# Vyom's Musings : The Illusion of CPEC Prosperity - The Debt Trap



## Vyom

So I have been reading through some literature regarding CPEC and this is what I found how Pakistan is getting itself into a circular debt cycle. which I hope will not turn into a spiral dept trajectory. also interestingly I found Pakistani negotiators missing on obvious points like they did on the FTA with China that resulted in decimation of local Pakistani Manufacturing as it could not compete with prices of Chinese products.

So Here are my observations. 

1. It doesn't fit the definition of an Economic corridor. An economic corridor [sic] “connects hubs or nodes of economic activity along a defined geography” (Asian Development Bank). Hence, an empty road through a barren landscape connecting strategically important point A with strategically important point B 3,000 kilometers away does not fit the description. To be truly an economic corridor, the envisaged roads will need to connect demand (markets) with supply (production centers and clusters). The markets as well as production centers can be per-existing ones, or new ones that will spring up as the ‘network effects’ of the economic corridor take root. _The Question is will the proposed China-Pakistan Economic Corridor will truly be an ‘economic’ corridor, or will it be a string of strategically important roads and a bunch of power projects. The Power projects are almost equal to the domestic demand that will be there when its implementation is over. When envisioning the future it is always a thumb rule to have surplus installed capacity. Further there are no domestic Power plant equipment manufactures in Pakistan that make Steam generators and Turbines _(500 MW+ capacity). (Would be great if you guys could get some JVs with the Chinese, but alas) 

Given the timeline for completion, these power projects could possibly add reasonable generation capacity to the Pakistan national grid by 2017-18, but they would hardly provide any relief in terms of the fast-growing demand for electricity. And there is no silver lining for consumers as far as the cost of the electricity is concerned.

2. It won't create local employment and capacity building. Chinese documents have already stated that the projects would cost more than a similar project in China because of the increased cost of bringing Chinese labour to Pakistan. Means all the wages and machinery deployment costs will flow back to Chinese pockets. The same way they have been doing it in Africa.

3. The corridor's main purpose is to grant Chinese access to the Gulf as an alternative to the vulnerable sea route in the South China sea. Rest is all add on. No worthwhile investment can come in the Balochistan KP stretch. Punjab and Sindh may imagine an export based strategy_ but can anyone produce cheaper than China?_ Further, export led growth is dicey in a world where major economies are in the doldrums [Eurozone, USA and even China is becoming sluggish].

4. The Karakorum Highway Route is Seismically active, snow laden for a little less than 6 months, and is very very very far away from China's consumption centers which lie in the far east. Its way cheaper to import via Ships to those areas, as for its energy requirements, China has gas pipeline links with central Asia, is making a super massive one from Russia. It is not going to be as dependent on gulf oil in the near future. _So if the Chinese have any sense of economics and cost vs risk analysis, they will only keep this route as a fire escape. Highly expensive and risk laden._

Pic 1 China population centers. :





​Pic 2 China-Central Asia Oil&Gas Pipelines




​
5. So how is proposed "investment" planned. it could have been made sweeter by allowing Pakistan to trade in rupees and then arrange fro currency swaps that would help in Pakistan in increasing its Forex and increase trade footprint at the same time. Whereby Pakistan gets to pay in rupees rather than in US dollars or renminbi._ Interestingly it has already been agreed that payments will be in US Dollars._

6. The idea of becoming a 'trading' hub already has a competitor, its Dubai that allows trans shipments to all countries and is already established a business hub. For Gwader to become a competitor it will have to provide services at par with Dubai and better it, from day one. good luck. In view of the economic landscape cities have become prosperous like Singapore and Dubai is their location on sea trading routes which they have cultivated over decades. In view of the Iran Deal, West will get trading access to Central Asia Via Bandar Abbas and other Iranian ports (Chahbahar is not even in question here) by circumventing the instability, and insurgency of Afghanistan which they might go to... at a later date if the dust settle downs there. All possible from Iran.

No country has become prosperous by converting itself into a big toll booth. good luck. 

7. China is making investments on which Pakistan has given *sovereign guarantee of 18% return*, meaning on investment of Rs 100 Pakistan will pay them back Rs 118 (that's in Compounded interest). In some cases its about 27.2 %.

_*Example*_ :-
Sinosure is charging a fee of 7pc for debt servicing, which will be added to the capital cost of a project. For instance, the capital cost of a 660MW project at Port Qasim is $767.9m. But it goes up to $956.1m by adding Sinosure’s fee of $63.9m, its financing fee and charges of $21m, and interest during construction of $72.8m; a 27.2pc return on equity is guaranteed. Ironically, interest during construction is allowed at the rate of 33.33pc for the first year; 33.33pc for the second; 13.33pc for the third; and 20pc for the fourth year.

How exactly this helps Pakistan? Beside the projects will be run on turnkey basis by Chinese companies who will employ Chinese manpower to accomplish it. Pakistan on the other hand will have to provide the Chinese security at its own cost. And all this is promised on whether the investments will materialize in the first place.

I think Pakistan is better off running these projects by itself only then it will derive the benefit of the investments. If China can not provide aid money then it should provide loan, let Pakistan execute these projects. Also the interest should not be 18% it should be 5%. Apparently domestic lending rates in Pakistan is Cheaper than that of being given to that to China, If the government gave this incentive to local banks and businesses the benefit would have been much greater.

In the end with 2016 of the repayment of International loans coming up. and with these debts to pay back Pakistan's coffers don't give much of a confidence.

@GURU DUTT @Bang Galore @SpArK @Srinivas @Chanakya's_Chant

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## SrNair

Brilliant Analaysis 


But we can forsee the fate of this so called economic corridor if we check the Chinese investment model in Africa.
They are outstanding businessmen.For businessmen the only God is profit and own interest.
In here Chinese will quietly pay a huge sum to the PA.That would be enough for their intetest.

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## saurav

Rubbish.. CPEC is a silver bullet.

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## Spectre

Vyom said:


> So I have been reading through some literature regarding CPEC and this is what I found how Pakistan is getting itself into a circular debt cycle. which I hope will not turn into a spiral dept trajectory. also interestingly I found Pakistani negotiators missing on obvious points like they did on the FTA with China that resulted in decimation of local Pakistani Manufacturing as it could not compete with prices of Chinese products.
> 
> So Here are my observations.
> 
> 1. It doesn't fit the definition of an Economic corridor. An economic corridor [sic] “connects hubs or nodes of economic activity along a defined geography” (Asian Development Bank). Hence, an empty road through a barren landscape connecting strategically important point A with strategically important point B 3,000 kilometers away does not fit the description. To be truly an economic corridor, the envisaged roads will need to connect demand (markets) with supply (production centers and clusters). The markets as well as production centers can be per-existing ones, or new ones that will spring up as the ‘network effects’ of the economic corridor take root. _The Question is will the proposed China-Pakistan Economic Corridor will truly be an ‘economic’ corridor, or will it be a string of strategically important roads and a bunch of power projects. The Power projects are almost equal to the domestic demand that will be there when its implementation is over. When envisioning the future it is always a thumb rule to have surplus installed capacity. Further there are no domestic Power plant equipment manufactures in Pakistan that make Steam generators and Turbines _(500 MW+ capacity). (Would be great if you guys could get some JVs with the Chinese, but alas)
> 
> Given the timeline for completion, these power projects could possibly add reasonable generation capacity to the Pakistan national grid by 2017-18, but they would hardly provide any relief in terms of the fast-growing demand for electricity. And there is no silver lining for consumers as far as the cost of the electricity is concerned.
> 
> 2. It won't create local employment and capacity building. Chinese documents have already stated that the projects would cost more than a similar project in China because of the increased cost of bringing Chinese labour to Pakistan. Means all the wages and machinery deployment costs will flow back to Chinese pockets. The same way they have been doing it in Africa.
> 
> 3. The corridor's main purpose is to grant Chinese access to the Gulf as an alternative to the vulnerable sea route in the South China sea. Rest is all add on. No worthwhile investment can come in the Balochistan KP stretch. Punjab and Sindh may imagine an export based strategy_ but can anyone produce cheaper than China?_ Further, export led growth is dicey in a world where major economies are in the doldrums [Eurozone, USA and even China is becoming sluggish].
> 
> 4. The Karakorum Highway Route is Seismically active, snow laden for a little less than 6 months, and is very very very far away from China's consumption centers which lie in the far east. Its way cheaper to import via Ships to those areas, as for its energy requirements, China has gas pipeline links with central Asia, is making a super massive one from Russia. It is not going to be as dependent on gulf oil in the near future. _So if the Chinese have any sense of economics and cost vs risk analysis, they will only keep this route as a fire escape. Highly expensive and risk laden._
> 
> Pic 1 China population centers. :
> 
> 
> 
> 
> ​Pic 2 China-Central Asia Oil&Gas Pipelines
> 
> 
> 
> 
> ​
> 5. So how is proposed "investment" planned. it could have been made sweeter by allowing Pakistan to trade in rupees and then arrange fro currency swaps that would help in Pakistan in increasing its Forex and increase trade footprint at the same time. Whereby Pakistan gets to pay in rupees rather than in US dollars or renminbi._ Interestingly it has already been agreed that payments will be in US Dollars._
> 
> 6. The idea of becoming a 'trading' hub already has a competitor, its Dubai that allows trans shipments to all countries and is already established a business hub. For Gwader to become a competitor it will have to provide services at par with Dubai and better it, from day one. good luck. In view of the economic landscape cities have become prosperous like Singapore and Dubai is their location on sea trading routes which they have cultivated over decades. In view of the Iran Deal, West will get trading access to Central Asia Via Bandar Abbas and other Iranian ports (Chahbahar is not even in question here) by circumventing the instability, and insurgency of Afghanistan which they might go to... at a later date if the dust settle downs there. All possible from Iran.
> 
> No country has become prosperous by converting itself into a big toll booth. good luck.
> 
> 7. China is making investments on which Pakistan has given *sovereign guarantee of 18% return*, meaning on investment of Rs 100 Pakistan will pay them back Rs 118 (that's in Compounded interest). In some cases its about 27.2 %.
> 
> _*Example*_ :-
> Sinosure is charging a fee of 7pc for debt servicing, which will be added to the capital cost of a project. For instance, the capital cost of a 660MW project at Port Qasim is $767.9m. But it goes up to $956.1m by adding Sinosure’s fee of $63.9m, its financing fee and charges of $21m, and interest during construction of $72.8m; a 27.2pc return on equity is guaranteed. Ironically, interest during construction is allowed at the rate of 33.33pc for the first year; 33.33pc for the second; 13.33pc for the third; and 20pc for the fourth year.
> 
> How exactly this helps Pakistan? Beside the projects will be run on turnkey basis by Chinese companies who will employ Chinese manpower to accomplish it. Pakistan on the other hand will have to provide the Chinese security at its own cost. And all this is promised on whether the investments will materialize in the first place.
> 
> I think Pakistan is better off running these projects by itself only then it will derive the benefit of the investments. If China can not provide aid money then it should provide loan, let Pakistan execute these projects. Also the interest should not be 18% it should be 5%. Apparently domestic lending rates in Pakistan is Cheaper than that of being given to that to China, If the government gave this incentive to local banks and businesses the benefit would have been much greater.
> 
> In the end with 2016 of the repayment of International loans coming up. and with these debts to pay back Pakistan's coffers don't give much of a confidence.
> 
> @GURU DUTT @Bang Galore @SpArK @Srinivas @Chanakya's_Chant



Brilliant analysis which is financially sound.

That said the purpose of CPEC from Pakistani perspective extends far beyond simple financial transaction and economic viability. CPEC is equally important for perception/optics, domestic consideration and Strategic Calculus.

1. *Perception and Optics*: Pakistan today is starved for Foreign investment due to its security situation, there is a huge negative perception with regards to capability and ability as a sourcing destination of goods and services. Foreign companies might set up distribution networks in future to cater domestic demand but hopes for it being a export hub is little to none.

Govt of the day needs to change the perception and make a start somewhere however exorbitant the cost and CPEC is that foot in the door. If they manage to ope-rationalize it successfully then it will be a signal that Pakistan is truely open for business and its cheap labor and young educated demographic is an alternative to India/BD/ Vietnam/Indonesia and likes. CPEC thus is an entry ticket to get into the game and not about winning the game.

In addition CPEC is a useful tool to convince the domestic populace that Govt is not sitting idle and is undertaking projects for their benefits. Pakistani Govt has mastered and somewhat overdone this selling CPEC as Panacea for all its ills which might blow back later.

2. *Strategic Calculus*: After withdrawal of NATO no major nation will have a stake in Pakistan strategically if not for CPEC and China. China needs someone to invest in Pakistan and thereby the protection of interests such a stake guarantees. Huge Chinese investment will bind China to Pakistan in addition of granting them a way/excuse to insert themselves in Indo - Pakistan calculus which is a good thing for stability. China will also not want a weakened Pakistan as it needs it to pay back the returns on its investment thus China will support Pakistan diplomatically and economically.

3. *Domestic Consideration: *The power projects, roadways and like are essential to satisfy domestic demand and Chinese money however costly is one of the few sources available for infrastructure funding in case of IMF/WB/ADB already spoken for and budgeted for other purpose.

I am not sure French and Japanese suppliers would provide Buyer's Credit/Supplier's Credit etc to fund these projects at this stage besides these are just short term loans essentially and what Pakistan needs is long term finances. The huge capital outlay from the govt revenues already goes towards Military and Debt servicing not leaving much for infrastructure outlays.

@SrNair

Regards

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## third eye

Vyom said:


> *No country has become prosperous by converting itself into a big toll booth*. good luck.



Thank you

The line above says it all.

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## Vyom

Spectre said:


> Brilliant analysis which is financially sound.
> 
> That said the purpose of CPEC from Pakistani perspective extends far beyond simple financial transaction and economic viability. CPEC is equally important for perception/optics, domestic consideration and Strategic Calculus.
> 
> 1. *Perception and Optics*: Pakistan today is starved for Foreign investment due to its security situation, there is a huge negative perception with regards to capability and ability as a sourcing destination of goods and services. Foreign companies might set up distribution networks in future to cater domestic demand but hopes for it being a export hub is little to none.
> 
> Govt of the day needs to change the perception and make a start somewhere however exorbitant the cost and CPEC is that foot in the door. If they manage to ope-rationalize it successfully then it will be a signal that Pakistan is truely open for business and its cheap labor and young educated demographic is an alternative to India/BD/ Vietnam/Indonesia and likes. CPEC thus is an entry ticket to get into the game and not about winning the game.
> 
> In addition CPEC is a useful tool to convince the domestic populace that Govt is not sitting idle and is undertaking projects for their benefits. Pakistani Govt has mastered and somewhat overdone this selling CPEC as Panacea for all its ills which might blow back later.
> 
> 2. *Strategic Calculus*: After withdrawal of NATO no major nation will have a stake in Pakistan strategically if not for CPEC and China. China needs someone to invest in Pakistan and thereby the protection of interests such a stake guarantees. Huge Chinese investment will bind China to Pakistan in addition of granting them a way/excuse to insert themselves in Indo - Pakistan calculus which is a good thing for stability. China will also not want a weakened Pakistan as it needs it to pay back the returns on its investment thus China will support Pakistan diplomatically and economically.
> 
> 3. *Domestic Consideration: *The power projects, roadways and like are essential to satisfy domestic demand and Chinese money however costly is one of the few sources available for infrastructure funding in case of IMF/WB/ADB already spoken for and budgeted for other purpose.
> 
> I am not sure French and Japanese suppliers would provide Buyer's Credit/Supplier's Credit etc to fund these projects at this stage besides these are just short term loans essentially and what Pakistan needs is long term finances. The huge capital outlay from the govt revenues already goes towards Military and Debt servicing not leaving much for infrastructure outlays.
> 
> @SrNair
> 
> Regards



Thank You  

However, but aren't finances and viability import to keep up the show ? You cannot just buy an elephant and hope to feed it with perception. Slowly it will grow frail if not fed properly. eventually will succumb as it happened with FTA with China. Yes the perception can be managed but for how long at 18% returns I doubt even if the GoP will be able to spend on the maintenance of roads and powerplants.

