Skip to main content

Crack Appearing In Pakistan, China Relations As Beijing Demands Higher Interest Under CPEC?





Beijing’s ambitious Belt and Road Initiative (BRI) hailed by Pakistan and supported through the China-Pakistan-Economic-Corridor (CPEC) has reportedly hit a new roadblock.

Satellite Image Reveals How China Is Expanding Its Key Airbase, Just 160 KM From Arunachal Borderhe Main Line 1 (ML-1) is the biggest project under CPEC worth $6.8 billion. Under ML-1, a 2,655 kilometer railway line will connect Karachi in the South to Peshawar in the North of Pakistan.

Federal Minister for Railways Sheikh Rashid Ahmed said that “the project will revolutionize the railway service in Pakistan”, Dawn had reported last month. He added that the project will create 150,000 jobs and a significant surge in the freight business after completion of the ML-1 project.  

Meanwhile, China isn’t keen on the one percent interest rate on the loan demanded by Islamabad for financing the project. Reportedly, the project is financed jointly by Beijing and Islamabad where Pakistan will invest 10% of the project cost as equity and China will extend 90 percent in the form of a loan under CPEC. 

“The execution of the project shall be in 3 packages and in order to avoid commitment charges, the loan amount for each package will be separately contracted,” the council had said. To remain in line with debt sustainability guidelines of the International Monetary Fund (IMF), under phase one $2.4 billion worth of work will be done followed by the second phase for $2.7 billion and then $1.7 billion in the third phase. 


The project is expected to increase the line capacity from 34 to over 171 trains each way per day. The work on the first phase is scheduled to begin in January 2021. However, now with Beijing raising concerns over the interest rate, the project may get delayed.

Reportedly, the Pakistan Railways have revealed that only Chinese firms are allowed to bid on the ML-1 project. “Under the framework agreement signed between the People’s Republic of China and the Government of the Islamic Republic of Pakistan, only Chinese companies/consortia are eligible to participate in the bidding process,” the invitation read. 

Experts talking to Nikkei Asia said that Beijing is using delaying tactics as it doesn’t want to end up with a bad deal. “Beijing doesn’t want to say no [to ML-1], it wants to appear committed in Pakistan, but at the same time it is aware of the risky environment for Chinese investments,” said Jeremy Garlick, an assistant professor at the Jan Masaryk Centre of International Studies at the Prague University of Economics and Business.

“Instead of turning down the request, China delays by offering an investment but putting up an obstacle to the final agreement to delay things,” Garlick told Nikkei Asia.

Border and Road Initiative (BRI) launched the multi-billion dollar CPEC programme in 2015 intending to connect Southeast Asia, Central Asia, the Gulf region, Africa and Europe with a network of land and sea routes. The program was launched by Chinese President Xi Jinping.

China’s BRI has received backlash from western countries. The US has criticized the CPEC programme saying that it is neither transparent nor cost-efficient. It has further warned Pakistan that it is subjecting itself to expensive loans under China’s BRI through which Beijing has pledged more than US$60 billion so far.

However, the warning has landed on deaf ears and Islamabad has vehemently defended the programme saying that this is an opportunity for Pakistan for its economic development.

Pakistan’s government and the opposition have come together and repeatedly hailed CPEC as a “game-changer and a guarantor of a better tomorrow for the country”. 

“It (CPEC) is a project that will take Pakistan to new heights [of prosperity],” the prime minister Imran Khan had said adding that Pakistan should learn from the world economic power, China.

Analysts believe that after leaning on China for loans, Pakistan is now left with no other option as the western banks are concerned about the lack of transparency in these Chinese loans.


Popular posts from this blog

SSG Commando Muddassir Iqbal of Pakistan Army

“ Commando Muddassir Iqbal was part of the team who conducted Army Public School operation on 16 December 2014. In this video he reveals that he along with other commandos was ordered to kill the innocent children inside school, when asked why should they kill children after killing all the terrorist he was told that it would be a chance to defame Taliban and get nation on the side. He and all other commandos killed children and later Taliban was blamed. Muddassir Iqbal has deserted the military and now he is  with mujahedeen somewhere in AF PAK border area” For authenticity of  this tape journalists can easy reach to his home town to interview his family members or   ISPR as he reveals his army service number” Asalam o Alaikum: My name is Muddassir Iqbal. My father’s name is Naimat Ali. I belong to Sialkot divison (Punjab province), my village is Shamsher Poor and district, tehsil and post office  Narowal. Unfortunately I was working in Pakistan army. I feel embarrassed to tell yo

RWR Advisory: Belt and Road at a Glance

This edition covers developments from March 12 - March 26..  Belt and Road at a Glance   Subscribe to the Belt and Road Monitor Top Developments China National Machinery Industry Corporation, commonly known as Sinomach, has agreed to  build  a $845 million, 255-mile railway across  Iran , building upon a sustained period of growth for Chinese investment in Iran that accelerated after Xi Jinping’s state visit to the country in January 2016. The railway will link the cities of Tehran, Hamedan and Sanandaj. China Civil Engineering Construction, a subsidiary of CRCC, is currently also  building  a 263-km railway line from Kermanshah to Khosravi. According to Chinese entrepreneur Lin Zuoru, who  owns  factories in Iran, “Iran is at the center of everything.”On March 23, China’s Ministry of Commerce announced that foreign direct investment by Chinese companies in 50 Belt and Road countries fell by 30.9% year-on-year. While the Ministry stated that this number covers investment across al

CPEC Jobs in Pakistan, salary details

JOBS...نوکریاں چائنہ کمپنی میں Please help the deserving persons... Salary: Salary package in China–Pakistan Economic Corridor (CPEC) in these 300,000 jobs shall be on daily wages. The details of the daily wages are as follows; Welder: Rs. 1,700 daily Heavy Duty Driver: Rs. 1,700 daily Mason: Rs. 1,500 daily Helper: Rs. 850 daily Electrician: Rs. 1,700 daily Surveyor: Rs. 2,500 daily Security Guard: Rs. 1,600 daily Bulldozer operator: Rs. 2,200 daily Concrete mixer machine operator: Rs. 2,000 daily Roller operator: Rs. 2,000 daily Steel fixer: Rs. 2,200 daily Iron Shuttering fixer: Rs. 1,800 daily Account clerk: Rs. 2,200 daily Carpenter: Rs. 1,700 daily Light duty driver: Rs. 1,700 daily Labour: Rs. 900 daily Para Engine mechanic: Rs. 1,700 daily Pipe fitter: Rs. 1,700 daily Storekeeper: Rs. 1,700 daily Office boy: Rs. 1,200 daily Excavator operator: Rs. 2,200 daily Shovel operator: Rs. 2,200 daily Computer operator: Rs. 2,200 daily Security Supervisor: Rs.