Featured China reluctant to approve $6b ML-I loan

[Norwegian]

secondly they think like in last 30 yrs someone will come and bail them out ..mostly the arabs
what we need is true bankruptcy once so that people understand the consequences

True that. Argentina, Lebanon, Venezuela had nobody to bail them out. Look how they ended.

 

[Globenim]

Chinese mediators: We want more than 2% interest and more guarantees.
Pakistani mediators: We want less than 2% interest and less guarantees.
U.S. regime propaganda mouthpieces: Pakistan and China outfall sources report! China is trapping Pakistan! Now for a short ad interrruption: The super awesome USA regime controlled debt trap alternative! The American death trap! Comes with endless strings attached, forcing you to destroy and shackle your own local agriculture and pharma industries and give unfair advantages to USA industries, give suicidal advantages to USA cartells to loot and carve out you local industries and open up the floodgates for USA regime controlled non government agencies subverting and meddling in your politics and spreading uncontrolled disinformation in your country. For freedom of course, just like in the good old free opium at gunpoint trade days. And if you ever want out we kill you! Back to the program Pakistan and China outfall!
Chinese and Pakistani mediators: Okay lets take 2%
U.S. regime propaganda mouthpieces: Remember that time when China trapped Pakistan into debt against their will? Everything worked out well but it was horrible. Pakistan is suffering and China is evil. Working together must stop. No its not fakenews! Remember when China bailed out a African country from American and British debt?

Its almost commical how surreal and detached from reality American and their British poodle regime propaganda has become.

 

[Chakar The Great]

I am disappoint to know that China is reluctant to give mere US $ 6 Billion to its strategic ally that too over period of 10 years.

 

[Norwegian]

I am disappoint to know that China is reluctant to give mere US $ 6 Billion to its strategic ally that too over period of 10 years.

Would you give that money to Pakistan?

 

[Chakar The Great]

Would you give that money to Pakistan?

I don't have that amount of money. But its tiny.

 

[Norwegian]

I don't have that amount of money. But its tiny.

Ok would India give?

 

[Chakar The Great]

Ok would India give?

I dont engage in trolls. Go ask India.

 

[ziaulislam]

True that. Argentina, Lebanon, Venezuela had nobody to bail them out. Look how they ended.

https://www.facebook.com/video.php?v=190411149462198

PPPP and PMLN ran ponzi schemes on the country and everyone loves them for it...

If someone doesnt see ponzi scheme in 30 yrs they dont deserve a country

 

[ziaulislam]

Idiots will chant geo bhutto and eat shit while bhuttos will be in dubai someone else will beg another bailout at god knows what cost and cycle will continue

Pakistan is truely a miracle

 

[ziaulislam]

Lebananon is good example because we had geo butto and nawaz sharif aik nasha kinda people over there too..
Now they have realized but its too late

 

[ZeEa5KPul]

With these people never say never. They got more lives then cats. They keep coming back. I remember like yestraday his mother - then a young Benezir talking nonsense in early 1980s with General Zia cavorting with President Reagan. Decade later she was PM. Then think of Nawaz Sharif and 2001. Generals Zia and Musharaf are history yet this spawn is still winning elections and power in Pakistan.

Never say never indeed. To be fair, it's not a problem unique to Pakistan

It sometimes happens in the East Asian countries you admire

To be fair to the Koreans, they did throw her in jail.

 

[khansaheeb]

China reluctant to approve $6b ML-I loan
Express concern over Pakistan’s growing debt


Shahbaz Rana May 08, 2021

File photo

ISLAMABAD:
Expressing concern over Pakistan’s growing debt, China has shown reluctance to approve $6 billion loan for the Mainline-I (ML-I) railway track -- the single largest project under the China-Pakistan Economic Corridor -- according to the record of a meeting and senior Pakistani officials.
The construction of ML-1 project in three phases had been approved by the Executive Committee of National Economic Council (Ecnec) in its meeting held in August last year. The actual cost of the project was $9bn initially, including equity amount of the government of Pakistan. But later, it was reduced gradually to $6.8bn.
“Beijing conveyed its concerns during a meeting held on March 30 to discuss financing modalities of the project,” the officials added.
Moreover, the officials said China also termed the total project cost of $6.8 billion at the lower side, which Islamabad is now willing to increase further by 15% or $1 billion.
The sources said that in the last meeting, Chinese authorities were wary of Pakistan’s ability to service its debt. The concerns have now also been reflected in the meeting records.

“The Chinese side have sought clarification regarding the possibility of raising further debt by Pakistan during currency of the IMF programme. The Pakistani side clarified that debt situation is being monitored and there is no restriction under the programme to raise debt for viable projects,” Deputy Chairman Planning Commission Dr Jehanzeb Khan told The Express Tribune while responding to a question.
The Chinese sides also showed its reservations over restrictions imposed by Group 20 nations and the International Monetary Fund which, in Beijing’s view, could undermine the ML-1 project, according to discussions that take took place in the last ML-I Financing Committee meeting held on March 30th.
“The Chinese side expressed concerns about Pakistan’s debts, including IMF’s requirements for the Pakistani government to avail loans and about the impact of restrictions under the G-20 Debt Servicing Suspension Initiative (DSSI) on the financing of the ML-I project,” showed a correspondence between Pakistan and China.
Pakistan’s public debt has jumped to 87.2% of the Gross Domestic Product at the end of the last fiscal year and the country is consuming over 60% of tax revenues in debt servicing. It was 72.5% of the GDP when the PML-N tenure ended about three years ago.
Pakistan has also availed the G-20 temporary debt relief worth $3.5 billion from July 2020 through December 2021 which, according to Beijing, was a signal of weakening debt repayment capacity.
“However, Pakistani authorities tried to remove the reservations shown by their Chinese counterpart,” the officials told The Express Tribune.