To give you an Idea how dire the situation is the budget spending of Pakistan has fallen by 0.7% YoY,in absolute terms couple inflation and that gives a different picture. This indicates a fall in revenue generation. while its (direect) defence spending has increased to 20% of Federal Budget. This means high expenses and falling income. along with All round High debt. 

High debt is not a bad thing as long as you can pay back. borrowings and payments are a part of it. But defaulting on payments has a severe blow. Falling exports are a trend. The CAD has reduced in Pakistan's case but on overall basis there the volume of trade has reduced too (-3.5%). 

China is Mercantile state it gives no concern to such trivial thing. if it wants to get back at India it can very well sans Pakistan.

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## Manindra

SrNair said:


> Brilliant Analaysis
> 
> 
> But we can forsee the fate of this so called economic corridor if we check the Chinese investment model in Africa.
> They are outstanding businessmen.For businessmen the only God is profit and own interest.
> In here Chinese will quietly pay a huge sum to the PA.That would be enough for their intetest.




And the status of Africa is ?
Compare to CPEC, China, Japan, India invest far more in Africa but the rule of the thumb is if you does not hold economic leverage you would be always loser.

Well @Vyom you are amusing

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## Vyom

Manindra said:


> And the status of Africa is ?
> Compare to CPEC, China, Japan, India invest far more in Africa but the rule of the thumb is if you does not hold economic leverage you would be always loser.
> 
> Well @Vyom you are amusing



Read well sir,

Asian Warrior: China in Africa – Messiah or Monster

One of the most brilliant analysis of Chinese activity in Africa. You can go through the article, it one of the most enlightening blog out there. However, individual discretion is advised.

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## Sipahi

*Govt proposes 29 industrial parks, 21 mineral zones under CPEC*

For Minerals Economic Processing Zones in Punjab, the federal government is proposing sites in the Salt Range (antimony) and Chin~~iot for iron ore.



For industrial zones in Sindh, the federal government has proposed sites of Sukkur, Larkana, Karachi, Bin Qasim, Korangi Creek and Khairpur. For Minerals Economic Processing Zones in Sindh, the proposed sites are Thar (coal) and Lakra (coal).



The proposed sites for Industrial Economic Zones/Parks in KP include Hattar, Gadoon, Ghazi, D I Khan, Jalozai, Nowshera, Bannu, Chitral and Risalpur. The proposed Minerals Economic Processing Zones in KP included Dargai (chromite), North Waziristan (chromite), Kurram (antimony), Waziristan, (copper), Chitral (antimony), Besham (iron ore, lead), Nizampur (iron ore) and Mohmand (marble).



The proposed sites for industrial zones in Balochistan included Quetta, Dostan, Gwadar, Khuzdar, Uthal, Hub and Dera Murad Jamali. The proposed Minerals Economic Processing Zones in Balochistan include Khuzdar (chromite, antimony), Chaghi (chromite), Qila Saifullah(antimony, chromite) Saindak (gold, silver), Reko Diq (gold), Kalat (iron ore) Lasbela (manganese), Gwadar (oil refinery), Muslim Bagh (chromite)



According to announcement of the Planning Commission here on Saturday, the joint working groups on various components of China-Pakistan Economic Corridor (CPEC) are expected to hold their meetings next month. The joint working group on energy is scheduled to meet in the first week of August, groups on transport infrastructure & Gawadar in second week and group on planning in third week of August 2015.

Govt proposes 29 industrial parks, 21 mineral zones under CPEC - thenews.com.pk

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## mpk1988

Excellent write up and wonderful analytical skills. Have you thought about joining the govt think tanks? 

Anyway, while its a sound write-up, I don't believe the Pakistanis are that naive to not hold any trump cards and let themselves be used. Maybe they see it as infrastructure development and strategic co-operation more than an economic one? Only time will tell. Hopefully, it works out for all parties.

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## GURU DUTT

pehle cachhaa @RiazHaq and now @Vyom i guess its high time i too should start "musing" say waht @ranjeet & @Shamain ji

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## Vyom

mshahid said:


> *Govt proposes 29 industrial parks, 21 mineral zones under CPEC*
> 
> For Minerals Economic Processing Zones in Punjab, the federal government is proposing sites in the Salt Range (antimony) and Chin~~iot for iron ore.
> 
> 
> 
> For industrial zones in Sindh, the federal government has proposed sites of Sukkur, Larkana, Karachi, Bin Qasim, Korangi Creek and Khairpur. For Minerals Economic Processing Zones in Sindh, the proposed sites are Thar (coal) and Lakra (coal).
> 
> 
> 
> The proposed sites for Industrial Economic Zones/Parks in KP include Hattar, Gadoon, Ghazi, D I Khan, Jalozai, Nowshera, Bannu, Chitral and Risalpur. The proposed Minerals Economic Processing Zones in KP included Dargai (chromite), North Waziristan (chromite), Kurram (antimony), Waziristan, (copper), Chitral (antimony), Besham (iron ore, lead), Nizampur (iron ore) and Mohmand (marble).
> 
> 
> 
> The proposed sites for industrial zones in Balochistan included Quetta, Dostan, Gwadar, Khuzdar, Uthal, Hub and Dera Murad Jamali. The proposed Minerals Economic Processing Zones in Balochistan include Khuzdar (chromite, antimony), Chaghi (chromite), Qila Saifullah(antimony, chromite) Saindak (gold, silver), Reko Diq (gold), Kalat (iron ore) Lasbela (manganese), Gwadar (oil refinery), Muslim Bagh (chromite)
> 
> 
> 
> According to announcement of the Planning Commission here on Saturday, the joint working groups on various components of China-Pakistan Economic Corridor (CPEC) are expected to hold their meetings next month. The joint working group on energy is scheduled to meet in the first week of August, groups on transport infrastructure & Gawadar in second week and group on planning in third week of August 2015.
> 
> Govt proposes 29 industrial parks, 21 mineral zones under CPEC - thenews.com.pk



Exactly what China wanted Pakistan to do.... you guys are following the Angola model of Chinese "investments". They will buy your resources (ores and minerals not finished products) dry and give you money for it.... then take it back through sovereign guarantee. In effect it gets everything for almost a fraction of what it would cost.

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## Manindra

Vyom said:


> Read well sir,
> 
> Asian Warrior: China in Africa – Messiah or Monster
> 
> One of the most brilliant analysis of Chinese activity in Africa. You can go through the article, it one of the most enlightening blog out there. However, individual discretion is advised.



Well, I am already expert on this (Asian Africa investment) but lazy in typing.
Well, we are also not far from them except we didn't bring huge quantity of Indian labour & trade weapons & finally our investments are lower than China ( but increasing significantly).
This we can call economic colonization of Africa by Asians.


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## Vyom

GURU DUTT said:


> pehle cachhaa @RiazHaq and now @Vyom i guess its high time i too should start "musing" say waht @ranjeet & @Shamain ji



That was the catch.


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## Sipahi

Vyom said:


> Exactly what China wanted Pakistan to do.... you guys are following the Angola model of Chinese "investments". They will buy your resources (ores and minerals not finished products) dry and give you money for it.... then take it back through sovereign guarantee. In effect it gets everything for almost a fraction of what it would cost.



Pakistaniyon se Amreeki e aise tang ni aye  Thora sabr karo china ko hum yahan gawadar mein shift karain gey


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## GURU DUTT

Vyom said:


> That was the catch.


well trolling to mai kerta nahin but thinking serouslli about it


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## Manindra

Vyom said:


> Exactly what China wanted Pakistan to do.... you guys are following the Angola model of Chinese "investments". They will buy your resources (ores and minerals not finished products) dry and give you money for it.... then take it back through sovereign guarantee. In effect it gets everything for almost a fraction of what it would cost.


You are seriously wrong here .
It is our old lady United Kingdom model.
remember cheap cotton & indigo import & costly fabric export.

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## Vyom

mshahid said:


> Pakistaniyon se Amreeki e aise tang ni aye  Thora sabr karo china ko hum yahan gawadar mein shift karain gey



dekh bhai, dimag walon ke liye likha tha... apko padh kar hansi aayi hai ... maafi chata hoon ... gustakhi meri...

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## Shot-Caller

Keep writing self pleasuring articles. Only shows how much you think about CPEC.


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## Vyom

Manindra said:


> You are seriously wrong here .
> It is our old lady United Kingdom model.
> remember cheap cotton & indigo import & costly fabric export.



Neo colonialism, brader. but Brits were overt, the countries are sovereign and they will fully fall in this trap. amazing shrewdness actually. got to admire the Chinese.



Shot-Caller said:


> Keep writing self pleasuring articles. Only shows how much you think about CPEC.



I need to know about the Chinese investment model, and your Economy. and I am good with numbers. not self pleasuring but an observation free to let go... I am not keeping you on gunpoint to understand, try economics lessons in college nearby.

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## Manindra

Vyom said:


> Neo colonialism, brader. but Brits were overt, the countries are sovereign and they will fully fall in this trap. amazing shrewdness actually. got to admire the Chinese.


They are as much sovereign as Nawabs of Bengal during de facto rule of East India Co.
All are crazy dictators or corrupt & keep in line with bribe, fear of coup, revolt or blackmail or others meanings.
Even Government of India is also not very far.
Our Aid data breakup by region give you a hint.

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## Vyom

mpk1988 said:


> Excellent write up and wonderful analytical skills. Have you thought about joining the govt think tanks?
> 
> Anyway, while its a sound write-up, I don't believe the Pakistanis are that naive to not hold any trump cards and let themselves be used. Maybe they see it as infrastructure development and strategic co-operation more than an economic one? Only time will tell. Hopefully, it works out for all parties.



I don't think that much. as long as my tanks are full I am happy.  Bourbon rocks 



Manindra said:


> They are as much sovereign as Nawabs of Bengal during de facto rule of East India Co.
> All are crazy dictators or corrupt & keep in line with bribe, fear of coup, revolt or blackmail or others meanings.
> Even Government of India is also not very far.
> Our Aid data breakup by region give you a hint.



A little more than Nawabs but that's about it. total resource exploitation. That Aid went to NGOs that's why Government rightly banned them. Yes, we need to be careful and better this game otherwise we will end up as sitting ducks.

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## Shot-Caller

Vyom said:


> I need to know about the Chinese investment model, and your Economy. and I am good with numbers. not self pleasuring but an observation free to let go... I am not keeping you on gunpoint to understand, try economics lessons in college nearby.


If only the world was revolving around your numbers and economic lessons.


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## Alpha BeeTee

Vyom said:


> So I have been reading through some literature regarding CPEC and this is what I found how Pakistan is getting itself into a circular debt cycle. which I hope will not turn into a spiral dept trajectory. also interestingly I found Pakistani negotiators missing on obvious points like they did on the FTA with China that resulted in decimation of local Pakistani Manufacturing as it could not compete with prices of Chinese products.
> 
> So Here are my observations.
> 
> 1. It doesn't fit the definition of an Economic corridor. An economic corridor [sic] “connects hubs or nodes of economic activity along a defined geography” (Asian Development Bank). Hence, an empty road through a barren landscape connecting strategically important point A with strategically important point B 3,000 kilometers away does not fit the description. To be truly an economic corridor, the envisaged roads will need to connect demand (markets) with supply (production centers and clusters). The markets as well as production centers can be per-existing ones, or new ones that will spring up as the ‘network effects’ of the economic corridor take root. _The Question is will the proposed China-Pakistan Economic Corridor will truly be an ‘economic’ corridor, or will it be a string of strategically important roads and a bunch of power projects. The Power projects are almost equal to the domestic demand that will be there when its implementation is over. When envisioning the future it is always a thumb rule to have surplus installed capacity. Further there are no domestic Power plant equipment manufactures in Pakistan that make Steam generators and Turbines _(500 MW+ capacity). (Would be great if you guys could get some JVs with the Chinese, but alas)
> 
> Given the timeline for completion, these power projects could possibly add reasonable generation capacity to the Pakistan national grid by 2017-18, but they would hardly provide any relief in terms of the fast-growing demand for electricity. And there is no silver lining for consumers as far as the cost of the electricity is concerned.
> 
> 2. It won't create local employment and capacity building. Chinese documents have already stated that the projects would cost more than a similar project in China because of the increased cost of bringing Chinese labour to Pakistan. Means all the wages and machinery deployment costs will flow back to Chinese pockets. The same way they have been doing it in Africa.
> 
> 3. The corridor's main purpose is to grant Chinese access to the Gulf as an alternative to the vulnerable sea route in the South China sea. Rest is all add on. No worthwhile investment can come in the Balochistan KP stretch. Punjab and Sindh may imagine an export based strategy_ but can anyone produce cheaper than China?_ Further, export led growth is dicey in a world where major economies are in the doldrums [Eurozone, USA and even China is becoming sluggish].
> 
> 4. The Karakorum Highway Route is Seismically active, snow laden for a little less than 6 months, and is very very very far away from China's consumption centers which lie in the far east. Its way cheaper to import via Ships to those areas, as for its energy requirements, China has gas pipeline links with central Asia, is making a super massive one from Russia. It is not going to be as dependent on gulf oil in the near future. _So if the Chinese have any sense of economics and cost vs risk analysis, they will only keep this route as a fire escape. Highly expensive and risk laden._
> 
> Pic 1 China population centers. :
> 
> 
> 
> 
> 
> ​Pic 2 China-Central Asia Oil&Gas Pipelines
> 
> 
> 
> 
> ​
> 5. So how is proposed "investment" planned. it could have been made sweeter by allowing Pakistan to trade in rupees and then arrange fro currency swaps that would help in Pakistan in increasing its Forex and increase trade footprint at the same time. Whereby Pakistan gets to pay in rupees rather than in US dollars or renminbi._ Interestingly it has already been agreed that payments will be in US Dollars._
> 
> 6. The idea of becoming a 'trading' hub already has a competitor, its Dubai that allows trans shipments to all countries and is already established a business hub. For Gwader to become a competitor it will have to provide services at par with Dubai and better it, from day one. good luck. In view of the economic landscape cities have become prosperous like Singapore and Dubai is their location on sea trading routes which they have cultivated over decades. In view of the Iran Deal, West will get trading access to Central Asia Via Bandar Abbas and other Iranian ports (Chahbahar is not even in question here) by circumventing the instability, and insurgency of Afghanistan which they might go to... at a later date if the dust settle downs there. All possible from Iran.
> 
> No country has become prosperous by converting itself into a big toll booth. good luck.
> 
> 7. China is making investments on which Pakistan has given *sovereign guarantee of 18% return*, meaning on investment of Rs 100 Pakistan will pay them back Rs 118 (that's in Compounded interest). In some cases its about 27.2 %.
> 
> _*Example*_ :-
> Sinosure is charging a fee of 7pc for debt servicing, which will be added to the capital cost of a project. For instance, the capital cost of a 660MW project at Port Qasim is $767.9m. But it goes up to $956.1m by adding Sinosure’s fee of $63.9m, its financing fee and charges of $21m, and interest during construction of $72.8m; a 27.2pc return on equity is guaranteed. Ironically, interest during construction is allowed at the rate of 33.33pc for the first year; 33.33pc for the second; 13.33pc for the third; and 20pc for the fourth year.
> 
> How exactly this helps Pakistan? Beside the projects will be run on turnkey basis by Chinese companies who will employ Chinese manpower to accomplish it. Pakistan on the other hand will have to provide the Chinese security at its own cost. And all this is promised on whether the investments will materialize in the first place.
> 
> I think Pakistan is better off running these projects by itself only then it will derive the benefit of the investments. If China can not provide aid money then it should provide loan, let Pakistan execute these projects. Also the interest should not be 18% it should be 5%. Apparently domestic lending rates in Pakistan is Cheaper than that of being given to that to China, If the government gave this incentive to local banks and businesses the benefit would have been much greater.
> 
> In the end with 2016 of the repayment of International loans coming up. and with these debts to pay back Pakistan's coffers don't give much of a confidence.
> 
> @GURU DUTT @Bang Galore @SpArK @Srinivas @Chanakya's_Chant


Seems a legit analysis.
However it can't be as dark as you paint it.
It will good if someone from our side gives a sane reply.
I'm no economic expert so the likes of me can be downplayed by your analysis.
Taking it with a pinch of namak.

