Pakistan Planning Minister Asad Umar has exuded hope of securing finances for the Mainline-I project of the China-Pakistan Economic Corridor (CPEC) next fiscal, saying an irritant in finalizing a deal was the Chinese banks’ reluctance to lend new loans.

Main Line-I project of Pakistan Railways – the biggest ever infrastructure project in the country’s history with an estimated cost of around USD 6.8 billion –funded by the Communist nation, aims to reconstruct the Peshawar-Karachi railway track, enabling it to carry trains up to a speed of around 120 km per hour.

The Chinese banks had financed CPEC energy projects but their money was stuck in the power circular debt, said Umar while addressing a press conference along with CPEC Authority Chairman Asim Saleem Bajwa.

The government has started clearing the circular debt and this would address their concern, said Umar.

About Rs 209 billion (USD 1,34,36,18,991) were due to Chinese investors in power plants and at least two coal-based CPEC power plants were facing financial issues in ensuring uninterrupted coal supplies, an official told The Express Tribune.

Pakistan wants to expand and modernize its dilapidated rail infrastructure through Chinese investment. But the project is facing delays due to a lack of financial close of the project.

Bajwa said CPEC’s second phase was making progress and the government has made Rs 87 billion (USD 55,93,05,513) allocation in the budget for CPEC projects.

The Pak-China Industrial cooperation agreement is the deliverable for the next Joint Cooperation Committee (JCC) meeting. But the absence of the industrial agreement has not stopped work on the CPEC industrial zone, said Bajwa.

The CPEC Master Plan is integrated with Pakistan’s economic plan, he said.

Pakistan is keen to sign a framework agreement on industrial cooperation during the next JCC meeting. However, the Chinese authorities were not willing to enter into another framework agreement.

Pakistan is trying to show progress on at least three SEZs – Rashakai SEZ in Khyber-Pakhtunkhwa, Allama Iqbal SEZ in Punjab and Dhabeji SEZ in Sindh. The development agreement for Rashakai SEZ had been concluded in September last year.

Bajwa said China was also cooperating with Pakistan in the agriculture sector and supporting cotton seed development. Pakistan will share its agriculture plan with China and the Chinese investors are keen to invest in modern corporate farming, said the chairman.

Bajwa said three dams will be made in Balochistan province for agriculture purposes.

Bajwa said the focus will be on the western route of CPEC and the government has made Rs 42 billion (USD 27,00,09,558) allocation in the next budget.

Umar said that Chinese financing for projects will reduce in the coming years due to the shifting of focus from public sector projects to private sector-led projects.

(SAM)