ISLAMABAD: Pakistan on Wednesday cleared, in principle, two strategically important $10 billion projects for upgrading a mainline of the Pakistan Railways to smoothen the China-Pakistan Economic Corridor (CPEC) traffic, and construction of a gas pipeline.
The Central Development Working Party (CDWP) gave the necessary nod to both the projects ahead of loans negotiations with Chinese authorities. China will provide loans for both the projects equivalent to 85% ($8.5 billion) of the cost of each project.
According to the project documents, 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.
This project is part of $46 billion CPEC package and is covered under the CPEC Framework Agreement, signed during the April 2015 visit of Chinese president to Pakistan.
The estimated cost of Gwadar-Nawabshah LNG Terminal & Pipeline project, also cleared in principle, is $2 billion including $1.4 billion Chinese loan. This project is strategically important for Pakistan as it will eventually link the country’s gas network with Iranian system.
“The exact costs of both the projects will be firmed up after finalising financing arrangements,” said CDWP Chairman and Minister for Planning Ahsan Iqbal while talking to The Express Tribune.
He said in order to finalise the financing arrangements, the approvals of the PC-Is of both the projects were necessary. “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.
The ML-I project has been planned under the CPEC Framework. The $8.2 billion worth PC-I has been prepared on the basis of joint feasibility study carried out by a consortium of firms, namely, M/s Creec of China and M/s Nespak and M/s Pracs of Pakistan.