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## Vyom

Shot-Caller said:


> If only the world was revolving around your numbers and economic lessons.



Nope, not mine, numbers are everyone's... its just that it's like electricity in Pakistan... not everybody gets it. 

I suggested a college nearby. Verify yourself. if proved wrong I'll withdraw the article.

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## Manindra

Vyom said:


> A little more than Nawabs but that's about it. total resource exploitation.


Only thing difference is Eat India Co. maintain large army on expense of Nawabs & Chinese currently not but in future maintain base by high margin profit in Africa.


> That Aid went to NGOs that's why Government rightly banned them. Yes, we need to be careful and better this game otherwise we will end up as sitting ducks.


You misunderstood. We gave aid to African Governments.

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## Alpha BeeTee

Vyom said:


> Nope, not mine, numbers are everyone's... its just that it's like electricity in Pakistan... not everybody gets it.
> 
> I suggested a college nearby. Verify yourself. if proved wrong I'll withdraw the article.


Nope ..
I think a counter analysis should prevail here.


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## Alpha BeeTee

Vyom said:


> Nope, not mine, numbers are everyone's... its just that it's like electricity in Pakistan... not everybody gets it.
> 
> I suggested a college nearby. Verify yourself. if proved wrong I'll withdraw the article.


Nope ..
I think a counter analysis should prevail here.


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## Vyom

Alpha BeeTee said:


> Seems a legit analysis.
> However it can't be as dark as you paint it.
> It will good if someone from our side gives a sane reply to your analysis.
> I'm no economic expert so the likes of me can be downplayed by your analysis.



Yeah these is the dark part , the bit much is a bit of word play, yet the risks exist. But make no mistake it will take a masterstroke of financial and economic policy maneuvering from your planners for Pakistan to become a Partner with China and not a colony. Nawaz doesn't have the intellectual capital to do it (in my view, and I can be completely wrong in it.)


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## Spectre

Vyom said:


> Thank You
> 
> However, but aren't finances and viability import to keep up the show ? You cannot just buy an elephant and hope to feed it with perception. Slowly it will grow frail if not fed properly. eventually will succumb as it happened with FTA with China. Yes the perception can be managed but for how long at 18% returns I doubt even if the GoP will be able to spend on the maintenance of roads and powerplants.
> 
> To give you an Idea how dire the situation is the budget spending of Pakistan has fallen by 0.7% YoY,in absolute terms couple inflation and that gives a different picture. This indicates a fall in revenue generation. while its (direect) defence spending has increased to 20% of Federal Budget. This means high expenses and falling income. along with All round High debt.
> 
> High debt is not a bad thing as long as you can pay back. borrowings and payments are a part of it. But defaulting on payments has a severe blow. Falling exports are a trend. The CAD has reduced in Pakistan's case but on overall basis there the volume of trade has reduced too (-3.5%).
> 
> China is Mercantile state it gives no concern to such trivial thing. if it wants to get back at India it can very well sans Pakistan.



Agreed to all above points but debt as such is meaningless as you have said as long as entity retains ability to service that debt. Infact from a banker's point of view there is nothing better than perpetual debt 

Now the question arises if Pakistan can service that debt as default would essentially make it Pariah state among investors, bankers and multilateral institutions like ADB/WB/IMF.

There is a very simple answer to that; left on its own Pakistan cannot service that debt without major reductions in defense and social sector spending. It essentially services its debt with more debt which is a debt trap/ponzi scheme however you look at it. The joke is that this phenomenon is not a secret. Everyone is in on it and still financing Pakistan further to keep it in a relatively stable that as no wants a nuclear capable and bankrupt state which would lead to nuclear proliferation for revenue among many other evils.

So essentially the case is not about feeding an elephant with perception but buying an elephant with leprechaun's gold and then buying it's food with leprechaun's gold and then performing a circus show where audience pays you back with the same leprechaun's gold

Your point about China is marginally true as it certainly has the capability to put road blocks in India's path to progress itself w/o Pakistan ; however things are not so open and shut. Pakistan is to China to what LeT is to Pakistan - Hope you get my point

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## Shot-Caller

Vyom said:


> Nope, not mine, numbers are everyone's... its just that it's like electricity in Pakistan... not everybody gets it.
> 
> I suggested a college nearby. Verify yourself. if proved wrong I'll withdraw the article.


If you were so bright you would have thought for a second about how many Indians live without electricity before being sarcastic about Pakistan.


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## bloo

Shot-Caller said:


> Keep writing self pleasuring articles. Only shows how much you think about CPEC.









Read the post before making a premature evaluation. The various Chinese investment model, and the ultimate fine print of the CPEC deal proves how much of an "asset" it actually is.
Vyom's analysis is brilliant and an eye opener for people who quote CPEC everywhere else without a smidgen of knowledge about it.

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## Rasengan

Vyom said:


> 1. It doesn't fit the definition of an Economic corridor. An economic corridor [sic] “connects hubs or nodes of economic activity along a defined geography” (Asian Development Bank). Hence, an empty road through a barren landscape connecting strategically important point A with strategically important point B 3,000 kilometers away does not fit the description. To be truly an economic corridor, the envisaged roads will need to connect demand (markets) with supply (production centers and clusters). The markets as well as production centers can be per-existing ones, or new ones that will spring up as the ‘network effects’ of the economic corridor take root. _The Question is will the proposed China-Pakistan Economic Corridor will truly be an ‘economic’ corridor, or will it be a string of strategically important roads and a bunch of power projects. The Power projects are almost equal to the domestic demand that will be there when its implementation is over. When envisioning the future it is always a thumb rule to have surplus installed capacity. Further there are no domestic Power plant equipment manufactures in Pakistan that make Steam generators and Turbines _(500 MW+ capacity). (Would be great if you guys could get some JVs with the Chinese, but alas)



Clearly your knowledge on the Economic Corridor between Pakistan and China is unfortunately disappointing, because the concept encompasses many different elements. For instance the Government of Pakistan has proposed 29 industrial zones and 21 economic mineral processing zones across all four provinces. This will generate new markets opening up previously economically unconnected regions of the country and increasing access and trade between the business communities of both China and Pakistan. Already a number of companies have shown an interests to relocate their factory units in Pakistan. For instance, a Chinese cement company has invested $350 on a factory situated near the Salt Ranges, which is one of the proposed industrial zones of Punjab. Last month the Chinese Textile Association spoke to the CM of Punjab, where they articulated the desire to shift their production units to Faisalabad another proposed industrial zone. SinoSteel a couple of weeks ago advocated quite clearly that it has an interests to move some of its units to Pakistan. There are four distinct phases of CPEC and the focus between 2015-2020 is on power projects so that sustainability of industry is uninterrupted due to power cuts. Millions of jobs will be created in these proposed industrial zones because they will become major metropolitan centers with complete brand new infrastructure facilities. Already I have a friend who is currently talking to some of the biggest property developers from Changsha and Guangdong who have an interests to invest huge in developing houses around these zones. 

Furthermore the construction of roads will immensely benefit Pakistan, because one of the main reasons why the mineral industry in the province of KPK and Baluchistan has been stagnant is because the basic infrastructure was not available. However, CPEC clearly does not just revolve around roads because two separate railways links between Kashgar and Gwadar have already been proposed. 

1) Kashgar-Hotan-Gilgit-Abbottabad, Havelian-Rawalpindi-Gujranwalan-Lahore-Sahiwal-Multan-Bahawalpur-Rohri-Spezand-Mastung-Kalat-Hosab-Turbat and Gwadar

2) Kashgar-Hotan-Gilgit-Abbottabad-Havelian-Jand-Miyanwali-Darya Khan-Zhob-Bostan-Quetta-Spezand-Mastung-Kalat-Hoshab-Turbat- Gwadar


The $46 billion investment revolves around Phase 1 in which $11 billion has been deposited aside for infrastructure works on the corridor, while the residual $35 billion will be directed towards energy projects. CPEC also includes investments in energy projects including the construction of coal-fired power plants. The first group of power plants, which will cost $15.5 billion, will contribute 10,400 megawatts of electricity to Pakistan’s grid by 2018. A second group of power plants, costing $18.3 billion, will be built after 2018, and will add an additional 6,600 megawatts to the grid. These in total will double Pakistan’s current electricity supply and alleviate the country’s daily electrical shortages. China is also helping Pakistan to build 6 nuclear reactors in Pakistan, supplying 3,400 MW. This is part of Pakistan's plan to use nuclear energy to generate 8,800 MW by 2030 and roughly $9-13 billion are being invested into the project which is separate from CPEC. Just last week China Three Gorges Dam Corporation has offered to invest $50 billion by reviewing 35,000 MW and completing the most important hydro projects in Pakistan. So things are changing for the better and the project is not just based on roads and power projects, although they play an important part.

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## Vyom

Shot-Caller said:


> If you were so bright you would have thought for a second about how many Indians live without electricity before being sarcastic about Pakistan.


 
Yup I know, Every year the total power capacity of a Pakistan equivalent gets commissioned here. Shortages will be history by 2018.  

So yes I took the unlawful liberty of calling a joke too soon.. come 2018 that will still hold true

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## AnnoyingOrange

Vyom said:


> So I have been reading through some literature regarding CPEC and this is what I found how Pakistan is getting itself into a circular debt cycle. which I hope will not turn into a spiral dept trajectory. also interestingly I found Pakistani negotiators missing on obvious points like they did on the FTA with China that resulted in decimation of local Pakistani Manufacturing as it could not compete with prices of Chinese products.
> 
> So Here are my observations.
> 
> 1. It doesn't fit the definition of an Economic corridor. An economic corridor [sic] “connects hubs or nodes of economic activity along a defined geography” (Asian Development Bank). Hence, an empty road through a barren landscape connecting strategically important point A with strategically important point B 3,000 kilometers away does not fit the description. To be truly an economic corridor, the envisaged roads will need to connect demand (markets) with supply (production centers and clusters). The markets as well as production centers can be per-existing ones, or new ones that will spring up as the ‘network effects’ of the economic corridor take root. _The Question is will the proposed China-Pakistan Economic Corridor will truly be an ‘economic’ corridor, or will it be a string of strategically important roads and a bunch of power projects. The Power projects are almost equal to the domestic demand that will be there when its implementation is over. When envisioning the future it is always a thumb rule to have surplus installed capacity. Further there are no domestic Power plant equipment manufactures in Pakistan that make Steam generators and Turbines _(500 MW+ capacity). (Would be great if you guys could get some JVs with the Chinese, but alas)
> 
> Given the timeline for completion, these power projects could possibly add reasonable generation capacity to the Pakistan national grid by 2017-18, but they would hardly provide any relief in terms of the fast-growing demand for electricity. And there is no silver lining for consumers as far as the cost of the electricity is concerned.
> 
> 2. It won't create local employment and capacity building. Chinese documents have already stated that the projects would cost more than a similar project in China because of the increased cost of bringing Chinese labour to Pakistan. Means all the wages and machinery deployment costs will flow back to Chinese pockets. The same way they have been doing it in Africa.
> 
> 3. The corridor's main purpose is to grant Chinese access to the Gulf as an alternative to the vulnerable sea route in the South China sea. Rest is all add on. No worthwhile investment can come in the Balochistan KP stretch. Punjab and Sindh may imagine an export based strategy_ but can anyone produce cheaper than China?_ Further, export led growth is dicey in a world where major economies are in the doldrums [Eurozone, USA and even China is becoming sluggish].
> 
> 4. The Karakorum Highway Route is Seismically active, snow laden for a little less than 6 months, and is very very very far away from China's consumption centers which lie in the far east. Its way cheaper to import via Ships to those areas, as for its energy requirements, China has gas pipeline links with central Asia, is making a super massive one from Russia. It is not going to be as dependent on gulf oil in the near future. _So if the Chinese have any sense of economics and cost vs risk analysis, they will only keep this route as a fire escape. Highly expensive and risk laden._
> 
> Pic 1 China population centers. :
> 
> 
> 
> 
> ​Pic 2 China-Central Asia Oil&Gas Pipelines
> 
> 
> 
> 
> ​
> 5. So how is proposed "investment" planned. it could have been made sweeter by allowing Pakistan to trade in rupees and then arrange fro currency swaps that would help in Pakistan in increasing its Forex and increase trade footprint at the same time. Whereby Pakistan gets to pay in rupees rather than in US dollars or renminbi._ Interestingly it has already been agreed that payments will be in US Dollars._
> 
> 6. The idea of becoming a 'trading' hub already has a competitor, its Dubai that allows trans shipments to all countries and is already established a business hub. For Gwader to become a competitor it will have to provide services at par with Dubai and better it, from day one. good luck. In view of the economic landscape cities have become prosperous like Singapore and Dubai is their location on sea trading routes which they have cultivated over decades. In view of the Iran Deal, West will get trading access to Central Asia Via Bandar Abbas and other Iranian ports (Chahbahar is not even in question here) by circumventing the instability, and insurgency of Afghanistan which they might go to... at a later date if the dust settle downs there. All possible from Iran.
> 
> No country has become prosperous by converting itself into a big toll booth. good luck.
> 
> 7. China is making investments on which Pakistan has given *sovereign guarantee of 18% return*, meaning on investment of Rs 100 Pakistan will pay them back Rs 118 (that's in Compounded interest). In some cases its about 27.2 %.
> 
> _*Example*_ :-
> Sinosure is charging a fee of 7pc for debt servicing, which will be added to the capital cost of a project. For instance, the capital cost of a 660MW project at Port Qasim is $767.9m. But it goes up to $956.1m by adding Sinosure’s fee of $63.9m, its financing fee and charges of $21m, and interest during construction of $72.8m; a 27.2pc return on equity is guaranteed. Ironically, interest during construction is allowed at the rate of 33.33pc for the first year; 33.33pc for the second; 13.33pc for the third; and 20pc for the fourth year.
> 
> How exactly this helps Pakistan? Beside the projects will be run on turnkey basis by Chinese companies who will employ Chinese manpower to accomplish it. Pakistan on the other hand will have to provide the Chinese security at its own cost. And all this is promised on whether the investments will materialize in the first place.
> 
> I think Pakistan is better off running these projects by itself only then it will derive the benefit of the investments. If China can not provide aid money then it should provide loan, let Pakistan execute these projects. Also the interest should not be 18% it should be 5%. Apparently domestic lending rates in Pakistan is Cheaper than that of being given to that to China, If the government gave this incentive to local banks and businesses the benefit would have been much greater.
> 
> In the end with 2016 of the repayment of International loans coming up. and with these debts to pay back Pakistan's coffers don't give much of a confidence.
> 
> @GURU DUTT @Bang Galore @SpArK @Srinivas @Chanakya's_Chant



Pakistanis know this.. but the country is so short of friends and investors... they don't have much options.

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## ryzvonusef

I understand OP's point, but as Ahsan Iqbal has repeatedly said, CPEC is not just a container transport project.

China is not stupid. CPEC (and BCIM, which OP must have been referring to obliquely) are one of six-seven other major corridor projects that China is investing on, in addition to other minor projects.

Now ignoring any military implications of Gwadar for china, from an economic point of view, there are no IMMEDIATE benefits from CPEC... that's because it is a LONG term project. (Compared to, say the BCIM which is more of an immediate project, linking Guangdong to Bay of Bengal via Kunming, Burma, Bangladesh and Kolkatta)

To see full potential of CPEC, you will have to wait 10-15 years.

----

But to give a preview, The Eastern seaboard is extremely congested, and there is a GDP imbalance between eastern and western provinces of China. Also, there is a population congestion and pollution problem in the eastern provinces of china. 

