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Pakistan and China to sign agreements worth $50 billion: Ahsan Iqbal

18 April, 2015

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ISLAMABAD: With Pakistan and China expected to sign agreements worth $50 billion during the forthcoming visit of President Xi Jinping, Planning and Development Minister Ahsan Iqbal has said Islamabad will have to move with Beijing’s pace on operationalising the China-Pakistan Economic Corridor (CPEC); otherwise China could choose some other route and engage some other partner.

Mr Iqbal, who is steering the multi-billion dollar programme with the National Development and Reform Commission of China, was speaking at a seminar on the CPEC.

“It is Pakistan’s responsibility to complete the Khunjerab-Gwadar route at a pace that can supplement China’s economic priorities attached to the CPEC,” he said. “It is the shortest but not the only supply chain available to China.”

The foreign ministry has said President Xi will visit Pakistan on April 20-21 at the invitation of the president and the prime minister. This will be his first foreign visit this year.

According to an official, the CPEC was originally estimated at about $45 billion but the size was revised to $50bn because of addition of some projects and cost escalations.

Ahsan Iqbal said a major chunk of $35-37bn was purely Chinese investment in IPPs (independent power projects) mode. Pakistan will purchase electricity from these projects, while the remaining $8-9bn will be Chinese concessional loans for infrastructure development like roads, ports and railways.

He said that although final terms and conditions were yet to be agreed upon, interest rate on the loans would be the lowest in the international market. He said the Chinese government would provide subsidy to its banks while awarding contracts to its companies for these projects.

$50bn agreements likely during Chinese president’s visit
Answering a question, the minister said the army would raise a special force for the security of Chinese workers to be engaged in various projects under the CPEC.

He said all major political parties had promised to extend their full support to the China-Pakistan economic cooperation at a recent meeting presided over by the prime minister. He said Pakistan needed continuity of policies, political cohesion and stability and peace in the country to complete the projects at a fast pace.

In a presentation, a senior official of the planning and development ministry said the two sides would sign government-to-government infrastructure deals of over $4bn. About $10.5bn commercial deals will be signed in the energy sector for 7,250MW power generation.

The Chinese president will perform the groundbreaking of about 10 projects. These include $44 million cross-border fibre optic data communication system project between Khunjerab and Islamabad, digital terrestrial

multimedia broadcast pilot project in Muree, $1.4bn Orange Line Mass Transit for Lahore, Cultural Centre in Islamabad, a small and medium hydro research centre, Pak-China FM-98 channel, 720MW Karot hydropower project, 200MW wind power projects and 900MW Zonergy solar power project in Bahawalpur.

The two sides will sign an inter-governmental framework agreement for construction of Karachi-Lahore motorway’s Multan-Sukkur section at a cost of about $2.6bn, Karakoram Highway Phase-II’s Thakot-Havelian section ($920m), Gwadar east-bay expressway ($230m) and Gwadar international airport ($140m). The finance ministry will sign financing agreements of the four key projects which will make the eastern route operational.

A framework agreement for financing development of industrial parks will also be signed. The State Oceanic Administration of China and Pakistan’s Ministry of Science and Technology will sign a protocol on the establishment of China-Pakistan Joint Maritime Research Centre.

A land lease deed for Gwadar port and Gwadar free zone will be signed between China Overseas Port Holding Company and Gwadar Port Authority. A joint feasibility study for upgradation of the main railway line and a framework agreement on Gwadar-Nawabshah LNG terminal and pipeline will also be signed.

China will extend commercial loans for executing 7,250MW projects, in addition to two coalmining projects in Thar. An agreement will be signed between Thar Power Company and a Chinese company for building two coal-fired power plants of 660MW at a cost of $900m.

Sino-Sindh Resources Limited will sign a $900m coalmining project at Thar Block-II and $1.9bn Thar coal power projects of 1,200MW. Nishat Group will sign 1,320MW coal-based power projects to be set up in Rahimyar Khan. Agreements for setting up two 1,320MW power projects in Muzaffargarh will also be signed.

Shandong Ruyi Group and Huaneng Shandong Power Generation Company will sign agreements for setting up 1,320MW coal-based power plants in Sahiwal at a cost of $1.6bn and 870MW hydropower project in Suki Kenari with $1.8bn to be sponsored by China Gezhouba Group.

The Foreign Office said the Chinese president would be accompanied by a large delegation, including First Lady Madam Peng Liyuan, senior ministers, functionaries of the Communist Party, government officials and chief executives of business houses.

The government will confer on President Xi the country’s highest civil award, Nishan-i-Pakistan, at a special ceremony to be held at the Aiwan-i-Sadr.

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