Pakistan's $8.2 Billion Rail Upgrade to Link with China, Russia, Central Asia & Europe

Pakistan government has approved an $ 8.2 billion project to upgrade the 1,872 km Karachi - Peshawar rail track, bridges, tunnels, and culverts, according to International Railway Journal.

The new track will support increased axle load of up to 25 tons, up from 22.8 tons which is now the norm in South Asian countries. The higher axle load capacity will allow heavier freight trains carrying more freight per train for greater trade overland.

China will provide 85% of the financing for the project. It will be done in two phases, with the first due for completion in December 2017 and the second in 2021.

It will be part of an international rail link that will connect Pakistan with China,  Russia, Central Asia and Europe. It will extend south from the city of Kashgar in the Xinjiang Uygur autonomous region in Western China to Pakistan's deep-sea Gwadar Port on the Arabian Sea, according to Zhang Chunlin, director of Xinjiang's regional development and reform commission.

Source: China Daily
A study for the plans for this international rail link was first presented in 2014 at a two-day International Seminar on the Silk Road Economic Belt in Urumqi, Xinjiang's capital, according to China Daily.

"The 1,800-kilometer China-Pakistan railway is planned to also pass through Pakistan's capital of Islamabad and Karachi," Zhang Chunlin said. "Although the cost of constructing the railway is expected to be high due to the hostile environment and complicated geographic conditions, the study of the (international rail link) project has already started," Zhang said. "China and Pakistan will co-fund the railway construction. Building oil and gas pipelines between Gwadar Port and China is also on the agenda," Zhang added.

The Pak-China link announcement was part of the discussion on China's broader effort to revive the historic Silk Route by building three main corridors through southern, central and northern Xinjiang to connect China with Russia, Europe and Pakistan. The Silk Road Economic Belt International seminar which concluded on Friday in Urumqi, Xinjinag was jointly sponsored by the State Council Information Office, China International Publishing Group (CIPG), China Academy of Social Sciences (CASS) and Xinjiang Academy of Social Sciences.

In a 2013 report, China's State-owned Xinhua News Agency articulated China's motivation to expand land trade in addition to building its navy to protect its sea trade. Here's what it said:

“As a global economic power, China has a tremendous number of economic sea lanes to protect. China is justified to develop its military capabilities to safeguard its sovereignty and protect its vast interests around the world."

The Xinhua report has for the first time shed light on China's growing concerns with US pivot to Asia which could threaten China's international trade and its economic lifeline of energy and other natural resources it needs to sustain and grow its economy. This concern has been further reinforced by the following:

1. Frequent US statements to "check" China's rise.  For example, former US Defense Secretary Leon Panetta said in a 2011 address to the Naval Postgraduate School in California: "We try everything we can to cooperate with these rising powers and to work with them, but to make sure at the same time that they do not threaten stability in the world, to be able to project our power, to be able to say to the world that we continue to be a force to be reckoned with." He added that "we continue to confront rising powers in the world - China, India, Brazil, Russia, countries that we need to cooperate with. We need to hopefully work with. But in the end, we also need to make sure do not threaten the stability of the world."

Source: The Guardian


2. Chinese strategists see a long chain of islands from Japan in the north, all the way down to Australia, all United States allies, all potential controlling chokepoints that could  block Chinese sea lanes and cripple its economy, business and industry.



Karakoram Highway-World's Highest Paved International Road at 15000 ft.


Chinese Premier's emphasis on "connectivity and maritime sectors" and "China-Pakistan economic corridor project" is mainly driven by their paranoia about the US intentions to "check China's rise" It is intended to establish greater maritime presence at Gwadar, located close to the strategic Strait of Hormuz, and  to build land routes (motorways, rail links, pipelines)  from the Persian Gulf through Pakistan to Western China. This is China's insurance to continue trade with West Asia and the Middle East in case of hostilities with the United States and its allies in Asia.

Pakistan's Gawadar Port- located 400 Km from the Strait of Hormuz


As to the benefits for Pakistanis, expanded trade and the Chinese investment in "connectivity and maritime sectors" and "China-Pakistan economic corridor project" will help build infrastructure, stimulate Pakistan's economy and create millions of badly needed jobs.

Clearly, China-Pakistan ties have now become much more strategic than the US-Pakistan ties, particularly since 2011 because, as American Journalist Mark Mazzetti of New York Times put it, the  Obama administration's heavy handed policies "turned Pakistan against the United States". A similar view is offered by a former State Department official Vali Nasr in his book "The Dispensable Nation".

Related Links:

Haq's Musings 

Comparison of Chabahar and Gwadar

How Strategic Are Pak-China Ties?

Gwadar as Hong Kong West

China-Pakistan Industrial Corridor

US-Pakistan Ties and New Silk Route

Can Pakistan Say No to US Aid?

Post Cold War Shifting Alliances

Comments

Riaz Haq said…
#Pakistan shares end higher ahead of #MSCI announcement to upgrade country to #EmergingMarkets status http://reut.rs/1VUulOH via @Reuters

Pakistani stocks closed higher on Monday in a volatile trading session ahead of a much-anticipated MSCI announcement on whether the bourse would be reclassified as an emerging market, analysts said.

The benchmark 100-share index of the Pakistan Stock Exchange finished 0.11 percent higher at 36,979.96.

The index clocked in an intraday range of more than 440 points, hitting a low of 36,637.81 in early trading before bouncing back towards the end of the session.

"Market sentiment remained sombre today, in line with sentiment seen in global equities and commodities ahead of central bank meetings in the U.S., U.K. and Japan this week," said Gohar Rasool, head of international sales at Inter Market Securities Pvt Ltd.

MSCI is due to announce whether it will be reclassifying Pakistan as an emerging market on Tuesday.

The stock exchange was dropped from the MSCI Emerging Markets Index in 2008, but Pakistan has in recent months launched a final push to get back in so it can vastly expand its pool of potential investors.

Among index heavyweights that gained on the day were Engro Fertilizers Ltd, MCB Bank Ltd and Fauji Fertilizer Company Ltd.

Oil stocks took a hit as international crude oil prices declined. Oil and Gas Development Company Ltd closed down 0.93 percent while Pakistan Oilfields Ltd was down 0.75 percent.

Traded volume on the day stood at 104.7 million shares, with traded value at 6.67 billion rupees ($63.83 million).
Riaz Haq said…
THE EXPRESS TRIBUNE > BUSINESS
Pakistan, China ink agreements worth $4.2b

As per the contracts, China would provide a concessionary loan of $1.3 billion for the 120-kilometre long Thakot-Havelian section of Karakoram Highyway-II (KKH-II) and $2.9 billion for the 392-kilometre Multan-Sukkur section of the Lahore-Karachi motorway.

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Since China is providing concessionary loans for both projects, the contracts have been awarded on a government-to-government basis, waiving the condition of international competitive bidding.

Out of the $46 billion CPEC investment package, roughly $11.5 billion is reserved for the road and railways infrastructure. China has promised to give concessionary loans for four infrastructure projects. Two of these projects will get interest-free loans.


http://tribune.com.pk/story/1096762/cpec-eastern-alignment-pakistan-china-ink-agreements-worth-4-2b/

From Business Recorder:


China would extend assistance to Pakistan at 1.6 percent interest rate for infrastructure projects under the China-Pakistan Economic Corridor (CPEC), it is learnt. Member, Infrastructure and Regional Connectivity of Planning Commission Malik Ahmad Khan confirmed that China would extend assistance to Pakistan at 1.6 percent interest for infrastructure projects under CPEC. "We wanted China to reduce this rate from 1.6 percent to 1 percent. And the Finance Division is making efforts in this regard," he added.

Under the China-Pakistan Economic Corridor Projects (CPEC), China has promised to invest around $11.8 billion in infrastructure projects and $33.8 billion in various energy projects which will be completed by 2017 at the latest. According to sources, the corridor is a 2,700-kilometre highway that would stretch from Kashghar to Gwadar through Khunjrab. The CPEC will integrate the economies of the two friendly countries; it envisages several economic zones.

http://www.brecorder.com/market-data/stocks-a-bonds/0/1223449/
Riaz Haq said…
#Pakistan Railways poised to get massive funding from #CPEC and #CAREC. #China #CentralAsia http://www.pakistantoday.com.pk/?p=559603 via @ePakistanToday

After decades of neglect, a silver lining is on the horizon for Pakistan Railways as it may be able to attract multi-billion dollar investment for the upgradation as well as deployment of new railway infrastructure across the country under two regional economic unions, the Central Asia Regional Economic Cooperation (CAREC) and China Pakistan Economic Corridor (CPEC), to link Central Asia and China with Pakistani ports of Karachi and Gwadar.