Projects like CPEC will allow the economy to move westward and relieve pressure. Obviously that will take time, hence the long-term nature of it. We effectively provide China with a western seaboard.

Also, countries like Iran (especially after sanctions end) and Russia are interested, as well as landlocked but resource rich CIS states, creating a pan-regional economic network. Just recently, UK gave funds for a small piece of CPEC road project.

How Pakistan will benefit from it is that, we are developing our own economic infrastructure, and take advantage of the chinese infrastructure to link up with the greater economy. (Behti ganga mein haath dhona, to use an urdu proverb) 

----

Please join us on SSC if you want to have a discussion on CPEC, we love collecting facts and figures on projects and discussing their implications:

PAKISTAN | China Pakistan Economic Corridor (CPEC) | Infrastructure | U/C - SkyscraperCity

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## Shot-Caller

Vyom said:


> Yup I know, Every year the total power capacity of a Pakistan equivalent gets commissioned here. Shortages will be history by 2018.
> 
> So yes I took the unlawful liberty of calling a joke too soon.. come 2018 that will still hold true


If its according to your analysis then I highly doubt it.


bloo said:


> Read the post before making a premature evaluation. The various Chinese investment model, and ultimate fine print of the CPEC deal proves how much of an "asset" it actually is.
> Vyom's analysis is brilliant and an eye opener for people who quote CPEC everywhere else without a smidgen of knowledge about it.


Yea sure all the research about it has been done by Indians and we are falling into a trap that will leave us penny less. Go worry about your own problems nobody needs Indian warnings. You are not the concerned party.


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## Rasengan

Vyom said:


> Given the timeline for completion, these power projects could possibly add reasonable generation capacity to the Pakistan national grid by 2017-18, but they would hardly provide any relief in terms of the fast-growing demand for electricity. And there is no silver lining for consumers as far as the cost of the electricity is concerned.
> 
> 2. It won't create local employment and capacity building. Chinese documents have already stated that the projects would cost more than a similar project in China because of the increased cost of bringing Chinese labour to Pakistan. Means all the wages and machinery deployment costs will flow back to Chinese pockets. The same way they have been doing it in Africa.



Pakistan's current electricity capacity will double in size once the projects in phase 1 are fully completed by 2021. However the effects will be noticed straightway because half of these projects will be completed by 2018. We should also not forget that China Petroleum Pipeline Bureau which is a subsidiary of China National Petroleum Corporation will invest $2 billion on the gas pipeline from Iran. The company been tasked to build 435 miles of pipeline from Gwadar to Nawabshah. Actually majority of the roads and power projects have equal distribution of workers from Pakistan and China. In fact the vast majority of workers are Pakistani's and evidence of this can be observed in the Sahiwal coal power project and the construction of roads.

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## Chanakya's_Chant

Vyom said:


> China has gas pipeline links with central Asia, is making a super massive one from Russia. It is not going to be as dependent on gulf oil in the near future.



Every day, China spends around $18 million on import of 6.3 million barrels of oil as shipment costs from the Middle East, accounting for 80% of its all oil needs, routing through the Strait of Malacca covering a distance of 9,912 miles. By cutting a corridor directly from Kashgar to Gwadar, it will bring these costs significantly down to one-third of the current levels as new distance will be 3,626 miles to Central China, whereas only 2,295 miles till West China.

Even if China were to use PCEC only for 50% of its current level of oil supplies, it will save around $6 million every day, almost $2 billion every year - these savings are peanuts to the Chinese economy, however, the greater gain may lie in the strategic outreach via Gwadar as its Maritime Silk Route.



Vyom said:


> 3. The corridor's main purpose is to grant Chinese access to the Gulf as an alternative to the vulnerable sea route in the South China sea. Rest is all add on. No worthwhile investment can come in the Balochistan KP stretch. Punjab and Sindh may imagine an export based strategy_ but can anyone produce cheaper than China?_ Further, export led growth is dicey in a world where major economies are in the doldrums [Eurozone, USA and even China is becoming sluggish].



Ironically, in Pakistan itself, there is growing cynicism about the CPEC’s prospects and feasibility because of security-related concerns and inter-provincial political discord on route preferences.

The Balochistan insurgency began a decade ago and is now the most violent and long-lasting of five rebellions that have broken out in Pakistan’s largest, most thinly populated and least developed province since its independence in 1947.

There have been occasional kidnappings and killings of Chinese workers in Pakistan in recent years, including in Balochistan. In March Baloch separatists attacked tankers carrying fuel to a Chinese company working on a mining project. Gwadar port, which was recently put under the management of a Chinese state-owned company, is a particular target. An attack by Balochs in January on the electricity grid knocked out power in 80% of Pakistan, including Islamabad.



Vyom said:


> _The Question is will the proposed China-Pakistan Economic Corridor will truly be an ‘economic’ corridor, or will it be a string of strategically important roads and a bunch of power projects. The Power projects are almost equal to the domestic demand that will be there when its implementation is over. When envisioning the future it is always a thumb rule to have surplus installed capacity. Further there are no domestic Power plant equipment manufactures in Pakistan that make Steam generators and Turbines _(500 MW+ capacity). (Would be great if you guys could get some JVs with the Chinese, but alas)



China has pledged investment before in Pakistan that has not proved as large as promised. The much hyped $46 billion investment is to be made in a span of 15 years - In all likelihood, the $11-billion amount for infrastructure purposes is a Chinese loan whereas the $35-billion investment for the power sector is yet to be converted into a concrete term sheet. The term-sheet for Chinese investment in the power sector does not seem very promising at the moment.

Nevertheless, given the Chinese determination to find a route to oil-rich West Asia through Pakistan, and the Pakistani desperation to provide every possible assurance to China about safeguarding its investments, the project is likely to be implemented, even if its scope may be limited. The Chinese decision to strike deals worth US$ 22 billion out of a total of $28 billion with private players rather than the Pakistan government has been touted as an indication of Chinese seriousness in investing in Pakistan. One has to remember that China and Pakistan have weathered geographical and logistical extremes in the past to build the highest metalled road on one of the toughest terrain, i.e. the Karakoram Highway. Moreover, the Pakistani decision to raise a special security division to protect Chinese workers and interests in Pakistan, consisting of 10,000 security personnel, including 5,000 from the elite special services group (SSG) of the Pakistan Army who are specially trained for counter-terrorism and security, indicates its resolve to implement the project in all earnestness.

However, Pakistan has to first mobilise its own industry and trade sectors to make the best use of the corridor. Else, it will be a road and pipeline largely meant for Chinese business – on Pakistan’s taxpayers’ cost – and now protected by the Pakistan Army on their cost only. This corridor is more about China than Pakistan - China stands to benefit more than anyone else through CPEC and in the meanwhile to think CPEC as a cure to all problems Pakistan is suffering from, which some overenthusiastic members often suggest is nothing but a delusion. Anyways best of luck to both CPEC.

BTW an excellent analysis - if only I could give you a positive rating!

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## bloo

Shot-Caller said:


> If its according to your analysis then I highly doubt it.
> 
> Yea sure all the research about it has been done by Indians and we are falling into a trap that will leave us penny less. Go worry about your own problems nobody needs Indian warnings. You are not the concerned party.



How successful it actually is remains to be seen. 
And chill dude, people here are only voicing their opinions like people always do because it is a "FORUM", so who are you tell anybody to go?


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## Vyom

Rasengan said:


> Clearly your knowledge on the Economic Corridor between Pakistan and China is unfortunately disappointing, because the concept encompasses many different elements. For instance the Government of Pakistan has proposed 29 industrial zones and 21 economic mineral processing zones across all four provinces. This will generate new markets opening up previously economically unconnected regions of the country and increasing access and trade between the business communities of both China and Pakistan. Already a number of companies have shown an interests to relocate their factory units in Pakistan. For instance, a Chinese cement company has invested $350 on a factory situated near the Salt Ranges, which is one of the proposed industrial zones of Punjab. Last month the Chinese Textile Association spoke to the CM of Punjab, where they articulated the desire to shift their production units to Faisalabad another proposed industrial zone. SinoSteel a couple of weeks ago advocated quite clearly that it has an interests to move some of its units to Pakistan. There are four distinct phases of CPEC and the focus between 2015-2020 is on power projects so that sustainability of industry is uninterrupted due to power cuts. Millions of jobs will be created in these proposed industrial zones because they will become major metropolitan centers with complete brand new infrastructure facilities. Already I have a friend who is currently talking to some of the biggest property developers from Changsha and Guangdong who have an interests to invest huge in developing houses around these zones.
> 
> Furthermore the construction of roads will immensely benefit Pakistan, because one of the main reasons why the mineral industry in the province of KPK and Baluchistan has been stagnant is because the basic infrastructure was not available. However, CPEC clearly does not just revolve around roads because two separate railways links between Kashgar an5% of that money will flow back to Chiand Gwadar have already been proposed.
> 
> 1) Kashgar-Hotan-Gilgit-Abbottabad, Havelian-Rawalpindi-Gujranwalan-Lahore-Sahiwal-Multan-Bahawalpur-Rohri-Spezand-Mastung-Kalat-Hosab-Turbat and Gwadar
> 
> 2) Kashgar-Hotan-Gilgit-Abbottabad-Havelian-Jand-Miyanwali-Darya Khan-Zhob-Bostan-Quetta-Spezand-Mastung-Kalat-Hoshab-Turbat- Gwadar
> 
> 
> The $46 billion investment revolves around Phase 1 in which $11 billion has been deposited aside for infrastructure works on the corridor, while the residual $35 billion will be directed towards energy projects. CPEC also includes investments in energy projects including the construction of coal-fired power plants. The first group of power plants, which will cost $15.5 billion, will contribute 10,400 megawatts of electricity to Pakistan’s grid by 2018. A second group of power plants, costing $18.3 billion, will be built after 2018, and will add an additional 6,600 megawatts to the grid. These in total will double Pakistan’s current electricity supply and alleviate the country’s daily electrical shortages. China is also helping Pakistan to build 6 nuclear reactors in Pakistan, supplying 3,400 MW. This is part of Pakistan's plan to use nuclear energy to generate 8,800 MW by 2030 and roughly $9-13 billion are being invested into the project which is separate from CPEC. Just last week China Three Gorges Dam Corporation has offered to invest $50 billion by reviewing 35,000 MW and completing the most important hydro projects in Pakistan. So things are changing for the better and the project is not just based on roads and power projects, although they play an important part.



Please avoid ad-ad hominem counters. 

Yes I am aware of that, of every point that you have mentioned, But this is partnership of Unequals, how many JV in heavy industries have you got ? How many Chemical plants ? How many Automotive industry? All "infrastructure" projects are "Turnkey". Its like buying something off the self. And everything will be done by Chinese manpower and Machinery. 95% of that Money Will flow back to China.

Infrastructure Building is a continual process and that learning is being not granted to Pakistan at 18% sovereign guarantee (who on earth charges that much interest ???!! and that too in Dollars not RMB or Rupee ) . That is like being robbed. Steel plants are huge business and China has enough to meet the demand of the world for the next decade for the Entire Planet, they are running at 70% capacity now. You guys need Shanghi electric to set up Turbo-Generators manufacturing, Super critical Boilers manufacturing. Wanxiang Group Corporation to start making cars there. if its not happening read the plot differently. 

There are no offset clauses in the agreement. that is the big point. The second half of your post is just the repeat of what I have read number of times. but how does that augment your capacity to make new plants. you can't keep buying things forever... rest its my take. Lets see how it pans out in 5-6 years. 

China is doing a rerun of its Africa Model, you need financial maneuvering

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## Rasengan

Vyom said:


> The corridor's main purpose is to grant Chinese access to the Gulf as an alternative to the vulnerable sea route in the South China sea. Rest is all add on. No worthwhile investment can come in the Balochistan KP stretch. Punjab and Sindh may imagine an export based strategy_ but can anyone produce cheaper than China?_ Further, export led growth is dicey in a world where major economies are in the doldrums [Eurozone, USA and even China is becoming sluggish].[/USER]



The Economic Corridor has many purposes, although I agree wholeheartedly that the project would grant China access to the Gulf as an alternative to the vulnerable sea route in the South China Sea. However, the implementation of CPEC will have far-reaching positive effects across Central Asia, whose resources are currently landlocked and Gwadar provides a possible solution for them to have access to the global markets. Today Iran has made it clear that it has the desire to be part of CPEC, which is fantastic news.


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## Vyom

GURU DUTT said:


> well trolling to mai kerta nahin but thinking serouslli about it



Trolling nahi hai bhai (Shayad Title me ahi thoda sa ) . Valid point hai.. came back from Africa yesterday... Loot machai hui hai wahan. everything is Chinese. Unimaginable.


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## GURU DUTT

Vyom said:


> Trolling nahi hai bhai (Shayad Title me ahi thoda sa ) . Valid point hai.. came back from Africa yesterday... Loot machai hui hai wahan. everything is Chinese. Unimaginable.


sirji when a nation deu to its own misplaced paranoia and priorities always shoots itself in the foot and never learn from there past mistakes no ammount of loot can open its eyes

do you forgot how the same muslim nawabs/feudal elite that is now ruling pakistan did to stop marathaas gave undeu credits and advantages to "company bahadur" in late 18th centuarry which resulted in east india raj in sub continent that resulted in 1857 revolt

and then to save there jageers in feudalism free independent india orcastrated partition of india

and after independence deu to there hate and disghust obsession against "hindu" india brought first the americans when they were unable to fight india and then saudies and now chinese ... rest you know better than me

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## Vyom

Rasengan said:


> The Economic Corridor has many purposes, although I agree wholeheartedly that the project would grant China access to the Gulf as an alternative to the vulnerable sea route in the South China Sea. However, the implementation of CPEC will have far-reaching positive effects across Central Asia, whose resources are currently landlocked and Gwadar provides a possible solution for them to have access to the global markets. Today Iran has made it clear that it has the desire to be part of CPEC, which is fantastic news.



Central Asia is more easily linked to Iran And China than through Pakistan, 

The article is Iran agrees to consider being part of CPEC - The Express Tribune is a bit misleading, the body gives much clear idea. Iran other than to link up with China by bypassing Afghanistan may not not have much incentives there on. rest post Iran Deal, Using Bandar Abbas is much more a stable route than of course Afghanistan And Karakorum. and more or less we are in the middle of a Geo economic and politic realignment things will be more clear few months down the line lets see how that pans out. But to tell the truth China benefits more in this than Pakistan.

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## Rasengan

Vyom said:


> Please avoid ad-ad hominem counters.
> 
> Yes I am aware of that, of every point that you have mentioned, But this is partnership of Unequals, how many JV in heavy industries have you got ? How many Chemical plants ? How many Automotive industry? All "infrastructure" projects are "Turnkey". Its like buying something off the self. And everything will be done by Chinese manpower and Machinery. 95% of that Money Will flow back to China.
> 
> Infrastructure Building is a continual process and that learning is being not granted to Pakistan at 18% sovereign guarantee (who on earth charges that much interest ???!! and that too in Dollars not RMB or Rupee ) . That is like being robbed. Steel plants are huge business and China has enough to meet the demand of the world for the next decade for the Entire Planet, they are running at 70% capacity now. You guys need Shanghi electric to set up Turbo-Generators manufacturing, Super critical Boilers manufacturing. Wanxiang Group Corporation to start making cars there. if its not happening read the plot differently.
> 
> There are no offset clauses in the agreement. that is the big point. The second half of your post is just the repeat of what I have read number of times. but how does that augment your capacity to make new plants. you can't keep buying things forever... rest its my take. Lets see how it pans out in 5-6 years.
> 
> China is doing a rerun of its Africa Model, you need financial maneuvering




Clearly you did not read my previous correspondence with meticulous care. Chinese industries will under no circumstances will attempt to relocate their industries to Pakistan in the first phase of CPEC, because the electricity dilemma needs to be resolved. Instead I gave you specific examples to demonstrate the potential of this project and how a large percentage of Chinese industry can move to Pakistan in the future. 

