The ongoing financial crisis in Pakistan and the economic slowdown in China appear to have had bearing on the progress of the China-Pakistan Economic Corridor (CPEC) programme, reported Islam Khabar.
The CPEC project that was commenced a decade ago was held as a harbinger of prosperity for Pakistan. However, seven years later, many projects under the CPEC still remain non-starters while some of those being operational have become liabilities and are incurring losses. Not just it is causing delays but has made the megaproject struggle for funds, reported Islam Khabar.
Moreover, Beijing’s refusal to release the promised funds has affected the CPEC project implementation and at the same time, cash-strapped Pakistan is being compelled to repay Chinese loans procured so far.
CPEC was launched in 2013 and most of the conditions in the agreement remain vague or hidden from general public knowledge.
Barring a few power projects, the major CPEC projects remained on paper till 2020 when the much-touted infrastructure programmes saw cost escalation to around USD 62-65 billion.
Now, it is said the cost has increased further, thanks to the increase in the capital cost of the different projects under the CPEC. The recent developments suggest Beijing is losing interest and confidence in the CPEC, reported Islam Khabar.
This is going to be difficult for the Islamabad government as the CPEC would remain incomplete, become a huge liability, and send Pakistan into a debt trap.
Implementation of an important CPEC project, the Mainline1 (ML-I)-railway line between Karachi and Peshawar–has been asked to be shelved by the Chinese government over feasibility issues.
After China’s backout, Pakistan has decided to build it on its own since the 1,871-km ML-I is one of the major four railway lines in Pakistan, reported Islam Khabar.