An official source said that the Asian Development Bank (ADB) has started the process to assess the financial needs for upgradation of 461 km main line (ML-1) between Lahore and Peshawar, under its CAREC Railway Connectivity Investment Programme. The financing is likely to start flowing form next year.

The Ministry of Railways has already shared plans, under early harvest projects by 2020, to upgrade Karachi-Peshawar main line (ML-1) and extension of ML-2 from Jacobabad to Gwadar via Basima to both CAREC and CPEC. If financing was available, the projects would be completed in relatively short time as the Pakistan Railways has technical expertise to execute the projects, he added.

ADB will be providing multi-tranche financing facility (MFF) to make the railway system more efficient and competitive. Improved railway corridor of Lahore-Peshawar will improve Pakistan Railways’ institutional efficiency. Financial assistance will also be provided for Railways’ modernization, IT-based accounting system and transforming and migrating accounting data into the new accounting system.

Under the plan, 411 km railway track between Lahore-Peshawar section of ML-1 will be upgraded and dualised together with new signaling and telecommunications system, including power supply for these systems, and upgraded passenger facilities at Lahore, Rawalpindi, and Peshawar stations. A 53-km section in the hilly area from Kaluwal to Pindora will have to be realigned and dualised. Except for realignment sections in the hilly tract, it is likely that all the work for rehabilitation and upgradation of the physical infrastructure will be limited to the PR-owned right of way.

Except for Pakistan, railways in all CAREC countries have more freight carriers than passenger tariff. CAREC railways have increased freight traffic volumes which shows the large potential for PR to freight forward to and from CAREC countries. Domestic market is large in Pakistan, Uzbekistan, Kazakhstan and China.

In the past, the railways infrastructure plans always received a cold shoulder from the government, but now the situation has changed as multilateral institutions are interested in linking Pakistani ports with China and Central Asia. Now the government wants to attract investment in railways infrastructure and China is asked to finance upgradation of strategically located ML-1 which connects major population centers in three provinces.

Under CPEC, Pakistan has shared Phase-I (Early Harvest Projects) upgradation of ML-1 (Karachi-Peshawar and Taxila to Havelian) and construction of New Dryport at Havelian (Buldher). In medium term, Phase-II upgradation of ML-2 and extension of ML-2 (Gwadar to Jacobabad via Basima) is proposed. The long term Phase-III seeks establishment of Havelian-Khunjrab-Kashghar rail link.

The source said Pakistan has shared plans to link the Gwadar port Kandahar, Kabul and Dushanbe. The second plan is to link Gwadar with Quetta and onwards to China. He said Pakistan Railways has prepared plans on rail link between Gwadar port and Mastung, Chaman to Kandahar rail link and rail lines between Kandahar and the Tajik border are also planned.
Riaz Haq said…
Regional cooperation forum: #CAREC offers avenues for deeper economic links among Stans #CentralAsia #Pakistan #CPEC

http://tribune.com.pk/story/1215393/regional-cooperation-forum-carec-offers-avenues-deeper-economic-links/

ISLAMABAD: Pakistan recently hosted the 15th meeting of the Central Asia Regional Economic Cooperation (Carec), a body working for the collective benefit of the region by promoting economic cooperation.

Pakistan is increasingly looking at Central Asian states in an effort to forge trade links and give a fillip to its dwindling exports. However, so far, it has not been able to tap the full trade potential because of lack of infrastructure for connecting the South and Central Asia regions.

Carec is also pushing ahead with plans to encourage regional connectivity to enhance the trade volume.

In the Carec meeting, more than 200 participants from 10 member states and multilateral development partners participated. The member countries included Afghanistan, Azerbaijan, China, Kazakhstan, Kyrgyzstan, Mongolia, Pakistan, Tajikistan, Turkmenistan and Uzbekistan while Georgia took part as an observer.

Carec is an important forum that encourages regional countries to develop physical networks and infrastructure and ensure peace, stability and economic development.

Strategies and initiatives were highlighted at the huddle to stimulate much-needed investment in energy sector of the member states. After a briefing on selected case studies undertaken by Carec members including Pakistan, prominent investors shared their insights to identify and make investments in energy projects.

Addressing the meeting, Prime Minister Nawaz Sharif appreciated that Carec had mobilised $29 billion for pouring into regional development projects and voiced hope that a mid-term review of the regional body in the next 10 years would prove to be an opportunity to fast-track economic cooperation.

The regional connectivity may lead to economic development and prosperity of the region. In this connection, Pakistan is working on energy projects such as the Central Asia-South Asia 1,000-megawatt (Casa-1,000) power import project and the Tapi gas pipeline that will start from Turkmenistan.

The Casa-1,000 is also going to pave the way for digital connectivity between the two regions through a fibre optic cable network called Digital Casa-I, which will link Tajikistan, Afghanistan and Pakistan.

The existing cable reaches Pakistan after going through a long route. It first goes to Russia, extends to Europe and then comes to Pakistan.

The new project will provide a good route to connect the two regions. It will allow regional countries to become independent while tapping the international internet channels.

CPEC support

In his welcome address at the Carec ministerial meeting on the theme “Linking connectivity with economic transformation”, Finance Minister Ishaq Dar said the China-Pakistan Economic Corridor (CPEC) programme, which Pakistan had undertaken, would complement regional connectivity initiatives of Carec members.

He stressed that the CPEC offered a massive opportunity for connectivity between Central Asia, Middle East and Africa and was bound to play a defining role in economic development of the two regions.

Dar said improving the transport corridor was not an end in itself but it was an investment in establishing sound infrastructure and complementary frameworks for shared prosperity of the present and future generations in the region.


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The markets of Central Asian states and Russia are open and this is the area where Pakistan needs to increasingly focus on.

With an air of distrust between Islamabad and Washington over the latter’s inclination towards Delhi, China and Russia could not only support Pakistan’s economy, but they will also block India’s efforts to isolate Pakistan in the international arena. To achieve all that, Pakistan needs to forge deeper links with the Central Asia region and Carec can play a decisive role in that connection.

Riaz Haq said…
CPEC to strengthen CAREC by expanding north-south corridor:


The primary north-south transport corridor in Pakistan runs from Torkham on the northern border with Afghanistan and passes through primary production and population centres such as Peshawar, Islamabad, Faisalabad, Multan, and Khanewal, before reaching the port city of Karachi in the south. The corridor serves the economy of an area that accounts for 80 percent to 85 percent of the country’s GDP and in the regional context, forms an integral part of the Central Asia Regional Economic Cooperation (CAREC) corridors 5 and 6 after Pakistan's accession to the CAREC Programme in 2010.

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The M-4 Motorway, linking Faisalabad with Khanewal, would be completed by July 2018, said National Highway Authority (NHA) member Mansoor Ahmed Sirohey on Friday.

He told journalists that the Asian Development Bank (ADB) is the leading financer in M-4 Motorway, as the bank disbursed $170 million (77 percent share of the project) in 2009 for construction of a 58km four-lane motorway M-4, connecting Faisalabad to Gojra (section I). This section was completed in December 2014.

Similarly, the ADB would provide 56.15 percent share of the funding of the section II of the M-4, which will construct the 62km four-lane access controlled motorway connecting Gojra and Shorkot. Meanwhile, government of the United Kingdom would provide grant of 29.02 percent and Pakistan would release share of 14.83 percent. The project is expected to complete by 2018, he added.

Sirohey said that contract for section-III of the motorway linking Shorkot to Khanewal has been signed and construction is expected to commence in December 2016. The ADB noted that M-4 Motorway in Punjab, linking Faisalabad with Khanewal, will cut travel time and support the government's broader goal of improved investment and trade flows along the country's vital north-south corridor route. Once fully completed, the M-4 Motorway will provide a faster, safer, more cost-effective north-south route to the currently overburdened national highway 5 and other existing narrow and congested routes.

http://nation.com.pk/business/19-Nov-2016/project-to-be-completed-in-2018-nha-member
Riaz Haq said…
#Pakistan #Railway track upgrade to include overpasses, underpasses & grade separation for high-speed trains #CPEC https://www.geo.tv/latest/124093-Railway-tracks-to-be-made-gate-free-and-signal-free-under-CPEC …

LAHORE: Railway tracks from Karachi to Peshawar will be made gate-free and signal-free under the next phase of the China-Pakistan Economic Corridor (CPEC), Geo News reported, citing sources.

A fence would be built around the tracks, similar to Motorway, and an underpass or overheard bridge would be built at every gate on the tracks, the sources said.

