[ad_1]
Stresses that the project should be implemented in accordance with the Framework Agreement
The Chinese authorities have indicated that China wants to complete the project quickly, as this project is already well behind schedule. PHOTO: FILE
ISLAMABAD: The Pakistan Railways (ML-I) main line project of $ 8.2 billion will be completed under a sovereign bilateral agreement, Beijing having not accepted a proposal to build the most China-Pakistan Economic Corridor System (CPEC) through third party contractors.
China has not accepted the proposal to complete the ML-I program on a build-operate-transfer basis, officials from the Ministry of Railways and the Ministry of Communications said.
During the working group level discussions held last month, China said the project should be implemented in accordance with the framework agreement, officials said.
Prime Minister Imran meets his Russian counterpart in Shanghai
Pakistan has also subsequently accepted China's request to continue to implement the existing agreement reached in May 2017.
"The funding model depends on the finalization of the technical design, which has not been completed yet. Once the design is finalized, the funding model can be decided, "said Hassan Daud, spokesperson for the CPEC's Ministry of Planning and Development at The Express Tribune.
After taking office, Khusro Bakhtiar, Minister of Planning and Development, said: "The government is looking into the possibility of completing the $ 9 billion ML-I project on the basis of the project. a build-operate-transfer system (BOT) ".
The minister added that Pakistan wanted to transfer the financial risks associated with the multi-billion dollar railway project to the contractors.
However, this would have required amendments to the framework agreement that China and Pakistan signed last May. According to the ML-I framework agreement, China will provide 85% of the project cost as a soft loan. The project has been declared of strategic importance by both countries.
Due to the strategic nature of the project, it was not advisable to call on a third party, officials said.
They said that China was keen to complete the project quickly, as this project is already well behind schedule. The extension and reconstruction of the Karachi-Lahore-Peshawar railway, known as the ML-I, is a first harvest and a strategic project of the CPEC framework.
In a joint statement issued at the conclusion of a meeting between Pakistani and Chinese leaders this weekend, both countries stressed that "the BIS's flagship project, the rapid development of the CPEC has played a important role in the cooperation between Belt and Road ".
The ML-I project has a total length of 1,872 kilometers. The previous government of the Pakistan Muslim League-Nawaz (PML-N) had decided to split the project in two because of its high cost and large-scale work requiring a renovation and extension of the road line from main iron.
Officials said that building the project on a BOT basis was not possible without a commercial and financial feasibility study. Pakistan has not undertaken any studies of this type.
During discussions in the joint working group, the Pakistani authorities also raised the issue of differences between Pakistan and China on the preliminary draft, officials said. In response to Pakistani concerns, a Chinese technical team is traveling to Pakistan.
Decipher myths: the CPEC is not a debt trap, the liability is quite manageable
Chinese consultants also began to share details of the preliminary design of the project, which was previously unavailable for Pakistan.
The Pakistani authorities have not managed the project properly since the beginning. The PML-N government approved the first phase at a cost of $ 3.4 billion, with no clear estimate of the cost and scope of the program.
Chinese consultants estimated the cost of the first phase at $ 4.1 billion against an estimate of $ 3.4 billion by Pakistan. The Pakistan Railways and the Ministry of Finance have not yet been able to resolve the dispute over the ownership of the loan and its service, as its balance sheet is not solvent for the acquisition of a loan of more than 8 billions of dollars.
The initial project cost of $ 8.2 billion was based on a joint feasibility study, which was not supported by a technical design study. Pakistan launched the CPEC four years ago without doing its homework. The Minister of Planning also announced that he would conduct a joint study to determine the flow of cargo traffic on the roads of the CPEC.
Officials said China was willing to help Pakistan conduct its study on the density of traffic.
Posted in The Express Tribune, November 6th, 2018.
As Business on Facebook, to follow @TribuneBiz on Twitter to stay informed and participate in the conversation.
[ad_2]Source link
