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Jyotish

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China to provide 90% funding for $6.8 bln Pakistani railway project — minister

KHURSHID AHMED

August 19, 2020


Policemen walk along trains stationed on a deserted platform at Karachi Cantonment railway station in Karachi on March 26, 2020. Under the $6.8 billion Mainline-1 (ML-1) project, Pakistan’s 2,655 km railway tracks will be upgraded to allow trains to move up to 165 km per hour, while the line capacity will increase from 34 to over 150 trains each way per day.

KARACHI: Federal Minister for Railways Shaikh Rashid Ahmed said on Tuesday China would provide 90 percent financing for a $6.8 billion initiative to upgrade the 1,872 kilometers Mainline-1 (ML-1) railway project, the country’s costliest project to date as part of the multibillion-dollar China-Pakistan Economic Corridor (CPEC) agreement.

CPEC has seen Beijing pledge over $60 billion for infrastructure projects in Pakistan, central to China’s wider Belt and Road Initiative (BRI) to develop land and sea trade routes in Asia and beyond.

“About 90 percent of financing for the project will be provided by the Chinese government [through the government concessional loan] while the remaining amount will be shared by us,” the railways minister told Arab News in an interview.

“The process of tendering will start in the first week of September and take about two months to complete. We will most probably start implementing the project by the end of the year,” he said, adding that the project was scheduled to be completed in five years.

Under the project, Pakistan’s existing 2,655km railway tracks would be upgraded to allow trains to move up to 165km per hour — twice as fast as they currently do — while the line capacity would increase from 34 to over 150 trains each way per day.

“When the ML-1 Project is completed, the speed of trains will more than double the current 65-110 kilometers per hour to 165 kilometers per hour,” Ahmed said. “Our cargo trains will also operate at a speed of 120 kilometers per hour.”

“We will also eliminate all crossings,” he added. “The new fully automatic [computer-based signaling and control] system will be installed, and underpasses and overhead bridges will be constructed.”

Ahmed said the project would provide job opportunities to more than 150,000 people, of whom 90 percent would be Pakistanis and 10 percent would be Chinese nationals.

“After the successful completion of ML-1, we will also focus on ML-2 and ML-3,” he said.

The move ahead on ML-1, which has been on hold for years, will dispel notions that the government of Prime Minister Imran Khan is seeking to roll back some of the mega Chinese-funded projects that he himself had questioned when in opposition.

The ML-1 Project will be executed in three phases to avoid commitment charges, the minister said. The loan amount for each package would also be separately contracted to double the tracks from Karachi to Peshawar via Hyderabad, Nawabshah, Rohri, Rahimyar Khan, Bahawalpur, Khanewal, Sahiwal, Lahore, Gujrawala and Rawalpindi.

At $6.8 billion, the ML-1 project is almost equal to Pakistan’s entire development budget for fiscal 2020/21, which stands at 1.32 trillion Pakistani rupees.

“One can only comment on the financing strategy [of the railway project] after more details become public. However, if its rate is within the same range offered by the World Bank to its affiliated institutions, then it is fine,” Dr. Ikram ul Haq, a Lahore-based financial analyst, told Arab News. “But if it is higher then comparative bidding should have been the best way.”

https://www.arabnews.pk/node/1721581/pakistan
 

Chakar The Great

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Unbelievable. Pakistan would have taken decades to finance such project.

IK is right, Pakistan's future is with China.

China doesn't talk much but supports massively unlike US , which is a lot of noise but nothing practical.
 

Pakistansdefender

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Unbelievable. Pakistan would have taken decades to finance such project.

IK is right, Pakistan's future is with China.

China doesn't talk much but supports massively unlike US , which is a lot of noise but nothing practical.
And you see this is not a dumb project in some remote part of the pakistan for decorative purpose .
But this is the project that would effect life of 60 to 70 percent pakistanis and would help exporters etc.
And this project has the potential to pay itself back. Unlike orange train which is not able to pay itself back and you have to hevaiky subsidise it.
China is already building dams in built own operate transfer basis. The real challenge is shifting industry in economic zones that are developed.
 

Max

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That's all fine, but how we will repay that money, will our Govt run railways be able to turn itself into profitable entity with current labour burden, their salaries and pension?

Why we don't privatize both PIA and Railways?
 

Salman Baig

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This is different from the initial details they showed when they signed agreement. Nearly 90% was suppose to be provided on currency exchange basis. It was not supposed to be loan. And from the exchange currency they were suppose to buy most of the raw material from Pakistan as per agreement but they are clearly accepting that its loan. I am confused. Can anyone please clarify?
 

Chhatrapati

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Federal Minister for Railways Shaikh Rashid Ahmed said on Tuesday China would provide 90 percent financing for a $6.8 billion initiative to upgrade the 1,872 kilometers Mainline-1 (ML-1) railway project, the country’s costliest project to date as part of the multibillion-dollar China-Pakistan Economic Corridor (CPEC) agreement.
Woah! That's expensive, hope it's OH electrified.
 

cloud4000

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China doesn't talk much but supports massively unlike US , which is a lot of noise but nothing practical.
Pakistan is a captive market for China. China has the inside track for all key — and profitable — projects.

Pakistan has tried to woo US companies to invest in Pakistan but there has been few takers so far.
 

Chakar The Great

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Pakistan is a captive market for China. China has the inside track for all key — and profitable — projects.

Pakistan has tried to woo US companies to invest in Pakistan but there has been few takers so far.
Every one is welcome in Pakistan to invest. China surely gets the preference.

But countries pledge and then they run away, what happened to bullet train project of India that was supposed to be financed by Japan?
 

Falcon26

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Unbelievable. Pakistan would have taken decades to finance such project.

IK is right, Pakistan's future is with China.

China doesn't talk much but supports massively unlike US , which is a lot of noise but nothing practical.
They need to get modern trains, especially for Punjab and the northern areas to boost domestic tourism. In the long run, Peshawar, Lahore and Islamabad should be connected by a network of fast trains so that people and goods can move faster and more efficiently. This will boost Pakistan’s economy.
 

Arsalan 345

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what are we earning from cpec? i think gwadar is operational. where is accountability? at least government should tell the public about cpec. how much are we earning yearly? we are taking too many loans.we have to return them as well.
 

Dark1

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Every one is welcome in Pakistan to invest. China surely gets the preference.

But countries pledge and then they run away, what happened to bullet train project of India that was supposed to be financed by Japan?
The maharashtra state government is a opposition party. They aren't trying to procure land for the bullet train , deeming it unnecessary. Story of India, too much federalism.
 

Dark1

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what are we earning from cpec? i think gwadar is operational. where is accountability? at least government should tell the public about cpec. how much are we earning yearly? we are taking too many loans.we have to return them as well.
And why do you have to return the loans for cpec ? Its a joint venture between China and Pakistan, let the Chinese also share the risk in its success. Remember its not only a economic project but a strategic one.
 

Arsalan 345

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And why do you have to return the loans for cpec ? Its a joint venture between China and Pakistan, let the Chinese also share the risk in its success. Remember its not only a economic project but a strategic one.
yes very much strategic. i agree.
 

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