Work on the project would be initiated from January. The first phase of the project would focus on railway tracks between Rawalpindi and Peshawar.

The signaling system in Pakistan Railways will also be upgraded under the project.

According to the sources, the purpose behind making railway tracks gate-free and signal-free is to make train journeys safer and faster for the public. The fencing and bridges would also lead to a reduction in accidents.

Once the project is completed, the tracks would be able to accommodate high-speed trains. The railways authorities have completed the planning for the project, the sources added.
Riaz Haq said…
National Transport Policy 2018 approved


https://nation.com.pk/02-Jun-2018/national-transport-policy-2018-approved

The National Transport Policy available with The Nation has recommended that Pakistan Civil Aviation Authority will be restructured, separating its regulatory and service provision responsibilities.

Work on the National Transport Policy was initiated by the Ministry of Planning, Development & Reform in collaboration with Department for International Development (DFID) and Asian Development Bank (ADB) in February, 2017.

In road transport the NTP said that the priority for passenger transport by road will be to enhance the usage of non-motorized transport and public transport. An increased focus will be made to the provision of public transport services and integration to other modes. Private transport will be considered complimentary to non-motorized transport and public transport, and will provide reliable access to low density and remote areas.

For freight, the predominant movement by road transport will increasingly be shifted to rail and pipeline, by better integration of agriculture and industry to rail stations, dry ports, and pipelines.

Rural roads will remain vital for providing accessibility to local communities and public services, Urban roads will be designed to support efficient and effective urban transport and International road transport will be supported by accession to and implementation of relevant international road transport agreements and conventions. Leasing within the Right of Way shall not be pursued.

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Regarding the maritime transport the NTP said that maritime sector shall be geared to become a major engine of growth through its support and facilitation of international trade. Karachi and Port Qasim ports will serve as the primary international gateway ports for all types of commodity shipments, with Gwadar Port balancing national trade opportunities, transshipment and regional transit.

A port-city council planning forum will be established to support port developments. Ports will be operated under a landlord port model.

Private sector terminal operators will lead in providing specialist terminal facilities and service delivery. Public sector will provide supportive port and navigation infrastructure and regulatory oversight.

Coastal port harbour facilities will be promoted, including freight and passenger shipping service concessions.

Maritime security will be enhanced for all maritime zones and implementation through maritime security agency. (xvii) An independent regulator will be established as national maritime authority.

Regarding the pipelines NTP said that oil, gas and bulk liquid will principally be transported via pipelines. Bulk dry commodities will be considered via slurry pipelines or conveyors upon establishment of a supporting business case. Pipeline connections will be established to ports, terminals, refineries, storage depots, dry ports, airports, industrial zones and to periphery of urban areas.

Regarding inland waterway transport the policy said that inland waterway transport will be promoted as a cheaper alternate, and environmentally friendly mode, and will become an element of intermodal transport services in conjunction and support of rail and road freight and passenger connections.

Passenger ferry services will target cross-river linkages, urban transit corridors, and coastal estuaries/ zones, as alternatives to rail and road access.

An inland waterway transport master plan will be developed, actively exploring other navigable rivers and canals, considering effective riverine water management planning.

The NTP further said that urban transport will be considered as a single integrated transport system and planned in accordance to the hierarchy of modes, including public transport, private transport, non-motorized transport, and freight transport.
Riaz Haq said…
Rail network to connect #Gwadar with #China, #Afghanistan under #CPEC. 1,328 km new line from #Jacobabad and #Quetta via Basima to Gwadar at a cost of $4.5 billion and new 560km rail track from Quetta to Kotla Jam on ML-2 via Zhob and DI Khan https://profit.pakistantoday.com.pk/2019/08/18/pakistans-railway-network-to-be-extended-to-gwadar-kashgar-kabul/ via @Profitpk

ISLAMABAD: The ambitious plan of connecting Pakistan’s railway network from China and Afghanistan to Gwadar deep sea port under China Pakistan Economic Corridor (CPEC) has been declared strategically important by both Pakistan and China.

The plan will help commercially viable transportation of goods from China and Central Asian States to the port city, besides boosting trade and tourism activities in the country.

The already agreed CPEC project for up-gradation of existing Main Line 1 (ML-1) railway track from Peshawar to Karachi will be materialised in the first phase, followed by new railway lines that would be laid across the country to boost trade activities under CPEC.

According to the plan, a new 1,059 kilometer railway line from Havelian in Pakistan’s province of Khyber Pakhtunkhwa (KP) to Kashghar in Chinese province of Xinjiang would be laid to connect both the countries through railways.

Another 1,328 kilometer long new railway line from Jacobabad and Quetta via Basima to Gwadar has also been planned to be constructed at a cost of $4.5 billion to connect the port city with the rest of the country and China. Similarly, Pakistan Railways also plans to lay a new 560km railway track from Quetta to Kotla Jam on ML-2 via Zhob and DI Khan.

A new railway line from Peshawar to Torkham in Afghanistan is also part of the plan, however, in a fresh development, a source in the ministry of planning and development said that the railway network would be extended deep in the country to Kabul, and then to Mazar-e-Sharif, so that the Central Asian states could be connected via railway line with Gwadar.

All these new railway projects have been put in the long-term plan of CPEC which is supposed to be completed by 2030. “In order to effectively eventuate ML-1 project, it has been decided to break the project into three packages,” an official in the railways ministry said.

The ministry of railways has already submitted the PC-1 of Package-1 to the Planning Commission.

“Keeping in view the importance of the project, Prime Minister Imran Khan has directed the authorities concerned to start work on the project as early as possible. Therefore, the PC-1 of first package of the project is expected to be considered by the Central Development Working Party (CDWP) later this month which would refer to the Executive Committee of National Economic Council (ECNEC) for final approval,” an official in planning ministry said.

He further said that once approved by the ECNEC, this project would be presented before the 9th annual meeting of Joint Coordination Committee (JCC) on CPEC between Pakistan and China to be held in October this year for finalising financing modalities.

The scope of work includes up gradation and doubling of ML-1 from Karachi to Peshawar and Taxila to Havelian (1,872km) including provision of modern signaling and telecommunication systems, conversion of level crossings into underpasses/flyovers and fencing of the track.

CPEC project leader in Ministry of Railways Basharat Waheed said that on completion of ML-1, Pakistan Railways will reap the advantages of increase in speed from 65-105 km/hour to 120-160 km/h, increase in line capacity from 34 to 171 trains each way per day, increase in freight volumes from 6 to 35 million tons per annum by 2025, increase in passenger trains (ex-Karachi) from 20 to 40 each way per day and increase in railway share of freight transport volume from less than 4% to 20%.

Journey time from Karachi to Lahore will be reduced from existing 18 hours to only 10 hours while that from Islamabad to Lahore will be reduced from four-and-a-half hours to two-and-a-half hours, he added.

Riaz Haq said…
#CPEC Re-Emerges In #Pakistan With Flurry Of Major #China Deals: 2 #hydropower projects costing $3.9 billion, and another to revamp Pakistan's colonial-era railways for $7.2 billion -- the most expensive #Chinese project yet in Pakistan. https://www.ndtv.com/world-news/belt-and-road-re-emerges-in-pakistan-with-flurry-of-china-deals-2263687 via @ndtv

China's Belt and Road program has found new life in Pakistan with $11 billion worth of projects signed in the last month, driven by a former lieutenant general who has reinvigorated the infrastructure plan that's been languishing since Prime Minister Imran Khan took office two years ago.
The nations signed deals on June 25 and July 6 for two hydro-power generation projects costing $3.9 billion in the Pakistan-occupied Kashmir region, and another to revamp the South Asian nation's colonial-era railways for $7.2 billion -- the most expensive Chinese project yet in Pakistan.

Khan's government appointed Asim Saleem Bajwa last year to run the China-Pakistan Economic Corridor Authority, which oversees more than $70 billion in projects from power plants to highways.

He also joined Khan's cabinet in late April, becoming one of more than a dozen former and current military officials in prominent government roles as the army expands its influence in the country.

The Chinese financing has helped rid Pakistan of an electricity deficit that left exporters unable to meet orders and major cities without electricity for much of the day. Still, the implementation of some investments appeared to stall since Khan came to power, with no new projects announced in 2018 and very few in 2019.

Since Chinese President Xi Jinping launched the initiative in 2013, the World Bank estimates about $575 billion worth of energy plants, railways, roads, ports and other projects have been built or are in the works across the globe. Its progress has slowed recently, dogged by accusations that China is luring poor countries into debt traps for its own political and strategic gain.