Furthermore, your knowledge on the Economic Corridor is extremely poor, because a number of Pakistani companies have done JV with Chinese companies on power projects. For example Sino Hydro is currently doing a joint venture with Engro on a coal project in Thar. The Bahawalpur Solar park project is linked to the Government of Punjab and TBEA Xinjiang Corporation. The Nishat Group is working with a Chinese company in a coal project in Rahim Yar Khan. Most of the workers in these projects are Pakistani's for your kind information, except for the engineers and technical experts from China. You are making a conjecture without knowing any real facts and you also tend to forget that when Pakistan has enough energy to sustain its own industries, eventually other companies around the world will also invest and locate their factories in Pakistan. Also the rate of return on a project is different, for example the solar project in Bahawalpur is 17% and the hydro dam projects is anywhere between 11%-15%, depending on project size and investment.


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## v9s

Vyom's Musings: AKA copy-paste news articles and claim them as your own.

Evaluating CPEC - Newspaper - DAWN.COM

CPEC projects: status, cost and benefits - Newspaper - DAWN.COM

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## Sipahi

Vyom said:


> dekh bhai, dimag walon ke liye likha tha... apko padh kar hansi aayi hai ... maafi chata hoon ... gustakhi meri...



*dekh bhai*.... apko pata hai k mere pass dimagh nahi hai ??????

Our previous govt. since the birth of Pakistan failed to take any advantage of these assets .... Take thar coal as example ... which are worlds 6th largest coal reserves and what are being done with them I am sure you are aware ... so I will be happy person since they will come out at least from the earth


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## GURU DUTT

waise dose any pakistani member knows about as to what happenned to that crude oil found in punjab a few months back


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## Sipahi

GURU DUTT said:


> waise dose any pakistani member knows about as to what happenned to that crude oil found in punjab a few months back



Our Govt will try its best to keep this safe for our next generation as usual .... no progress

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## Rasengan

Vyom said:


> Central Asia is more easily linked to Iran And China than through Pakistan,
> 
> The article is Iran agrees to consider being part of CPEC - The Express Tribune is a bit misleading, the body gives much clear idea. Iran other than to link up with China by bypassing Afghanistan may not not have much incentives there on. rest post Iran Deal, Using Bandar Abbas is much more a stable route than of course Afghanistan And Karakorum. and more or less we are in the middle of a Geo economic and politic realignment things will be more clear few months down the line lets see how that pans out. But to tell the truth China benefits more in this than Pakistan.



Your first sentence depends on which particular Central Asian country you are talking about and both Gwadar and Chahabar will benefit in the long term because no single port can monopolize the whole market and this is agreed upon by most Iranian members on this defense site. Furthermore, Iran will has a desire to see CPEC successful because the province of sistan will become more stable and trade will increase between Pakistan, China and Iran in the long term. I would rather listen to the words of Javed Zarif than believe in your analysis.



GURU DUTT said:


> waise dose any pakistani member knows about as to what happenned to that crude oil found in punjab a few months back



Pakistan has a number of gas and oil fields in the country, however the lobby is very strong in keeping this quite because a number of individuals are making huge kickbacks from importing oil from Saudi Arabia.


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## GURU DUTT

Rasengan said:


> Your first sentence depends on which particular Central Asian country you are talking about and both Gwadar and Chahabar will benefit in the long term because no single port can monopolize the whole market and this is agreed upon by most Iranian members on this defense site. Furthermore, Iran will has a desire to see CPEC successful because the province of sistan will become more stable and trade will increase between Pakistan, China and Iran in the long term. I would rather listen to the words of Javed Zarif than believe in your analysis.
> 
> 
> 
> *Pakistan has a number of gas and oil fields in the country, however the lobby is very strong in keeping this quite because a number of individuals are making huge kickbacks from importing oil from Saudi Arabia*.


@Vyom bhai take a look here 

waise whats the rate of petrol and disel in pakistan (lahore, islamabad & karachi)


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## Pulsar

Alpha BeeTee said:


> Seems a legit analysis.
> However it can't be as dark as you paint it.
> It will good if someone from our side gives a sane reply.
> I'm no economic expert so the likes of me can be downplayed by your analysis.
> Taking it with a pinch of namak.


A couple of points in addition to what the OP has written which was spot on:

1. The grand design of China is not only oil from the Middle East through Gwadar to Xinjiang but to establish a naval base there to dominate the Strait of Hormuz through which 45% of the world's seaborne oil shipments flow. In order to maintain and supply this naval fleet, the only viable option is via the CPEC. This logistics artery will also then allow the Chinese to dominate parts of East Africa, the Arabian Sea and the Indian Ocean. Gwadar has been handed over to China on a 40 year 'operational' lease which is extendable ad infinitum. In other words, all operations in Gwadar are now under Chinese control.

2. China is disposing off its coal based power plants as it has to lower its greenhouse gas emissions as per the norms agreed to. These coal fired plants would be shipped to Pakistan and needless to say, will be an environmental disaster. China wants to palm off its polluting industry to Pakistan for it to handle while it turns to non polluting nuclear power instead!

3. The cost per unit of electricity which would also include solar and wind power (both of which are frightfully expensive) would be between Rs 18 -20 PKR, putting into question affordability and viability.

4. The $11-billion amount for infrastructure purposes is a Chinese loan whereas the $35-billion investment for the power sector is yet to be converted into a concrete term sheet.

5. Though Pakistan will acquire a new asset in terms of infrastructure, it has to first mobilise its own industry and trade sectors to make the best use of the corridor. *Else, it will be a road and pipeline largely meant for Chinese business – on Pakistan’s taxpayers’ cost – and protected by the Pakistan Army at Pakistan's cost.*

6. The term-sheet for Chinese investment in the power sector does not seem very promising at the moment. The federal government’s sovereign guarantee has been called in several times by IPPs over the last few years. The Chinese most likely may not give it its due value.

7. The next alternative for them as a guarantee is a revolving letter of credit backed by the Pak government. That is almost a non-starter for the government as it will imply special privileges to Chinese investors and no bank can offer revolving letter of credit for the life cycle of a power project, running over decades.

8. If Pakistan cannot overcome its power crisis, and prepare a trade-centric economic vision, they stand to benefit little from PCEC in terms of additional business opportunities apart from temporary jobs.

9. Industrial parks and economic zones would be set up primarily for and by the Chinese. Except for restricted local rural employment, the profits of these companies which would be ploughed back to China.

10. A net rise in the import bill will result as land connectivity with China improves (especially under the operation of a Free Trade Agreement) which would mean mounting trade deficits for Pakistan. The cost of transportation from hubs in Pakistan to the Kashgar region would be an average of Rs 4 Lakhs PKR per 10-ton truck. Thus, transportation of low value Pakistani goods would be nonviable.

11. Further, a net increase in the import bill will only be a small part of the problem. Most of the envisioned projects will incur liabilities in foreign exchange (for capital and fuel imports, debt servicing, profit repatriation and wages), while their earnings will be in rupees; the currency mismatch, unless offset by a strong jump in exports, could prove to be a large drag on the country’s balance of payments position.

All in all, it's not as if 'rivers of gold' are about to flow in Pakistan as some Pakistani commentators have mentioned. The (CPEC) road ahead is not all hunky dory!

My two bits!

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## Rasengan

GURU DUTT said:


> @Vyom bhai take a look here
> 
> waise whats the rate of petrol and disel in pakistan (lahore, islamabad & karachi)



Guru Dutt when your knowledge is non-existent on a particular subject, then its best to hush your gums instead of clapping your hands like a chura Now I did not exactly state in my previous message that Pakistan has the largest reserves of oil and gas in the world, however we have enough deposits to meet our own needs. The reason why this does not happen, because the government does not provide enough incentive for companies to explore and feasibly extract these resources, partly because a strong lobby is against it. You can ask other members to verify in what I am trying to say. Now if you cannot understand this fact, then please join a special school needs school



Pulsar said:


> A couple of points in addition to what the OP has written which was spot on:
> 
> 1. The grand design of China is not only oil from the Middle East through Gwadar to Xinjiang but to establish a naval base there to dominate the Strait of Hormuz through which 45% of the world's seaborne oil shipments flow. In order to maintain and supply this naval fleet, the only viable option is via the CPEC. This logistics artery will also then allow the Chinese to dominate parts of East Africa, the Arabian Sea and the Indian Ocean. Gwadar has been handed over to China on a 40 year 'operational' lease which is extendable ad infinitum. In other words, all operations in Gwadar are now under Chinese control.
> 
> 2. China is disposing off its coal based power plants as it has to lower its greenhouse gas emissions as per the norms agreed to. These coal fired plants would be shipped to Pakistan and needless to say, will be an environmental disaster. China wants to palm off its polluting industry to Pakistan for it to handle while it turns to non polluting nuclear power instead!
> 
> 3. The cost per unit of electricity which would also include solar and wind power (both of which are frightfully expensive) would be between Rs 18 -20 PKR, putting into question affordability and viability.
> 
> 4. The $11-billion amount for infrastructure purposes is a Chinese loan whereas the $35-billion investment for the power sector is yet to be converted into a concrete term sheet.
> 
> 5. Though Pakistan will acquire a new asset in terms of infrastructure, it has to first mobilise its own industry and trade sectors to make the best use of the corridor. *Else, it will be a road and pipeline largely meant for Chinese business – on Pakistan’s taxpayers’ cost – and protected by the Pakistan Army at Pakistan's cost.*
> 
> 6. The term-sheet for Chinese investment in the power sector does not seem very promising at the moment. The federal government’s sovereign guarantee has been called in several times by IPPs over the last few years. The Chinese most likely may not give it its due value.
> 
> 7. The next alternative for them as a guarantee is a revolving letter of credit backed by the Pak government. That is almost a non-starter for the government as it will imply special privileges to Chinese investors and no bank can offer revolving letter of credit for the life cycle of a power project, running over decades.
> 
> 8. If Pakistan cannot overcome its power crisis, and prepare a trade-centric economic vision, they stand to benefit little from PCEC in terms of additional business opportunities apart from temporary jobs.
> 
> 9. Industrial parks and economic zones would be set up primarily for and by the Chinese. Except for restricted local rural employment, the profits of these companies which would be ploughed back to China.
> 
> 10. A net rise in the import bill will result as land connectivity with China improves (especially under the operation of a Free Trade Agreement) which would mean mounting trade deficits for Pakistan.
> 
> 11. Further, a net increase in the import bill will only be a small part of the problem. Most of the envisioned projects will incur liabilities in foreign exchange (for capital and fuel imports, debt servicing, profit repatriation and wages), while their earnings will be in rupees; the currency mismatch, unless offset by a strong jump in exports, could prove to be a large drag on the country’s balance of payments position.
> 
> All in all, it's not as if 'rivers of gold' are about to flow in Pakistan as some Pakistani commentators have mentioned. The road ahead is not all hunky dory!
> 
> My two bits!




You have just copied and pasted an article from the internet, because I have read this analysis written by a Pakistan writer.


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## GURU DUTT

Rasengan said:


> Guru Dutt when your knowledge is non-existent on a particular subject, then its best to hush your gums instead of clapping your hands like a chura Now I did not exactly state in my previous message that Pakistan has the largest reserves of oil and gas in the world, however we have enough deposits to meet our own needs. The reason why this does not happen, because the government does not provide enough incentive for companies to explore and feasibly extract these resources, partly because a strong lobby is against it. You can ask other members to verify in what I am trying to say. Now if you cannot understand this fact, then please join a special school needs school


sirji itna gussaa 

waise tell me if successive goverments of NS & PPP were so corrupt and made a cut in every deal do you realli think they wont have had made something in this deal aswell 

waise what are the avrage rates of petrol , diesel and CNG in pakistan ?


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## Pulsar

Rasengan said:


> You have just copied and pasted an article from the internet, because I have read this analysis written by a Pakistan writer.


Really? Show it! No Pakistani has said anything about a Chinese naval base, cost of electricity that the ordinary Pakistan would have to pay, polluting coal fired plants being palmed off to Pakistan by the Chinese, transportation costs over the CPEC and so on!

Instead, Pakistani writers have bent over backwards in describing the CPEC as a 'game changer' going to the extent of saying that Pakistan will soon become the next super power!! Oh yeah!

*It's amusing to see how the Pakistanis are going all ga-ga over this project just because the Chinese are investing $34 billion (the remainder $11 billion is a loan by the Chinese at exorbitant interest rate) while the UAE is investing more than double that amount - $75 billion - in India and we're not dancing and jumping around like you guys are doing! *

Anyways, all the best.

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## Capt.Popeye

Rasengan said:


> Pakistan has a number of gas and oil fields in the country, however the lobby is very strong in keeping this quite because a number of individuals are making huge kickbacks from importing oil from Saudi Arabia.



However the question is how much exploitable reserves are there in those fields ?
Just as there is also evidence of Shale Gas in Pakistan, but the question is whether it is viable to extract and use it.

Similarly Pakistan has Lignite Coal reserves; but how suitable are they for the future Power Plants ?

There has already been extensive discussions on these matters on PDF. Our Esteemed co-member @niaz has the required expertise to explain the realities.


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## Rasengan

GURU DUTT said:


> sirji itna gussaa
> 
> waise tell me if successive goverments of NS & PPP were so corrupt and made a cut in every deal do you realli think they wont have had made something in this deal aswell
> 
> waise what are the avrage rates of petrol , diesel and CNG in pakistan ?



Actually I feel wonderful because I am smoking a Cohiba, therefore I don't have a shred of anger in me. NS or Zardari have a huge number of shares in Lucky Cement which is Pakistan's biggest cement company and recently they won a contract for expansion. The increase in production is for projects in CPEC, therefore they are making money and disagreeing with such idea would be pointless. Currently I am in London, therefore I would not know the present price of diesel, petrol or CNG in Pakistan.


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## slapshot

Pulsar said:


> *It's amusing to see how the Pakistanis are going all ga-ga over this project just because the Chinese are investing $34 billion (the remainder $11 billion is a loan by the Chinese at exorbitant interest rate) while the UAE is investing more than double that amount - $75 billion - in India and we're not dancing and jumping around like you guys are doing! *
> 
> Anyways, all the best.


What else you are exactly doing by showing off these figures here if its not so called dancing? If CPEC doesn't have any significance than why bother with it and cry rivers?


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## GURU DUTT

slapshot said:


> What else you are exactly doing by showing off these figures here if its not so called dancing? If CPEC doesn't have any significance than why bother with it and cry rivers?


by same logic why things like poverty or growth in india makes memebrs like chachhaa @RiazHaq "muse" over it and then all pakistani members join in to make fun of India

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## Rasengan

Pulsar said:


> Really? Show it! No Pakistani has said anything about a Chinese naval base, cost of electricity that the ordinary Pakistan would have to pay, polluting coal fired plants being palmed off to Pakistan by the Chinese, transportation costs over the CPEC and so on!
> 
> Instead, Pakistani writers have bent over backwards in describing the CPEC as a 'game changer' going to the extent of saying that Pakistan will soon become the next super power!! Oh yeah!
> 
> *It's amusing to see how the Pakistanis are going all ga-ga over this project just because the Chinese are investing $34 billion (the remainder $11 billion is a loan by the Chinese at exorbitant interest rate) while the UAE is investing more than double that amount - $75 billion - in India and we're not dancing and jumping around like you guys are doing! *
> 
> Anyways, all the best.



I cannot be bothered to surf the internet to find the article in which you have copied and pasted as your own analysis, because its a waste of my productive time. Its amusing to witness the outcome how this project is causing a terrible itch in Indians, because you have come into a Pakistan Defence Forum, while continuously whinging about CPEC.


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## Pulsar

Rasengan said:


> I cannot be bothered to surf the internet to find the article in which you have copied and pasted as your own analysis, because its a waste of my productive time. Its amusing to witness the outcome how this project is causing a terrible itch in Indians, because you have come into a Pakistan Defence Forum, while continuously whinging about CPEC.


Accusations need to be proved or you need to kindly STFU.