The Pakistani side stated that the IMF has not imposed any restriction on loans for the ML-I project and that country’s foreign debt was largely under control and the government has the ability to repay the debts, according to the documents.
The Pakistani side held that the implementation of the ML-I project would bring multiple benefits to Pakistan Railways, in addition to improving the financial situation of the company.
The ML-I project includes dualization and upgrading of the 1,872km railway track from Peshawar to Karachi and is a major milestone for the second phase of CPEC and its construction is facing a delay of over three years.
The government has planned to complete the ML-I project in various packages, spanning over almost 10 years and aimed at spreading the loan over a longer period due to concerns expressed by the IMF.
China also highlighted the dilapidated financial condition of Pakistan Railways that do not allow it to take $6 billion new debt on its books.
The negotiations to secure the loan have been going on for the last over one year but so far no conclusion has been reached. The project is facing delays of over three years against the original schedule agreed between the two countries.
In a meeting held on March 30, Pakistan again expected that the loan currency would be a combination of RMB and the US dollar, covering 85% of the project cost, with an interest rate comparable to the infrastructure project under CPEC and promised that the Pakistani government would provide guarantees.
The share of each currency has not been indicated in the revised term sheet. China wants to give the $6 billion loan in RMB, as it competes with global dominance of the US dollar.

“Pakistan has not yet accepted the Chinese stance of getting a mix of commercial and concessionary loans,” said the sources. Both the sides have not converged on the loan payback period. China has proposed 15 to 20-year payback period, including a five-year grace period.
Pakistan has asked for a 25-year repayment period, including a 10-year grace period.
The Chinese ambassador to Pakistan, Nong Rong, on Friday met with Minister for Planning Asad Umar and discussed matters related to bilateral relations and projects under the CPEC and the upcoming Joint Cooperation Committee meeting, according to a Planning Ministry handout.
But the handout was silent on the the 10th JCC meeting date, which Pakistan has been trying to hold since October last year.
The sources said that Asad Umar pointed that a deal on ML-I was important to showcase the JCC as a successful event. The sources added China was reluctant to hold the JCC until it is assured that CPEC is fully back on track.
Both the sides have now agreed that a joint roadmap to push forward the ML-I project implementation that will entail confirming financial terms, launching bidding process and concluding the commercial contract, will be finalised.
---
Amazing Chinese strategy. First put Pakistan in debt trap under CPEC and then stop further loans because Pakistan can't pay previous loans

@Horus @waz @beijingwalker @Beast @ziaulislam @Patriot forever @Indus Pakistan @Del @Dual Wielder @Joe Shearer @jamahir @Verve @koolio @Mav3rick @Muhammad Omar

I think our Chinese brothers are also facing economic pinch and cutting down on risk. But is good that China is being responsible in addressing Pakistan's ability to pay and manage debt.

 

[imadul]

Japan could be an alternative. Japanese govt was partnering in KCR but PPP Zardari sabotaged the agreement.
ML-1 and KCR are viable projects and would pay off their costs. Pakistan can go for BOT basis for both Karachi Mass Rail Transit, KCR, and ML-1 with Japan.

 

[vi-va]

Chinese mediators: We want more than 2% interest and more guarantees.
Pakistani mediators: We want less than 2% interest and less guarantees.
U.S. regime propaganda mouthpieces: Pakistan and China outfall sources report! China is trapping Pakistan! Now for a short ad interrruption: The super awesome USA regime controlled debt trap alternative! The American death trap! Comes with endless strings attached, forcing you to destroy and shackle your own local agriculture and pharma industries and give unfair advantages to USA industries, give suicidal advantages to USA cartells to loot and carve out you local industries and open up the floodgates for USA regime controlled non government agencies subverting and meddling in your politics and spreading uncontrolled disinformation in your country. For freedom of course, just like in the good old free opium at gunpoint trade days. And if you ever want out we kill you! Back to the program Pakistan and China outfall!
Chinese and Pakistani mediators: Okay lets take 2%
U.S. regime propaganda mouthpieces: Remember that time when China trapped Pakistan into debt against their will? Everything worked out well but it was horrible. Pakistan is suffering and China is evil. Working together must stop. No its not fakenews! Remember when China bailed out a African country from American and British debt?

Its almost commical how surreal and detached from reality American and their British poodle regime propaganda has become.

That's exactly the playbook. China should take notes.

 

[Genghis khan1]

Chinese were funding those infrastructure projects which will:
#1 Keep their industry rolling, to improve their declining GDP growth.
#2 Provide a quick return on investment..

What Pakistan needed and could have achieved:
#1 Investment, not a loan.
#2 Local revival of the industry ( production and supply chain) through these projects.
#3 Viable long-term Hydropower project instead of coal IPPs.

When end up happing:
#1 Pakistan took loans on the financially less viable project, Chinese companies and banks knew, that's why instead of investing they gave loans with guarantees.
#2 Instead of the local production and revival of industry, the Supply chain was maintained through the import from china.
#3. Imported Coal (Bank friendly) IPPs were offered by China and approved by the previous govt instead of more Pakistan-friendly Hydropower projects.

PS: No one expecting Gwadar to start producing Billion in import duties. Pakistan should have asked the Chinese to utilize Gwadar port to make it financially viable. imagine if the Chinese start using 1% of their total import, Gwader will pay for itself in no time.

Chinese were looking for a quick buck, they were not here to give charity.

Now Pakistan is struggling to pay back.