Ministry of Planning clarifies western media fresh report on CPEC
ISLAMABAD: The Ministry of Planning has said that Western media recent’ reports regarding China Pakistan Economic Corridor (CPEC) are based on incorrect information, distorted facts and one-sided opinions of individuals.
The ministry clarified that China Pakistan Economic Corridor (CPEC) is a flagship and most active project of Belt and Road Initiative where 22 projects of worth $ 28 billion have been actualized over the past 04 years.
It said the project could not be compared with Chinese overseas investment in Sri Lanka or Malaysia as frameworks and financial modes of CPEC are altogether different in nature.
CPEC finances are divided in government to government loans, investment and grants. Infrastructure sector is being developed through interest free or government concessional loans.
Gwadar Port is grant-based or investment which means the Government of Pakistan does not have to pay back the invested amount for the development of the port.
Energy projects are being executed under Independent Power Producers (IPPs) mode and finances are mainly taken by the private companies from China Development Bank and China Exim Bank against their own balance sheets, therefore, any debt would be borne by the Chinese investors instead of any obligation on part of the Pakistani government.
Pakistan has opted for Chinese investment under CPEC due to the favorable financing arrangements. China stepped forward to support Pakistan’s development at a time when foreign investment had dried up, and economic activities were being crippled by energy shortages and infrastructure gaps. CPEC is not imposing any immediate burden with respect to loans repayment and energy sector outflows.
CPEC outflows would start from the year 2021 and spread over 20 to 25 years with a maximum in the year 2024 and 2025.