"The reality is that much of CPEC, like the Belt and Road more broadly, has been paralyzed," said Jonathan Hillman, a senior fellow at the Center for Strategic and International Studies in Washington, referring to the China-Pakistan Economic Corridor. Pakistan "is a flagship for China's Belt and Road, so the need to show progress is even more important."

In a tweet last month, Bajwa said some detractors had given the "false impression" that CPEC had been slowed. Not only has the pace of work on projects picked up recently, but a great deal of ground work has been done to launch phase two of the project that also includes special economic zones to lure Chinese manufacturers, agriculture, science, technology and tourism, he wrote.

"The prime minister pushed very hard on this," said Abdul Razak Dawood, Khan's adviser on commerce and investments said by phone. "We feel that we have to get more and more hydro in our energy mix."

A spokesman in Bajwa's office said he was not immediately available to comment.

Little Progress

Pakistan's army is already responsible for securing every single Beijing-funded project scattered across the country, from the mountains near the Chinese border to the desert in Gwadar where the Chinese operate a port. Its role has become even more important following terrorist attacks on three Chinese-related projects in the past year.

"There is no doubt that PM Khan's arrival slowed the pace of CPEC projects," said Mosharraf Zaidi, a senior fellow at Islamabad-based think tank, Tabadlab, and a former principal advisor to the foreign ministry. "The renewed energy and approval we are now seeing is almost entirely likely due to the chairperson having settled in, and being added to Prime Minister Khan's cabinet."
Riaz Haq said…
Railway Minister Shaikh Rasheed's Tweet:

انگریز نے ٹریک بنایا ہم نے 70 سال ٹریک کو ہاتھ نہیں لگایا،ٹریک بنے گا اس میں کوئی ریلوے کراسنگ نہیں ہو گی،7 گھنٹے میں کراچی سے لاہور کا سفر ہو گا،اسی سال یہ کام شروع ہوگا اور چین کی جس بھی پارٹی کو کنٹریکٹ ملے گا،ڈیڑھ لاکھ لوگوں کو کنسٹرکشن میں نوکری ملے گی۔

https://twitter.com/ShkhRasheed/status/1281597235898331136?s=20
Riaz Haq said…
#Kavkaz2020: Why #Russia’s Latest #Military Drills Are a Golden Opportunity for #Pakistan! 18 nations, including #China, Pakistan & Central Asian nations are participating. #India has withdrawn from opportunity for military diplomacy. @Diplomat_APAC https://thediplomat.com/2020/09/kavkaz-2020-why-russias-latest-military-drills-are-a-golden-opportunity-for-pakistan/

Pakistan can also use the opportunity to reset relations closer to home. The scenic Wakan corridor separates Pakistan and Tajikistan and at their closest point, the two countries are a mere 10 miles apart. Despite historical and cultural ties between the two Asian nations (both were part of the Arab Umayyad and Persian Empires) and their joint participation in several infrastructure and energy projects (the Central Asia-South Asia Electricity Transmission and Trade Program), Tajikistan plays host to India’s only air force base outside of its borders. The Farkhor Air Base lies around 81 miles southeast of Dushanbe and perilously close to Pakistan’s northern border with Afghanistan. Indian fighter jets taking off from the base can reach Pakistani airspace in little more than a few minutes.

Naturally, this has put a significant strain on relations with Islamabad. Perhaps unsurprisingly, there are no major military ties or significant arms deals between Pakistan and Tajikistan, and if the former plays its cards right, it could use the drills as an opportunity to pull Tajikistan away from India’s military grip.

Military drills are often seen as a show of common strength between allies and a warning to others. However, for Pakistan it would be wise not to see these drills as a show of strength, but rather as an important opportunity to further its relationship with the former Soviet World. India’s recent decision to stay away from Kavkaz 2020 along with the sheer number of former Soviet states participating in them suggests a golden opportunity Pakistan cannot afford to ignore.
Riaz Haq said…
#Pakistan to lay 105 Km new #railway track to transport Thar #coal to be ready by June 2022 with the initial capacity of carrying 3.80 million tons/year (MTPA) of coal from Thar coal mine. By 2025 it will transport 10.80 million tons/year. #Sindh #energy https://nation.com.pk/24-Aug-2020/govt-decides-to-lay-new-railway-track-for-supply-of-thar-coal

The project will require around 1600 Acres of land and it will be operational by June 2022 with the initial capacity of carrying 3.80 MTPA coal from Thar coal mine. By 2025 it will have the capacity to transport 10.80 MTPA coal, the source said. The cost of laying of 105-kilometer long new railway line from Thar coal mines to Chhor station on Hyderabad-Mirpurekhas, Khokhropar section of Pakistan railway is around Rs24.50 billion, cost of rolling stock is Rs65 billion, O&M cost is Rs4 billion and cost of improvement of the existing 149 KM track from Hyderabad to new Chhor station is Rs3.8 billion. The source said that rail transportation of coal from Thar mines is the most feasible and three times cheaper option as compared to road transportation. The project will help saving foreign exchange reserves of $432 million per annum which can increase up to $1.2 billion per annum at ultimate mine capacity. Moreover the transportation by rail will protect the road infrastructure from damage and will save the environment.
Riaz Haq said…
The spatial competition between containerised rail and sea transport in Eurasia

https://www.nature.com/articles/s41599-019-0334-6

The competition in space between rail and sea transport is of great significance to the integration of Eurasia. This paper proposes a land and sea transport spatial balance model for container transport, which can extract a partition line on which transport costs by rail and sea are equal given a destination. Four scenarios are discussed to analyse the effects of different factors on the model. Then the model is empirically tested on current rail and sea transport networks to identify the transport competition pattern in Eurasia. The location of destinations, the freight costs, and time costs are the three main factors affecting the model. Among them, time costs are determined by the value of a container and its contents, the interest rate, and by time differences between land and sea transport. The case study shows that Eurasia forms a transport competition pattern with a land area to sea area ratio of about 1:2; this ratio, however, changes to 1:1 when time costs are considered. Further, the land and sea transport balance lines are consistent with the theories of geopolitics, which indicate that the same processes may exist in the spatial pattern of geo-economics and geopolitics in Eurasia. According to the balance lines, we get a spatial partition, dividing Eurasia into the land transport preferred area, the land–sea transport indifference area, and the sea transport preferred area. The paper brings a new perspective to the exploration of geopolitical economic spatial patterns of Eurasia and provides a practical geographic theory as an analytic basis for the implementation of the Belt and Road Initiative.

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There are some limitations in the case study too. First, it is based on the precondition of using Beijing and Berlin as the destinations, and the current fluctuated values of speeds, goods and freight rates are all set unique. According to the simulation under different scenarios, preferential policies for transportation could be carried out by governments or transport companies in different places, which could further strengthen the practicality of our model. Specifically, some countries (such as India) oppose China’s BRI (Blah, 2018; Pattanaik, 2018). Therefore, we could add evaluations of the strategies for infrastructure construction, of such countries, in the future. Second, container transportation is a complex process. The extent to which the cross-border transportation between countries is frictionless will affect the land transport pattern. Moreover, these factors are difficult to quantify and have not been considered in this paper, such as unequal freight cost rates in different countries, different capabilities and widths of rails, time spent at ports, tariffs, insurance costs and so on, which may also influence actual costs. Third, in not considering the road network, this paper presents a basic possible pattern of land and sea transport balance based on the current railway and maritime networks, which may bias our results. At a strategic level, the results can offer positive suggestions to influence a better approach for transportation. It will, however, be necessary for individual decision-makers to make accurate calculations of the costs of different routes at a micro-level. Additionally, container shipping on the northern sea route is a potential transport corridor (Verny and Grigentin, 2009), it could be included in the future study. Moreover, because of the organisational system and mature development of transport companies, the related data of container transport are easy to obtain, which helps determining the costs and speeds more easily. In contrast, it is hardly to collect datasets of bulk transport. However, the effect of bulk transport may be significant because it is likely to form a large proportion of global maritime trade (J.P.Morgan Asset Management, 2019). This may render some ports more economically viable.

