Development collaboration: UK to fund part of corridor project

In a first, London to finance infrastructure in Pakistan.

ISLAMABAD:

In a significant departure from past policy, the United Kingdom has become a partner in the China-Pakistan Economic Corridor and agreed to provide $121.6 million in grants to fund the construction of Burhan-Havelian Expressway, part of the northern route of the corridor.

The Asian Development Bank (ADB) and the Department for International Development (DFID) of the United Kingdom will co-finance the $327 million cost of the 59 kilometre Hassanabdal-Havelian Expressway (E-35) project, according to a press release issued by the Manila-based lending agency on Tuesday.

This is the first time London will fund any infrastructure project in Pakistan, as its focus has historically been on social sectors. This is also the first time DFID is collaborating with the ADB in Pakistan.



Against objections from the United States, Britain has joined the China-led Asian Infrastructure Investment Bank, set up by Beijing as a counterweight to the Washington-based World Bank.

While Washington has not officially had a comment on CPEC, former US ambassador to Pakistan Cameron Munter, currently visiting Islamabad, said the initiative will heighten Pakistan’s status at the regional and global level. Under CPEC, China plans to finance $46 billion worth of infrastructure projects in Pakistan in exchange for getting access to Gwadar port for its western hinterlands.

“The ADB and DFID are joining hands to promote regional connectivity, economic growth, and stability in Pakistan,” said Sean O’Sullivan, ADB director general for Central and West Asia, at the agreement signing. O’Sullivan is visiting Pakistan for the first time. He said the ADB’s partnership with DFID for the E-35 is an important step towards regional connectivity.

Finance Minister Ishaq Dar and DFID Pakistan Head Richard Montgomery were also present at the signing of the agreement. The loan agreement was signed by ADB Pakistan Country Director Werner E Liepach and Economic Affairs Secretary Saleem Sethi, while the project agreement was signed by National Highway Authority Chairman Shahid Ashraf Tarar.

The ADB had earlier approved a $327 million loan for the project in two tranches of $200 million and $127 million respectively under the multi tranche facility (MFF) for the National Trade Corridor Highway Investment Program (NTCHIP). This original investment was for the E-35 expressway connecting the existing M-1 at Hassanabdal (Burhan) to Havelian. DFID’s grant contribution of $121.6 million will allow ADB to fund the extension of the expressway to Abottabad and Mansehra to the North.

DFID will provide the grant in two tranches. The first tranche will be equal to $82.4 million while the second tranche will amount to $39.2 million.

The 59.1 kilometre long Burhan-Havelian road is an important juncture on the northern alignment of the CPEC.

Published in The Express Tribune, September 2^nd,  2015.