceramic industries, ice and cold storage, electric appliance and halal food industry. This sampling reflects the diversity and span of the SEZs.

The fifth and sixth core areas, ‘agricultural cooperation’ and ‘tourism’, are planned in the last two phases of CPEC construction and development, upto 2025 and 2030.

Seventh is social development. The completion of the Western Route (Hakla-DIK-Zhob linking Basima-Gwadar) in particular would open up the backward districts of Balochistan and southern K-P, integrating them with national markets. This would improve the lot of communities along this route, enabling them to sell their mining, livestock, poultry, horticulture and fisheries output; reduce transportation costs and offer employment in related industries and services. Fiber optic connectivity would enhance cellphone and internet coverage and broadband usage, ushering national integration and development.

Planners are sensitive to the potential sense of deprivation in areas adjoining the CPEC command areas for lack of comparative educational, health, drinking water and vocational training facilities, etc. Various CPEC projects, like Engro Thar Coal Mining, have built-in community-related projects, such as employment/contractual services, construction of rural roads, transport services, agriculture development, vocational and on-job training for locals.

This core area also covers people-to-people exchanges, transfer of knowledge in different sectors, the establishment of Pakistan Academy of Social Sciences and transfer of knowledge in education sector through consortium of business schools. People-to-people and business-to-business visits are underway, besides training workshops on industrial zones.

Eighth is financial cooperation. The Joint Cooperation Committee (JCC), meeting regularly, has worked on speedy custom clearance, reducing dollar-dependency through the currency swap agreement and direct investments to lift the Pakistani economy.

In sum, with so much achieved, a real and or perceived slowing down is not in line with Sino-Pak national interests.

Published in The Express Tribune, June 3^rd, 2021.

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