Riaz Haq said…
Impact of Transport Cost and Travel Time on Trade under China-Pakistan Economic Corridor (CPEC)
Khalid Mehmood Alam


https://www.hindawi.com/journals/jat/2019/7178507/


China is the second biggest economy in the world and almost 40% of its trade in 2016 is transported through the South China Sea. China needs a small, secure, and low-cost path to trade with Europe and the Middle East and China-Pakistan Economic Corridor (CPEC) is a feasible solution to this requirement. This research analyzes the effect of CPEC on trade in terms of transport cost and travel time. In addition, the study compares the existing routes and the new CPEC route. The research methodology consists of qualitative and descriptive statistical methods. The variables (transport cost and travel time) are calculated and compared for both the existing route and new CPEC route. The results show that transport cost for 40-foot container between Kashgar and destination ports in the Middle East is decreased by about $1450 dollars and for destination ports in Europe is decreased by $1350 dollars. Additionally, travel time is decreased by 21 to 24 days for destination ports in the Middle East and 21 days for destination ports in Europe. The distance from Kashgar to destination ports in the Middle East and Europe is decreased by 11,000 to 13,000 km.

Transportation is the shifting of goods by truck, rail, road, and sea and is reasoned as an important indicator for economic development [1]. Transport has two main parts. The first part represents vehicles that are either van, truck, rails, airplanes, or ships and second part represents the transport infrastructure such as roads, highways, seaways, airways, and railway tracks on which transport runs smoothly. In the recent days, both parts of transportation are considered as an important factor of trade and help in reducing transportation cost and travel time. The selection of transport mode for delivery of goods within less time and minimum cost is important to maximize the profit. Every state tries its best to discover short trade routes that can reduce trade cost and transfer time. To enhance their trade, countries invest in transport infrastructures like roads and rails and adequate transport infrastructure can potentially reduce transport cost and travel time. Transport cost and travel time are considered as the most important among all factors [2].

Shipping industry plays an significant part in the development of trade and about 80% of world trade is transported by the international shipping industry [3, 4]. The import and export of goods on large scale are not possible without shipping [5]. China is the second biggest economy and energy user in the world and safety of the oil supply chain stay the essential idea of China’s strategies [6]. China is importing about 83% of oil supplies by sea, out of which 77% are functioning through the Strait of Malacca, a possible bottleneck for China [7]. There are some factors like China’s regional disputes, pirate incidences, and geopolitics that make the Strait of Malacca as an attentive weakness for China and may stop economic development in case of any unanticipated events [8, 9]. About 60% of world pirate occurrences take place in the Strait of Malacca and presence of the Indian and US armadas in the seaway rises serious security concerns and in case of any unforeseen actions can affect trade and economic supplies of China [10–12]. To overcome these challenges, China wants to get access to deep water through Pakistan. The China-Pakistan Economic Corridor will link the city of Kashgar in Western China and the Gwadar Port in Pakistan by developing a transport infrastructure network comprising road and rail. Kashgar has great economic opportunities for the shortest land access to the local markets of Pakistan, Afghanistan, Iran, India, Uzbekistan, Kyrgyzstan, and Kazakhstan [13].

Riaz Haq said…
Realizing strategic ML-1 #railway project in #Pakistan under #CPEC: A forward movement for BRI. Goal is to modernize the dilapidated railway #infrastructure of Pakistan. It has great strategic importance for both Pakistan and #China.- Global Times https://www.globaltimes.cn/page/202111/1240207.shtml#.YaUKiB35SZA.twitter

Upgradation of the Pakistan Railway's Mainline-I, which runs north to south connecting the country, is envisaged under the multibillion dollar China-Pakistan Economic Corridor (CPEC) - a flagship project of the Belt and Road Initiative (BRI). The goal is to revamp and modernize the dilapidated railway infrastructure of Pakistan. The project has great strategic importance for Pakistan and China, as it would revive the backbone of the railway network. The project was declared a "strategic project" by the Joint Cooperation Committee (JCC) of CPEC in 2017. It, thus, reflects a high-level consensus between leadership and policymakers of both countries.

Significance of the ML-I project can be gauged from the fact that Pakistan's present railway track and allied infrastructure were initiated during the 19th century under the British Raj. In 1947, at the time of independence, Pakistan inherited the same infrastructure and continued to run it. Now population dynamics have changed and along with it the infrastructure has degraded as it is a 150 year old system.

A modern railway network is a strategic requirement of Pakistan's economy and supply chain systems. It will improve logistics transportation systems, save transportation time, promote connectivity and improve the quality of travel across the country.

The goal of connectivity through CPEC is unachievable without upgrading the ML-1 of Pakistan railways. The upgradation and expansion of ML-1 is, thus, considered as a big milestone in the improvement and modernization of Pakistan railways.

ML-I spans nearly 1,872 kilometers. The estimated cost of expansion and reconstruction of the ML-1 projects is $6.8 billion.

In 2015, technical experts from both China and Pakistan undertook a joint feasibility study. It was carried out by China Railway Eryuan Engineering Group Corporation, Ltd, NESPAK and PRACS. The report from the feasibility study was deliberated at the JCC in 2017, and at that time, the committee approved the study and gave a go-ahead for the next stage of the project i.e., realizing financial close and finalizing the design and other technical details.

Under the proposed framework, the ML-I project consists of three packages: first, to upgrade the track between Lala Musa to Lahore, Lahore to Multan, and Nawab Shah to Rohri. The second package will focus on modernization of the track between Lala Musa and Rawalpindi, Nowshera-Peshawar and Hyderabad Karachi section. The third package will focus on upgradation of Multan Khanewal to Sukkur section.

After the upgradation and completion of the project, the entire track will be a modern dual track. The speed of passenger trains will increase from existing 65-110 kilometers per hour to 160 kilometers per hour, while freight trains will be able to run at the speed of 120 kilometer per hour. Moreover, Pakistan railways will have a computer based signaling and control system, reducing inefficiencies and accidents, while grade separation will be implemented to ensure the safety of train operations.

It was in 2017 that JCC agreed to undertake the project and the framework agreement was signed in May, 2017 during the visit to Beijing of then Prime Minister Nawab Sharif. Since then, both sides have remained engaged in talks for financial closure, with work not yet commenced. For three years, both sides have negotiated on the estimated cost of the project and mode of financing.

Riaz Haq said…
Realizing strategic ML-1 #railway project in #Pakistan under #CPEC: A forward movement for BRI. Goal is to modernize the dilapidated railway #infrastructure of Pakistan. It has great strategic importance for both Pakistan and #China.- Global Times https://www.globaltimes.cn/page/202111/1240207.shtml#.YaUKiB35SZA.twitter

Earlier, it was suggested that the project would cost more than $8 billion. This was an expensive undertaking for Pakistan, as the federal government had initially approved the project cost of $7.2 billion over eight years. Pakistan sought to reduce the cost. In 2020, both sides agreed to a reduce projected cost of $6.8 billion and the Executive Committee of the National Economic Council approved the project in August 2020.

Next, talks commenced for exploring financing arrangements for the project. Pakistan sought government concessional loan from China on low-interest rates in the USD denomination, as it considers ML-I a strategic project for both sides. China proposed a combination of commercial and concessional loans, with mix of RMB and USD components. The interest rates in Pakistan's proposed financing facility are lower than the China proposed arrangement.

Given Pakistan's current economic challenges, partly owing to the impact of the COVID-19 pandemic, it will be a difficult undertaking for Pakistan to make timely payments if it takes commercial loans for the ML-I project. It would also lead to delays in the implementation of the project and possible cost overruns. Already the start of the project has been delayed for over four years. Given ML-I is a strategic project and consensus was reached between the leaders of two countries, it is important that both sides address such issues in a timely manner for early commencement of the construction of the project.

In September, 10th JCC was held virtually and the two sides reviewed progress on CPEC projects. Pakistan and China also reviewed progress on ML-I project and decided to remain engaged on finalizing its financing arrangements. As both countries consider ML-I a strategic project, it would be in their common interest for both to display flexibility and finalize the financing mechanism through a proactive approach.

After its completion ML-I will play a major role in enhancing connectivity and supporting new economic activity. Pakistan has already proposed extension of ML-I to the Torkham border and onwards to Afghanistan. The Chinese side has expressed interest in exploring such an extension. When materialized, ML-I it will inevitably enhance connectivity with Afghanistan, Central Asia and directly enhance Pakistan and China's trade with Iran, Turkey and Central Asia and go on to become a success story of the BRI. Besides, ML-I will be cherished as China's major contribution toward Pakistan and its people's well being from an old and time tested friend. Both Pakistan and China still rejoice and take pride in the joint venture construction of the Karakoram Highway; ML-I would be an additional feather in the cap.
Riaz Haq said…
#Pakistan, #China agree to execute ML-1 #Railway Up-gradation Project under #CPEC on a priority basis. The agreement was reached at a virtual held meeting between the CPEC Authority and the National Development and Reforms Commission (NDRC) of China. #Transport- Business Recorder

https://www.brecorder.com/news/40161566

ISLAMABAD: Pakistan and China agreed to execute the much-awaited mega ML-1 Pakistan Railway Up-gradation Project under the China-Pakistan Economic Corridor (CPEC) on a priority basis.