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## Kaniska

It is not like whatever you have mentioned, Pakistan does not know about it...But the point is no one except China is ready to invest in Pakistan with such large amount...And it suits to China to invest as it helps them to bring their stuff to West China. So win win for all. Pakistan got something rather than nothing from others and China got the leverage with Pakistan and also connection to West China...

I see this deal as a win win for both parties with assumption that both parties knows their limitations..


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## Rasengan

Capt.Popeye said:


> However the question is how much exploitable reserves are there in those fields ?
> Just as there is also evidence of Shale Gas in Pakistan, but the question is whether it is viable to extract and use it.
> 
> Similarly Pakistan has Lignite Coal reserves; but how suitable are they for the future Power Plants ?
> 
> There has already been extensive discussions on these matters on PDF. Our Esteemed co-member @niaz has the required expertise to explain the realities.



That is a very good question, however the Government of Pakistan has not exactly bothered to do a proper feasibility study to work out how much is exploitable. Private Companies don't have the incentive because the current government policy is discouraging them because of the lobby that currently exists in Pakistan, which is not linked to any specific party. However in my opinion Pakistan has enough reserves to meet its own domestic needs. In reference to Thar Coal, projects are already underway with Engro and Sino Hydro.


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## Sipahi

GURU DUTT said:


> sirji itna gussaa
> 
> waise tell me if successive goverments of NS & PPP were so corrupt and made a cut in every deal do you realli think they wont have had made something in this deal aswell
> 
> waise what are the avrage rates of petrol , diesel and CNG in pakistan ?



Petrol 74 PKR hai 

I dont remeber exactly because mein tou 2 din bad 1000 ka dalwata hun

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## Vyom

Rasengan said:


> Your first sentence depends on which particular Central Asian country you are talking about and both Gwadar and Chahabar will benefit in the long term because no single port can monopolize the whole market and this is agreed upon by most Iranian members on this defense site. Furthermore, Iran will has a desire to see CPEC successful because the province of sistan will become more stable and trade will increase between Pakistan, China and Iran in the long term. I would rather listen to the words of Javed Zarif than believe in your analysis.


 
I wont force you to take my word on it. I missed Javed's quote if it was there on the article. but as I said lets wait to see how it pans out. Also I was referring of the CA as an entire region and not specific countries. and I agree That no one country can have a monopoly over trade. 

However It remains to be seen if Pakistan will provide land route access to Iran for India and vice versa, or it will keep denying it like it has Afghanistan access to Indian Market, and Indian Access to Afghanistan. It will benefit Pakistan as trans shipment point, but that's something over which the military might be apprehensive of.


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## Rasengan

Pulsar said:


> Accusations need to be proved or you need to kindly STFU.




Pulsar you remind me of a paper tiger, thus arm chair general calm down before you burst open one of your main arteries. Furthermore learn some manners and stop speaking from your rear end We both know that message was copied from an article written by a Pakistani, therefore continue playing twiddledum with your fingers and hush your gums.


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## Mo12

@Vyom ... What is you academic background? 

Also it can be dangerous with China doing high percentage of all investment in Pakistan with the issues you raised, this is why the word "Diversification" is so important in investment.

However I am China will be leniet enough if Pakistan struggles to repay debt back to China


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## Capt.Popeye

Rasengan said:


> That is a very good question, however the Government of Pakistan has not exactly bothered to do a proper feasibility study to work out how much is exploitable. Private Companies don't have the incentive because the current government policy is discouraging them because of the lobby that currently exists in Pakistan, which is not linked to any specific party. However in my opinion Pakistan has enough reserves to meet its own domestic needs. In reference to Thar Coal, projects are already underway with Engro and Sino Hydro.




Even that claim is questionable. As I said earlier, there has been enough discussions on this here on PDF. And the member's name that I've stated, made some very valuable and informed contributions.

As for Thar Lignite, is a _Brown Coal _of very low thermal coefficient, it remains to be seen how efficacious it is in its use.


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## GURU DUTT

mshahid said:


> Petrol 74 PKR hai
> 
> I dont remeber exactly because mein tou 2 din bad 1000 ka dalwata hun


its 61INR in delhi .... but im a poor man 500 ka char din me as my car gives onli 15KMPL


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## Sipahi

GURU DUTT said:


> its 61INR in delhi .... but im a poor man 500 ka char din me as my car gives onli 15KMPL



its about "Zarorat" I think


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## Vyom

GURU DUTT said:


> its 61INR in delhi .... but im a poor man 500 ka char din me as my car gives onli 15KMPL



Enfields rock. Bas tel ka mat pucho..  tank full karwa leta hoon bas. 



mshahid said:


> Petrol 74 PKR hai
> 
> I dont remeber exactly because mein tou 2 din bad 1000 ka dalwata hun



Thats 50 INR !! 

Govt is taxing our balls off..


----------



## Sipahi

Vyom said:


> Enfields rock. Bas tel ka mat pucho..  tank full karwa leta hoon bas.
> 
> 
> 
> Thats 50 INR !!
> 
> Govt is taxing our balls off..



Na, 47 INR according to today's Forex rates. Our Govt too.


----------



## GURU DUTT

Vyom said:


> Enfields rock. Bas tel ka mat pucho..  tank full karwa leta hoon bas.
> 
> 
> 
> Thats 50 INR !!
> 
> Govt is taxing our balls off..


500 INR me bullet ka tank full 

bhai lagta hai kissi moti party ka driver set ker rakhaa hai apne


----------



## Bouncer

First off, thank you for this detailed and meaningful analysis. It is always good to read constructive criticism about such a major project when 99% of the news and analyses declare it THE silver bullet for all our problems. However, I have a few comments of my own here and would like to read your response.



Vyom said:


> 1. It doesn't fit the definition of an Economic corridor. An economic corridor [sic] “connects hubs or nodes of economic activity along a defined geography” (Asian Development Bank). Hence, an empty road through a barren landscape connecting strategically important point A with strategically important point B 3,000 kilometers away does not fit the description. To be truly an economic corridor, the envisaged roads will need to connect demand (markets) with supply (production centers and clusters). The markets as well as production centers can be per-existing ones, or new ones that will spring up as the ‘network effects’ of the economic corridor take root. _The Question is will the proposed China-Pakistan Economic Corridor will truly be an ‘economic’ corridor, or will it be a string of strategically important roads and a bunch of power projects. The Power projects are almost equal to the domestic demand that will be there when its implementation is over. When envisioning the future it is always a thumb rule to have surplus installed capacity. Further there are no domestic Power plant equipment manufactures in Pakistan that make Steam generators and Turbines _(500 MW+ capacity). (Would be great if you guys could get some JVs with the Chinese, but alas)



This is not just a road project. Both governments have planned and launched export processing zones along this route. There are some industrial parts (apparel parks, electronics city etc) which are in advanced stages. There is also a dedicated free zone for Chinese companies in Gawadar (land was allocated for it last week).

I agree that the power projects included in the early harvest program are for current demand only. These projects, about 10,600MW in total, are supposed to start providing energy before the next elections in 2018. There are other projects as well in the pipeline. Besides no one said that more projects can't be started once this planned economic boom starts.



Vyom said:


> 2. It won't create local employment and capacity building. Chinese documents have already stated that the projects would cost more than a similar project in China because of the increased cost of bringing Chinese labour to Pakistan. Means all the wages and machinery deployment costs will flow back to Chinese pockets. The same way they have been doing it in Africa.



Chinese companies do employ a lot of their local resources, as I believe this is Chinese government's official policy to kick start infrastructure projects in developing countries with soft loans and then drive this money back home by employing Chinese companies and Chinese manpower. But remember, Pakistan doesn't have anyother alternatives right now. A power plant company that employs 50% Chinese manpower is better than a power plant which doesn't exist at all! So I believe its a net positive sum for Pakistan. Plus foreign expertise is always welcome.



Vyom said:


> 3. The corridor's main purpose is to grant Chinese access to the Gulf as an alternative to the vulnerable sea route in the South China sea. Rest is all add on. No worthwhile investment can come in the Balochistan KP stretch. Punjab and Sindh may imagine an export based strategy_ but can anyone produce cheaper than China?_ Further, export led growth is dicey in a world where major economies are in the doldrums [Eurozone, USA and even China is becoming sluggish].



Actually yes. A few countries have started producing cheaper stuff than China as China moves up the industrial ladder. Take that news of Foxcon opening assembly plants in India for example. Wages are increasing in coastal China and I believe CPEC like projects will serve to protect Chinese investments in low skill industries like textiles etc by moving them to cheaper locations like Pakistan.



Vyom said:


> 4. The Karakorum Highway Route is Seismically active, snow laden for a little less than 6 months, and is very very very far away from China's consumption centers which lie in the far east. Its way cheaper to import via Ships to those areas, as for its energy requirements, China has gas pipeline links with central Asia, is making a super massive one from Russia. It is not going to be as dependent on gulf oil in the near future. _So if the Chinese have any sense of economics and cost vs risk analysis, they will only keep this route as a fire escape. Highly expensive and risk laden._



Agreed. But CPEC has far more strategic value than purely economic one i.e. bypassing the Straits of Malacca. So I guess that's their rationale.



Vyom said:


> 5. So how is proposed "investment" planned. it could have been made sweeter by allowing Pakistan to trade in rupees and then arrange fro currency swaps that would help in Pakistan in increasing its Forex and increase trade footprint at the same time. Whereby Pakistan gets to pay in rupees rather than in US dollars or renminbi._ Interestingly it has already been agreed that payments will be in US Dollars._



Pakistan already has currency swap agreement in place with China. These projects are contracted in USD because of our current economic situation I guess. Your views on it?



Vyom said:


> 6. The idea of becoming a 'trading' hub already has a competitor, its Dubai that allows trans shipments to all countries and is already established a business hub. For Gwader to become a competitor it will have to provide services at par with Dubai and better it, from day one. good luck. In view of the economic landscape cities have become prosperous like Singapore and Dubai is their location on sea trading routes which they have cultivated over decades. In view of the Iran Deal, West will get trading access to Central Asia Via Bandar Abbas and other Iranian ports (Chahbahar is not even in question here) by circumventing the instability, and insurgency of Afghanistan which they might go to... at a later date if the dust settle downs there. All possible from Iran.



I think this idea that Gawadar can rival Dubai anytime before 20~30 years is ludicrous. It will take time but of course there is potential. Pakistan has an edge over UAE everywhere (bigger market, bigger human resources) except for the monies right now. And CPEC aims to address this, albeit slowly.



Vyom said:


> 7. China is making investments on which Pakistan has given *sovereign guarantee of 18% return*, meaning on investment of Rs 100 Pakistan will pay them back Rs 118 (that's in Compounded interest). In some cases its about 27.2 %.



Given our economic and security situation, I guess Pak would have taken anything. Like I mentioned above, its better than nothing. But I do agree that this whole project can be a massive death trap if its not managed properly. Right now, however every thing seems to be going as planned.

Reactions: Like Like:
6


----------



## Rasengan

Capt.Popeye said:


> Even that claim is questionable. As I said earlier, there has been enough discussions on this here on PDF. And the member's name that I've stated, made some very valuable and informed contributions.
> 
> As for Thar Lignite, is a _Brown Coal _of very low thermal coefficient, it remains to be seen how efficacious it is in its use.



You are talking about Mr. Niaz? He does have fantastic knowledge on the subject and is well informed. However, the reality is no proper feasibility study has been conducted across the whole of Pakistan. I did specify in my previous message that this was my opinion on the assumption that Pakistan has enough reserves just to meet its own domestic needs. Whether this option is viable all depends on the incentive and policies the government provides for local companies to extract these resources. The strong lobby in Pakistan is preventing this from occuring. As for the Thar coal project, it seems to be successful because a pilot project of 50 MW was completed.


----------



## Vyom

GURU DUTT said:


> 500 INR me bullet ka tank full
> bhai lagta hai kissi moti party ka driver set ker rakhaa hai apne



na bhai paisa toh puchta bhi nahi hoon card pe payment. dard kafi hota hai... bas tank full 



Bouncer said:


> First off, thank you for this detailed and meaningful analysis. It is always good to read constructive criticism about such a major project when 99% of the news and analyses declare it THE silver bullet for all our problems. However, I have a few comments of my own here and would like to read your response.
> 
> 
> 
> This is not just a road project. Both governments have planned and launched export processing zones along this route. There are some industrial parts (apparel parks, electronics city etc) which are in advanced stages. There is also a dedicated free zone for Chinese companies in Gawadar (land was allocated for it last week).
> 
> I agree that the power projects included in the early harvest program are for current demand only. These projects, about 10,600MW in total, are supposed to start providing energy before the next elections in 2018. There are other projects as well in the pipeline. Besides no one said that more projects can't be started once this planned economic boom starts.
> 
> 
> 
> Chinese companies do employ a lot of their local resources, as I believe this is Chinese government's official policy to kick start infrastructure projects in developing countries with soft loans and then drive this money back home by employing Chinese companies and Chinese manpower. But remember, Pakistan doesn't have anyother alternatives right now. A power plant company that employs 50% Chinese manpower is better than a power plant which doesn't exist at all! So I believe its a net positive sum for Pakistan. Plus foreign expertise is always welcome.
> 
> 
> 
> Actually yes. A few countries have started producing cheaper stuff than China as China moves up the industrial ladder. Take that news of Foxcon opening assembly plants in India for example. Wages are increasing in coastal China and I believe CPEC like projects will serve to protect Chinese investments in low skill industries like textiles etc by moving them to cheaper locations like Pakistan.
> 
> 
> 
> Agreed. But CPEC has far more strategic value than purely economic one i.e. bypassing the Straits of Malacca. So I guess that's their rationale.
> 
> 
> 
> Pakistan already has currency swap agreement in place with China. These projects are contracted in USD because of our current economic situation I guess. Your views on it?
> 
> 
> 
> I think this idea that Gawadar can rival Dubai anytime before 20~30 years is ludicrous. It will take time but of course there is potential. Pakistan has an edge over UAE everywhere (bigger market, bigger human resources) except for the monies right now. And CPEC aims to address this, albeit slowly.
> 
> 
> 
> Given our economic and security situation, I guess Pak would have taken anything. Like I mentioned above, its better than nothing. But I do agree that this whole project can be a massive death trap if its not managed properly. Right now, however every thing seems to be going as planned.




Wonderful reply, Thank you.

just keep an eye open for the Chinese, no matter how much friends they are they are very calculative to the last penny. I have been astounded at their exploitation of African resources. Avoid the debt trap, Pakistan's financial maneuvering will be tested, your IMF loans dont make it any easier. Good luck.

Reactions: Like Like:
1


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## Capt.Popeye

Rasengan said:


> You are talking about Mr. Niaz? He does have fantastic knowledge on the subject and is well informed. However, the reality is no proper feasibility study has been conducted across the whole of Pakistan. I did specify in my previous message that this was my opinion on the assumption that Pakistan has enough reserves just to meet its own domestic needs. Whether this option is viable all depends on the incentive and policies the government provides for local companies to extract these resources. The strong lobby in Pakistan is preventing this from occuring. As for the Thar coal project, it seems to be successful because a pilot project of 50 MW was completed.



Is'nt it mind-boggling that no proper feasibility study has been done on something that is being touted as a reserve of resources ?

Does an 'assumption' qualify to form the basis of some judgements?

About the Thar Lignite based pilot project; can you provide any data on the operating efficiency ratio or the Cost/benefit ratios, among other operating parameters?

It makes no point to talk in the air.


----------



## Spectre

Capt.Popeye said:


> Is'nt it mind-boggling that no proper feasibility study has been done on something that is being touted as a reserve of resources ?
> 
> Does an 'assumption' qualify to form the basis of some judgements?
> 
> About the Thar Lignite based pilot project; can you provide any data on the operating efficiency ratio or the Cost/benefit ratios, among other operating parameters?
> 
> It makes no point to talk in the air.



Most important thing is the GCV (gross calorific value) of coal; India sorely lacks in this dept. prompting imports. 

