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China halts funding, Pakistan left stunned

The media reported on  December 05, 2017 that China has temporarily stopped the funding of some projects particularly those related to the road network under the China-Pakistan Economic Corridor (CPEC), begun over two years ago, pending a further decision on 'new guidelines' to be issued from Beijing.

Dec 19, 2017
By Anil Bhat
 
The media reported on  December 05, 2017 that China has temporarily stopped the funding of some projects particularly those related to the road network under the China-Pakistan Economic Corridor (CPEC), begun over two years ago, pending a further decision on 'new guidelines' to be issued from Beijing.
 
At least three road projects of the over Rs 1 trillion worth programme of the National Highway Authority’s (NHA) road projects are expected to be delayed.  Include (a) the 210 km Dera Ismail Khan-Zhob Road, at an estimated cost of Rs 81 billion, of which Rs 66 billion will be spent on construction of road and Rs 15 billion on land acquisition, (b) the Rs 19.76 billion 110 km Khuzdar-Basima Road project and (c) the Rs 8.5bn 136-km remaining portion of Karakarom Highway (KKH) from Raikot to Thakot.
 
All these three projects were originally part of Pakistan's own development programme, but in December 2016, the NHA announced that they were to be included under the CPEC umbrella to become eligible for concessionary finance from China. The funding of the three projects was expected to be finalised during the Joint Working Group (JWG) meeting held on November 20, but Pakistan was informed that the existing procedure for release of funds had been ended and that Beijing will issue 'new guidelines' under which a new procedure will be made  for release of the funds. The new guidelines would be applicable for future projects of the CPEC.
 
The reason for China has temporarily halting release of funds for the corridor seems to be that it is quite disturbed with increasing news reports being published in Pakistan about corruption in CPEC projects.
 
Several CPEC projects including an USD 8.2 billion project for upgrading main railway lines and a scheme for setting up special economic zones face delays or are in danger of being closed due to the inability of Pakistan’s federal and provincial governments to overcome their inefficiencies.
 
A major Chinese firm bailed out of the USD 590 million 330MW power project for Pakistan’s Punjab province which was scheduled to start electricity production by end-2017.
 
The CPEC is intended to rapidly modernise Pakistan's infrastructure and strengthen its economy by the construction of modern transportation networks, numerous energy projects, and special economic zones.
 
This move by China has left Pakistan stunned, to say the least.
 
(Anil Bhat is a retired Indian Army officer. He can be contacted at wordsword02@gmail.com)

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