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CPEC projects worth $28bn completed in 4 yrs: Ministry
Pakistan has $28bn of projects under China-Pakistan Economic Corridor (CPEC) completed over the past four years, the ministry of planning said yesterday.
The planning ministry said at least 22 CPEC projects have been completed since 2014.
“CPEC is not imposing any immediate burden with respect to loans repayment and energy sector outflows (which) will start from 2021 and spread over 20 to 25 years with a maximum in 2024 and 2025,” the ministry said in a statement.
“The resultant benefits of these investments to the Pakistan economy would far outweigh these outflows.”
The planning ministry said CPEC has provided enormous opportunities for the country to grow economically.
It is an engine for economic growth and is expected to increase GDP growth by 2% to 3%.
The ministry said CPEC is a flagship and most active project of Belt and Road Initiative and “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,” it added.
Infrastructure sector is being developed through interest free or government concessional loans.
Gwadar port is grant-based or investment which means the government does not have to pay back the invested amount for the development of the port.
Energy projects are being executed under independent power producers 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,” the ministry of planning said.
“Pakistan has opted for Chinese investment under the China-Pakistan Economic Corridor due to the favour- able financing arrangements.” China stepped forward to support development at a time when foreign investment had dried up, and economic activities were being crippled by energy shortages and infrastructure gaps in the country.
CPEC has facilitated in overcoming crucial energy, transport infrastructure and supply chain bottlenecks.
Under CPEC, development of Gwadar would ensure strengthening of maritime sector particularly the coastal tourism and local fishery industry “thereby benefiting the local communities”.
“Pakistan has repeatedly stated that it is fully committed to the China-Pakistan Economic Corridor, which enjoys complete consensus among all institutions and political forces,” the planning ministry said.
“It is a key to the future of Pakistan’s socioeconomic development. Within the broad parameters of the already approved CPEC framework, the present government, with mutual consultation of government of China is broadening the base and expediting pace of the China-Pakistan Economic Corridor.”
Government is also developing a mechanism to include third party participation in CPEC.
“Socioeconomic development and poverty alleviation are being included in CPEC and a separate working group is being established to fast-track the dimension of the mega project,” the planning ministry said.
“Gwadar continues as prioritised and being developed as standalone project and a transshipment hub based on blue economy principles.
Industrialisation under the ChinaPakistan Economic Corridor has already been fast-tracked and four SEZs (special economic zones) would hit the ground soon.”