I would be pretty interested in knowing the quantum of reserves along with quality - Don't think Pakistan would have too much to spare as it would need it for their thermal plants.


----------



## coffee_cup

Vyom said:


> ...
> I need to know about the Chinese investment model, and your Economy. and *I am good with numbers*. not self pleasuring but an observation free to let go... I am not keeping you on gunpoint to understand, try economics lessons in college nearby.



Sure you are. Therefore you should use this knowledge to anaylsis Indias grave problems such as towering poverty levels, highest number of suicides committed by farmers anywhere in the world, increasingly extremist society where mass murderers are being elected PMs and most of the hindu extremists, despite committing terrible terrorist act, getting away with slaps on their wrists.

Yeah, you should concentrate on insurgencies running in more than 20 states of India and analyse the solutions.


Funny thing, the thread about Pakistan being opened by dulusional Indians majority of the posters on the thread are also indians... suddenly showing their "expertise" about our country, 

Oh man these Indians,  

Leave Pakistani alone. This obsession with Pakistan is taking your country no where!


----------



## sathya

Vyom said:


> So I have been reading through some literature regarding CPEC and this is what I found how Pakistan is getting itself into a circular debt cycle. which I hope will not turn into a spiral dept trajectory. also interestingly I found Pakistani negotiators missing on obvious points like they did on the FTA with China that resulted in decimation of local Pakistani Manufacturing as it could not compete with prices of Chinese products.
> 
> So Here are my observations.
> 
> 1. It doesn't fit the definition of an Economic corridor. An economic corridor [sic] “connects hubs or nodes of economic activity along a defined geography” (Asian Development Bank). Hence, an empty road through a barren landscape connecting strategically important point A with strategically important point B 3,000 kilometers away does not fit the description. To be truly an economic corridor, the envisaged roads will need to connect demand (markets) with supply (production centers and clusters). The markets as well as production centers can be per-existing ones, or new ones that will spring up as the ‘network effects’ of the economic corridor take root. _The Question is will the proposed China-Pakistan Economic Corridor will truly be an ‘economic’ corridor, or will it be a string of strategically important roads and a bunch of power projects. The Power projects are almost equal to the domestic demand that will be there when its implementation is over. When envisioning the future it is always a thumb rule to have surplus installed capacity. Further there are no domestic Power plant equipment manufactures in Pakistan that make Steam generators and Turbines _(500 MW+ capacity). (Would be great if you guys could get some JVs with the Chinese, but alas)
> 
> Given the timeline for completion, these power projects could possibly add reasonable generation capacity to the Pakistan national grid by 2017-18, but they would hardly provide any relief in terms of the fast-growing demand for electricity. And there is no silver lining for consumers as far as the cost of the electricity is concerned.
> 
> 2. It won't create local employment and capacity building. Chinese documents have already stated that the projects would cost more than a similar project in China because of the increased cost of bringing Chinese labour to Pakistan. Means all the wages and machinery deployment costs will flow back to Chinese pockets. The same way they have been doing it in Africa.
> 
> 3. The corridor's main purpose is to grant Chinese access to the Gulf as an alternative to the vulnerable sea route in the South China sea. Rest is all add on. No worthwhile investment can come in the Balochistan KP stretch. Punjab and Sindh may imagine an export based strategy_ but can anyone produce cheaper than China?_ Further, export led growth is dicey in a world where major economies are in the doldrums [Eurozone, USA and even China is becoming sluggish].
> 
> 4. The Karakorum Highway Route is Seismically active, snow laden for a little less than 6 months, and is very very very far away from China's consumption centers which lie in the far east. Its way cheaper to import via Ships to those areas, as for its energy requirements, China has gas pipeline links with central Asia, is making a super massive one from Russia. It is not going to be as dependent on gulf oil in the near future. _So if the Chinese have any sense of economics and cost vs risk analysis, they will only keep this route as a fire escape. Highly expensive and risk laden._
> 
> Pic 1 China population centers. :
> 
> 
> 
> 
> 
> ​Pic 2 China-Central Asia Oil&Gas Pipelines
> 
> 
> 
> 
> ​
> 5. So how is proposed "investment" planned. it could have been made sweeter by allowing Pakistan to trade in rupees and then arrange fro currency swaps that would help in Pakistan in increasing its Forex and increase trade footprint at the same time. Whereby Pakistan gets to pay in rupees rather than in US dollars or renminbi._ Interestingly it has already been agreed that payments will be in US Dollars._
> 
> 6. The idea of becoming a 'trading' hub already has a competitor, its Dubai that allows trans shipments to all countries and is already established a business hub. For Gwader to become a competitor it will have to provide services at par with Dubai and better it, from day one. good luck. In view of the economic landscape cities have become prosperous like Singapore and Dubai is their location on sea trading routes which they have cultivated over decades. In view of the Iran Deal, West will get trading access to Central Asia Via Bandar Abbas and other Iranian ports (Chahbahar is not even in question here) by circumventing the instability, and insurgency of Afghanistan which they might go to... at a later date if the dust settle downs there. All possible from Iran.
> 
> No country has become prosperous by converting itself into a big toll booth. good luck.
> 
> 7. China is making investments on which Pakistan has given *sovereign guarantee of 18% return*, meaning on investment of Rs 100 Pakistan will pay them back Rs 118 (that's in Compounded interest). In some cases its about 27.2 %.
> 
> _*Example*_ :-
> Sinosure is charging a fee of 7pc for debt servicing, which will be added to the capital cost of a project. For instance, the capital cost of a 660MW project at Port Qasim is $767.9m. But it goes up to $956.1m by adding Sinosure’s fee of $63.9m, its financing fee and charges of $21m, and interest during construction of $72.8m; a 27.2pc return on equity is guaranteed. Ironically, interest during construction is allowed at the rate of 33.33pc for the first year; 33.33pc for the second; 13.33pc for the third; and 20pc for the fourth year.
> 
> How exactly this helps Pakistan? Beside the projects will be run on turnkey basis by Chinese companies who will employ Chinese manpower to accomplish it. Pakistan on the other hand will have to provide the Chinese security at its own cost. And all this is promised on whether the investments will materialize in the first place.
> 
> I think Pakistan is better off running these projects by itself only then it will derive the benefit of the investments. If China can not provide aid money then it should provide loan, let Pakistan execute these projects. Also the interest should not be 18% it should be 5%. Apparently domestic lending rates in Pakistan is Cheaper than that of being given to that to China, If the government gave this incentive to local banks and businesses the benefit would have been much greater.
> 
> In the end with 2016 of the repayment of International loans coming up. and with these debts to pay back Pakistan's coffers don't give much of a confidence.
> 
> @GURU DUTT @Bang Galore @SpArK @Srinivas @Chanakya's_Chant




That's one big business analysis 

Bro you are a born businessman!


----------



## Capt.Popeye

Spectre said:


> Most important thing is the GCV (gross calorific value) of coal; India sorely lacks in this dept. prompting imports.
> 
> I would be pretty interested in knowing the quantum of reserves along with quality - Don't think Pakistan would have too much to spare as it would need it for their thermal plants.



I was speaking specifically about Lignite which is what Thar Coal is.

India is a different matter, there is both Steaming Coal and Lignite in India. Most of the Coal is Steaming Coal which can be used in Thermal Power Plants, however it has an high Ash Content, which is more of a management issue. India imports Coking Coal which is used mainly in the Metallurgy Industry and much less so for Power Plants.

India has substantial Lignite too, in the Neyveli Area on the TN/AP border. This Brown Coal with far less GCV. it needs to be processed before it can be used. The PPs which run on this are much lower in efficiency and higher in operating costs.

Reactions: Like Like:
1


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## Spectre

Capt.Popeye said:


> I was speaking specifically about Lignite which is what Thar Coal is.
> 
> India is a different matter, there is both Steaming Coal and Lignite in India. Most of the Coal is Steaming Coal which can be used in Thermal Power Plants, however it has an high Ash Content, which is more of a management issue. India imports Coking Coal which is used mainly in the Metallurgy Industry and much less so for Power Plants.
> 
> India has substantial Lignite too, in the Neyveli Area on the TN/AP border. This Brown Coal with far less GCV. it needs to be processed before it can be used. The PPs which run on this are much lower in efficiency and higher in operating costs.



I agree, Lignite coal is essentially the lower grade and produces huge stress on equipment in addition to environmental concerns. The coal needed is thermal coal or steam coal which is a grade between Bituminous and Anthracite.

India is the third largest producer of steam coal but ash content is high which is not desirable so India lately has shown a huge increase in import of coal for power plants, refer acquisition of coal mines in Indonesia by Tata Power for UMPP and interest of Adani and Essar in Australia. In addition the PSUs are too looking at acquisitions.

Coal Facts | WCA | World Coal Association

India infact ironically is the third largest coal importer too with increasingly higher share going towards Power Plants. Total coal imports are projected at 200 million tonnes.

India's coal imports to jump 19 percent to 200 million tonnes in 2014/15| Reuters


----------



## RazorMC

Vyom said:


> So I have been reading through some literature regarding CPEC and this is what I found how Pakistan is getting itself into a circular debt cycle. which I hope will not turn into a spiral dept trajectory. also interestingly I found Pakistani negotiators missing on obvious points like they did on the FTA with China that resulted in decimation of local Pakistani Manufacturing as it could not compete with prices of Chinese products.
> 
> So Here are my observations.
> 
> 1. It doesn't fit the definition of an Economic corridor. An economic corridor [sic] “connects hubs or nodes of economic activity along a defined geography” (Asian Development Bank). Hence, an empty road through a barren landscape connecting strategically important point A with strategically important point B 3,000 kilometers away does not fit the description. To be truly an economic corridor, the envisaged roads will need to connect demand (markets) with supply (production centers and clusters). The markets as well as production centers can be per-existing ones, or new ones that will spring up as the ‘network effects’ of the economic corridor take root. _The Question is will the proposed China-Pakistan Economic Corridor will truly be an ‘economic’ corridor, or will it be a string of strategically important roads and a bunch of power projects. The Power projects are almost equal to the domestic demand that will be there when its implementation is over. When envisioning the future it is always a thumb rule to have surplus installed capacity. Further there are no domestic Power plant equipment manufactures in Pakistan that make Steam generators and Turbines _(500 MW+ capacity). (Would be great if you guys could get some JVs with the Chinese, but alas)
> 
> Given the timeline for completion, these power projects could possibly add reasonable generation capacity to the Pakistan national grid by 2017-18, but they would hardly provide any relief in terms of the fast-growing demand for electricity. And there is no silver lining for consumers as far as the cost of the electricity is concerned.
> 
> 2. It won't create local employment and capacity building. Chinese documents have already stated that the projects would cost more than a similar project in China because of the increased cost of bringing Chinese labour to Pakistan. Means all the wages and machinery deployment costs will flow back to Chinese pockets. The same way they have been doing it in Africa.
> 
> 3. The corridor's main purpose is to grant Chinese access to the Gulf as an alternative to the vulnerable sea route in the South China sea. Rest is all add on. No worthwhile investment can come in the Balochistan KP stretch. Punjab and Sindh may imagine an export based strategy_ but can anyone produce cheaper than China?_ Further, export led growth is dicey in a world where major economies are in the doldrums [Eurozone, USA and even China is becoming sluggish].
> 
> 4. The Karakorum Highway Route is Seismically active, snow laden for a little less than 6 months, and is very very very far away from China's consumption centers which lie in the far east. Its way cheaper to import via Ships to those areas, as for its energy requirements, China has gas pipeline links with central Asia, is making a super massive one from Russia. It is not going to be as dependent on gulf oil in the near future. _So if the Chinese have any sense of economics and cost vs risk analysis, they will only keep this route as a fire escape. Highly expensive and risk laden._
> 
> Pic 1 China population centers. :
> 
> 
> 
> 
> ​Pic 2 China-Central Asia Oil&Gas Pipelines
> 
> 
> 
> 
> ​
> 5. So how is proposed "investment" planned. it could have been made sweeter by allowing Pakistan to trade in rupees and then arrange fro currency swaps that would help in Pakistan in increasing its Forex and increase trade footprint at the same time. Whereby Pakistan gets to pay in rupees rather than in US dollars or renminbi._ Interestingly it has already been agreed that payments will be in US Dollars._
> 
> 6. The idea of becoming a 'trading' hub already has a competitor, its Dubai that allows trans shipments to all countries and is already established a business hub. For Gwader to become a competitor it will have to provide services at par with Dubai and better it, from day one. good luck. In view of the economic landscape cities have become prosperous like Singapore and Dubai is their location on sea trading routes which they have cultivated over decades. In view of the Iran Deal, West will get trading access to Central Asia Via Bandar Abbas and other Iranian ports (Chahbahar is not even in question here) by circumventing the instability, and insurgency of Afghanistan which they might go to... at a later date if the dust settle downs there. All possible from Iran.
> 
> No country has become prosperous by converting itself into a big toll booth. good luck.
> 
> 7. China is making investments on which Pakistan has given *sovereign guarantee of 18% return*, meaning on investment of Rs 100 Pakistan will pay them back Rs 118 (that's in Compounded interest). In some cases its about 27.2 %.
> 
> _*Example*_ :-
> Sinosure is charging a fee of 7pc for debt servicing, which will be added to the capital cost of a project. For instance, the capital cost of a 660MW project at Port Qasim is $767.9m. But it goes up to $956.1m by adding Sinosure’s fee of $63.9m, its financing fee and charges of $21m, and interest during construction of $72.8m; a 27.2pc return on equity is guaranteed. Ironically, interest during construction is allowed at the rate of 33.33pc for the first year; 33.33pc for the second; 13.33pc for the third; and 20pc for the fourth year.
> 
> How exactly this helps Pakistan? Beside the projects will be run on turnkey basis by Chinese companies who will employ Chinese manpower to accomplish it. Pakistan on the other hand will have to provide the Chinese security at its own cost. And all this is promised on whether the investments will materialize in the first place.
> 
> I think Pakistan is better off running these projects by itself only then it will derive the benefit of the investments. If China can not provide aid money then it should provide loan, let Pakistan execute these projects. Also the interest should not be 18% it should be 5%. Apparently domestic lending rates in Pakistan is Cheaper than that of being given to that to China, If the government gave this incentive to local banks and businesses the benefit would have been much greater.
> 
> In the end with 2016 of the repayment of International loans coming up. and with these debts to pay back Pakistan's coffers don't give much of a confidence.
> 
> @GURU DUTT @Bang Galore @SpArK @Srinivas @Chanakya's_Chant



Not sure if you're an alt (no offense) but the post was refreshingly well-written with valid arguments.
Thanks given btw.

Reactions: Like Like:
1


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## Capt.Popeye

Spectre said:


> I agree, Lignite coal is essentially the lower grade and produces huge stress on equipment in addition to environmental concerns. The coal needed is thermal coal or steam coal which is a grade between Bituminous and Anthracite.
> 
> India is the third largest producer of steam coal but ash content is high which is not desirable so India lately has shown a huge increase in import of coal for power plants, refer acquisition of coal mines in Indonesia by Tata Power for UMPP and interest of Adani and Essar in Australia. In addition the PSUs are too looking at acquisitions.
> 
> Coal Facts | WCA | World Coal Association
> 
> India infact ironically is the third largest coal importer too with increasingly higher share going towards Power Plants. Total coal imports are projected at 200 million tonnes.
> 
> India's coal imports to jump 19 percent to 200 million tonnes in 2014/15| Reuters



That is precisely what I said in the earlier post. The problem is more related to fly-ash related issues and less to GCV issues.


----------



## Spectre

Capt.Popeye said:


> That is precisely what I said in the earlier post. The problem is more related to fly-ash related issues and less to GCV issues.



Sorry Sir, but that is incorrect. Low GCV of Indian coal is an issue too though they can be used in our power plants (case of beggars not being choosers) but efficiency per pound is very less. If you apply international benchmarks - Indian coal is characterised by low GCV and High Fly ash. Higher the GCV better the output of thermal plants. in most simplistic terms that is why high GCV is desired and is of high cost.