The agreement was reached at a virtual held meeting between the CPEC Authority and the National Development and Reforms Commission (NDRC) of China to follow up on the decisions taken during the recent visit of the prime minister to China.

Special Assistant to Prime Minister (SAPM) on CPEC Affairs Khalid Mansoor and Director-General NDRC co-chaired the meeting.

The ambassador of Pakistan in China also participated.

The meeting decided that Pakistan Railways would immediately contact the National Railway Administration (NEA) to work out further details of the project.

ML-1 project: design fault, inadequate consultancy cause delay

The meetings also discussed the schedule for holding of meetings of Joint Working Groups (JWG) for various sectors. It was decided that meetings of the Joint Working Groups for Industrial Cooperation, Information Technology, Science and Technology and Agriculture would be held in the near future.

The NDRC director-general said that the relevant Chinese institutions were already taking the necessary actions to implement the understandings reached during the visit.

The SAPM CPEC Affairs stated that the prime minister’s meeting with the Chinese leadership had been extremely fruitful and the relevant institutions of the two countries were fully geared to take the necessary steps to translate the understandings reached at the highest level into actual actions on the ground at the earliest.

The NDRC director general stated that the relevant Chinese institutions were already taking the necessary actions to implement the understandings reached during the visit. He said that the Chinese side attaches the utmost importance to the ML-1 project and several internal meetings between the National Railway Administration and other relevant institutions have been held to work out the modalities and prepare for execution of the first phase of the project.

The meeting also discussed projects in the power sector including the 300MW Power Project in Gwadar and the 1,320 MW Thar Coal Block-1 Power project. It was noted that all actions relating to these projects had been completed on Pakistan side. It was decided that the Chinese side would expedite the next steps relating to these projects.

The meeting expressed satisfaction at the pace of implementation of various projects in Gwadar such as the East Bay Expressway, New Gwadar International Airport, Pak-China Friendship Hospital, etc.

The SAPM on CPEC Affairs expressed his gratitude to the NDRC for their support and facilitation in forwarding the agenda of the CPEC.

Riaz Haq said…
Pakistan, China aim to jump-start Belt and Road plans in key talks

https://asia.nikkei.com/Spotlight/Belt-and-Road/Pakistan-China-aim-to-jump-start-Belt-and-Road-plans-in-key-talks


“Pakistan has agreed to increase the cost of ML-1 from $6.8 billion to $9.85 billion, on the demand of Chinese negotiators, who termed the former cost figure as unrealistic,” an official privy to CPEC planning told Nikkei Asia on condition of anonymity since he was not authorized to talk to the media. The official further added that the ML-1 project will likely be approved by the JCC, which would be a major boost for the CPEC.


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Pakistan and China aim to revive Belt and Road projects in the South Asian country at an annual huddle, scheduled to take place virtually on Thursday. In the run-up to the talks, cash-strapped Islamabad appears to have accepted a Chinese demand to increase the cost of a railway, as it seeks to secure more financing.

This will be the 11th meeting of the Joint Cooperation Committee, the key forum for making decisions on the China-Pakistan Economic Corridor (CPEC), a $50 billion Pakistan component of the Belt and Road. Zhao Shiren, the Chinese consul general in Lahore, told local media earlier this month that work on the CPEC is expected to speed up after the JCC meeting.

The center of attention now is Main Line 1, or ML-1, a project that will upgrade 1,733 kilometers of railway track between Karachi and Peshawar. This is the largest CPEC project in terms of cost, and it has been awaiting a final decision for the past five years.

"Pakistan has agreed to increase the cost of ML-1 from $6.8 billion to $9.85 billion, on the demand of Chinese negotiators, who termed the former cost figure as unrealistic," an official privy to CPEC planning told Nikkei Asia on condition of anonymity since he was not authorized to talk to the media. The official further added that the ML-1 project will likely be approved by the JCC, which would be a major boost for the CPEC.

In multiple background interviews, sources said other projects expected to get the nod include the Karachi Circular Railway at a cost of $1.33 billion and the Karakoram Highway realignment, valued at $1.8 billion.

Apart from these plans, another major issue up for discussion will be power projects. Beijing has built 12 power plants under the CPEC and Pakistan owes more than 250 billion rupees ($1.14 billion) in unpaid bills to the facilities. The JCC huddle is expected to deliberate on forming a revolving account for Chinese power producers so that they can get paid without getting entangled in Pakistan's web of debt.

Moreover, the JCC meeting might decide the fate of a 300-megawatt power plant in Gwadar -- a port intended to be a key Belt and Road hub. The Pakistani government would prefer to scrap the project as it scrambles to save money, whereas China seeks approval to start building it.

Aslam Bhootani, a member of the national assembly representing Gwadar, is not happy about the outlook. "No investment will come in Gwadar" unless the area's power problems are resolved, he said. "Scrapping the 300 MW power plant will not help in this situation."

Experts are on the fence about the prospects for rejuvenating the CPEC.

Michael Kugelman, director of the South Asia Institute at the Wilson Center, said the CPEC is in a holding pattern, with no new projects and existing projects moving very slowly out of caution over Pakistan's economic crisis, with its foreign reserves falling dangerously low.

"Given Pakistan's severe economic stress, as well as China's own recent slowdown," he said, "there will be little space for any type of new economic activity."

But the Pakistani government does have an incentive to stay in China's good books. Next week, soon after the JCC, Prime Minister Shehbaz Sharif is scheduled to visit China. This will be his first visit to Beijing as leader.

Riaz Haq said…
Pakistan, China aim to jump-start Belt and Road plans in key talks

https://asia.nikkei.com/Spotlight/Belt-and-Road/Pakistan-China-aim-to-jump-start-Belt-and-Road-plans-in-key-talks


According to media reports, Sharif will likely seek $10 billion in financial assistance from China, through balance of payment support and rolling over Chinese loans, which make up 30% of Pakistan's total external debt. Experts believe the Sharif government wants the JCC to be successful so that it can secure the required financial support from China during the prime minister's visit.

Despite his skepticism and the CPEC's sputtering progress, Kugelman also suggested Sharif might be the man to restore some momentum. "It was Prime Minister Sharif's brother [Nawaz Sharif] who launched the CPEC, and there's reason to believe Beijing is more comfortable working with the ruling PML-N party than with Imran Khan's PTI, which asked questions about transparency [of CPEC projects] that China didn't like," Kugelman told Nikkei.

While Sharif is planning to revive the CPEC, his political nemesis Khan is in full-throttle mode to topple his government. Even after suffering a setback last week with his disqualification from office over alleged mishandling of foreign gifts, Khan has announced a long march from Lahore to Islamabad starting Friday, demanding Sharif's resignation and fresh elections. Initially, it appeared Khan might be barred from politics for years but for now he has only been stripped of his seat in parliament.

Government officials fear the political uncertainty could jeopardize any gains made at the JCC meeting.

The instability is a problem, said James M. Dorsey, a senior fellow at the S. Rajaratnam School of International Studies in Singapore. But he said Beijing has already factored it in when making decisions about CPEC projects.

"Beijing knows that the ML-1 project is also in the interest of Pakistan and even if Khan again formed the government, he cannot reverse it," Dorsey said.

He added that the Belt and Road, in general, has been slowing down, and that efforts made to revive the CPEC are partly Beijing's attempt to fire up its broader global infrastructure drive.
Riaz Haq said…
China, Pakistan Agree to Launch $10 Billion Railroad Project
Two countries plan to upgrade line from Karachi to Peshawar
Pakistan officials have said they expect funding from China
By Faseeh Mangi


https://www.bloomberg.com/news/articles/2022-11-02/china-pakistan-agree-to-launch-10-billion-railroad-project

Chinese President Xi Jinping and Pakistani Prime Minister Shehbaz Sharif agreed in a meeting in Beijing to launch a high-speed rail project that could cost $9.85 billion, a move that comes as the world’s No. 2 economy moves to slow some of its lending due to growth concerns.

The two nations agreed to get started on the Main Line-1, according to a statement from Sharif’s office, which described it as “a project of strategic importance.”

That project involves upgrading a 1,163-mile, colonial-era track from Karachi to Peshawar to carry high-speed trains. Earlier this week, Pakistan formally approved the project, which has been in discussion for years, without saying where the funding would come from or providing technical details.

Officials in Pakistan have previously said they expected to get loans from China for the upgrade.

