Amid the opposition’s call for transparency in the finalisation of mega projects with China, the government on Monday unveiled a list of 36 projects worth $39.6 billion that it wants Beijing to finance in return of giving it access to Gwadar port.
It was for the first time that the federal government shared the details of the much-hyped China-Pakistan Economic Corridor (CPEC) with a parliamentary panel. The details were submitted to the National Assembly Standing Committee on Planning and Development.
The cost that the government has revealed is approximately $6 billion higher than what it initially announced. Out of 37 projects, as many as 22 schemes are about the power sector having a total estimated cost of $27.3 billion, according to the government’s working paper.
There is a tentative agreement with China on these projects but the component of Chinese financing has yet to be finalised, said Planning Secretary Hasan Nawaz Tarar while briefing the standing committee. He maintained that the list of the projects was subject to any deletion or addition.
Tarar said China was focusing on Gwadar port and on their request Pakistan has constituted a fourth Joint Working Group on Gwadar. “Both China and Pakistan have their own interests. China has an interest in Gwadar port while Pakistan’s interest is to economically develop the corridor,” he added.
The projects are finalised at the level of Joint Cooperation Committee – the body that has ministerial level representation of both countries. Tarar said the third JCC meeting will be held in Beijing next month, in which all these projects will be reviewed.
He clarified that the finalisation of the list does not mean that all the projects will be implemented as the final decision rests with Chinese authorities who are currently evaluating these projects.
“The road and infrastructure projects will be implemented under government-to-government arrangements and China will provide concessional funding for these schemes,” he stated.
Tarar said that all power sector projects will be funded by Chinese financial institutions purely on commercial considerations and most of these will be undertaken by the private sector.
According to the committee members, in terms of costing, the projects appeared as a wish-list of the government.
“These are mega projects of significant importance and should have been shared with the parliament a year ago,” said Nafeesa Shah of Pakistan Peoples Party, a member of the standing committee. She said the speed with which the government is moving on CPEC projects was a matter of concern. Shah alleged that the projects were being finalised in a non-transparent manner.
According to the list, the government wants to build six coal-based power projects, each 660 megawatts (MW), in Gaddani at an estimated cost of $5.94 billion. Two more coal-based power plants, each 660MW, are planned to be set up at Port Qasim having an estimated cost of $2 billion. Three projects, each 330MW, are proposed to be set up at Thar Power Coal Plant with an estimated cost of $1 billion.
China Power International has been proposed to set up two power plants having total generation capacity of 1,200MW with an estimated cost of $1.8 billion. A coal mining project of $860 million at Thar Block-II is part of the list. At Thar Block-I, another coal mining project worth $1.3 billion has been planned.
The government has also included 1,100MW Kohal power project worth $2.4 billion, 720MW Karot hydropower project worth $1.42 billion, 873MW Suki Kanari hydropower project costing $1.8 billion and three wind power projects of 250 MW worth $375 million in its list.
The federal government has included nine projects of the Punjab government that promises 6,110MW power generation at an estimated cost of $6.2 billion. The Orange line Metro Train costing $1.6 billion is also included in the list. The cost of 387 kilometre Multan-Sukkur section of Karachi-Lahore Motorway has been estimated at $2.6 billion.
The cost of Karakoram Highway, Raikot to Islamabad section, has been estimated at $3.5 billion. Similarly, the cost of rehabilitation and upgradation of Karachi-Lahore-Peshawar railway track has been estimated at $3.7 billion.
The federal government has approved CPEC support project worth Rs409 million for providing secretariat support to implement the corridors projects. To streamline the process, CPEC steering committee has been set up which is headed by Prime Minister Nawaz Sharif. It provides strategic guidance for planning, monitoring and implementation of the projects.
Tarar said China has shared its outline of the long-term plan with Pakistan. After reviewing the plan and reaching to an agreement with the Chinese side, the same plan will be submitted before the next JCC meeting for approval, he added.
Published in The Express Tribune, July 22nd, 2014.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.