CPEC: Pakistan, China in talks to complete ML-1 project early, Parliamentary Committee told

Islamabad: Pakistani National Assembly Standing Committee on Planning, Development and Special Initiatives was informed that the government was engaged with the Chinese authorities for early conclusion of the financial negotiations on construction of Main Line (ML-1) railway project under China Pakistan Economic Corridor (CPEC).

“We are 100 percent hopeful that the negotiations with China would yield positive results and work on the project would start soon, but if in any case, the talks remain unsuccessful, the government will go to other countries to materialize the project plan,” an official of the Planning Ministry told the committee.

The meeting held here presided over by the Committee Chairman Junaid Akbar was informed that the government was fully prepared to float the tender for the project as it had completed all the initial requirements including preliminary design and the feasibility reports, said an official statement.

The ministry official said the government to government framework agreement between Pakistan and China had also been signed so, “as soon as the loan agreement is signed, we will float the tenders for the project within 50 days”.

Member of the Committee Agha Rafiullah, expressing dissatisfaction over the progress of mega CPEC project ML-1, said that so far there was zero progress on the project and urged to speed up the process so that physical work could be started as soon as possible.

The ML-1 project which was included among the early harvest projects of the CPEC, faced inordinate delay due to some technical differences between the two sides.

The meeting was informed that cost of original PC-1 of ML-1 project agreed during the previous government was US$9.172 billion, but the incumbent government negotiated and managed to slash the project cost by 25% to $6.8 billion.

It was further informed that the Chinese side was demanding that the project financing should be made totally in the Chinese currency RMB, however the financing committee from Pakistan side which had met for around five times with the Chinese side so far, had proposed a mix of RMB and USD.

Similarly the Chinese side had demanded that the total tenor (length of time until a loan is due) of the loan should be 15-20 years while the financing committee had proposed 25 years’ tenor.

With regard to loan share, the financing committee had agreed to the Chinese demand of 85%.

The Chinese side is also demanding that 1% interest rate on the loan was too low while the financing committee had proposed to keep the rate less than other CPEC projects (average 2.38%).

The meeting was told that under the project, the 1872 kilometers’ long railway track from Karachi to Peshawar would be up-graded and doubled and the new track would be laid to improve the speed limit of the passenger trains up to 160 kilometers per hour.