The US has in the past criticized China for using what it calls “debt diplomacy” to make developing nations more dependent on Beijing. Still, earlier this year China delayed a bailout for Pakistan as its debt soared, and it has been scaling back lending in Africa as its economy slows.

About 30% of Pakistan’s foreign debt is owed to China, including state-owned commercial banks, the International Monetary Fund said in a report in September.

In June, Moody’s Investors Service downgraded its outlook on Pakistan to negative from stable, citing financial concerns.

See: Xi Kicks Off Third Term With Flurry of Diplomatic Activity

In their talks, Xi and Sharif agreed to finalize details on an inner-city rail line in Karachi. The Chinese leader also said his nation would provide 500 million yuan ($68.7 million) to Pakistan to help it rebuild after flooding over the summer that displaced more than half a million people.

Also Wednesday, the two countries’ central banks signed a memorandum of cooperation on a yuan clearing in Pakistan, the People’s Bank of China said in a statement. It didn’t give more details.

Sharif is wrapping up a two-day visit to Beijing. China is hosting a flurry of foreign leaders this week, as Xi kicks off a norm-busting third term during which he’s vowed to increase his nation’s global influence.

Vietnam’s Communist Party chief Nguyen Phu Trong became the first foreign leader to meet Xi since the Chinese president removed rivals and installed loyalists at a leadership reshuffle last month.

Xi and his top officials are then expected to hold talks in the capital with German Chancellor Olaf Scholz and Tanzanian President Samia Suluhu Hassan. Later this month, he will likely travel to Indonesia and Thailand for major summits attended by global leaders including President Joe Biden and Russia’s Vladimir Putin.

Riaz Haq said…
Pakistan taps Chinese credit for railway upgrade despite debt crisis
Islamabad says $10bn revamp of colonial-era line is essential even as it faces risk of default and forex reserves plunge

https://www.ft.com/content/44c26d5c-97d2-4181-b5a4-9ef66ce776db

Ahsan Iqbal, Pakistan’s planning minister, said the ML1 upgrade was vital to keep trains running and an example of the transformative work that Chinese credit had made possible.

“If we do not undertake this project, in a couple of years Pakistan will lose its railway logistics,” Iqbal told the Financial Times.

“The whole railway system will break down, this main line will break down. It will be very risky to run commercial operations on this track. It is no longer a choice. It is an imperative.”


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Iqbal, who oversees Pakistan’s involvement in the Belt and Road Initiative, China’s international infrastructure scheme, said it would take six to nine years to complete the ML1 upgrade. The work will include replacing track, modernising signalling, converting level crossings into underpasses or flyovers and building fences to stop cattle crossing the line.

The planning minister said the project would proceed in phases “to make it more manageable”, with an initial cost of $3bn. The loan from China would be repayable over 20 to 25 years and would be “concessional”, he said, without providing further details.

Chinese lending to Pakistan goes back years, part of an effort to forge economic and military ties that will help to counter their mutual rival India. The ML1 upgrade is part of the China-Pakistan Economic Corridor, a BRI centrepiece with an estimated total cost of $60bn.

The CPEC also includes Chinese development of a deep-sea port at Gwadar in south-western Pakistan, among other projects. Beijing is separately supplying Pakistan’s military with eight submarines and advanced J-10 C fighter jets.

A western diplomat in Islamabad said that for such projects to have continued even as Beijing saw growing financial distress in BRI recipient countries pointed to the importance it put on ties with Pakistan.

“Even if the rest [of BRI] lags behind, China wants to stay the course with Pakistan,” the diplomat said, adding that the relationship had “important military aspects developed over the long term”.

The projects — and Chinese financing — have also stoked domestic tensions. Police in Gwadar last month imposed emergency measures and dismantled a protest camp that had obstructed operations at the port with demands, among others, for Chinese nationals to leave.


Projects such as ML1 have also fuelled analyst concerns over whether excessive Chinese lending is exacerbating strains on Pakistan’s precarious finances. Chinese state lenders are together among the largest creditors to Islamabad, accounting for about $30bn of its outstanding debt.

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Sakib Sherani of advisory firm Macro Economic Insights said it was unfair to single out China’s role in Pakistan’s debt woes, with the largest repayments in the current financial year actually due to multilateral lenders.

But Chinese loans tend to carry higher interest rates than multilateral or other bilateral creditors, according to the AidData research lab at William & Mary college in the US. Chinese annual interest is typically 3-4 per cent compared with 1-2 per cent from OECD lenders, AidData said.



Even as it taps Beijing for the ML1 project, Pakistan is looking elsewhere for funds to help stabilise its shrinking reserves. The finance ministry is in talks with the IMF to secure the next tranche of a $7bn assistance programme, and has said it will approach “friendly” countries such as Saudi Arabia for more loans.

Sharif’s government is betting it can steady the economy in time for parliamentary elections that must be held before the end of this year.

Iqbal said he was confident the country would pull through. “Pakistan is facing economic [and] fiscal difficulties, but it is not in the range that it is a default economy yet. We are managing very prudently.”
Riaz Haq said…
ML-1, KCR (Karachi Circular Railway) upgrade projects to start in March

https://www.thenews.com.pk/print/1026277-ml-1-kcr-upgrade-projects-to-start-in-march

He (Ambassador Non Rong) recalled that under the CPEC, 192,000 jobs were created, 6000MW of electricity was generated, 510 km of highway was constructed and 886 km of transmission was set up, which laid a solid foundation for Pakistan’s socio-economic development. “In fact, Pakistan’s trade surplus of agricultural products is expected to exceed a record high of $1 billion in 2022,” the ambassador said.

The Chinese sources said the ML-1 is the largest infrastructure project of CPEC worth $6.86 billion. The project involves the up-gradation and dualization of ML-1 to increase the operating speed from the current 60 km/h and 105 km/h to a proposed 160 km/h. The project also involves the establishment of a dry port near Havelian. ML-1, the Karachi to Peshawar line, is one of four main railway lines in Pakistan, operated and maintained by Pakistan Railways. The line begins from Karachi City Station or Kiamari station and ends at Peshawar Cantonment Station. The total length of this railway line is 1,687 kilometers. There are 184 railway stations from Kiamari to Peshawar Cantonment on this line. The line serves as the main passenger and freight line of the country. 75 percent of the country’s cargo and passenger traffic uses the ML-1. The existing timeline for the completion of ML-1 extends to December 2024. Under the umbrella of this project, level crossing will be converted into flyovers or underpasses so that the speed can be increased by getting rid of the obstacles.

The project could not be started during the PTI government due to China’s concerns over debt repayment plan, the sources pointed out. ML-I railway line project is very important to achieve connectivity between Gwadar (Pakistan) and Kashgar (China) through a train track that will provide the easiest and safest way to transport oil between China and the Middle East, saving China travel costs. The railway line upgrade will provide faster travel facilities to the people of Pakistan and commercial benefits like bringing raw materials to the Special Economic Zone (SEZ) and faster delivery of finished goods to remote areas of the country as well Gwadar port. Another great benefit is that coal will be delivered for fuel to the power plants through the railway track, which will also generate good revenue for the railways. Due to unnecessary delays, the cost of this historic project has increased. The Imran’s PTI government failed to convince the IMF and the Chinese government to start the project. Another reason for the increase is the recent floods in Pakistan, which has destroyed the railway lines of most parts of the country. As soon as the new government was formed in April, 2022, Pakistan’s Minister for Planning Ahsan Iqbal restarted the discussion with the Chinese authorities on revival of the project.

The revived KCR operation is intended to become an inter-regional public transit system in Karachi, with an aim to connect the city centre with several industrial and commercial districts within the city and the outlying localities. In May 2017, the then government approved Rs27.9 billion ($120 million) restoration package for the KCR. However, delays and disputes with the Sindh provincial government ultimately led to cancellation of the funding. KCR would be constructed with the cost of Rs294 billion and used by 500,000 passengers/day, which would increase to 1 million in later years. KCR will have 250 modern driverless electric bullet trains, which would run 17-hours a day throughout a week. The KCR project would be run by the Sindh government through Karachi Urban Transport Corporation (KUTC) and likely to be completed by 2025.
Riaz Haq said…
Bilal I Gilani
@bilalgilani
Who wants to partner with whom

Gallup International survey in 64 countries on who wants to partner with whom

•Among different religious groups, US is ahead of China in preference for economic partnership. However, the gap is narrowest among Muslim respondents.

https://twitter.com/bilalgilani/status/1631953152646717440?s=20

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Bilal I Gilani
@bilalgilani
A representative sample of men and women in Pakistan was asked the following question: “Which of the following would you prefer your country to partner with economically – ” 56% responded China, 13% preferred US, 8% said Russia while another 8% said Others

Gallup International

https://twitter.com/bilalgilani/status/1631954401756684294?s=20

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Bilal I Gilani
@bilalgilani
•Interesting to note that just like economic preference, low-income economies prefer China for security partnership.