India Coal has GCV in ranges of 3900 Talchar of Orissa to 4300 of Raniganj compared to GCV of around 6500 of Australian coal and 7500 of American coal (Illinois). Conclusion taken from below study.

http://nopr.niscair.res.in/bitstream/123456789/17587/1/JSIR 63(2) 156-162.pdf

Gross calorific value to define coal pricing | Business Standard News


----------



## Echo_419

mshahid said:


> Petrol 74 PKR hai
> 
> I dont remeber exactly because mein tou 2 din bad 1000 ka dalwata hun



Same mein 3-4 din badh 1000 ka dalvata hu


----------



## Bouncer

Vyom said:


> Wonderful reply, Thank you.
> 
> just keep an eye open for the Chinese, no matter how much friends they are they are very calculative to the last penny. I have been astounded at their exploitation of African resources. Avoid the debt trap, Pakistan's financial maneuvering will be tested, your IMF loans dont make it any easier. Good luck.



Thank you. I absolutely believe that the success of this project hinges on how it is managed. The Chinese are very smart with their money, but I believe that fortunately for Pakistan, we engaged them at a very good time because of a number of reasons;


President Xi's political legacy depends on this _new _Silk Road project. He and his team are very much invested in this broad project (spanning Central Asia as well). This is a good thing for us.
Chinese government is loaded with cash to spend. They are trying to move more towards domestic consumption and a part of this strategy involves offloading this extra cash to keep Chinese companies busy and their manpower employed instead of rioting on the streets.
I believe that these two factors are played an important part in the birth of this project.

You mentioned Africa earlier as well. I have worked in Africa (Southern, Eastern regions) for a few years and I have seen and heard the first hand accounts of this exploitation there. Pakistan is different in a lot of ways. First off, we have democracy and accountability. Though both of these are in nascent stages but the situation is still much much different from countries such Angola. Our media, think tanks and opposition politicians etc have been scrutinizing these projects very closely. Secondly, Pakistan's local industry is much stronger than African countries in general and can absorb these projects. Finally, we are not offering much natural resources in return; we are offering services.

Edit: If you are interested about China's ever growing interest in Africa and its consequences, I suggest this book by French Howard. Its called something like "China's second continent"

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## Spectre

Bouncer said:


> Thank you. I absolutely believe that the success of this project hinges on how it is managed. The Chinese are very smart with their money, but I believe that fortunately for Pakistan, we engaged them at a very good time because of a number of reasons;
> 
> 
> President Xi's political legacy depends on this _new _Silk Road project. He and his team are very much invested in this broad project (spanning Central Asia as well). This is a good thing for us.
> Chinese government is loaded with cash to spend. They are trying to move more towards domestic consumption and a part of this strategy involves offloading this extra cash to keep Chinese companies busy and their manpower employed instead of rioting on the streets.
> I believe that these two factors are played an important part in the birth of this project.
> 
> You mentioned Africa earlier as well. I have worked in Africa (Southern, Eastern regions) for a few years and I have seen and heard the first hand accounts of this exploitation there. Pakistan is different in a lot of ways. First off, we have democracy and accountability. Though both of these are in nascent stages but the situation is still much much different from countries such Angola. Our media, think tanks and opposition politicians etc have been scrutinizing these projects very closely. Secondly, Pakistan's local industry is much stronger than African countries in general and can absorb these projects. Finally, we are not offering much natural resources in return; we are offering services.



The need of the hour for Pakistan if it wants to avoid the debt trap is:

1. Increase Tax base by 30 -40% and revenue collection by 10%- 20% by granting clemency to tax absconders for a limited period with a penalty to be paid.

2. Wrap up actively operations and sterlize effected areas of security threats. Subsequent to that a massive reduction in Defense Spending in the range of 20 - 30% p.a. Possible only in case of peace treaty with India.

3. Lower the cost of finance Conversion of high cost loans from China to lower/zero cost loans from Europe and Japan.

4. Re-negotiate terms of investment with China to reduce the assured guaranteed return to 13% p.a or 8% plus a figure bench-marked to your G.D.P growth that way you make China partner in your growth.

5. Trade Barriers to goods from China and promotion of their domestic industries via trade sops, lower barriers to credit, better connectivity and power supply. Low tax rates for Industry.

6. Tax- Holidays for all export based service industries like IT, Finance, BPO , Legal and Medical Transcription.

This is required urgently - within a period of 2-3 years otherwise my friend it would be too late. Every country in the region is competitor of Pakistan for pie of Global trade. Pakistan has to decide if it wants to continue to be an aids sinkhole or the next China.

Pardon me for my harsh words.

Regards


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## Shoaib Rathore

wow an indian more concerned about Pakistan than its own country. thats *Amusing! 
*yes its a economic corridor as it will be used for economic activity
it *Will *create lots of direct n indirect jobs 
we all know why china will be using gawadar 
so u advising china to use south china sea route but u just said that is vulnerable
china investing in dollars n will get return also in dollars


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## Sliver

Vyom said:


> So I have been reading through some literature regarding CPEC and this is what I found how Pakistan is getting itself into a circular debt cycle. which I hope will not turn into a spiral dept trajectory. also interestingly I found Pakistani negotiators missing on obvious points like they did on the FTA with China that resulted in decimation of local Pakistani Manufacturing as it could not compete with prices of Chinese products.
> 
> So Here are my observations.
> 
> 1. It doesn't fit the definition of an Economic corridor. An economic corridor [sic] “connects hubs or nodes of economic activity along a defined geography” (Asian Development Bank). Hence, an empty road through a barren landscape connecting strategically important point A with strategically important point B 3,000 kilometers away does not fit the description. To be truly an economic corridor, the envisaged roads will need to connect demand (markets) with supply (production centers and clusters). The markets as well as production centers can be per-existing ones, or new ones that will spring up as the ‘network effects’ of the economic corridor take root. _The Question is will the proposed China-Pakistan Economic Corridor will truly be an ‘economic’ corridor, or will it be a string of strategically important roads and a bunch of power projects. The Power projects are almost equal to the domestic demand that will be there when its implementation is over. When envisioning the future it is always a thumb rule to have surplus installed capacity. Further there are no domestic Power plant equipment manufactures in Pakistan that make Steam generators and Turbines _(500 MW+ capacity). (Would be great if you guys could get some JVs with the Chinese, but alas)
> 
> Given the timeline for completion, these power projects could possibly add reasonable generation capacity to the Pakistan national grid by 2017-18, but they would hardly provide any relief in terms of the fast-growing demand for electricity. And there is no silver lining for consumers as far as the cost of the electricity is concerned.
> 
> 2. It won't create local employment and capacity building. Chinese documents have already stated that the projects would cost more than a similar project in China because of the increased cost of bringing Chinese labour to Pakistan. Means all the wages and machinery deployment costs will flow back to Chinese pockets. The same way they have been doing it in Africa.
> 
> 3. The corridor's main purpose is to grant Chinese access to the Gulf as an alternative to the vulnerable sea route in the South China sea. Rest is all add on. No worthwhile investment can come in the Balochistan KP stretch. Punjab and Sindh may imagine an export based strategy_ but can anyone produce cheaper than China?_ Further, export led growth is dicey in a world where major economies are in the doldrums [Eurozone, USA and even China is becoming sluggish].
> 
> 4. The Karakorum Highway Route is Seismically active, snow laden for a little less than 6 months, and is very very very far away from China's consumption centers which lie in the far east. Its way cheaper to import via Ships to those areas, as for its energy requirements, China has gas pipeline links with central Asia, is making a super massive one from Russia. It is not going to be as dependent on gulf oil in the near future. _So if the Chinese have any sense of economics and cost vs risk analysis, they will only keep this route as a fire escape. Highly expensive and risk laden._
> 
> Pic 1 China population centers. :
> 
> 
> 
> 
> 
> ​Pic 2 China-Central Asia Oil&Gas Pipelines
> 
> 
> 
> 
> ​
> 5. So how is proposed "investment" planned. it could have been made sweeter by allowing Pakistan to trade in rupees and then arrange fro currency swaps that would help in Pakistan in increasing its Forex and increase trade footprint at the same time. Whereby Pakistan gets to pay in rupees rather than in US dollars or renminbi._ Interestingly it has already been agreed that payments will be in US Dollars._
> 
> 6. The idea of becoming a 'trading' hub already has a competitor, its Dubai that allows trans shipments to all countries and is already established a business hub. For Gwader to become a competitor it will have to provide services at par with Dubai and better it, from day one. good luck. In view of the economic landscape cities have become prosperous like Singapore and Dubai is their location on sea trading routes which they have cultivated over decades. In view of the Iran Deal, West will get trading access to Central Asia Via Bandar Abbas and other Iranian ports (Chahbahar is not even in question here) by circumventing the instability, and insurgency of Afghanistan which they might go to... at a later date if the dust settle downs there. All possible from Iran.
> 
> No country has become prosperous by converting itself into a big toll booth. good luck.
> 
> 7. China is making investments on which Pakistan has given *sovereign guarantee of 18% return*, meaning on investment of Rs 100 Pakistan will pay them back Rs 118 (that's in Compounded interest). In some cases its about 27.2 %.
> 
> _*Example*_ :-
> Sinosure is charging a fee of 7pc for debt servicing, which will be added to the capital cost of a project. For instance, the capital cost of a 660MW project at Port Qasim is $767.9m. But it goes up to $956.1m by adding Sinosure’s fee of $63.9m, its financing fee and charges of $21m, and interest during construction of $72.8m; a 27.2pc return on equity is guaranteed. Ironically, interest during construction is allowed at the rate of 33.33pc for the first year; 33.33pc for the second; 13.33pc for the third; and 20pc for the fourth year.
> 
> How exactly this helps Pakistan? Beside the projects will be run on turnkey basis by Chinese companies who will employ Chinese manpower to accomplish it. Pakistan on the other hand will have to provide the Chinese security at its own cost. And all this is promised on whether the investments will materialize in the first place.
> 
> I think Pakistan is better off running these projects by itself only then it will derive the benefit of the investments. If China can not provide aid money then it should provide loan, let Pakistan execute these projects. Also the interest should not be 18% it should be 5%. Apparently domestic lending rates in Pakistan is Cheaper than that of being given to that to China, If the government gave this incentive to local banks and businesses the benefit would have been much greater.
> 
> In the end with 2016 of the repayment of International loans coming up. and with these debts to pay back Pakistan's coffers don't give much of a confidence.
> 
> @GURU DUTT @Bang Galore @SpArK @Srinivas @Chanakya's_Chant



very well written, due credit needs to be given!.

however, some caveats in here:
An economic "corridor" can grow in top down or bottom up approach. Connecting existing manufacturing centers with consumer centers is a bottom up approach. It is possible to develop the other way as well. Creating a busy network helps to get the critical amount of population necessary to tap and develop other areas along the corridor.

Apart from that a few brilliant lines of note from the write up:
*No country has become prosperous by converting itself into a big toll booth.*

A lot of Pakistani posters definitely regard their "geo strategic location" very highly. Location can be an add on but never a core strength.

*China is making investments on which Pakistan has given sovereign guarantee of 18% return
*
This according to me is even bigger. Given that most of the money flows back to Chinese companies than local population. Pakistan is betting big on the longer term outcomes while china is making profit from the get go. and that too and 18% return.

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## Rasengan

Capt.Popeye said:


> Is'nt it mind-boggling that no proper feasibility study has been done on something that is being touted as a reserve of resources ?
> 
> Does an 'assumption' qualify to form the basis of some judgements?
> 
> About the Thar Lignite based pilot project; can you provide any data on the operating efficiency ratio or the Cost/benefit ratios, among other operating parameters?
> 
> It makes no point to talk in the air.



You can read this article from the Governments own website. No proper feasibility study has been implemented, although this does not exactly mean no exploration has occurred within Fata and the Indus Basin on small blocks. Like I said in my previous message, if the Government actually provides an incentive and proactive policies for local firms to risk investment, then there is a huge chance that we can meet our own domestic needs. However this is unlikely to occur do a strong lobby in Pakistan.

http://www.mpnr.gov.pk/gop/index.ph...wbG9hZHMvYnJvc2hlci9vcHBvcnR1bml0aWVzb2cucGRm

In reference to your last question, I have no idea since I don't belong to this industry. However the 50MW pilot project was pronounced to be successful and a much larger project has been decided to be initiated between Sino Hydro and Engro. However if you are interested to know more then you can read this link from Nepra.

http://www.nepra.org.pk/Tariff/Upfront/COAL UpFront Tariff.pdf


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## airuah

so China invests some cash to build stuff for its own benefit using Chinese workers so that the investment money in construction and materials will go Back to China. 

Pakistan gets to Pay back China for the investment with interest . 


So Pakistan's role in CPEC = TOLL BOOTH OPERATOR. 

Great! So Indians are asked to buy burnol coz we are jealous of Pakistan becoming a toll booth operator who runs a toll booth to pay back China for an investment that China made for itself.


P.S: yes Indians are against this because it passes through Kashmir which belongs to us. But it ends there. Not for any other reason.

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## GURU DUTT

airuah said:


> so China invests some cash to build stuff for its own benefit using Chinese workers so that the investment money in construction and materials will go Back to China.
> 
> Pakistan gets to Pay back China for the investment with interest .
> 
> 
> So Pakistan's role in CPEC = TOLL BOOTH OPERATOR.
> 
> Great! So Indians are asked to buy burnol coz we are jealous of Pakistan becoming a toll booth operator who runs a toll booth to pay back China for an investment that China made for itself.
> 
> 
> P.S: yes Indians are against this because it passes through Kashmir which belongs to us. But it ends there. Not for any other reason.


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## Bossman

Why are Indians so obsessed by CPEC. Pakistan must be doing something right

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## Vyom

Shoaib Rathore said:


> wow an indian more concerned about Pakistan than its own country. thats *Amusing! *
> yes its a economic corridor as it will be used for economic activity
> it *Will *create lots of direct n indirect jobs
> we all know why china will be using gawadar
> so u advising china to use south china sea route but u just said that is vulnerable
> china investing in dollars n will get return also in dollars



I am interested in economic models. I raised a point because it went against normal flow of thought oh how economic models and projects are financed. @Bouncer got my intent and I fully agree with his points.

There is always a degree of uncertainty with all new projects even with a due feasibility study. Pakistan has avoided, quite remarkably, a number of pit falls, this is the first time it has fallen behind and is doing its bit in catching up. so my concerns purely numerical. African nations are a lost cause Latin America is you know is going someway which I cannot fathom (and there are the Chinese in Latin America too... sigh). Rest most interesting Economy that is coming on offer is the Chinese rise against America and Iran (it will flip the MENA region on its head). Interesting times ahead.

And about my country's economy, it seem to be on track 7%-7.7% of growth, manufacturing is picking up, so is industrial output, Railways overhaul is in progress, we got 22,000 MW of power commissioned into the system last year. Inflation is -4% on wholesale prices and +3.47% on retail prices. So outlook is stable as of now.

Issue with India is our Finance Minister  who is a lawyer and his support fellow who is a McKinsky type "Consultant"  again) both are good with the words, nothing on ground and political wits. That's keeping us from a 8.5+% trajectory.



RazorMC said:


> Not sure if you're an alt (no offense) but the post was refreshingly well-written with valid arguments.
> Thanks given btw.



The Closest I get to being an alt is locked up in my library with Bourbon for hours (no offense taken mate).

Thank you for your reading

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## Odysseus

Alpha BeeTee said:


> Nope ..
> I think a counter analysis should prevail here.


A pakistani economic expert talking on the same line. Wach from 6:22 onwards.






Another one. 13:00 onwards


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## Sanchez

I am amazed by so many analysis from Indian members. I don't doubt the good will of them and wondered if Pakistan have real economists.

With CPEC it's a China's trap, without CPEC it's a China's fault.  Chinese government should have employed an Indian designer for CPEC. It's also a fault of China...

Shall we replace CPEC with IPEC?


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