The Chinese government is planning to invest the sum of $8.5 billion in Pakistan. According to media report, China is investing this huge amount of money to upgrade Pakistan's rail network and also build a gas pipeline in the country.
financialexpress.com reports that China will finances these project with a $7 billion concessionary loan:
The Central Development Working Party (CDWP), a Pakistan body to authorise major projects, yesterday approved $10 billon worth two projects. China will provide loans equivalent to 85 per cent ($8.5 billion) of the cost of each project.
The cost of upgrading of Pakistan Railways existing Mainline (ML-I) and establishment of a dry port near Havelian is $8.2 billion, which the Chinese government will finance with a $7 billion concessionary loan, The Express Tribune reported.In a statement issued by the Central Development Working Party chairman, Ahsan Iqman a body which is responsible for approving major projects in Pakistan, who also yesterday approved $10 billion worth two projects, the cost of the projects will firmed up after finalizing financing arrangements.
“The exact costs of both the projects will be firmed up after finalising financing arrangements,” CDWP Chairman and Minister for Planning, Ahsan Iqbal, said.
“After finalisation of the financing arrangements, both the projects will be taken to the Executive Committee of National Economic Council (Ecnec) with firmed up cost for final approval,” he said. financialexpress.com
financialexpress.com reports that the project is to be completed in two phases in five years by 2021.
At present, Pakistan Railways is picking up less than 4 per cent of the traffic volume of the country, which the government intends to increase to at least 20 per cent by 2025.
The project is planned to be completed in two phases in five years by 2021 on engineering, procurement and construction (EPC) mode. Phase-I will be completed by December 2017 and Phase-II by the year 2021.
The CDWP also cleared Gwadar-Nawabshah LNG Terminal and Pipeline Project at an estimated cost of roughly USD 2 billion or Rs 206.6 billion.
The Chinese Exim bank will provide 85 per cent of the financing under government-to-government mode. The EPC contract will be given to a Chinese company.
The pipeline project will be included in the CPEC framework.
The key objective of this project is to overcome gas shortages by importing LNG and its transportation through Gwadar-Nawabshah pipeline.
In phase-I, the pipeline will follow the coastal pipeline corridor, which was formally established for the Iran-Pakistan gas pipeline.
In phase-II, a 90-kilometer patch will be constructed from Gwadar to Pakistan-Iran border to tie the national network with Iranian system.
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