Gallup International survey in 64 countries on who wants to partner with whom

https://twitter.com/bilalgilani/status/1631954080275877890?s=20

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Bilal I Gilani
@bilalgilani
Pakistan tops the world in terms of wanting to have security partnership with China

Gallup International survey in 64 countries on who wants to partner with whom

https://twitter.com/bilalgilani/status/1631953801484574723?s=20

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Bilal I Gilani
@bilalgilani
Out of the 64 countries that were surveyed, South Korea tops security preference for US, Pakistan tops preference for China, while Serbia tops the preference for Russia and EU for security partnership

Gallup International survey in 64 countries on who wants to partner with whom

https://twitter.com/bilalgilani/status/1631953576535773185?s=20


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Bilal I Gilani
@bilalgilani
•Popularity of economic partnership with China was found to be highest in Sub Saharan Africa followed by MENA region. The least support was found in EU (lower than even US)

Gallup International survey in 64 countries on who wants to partner with whom

https://twitter.com/bilalgilani/status/1631953351406436354?s=20

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Bilal I Gilani
@bilalgilani
•Younger populations are more amiable towards China when it comes to striking Economic partnership. 23% of respondents under the age of 34 preferred China. Only 11 % in 55+ age bracket across the globe.

https://twitter.com/bilalgilani/status/1631952766477258754?s=20

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Bilal I Gilani
@bilalgilani
Pakistan, UAE and Nigeria are at the bottom for economic partnership with EU.

Gallup International survey in 64 countries on who wants economic partnership with whom

https://twitter.com/bilalgilani/status/1631952561530974208?s=20

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Bilal I Gilani
@bilalgilani
Yemen, Pakistan and Russia top in willingness to pursue economic partnership with China.

Gallup international survey on who wants to partner with whom in the global rivals US , China , Russia

https://twitter.com/bilalgilani/status/1631952275773050880?s=20

Riaz Haq said…
#Chinese Gov't Commissioned Study: #China-#Pakistan #railway ‘worth it’ at estimated US$58 billion. It should proceed because of its #strategic significance. It has the potential to reshape #trade and #geopolitics across the Eurasian continent. #CPEC https://www.scmp.com/news/china/science/article/3218413/china-pakistan-railway-worth-it-estimated-us58-billion-study

Belt and Road Initiative’s most expensive transport infrastructure project ‘has potential’ to reshape trade and geopolitics
The rail link is part of a broader plan to revive ancient Silk Road connections and reduce reliance on Western-dominated routes

The China-Pakistan railway – China’s largest Belt and Road Initiative transport project – will cost an estimated 400 billion yuan (US$57.7 billion), but should proceed because of its strategic significance, a government-commissioned feasibility study has found.
The proposed railway, connecting Pakistan’s port of Gwadar to Kashgar in China’s Xinjiang Uygur autonomous region, was assessed by scientists from the state-owned China Railway First Survey and Design Institute Group Co Ltd.
The team, led by the institute’s deputy director of capital operations Zhang Ling, said the project was the belt and road plan’s most expensive transport infrastructure.
Despite the cost, the project had the potential to reshape trade and geopolitics across the Eurasian continent and should be supported, the team said in a report published by the Chinese-language journal Railway Transport and Economy in April.
“The government and financial institutions [in China] should provide strong support, increase coordination and collaboration among relevant domestic departments, strive for the injection of support funds and provide strong policy support and guarantees for the construction of this project,” they said.
The institute is one of the largest of its kind in China and has been involved in many major railway projects at home and internationally, including Indonesia’s Jakarta-Bandung high-speed rail line.
The 3,000km (1,860-mile) railway will link China’s western regions with the Arabian Sea, bypassing the Strait of Malacca and reducing dependence on the South China Sea.
Connections with other transport networks – including in Iran and Turkey – would also provide a more direct route to Europe for Chinese goods, while Pakistan is forecast to get a much-needed boost from the improved infrastructure and easier trade with China.
The scheme is a key component of Beijing’s broader belt and road plan to promote economic cooperation and connectivity among the countries along the ancient Silk Road trade routes.
Previous studies by Chinese government researchers have suggested the infrastructure initiative could have significant geopolitical implications, helping to shift the balance of power away from traditional Western-dominated trade routes.
As well as encouraging a more multipolar world order, the belt and road plan could also help to promote economic development and stability in countries along the route by creating jobs, boosting infrastructure investment and increasing trade, the studies said.
Most belt and road transport infrastructure construction projects had received a significant proportion of funding from the host countries, and the scale of investment was much smaller, Zhang and his colleagues noted.
For example, total investment in Kenya’s Mombasa-Nairobi standard gauge railway was US$3.8 billion, with China providing 5 per cent of the funding and Kenya paying for the rest.
Riaz Haq said…
#Chinese Gov't Commissioned Study: #China-#Pakistan #railway ‘worth it’ at estimated US$58 billion. It should proceed because of its #strategic significance. It has the potential to reshape #trade and #geopolitics across the Eurasian continent. #CPEC https://www.scmp.com/news/china/science/article/3218413/china-pakistan-railway-worth-it-estimated-us58-billion-study


The project connects the port city to the Kenyan capital and is part of a larger plan to link East African countries by rail. Similarly, China contributed 30 per cent of the US$4 billion funding for the Addis Ababa-Djibouti rail line in Ethiopia.
China covered 75 per cent of the Jakarta-Bandung high-speed railway’s costs of US$5.9 billion, with Indonesian state-owned enterprises providing the remainder.
But Pakistan is unable to make a similar contribution. Its GDP last year was US$370 billion – just six times the estimated cost of the project.
“Due to energy shortages, poor investment environment and fiscal deficits,


Pakistan’s economic growth rate has come under pressure,” the team said.
“In terms of railway investment and construction, Pakistan is unable to provide sufficient financial and material support and mainly relies on Chinese enterprises for investment and construction.”

One reason for the hefty cost is the mountainous and geologically complex terrain along the route. There could be technical challenges to overcome in the construction and operation of the railway, the researchers said.
The project also required supporting infrastructure – such as ports and logistics facilities – that might not be immediately available in Pakistan, they said.

The study said Pakistan’s labour policies could be unpredictable, which could potentially affect the railway’s construction and operating costs.
The team also noted that Pakistan had experienced security challenges in recent years, including in its western region where the railway will pass through. Balochistan province, for instance, has been plagued by separatist violence for decades.

This could potentially disrupt construction and operation of the railway and pose a risk to Chinese workers and investments, the researchers said.
The study also pointed out the railway’s potential impact on neighbouring countries, such as India. With each country having its own priorities and interests, there could be disagreements or delays in decision-making related to the project, it said.
Zhang’s team suggested that a build and transfer (BT) model would provide the best investment and financing strategy for the project.
They considered BT against build-operate-transfer, public-private partnerships, and the engineering, procurement, construction mode that are becoming more popular in belt and road projects.


In the BT model, a contractor would be responsible for designing, building and financing the railway, with payment on completion and ownership transferred to the government or other commissioning entity.
The researchers said BT would allow the risks associated with the railway’s construction and operation to be allocated more effectively between China and Pakistan, potentially reducing the financial risks for both parties.
By ensuring that ownership of the railway was transferred to Pakistan, BT could also help to build trust between China and Pakistan by showing China’s commitment to supporting Pakistan’s long-term economic development, they said.
China and Pakistan have been talking for years about the railway, a crucial part of the China-Pakistan Economic Corridor (CPEC) that was launched in 2015 and aims to connect Gwadar port to Xinjiang through a network of roads, railways and pipelines.
The researchers said the China-Pakistan relationship was complex, with both countries having different priorities and interests.
Negotiating agreements related to financing, labour policies, and other issues would require careful consideration of each country’s priorities and interests, they said.
In conclusion, Zhang and his team said their recommendation could help to move negotiations forward.
Riaz Haq said…
EIU (Economic Intelligence Unit)report

China Going Global Investment Index 2023
This year’s edition of the China Going Global Investment Index ranks 80 economies across nearly 200 indicators to identify opportunities and risk for Chinese firms and investors looking to expand globally.

A decade since Xi Jinping’s Belt and Road Initiative (BRI) launched in 2013, Chinese firms have become formidable investors globally, and the flow of overseas investment is set to increase over the next decade.

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