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Chinese firms offer Gwadar-Khunjrab rail link

Edevelop

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LAHORE - Consortium of two leading Chinese construction companies, CREC and Sinotec, has offered to construct strategic Gwadar-Khunjrab Rail Link at an estimated cost of Rs250 billion including Rs160 billion for infrastructure and Rs90 billion for locomotives on electric traction basis in four years on soft term loan.
The offer was made on behalf of the Chinese companies Consortium by Mr. Song Shuan Ping in a presentation before Railways Minister Khwaja Sa’ad Rafique in Islamabad. The loan so offered can be professional loan, commercial loan or as a grant and will be payable in seven years period.
Pointing out strategic importance of Gwadar –Khunjrab Rail Link, Mr Song Shuang Song listed a number of benefits which would accrue both to Pakistan and China as well as other countries of the region once the project is implemented and it becomes operational. He said the rail link will enhance the security of Pakistan and stabilize the region due to its strategic importance, main aim of the link is to connect the Central Asian Republics with Pakistan Railways network, the link will boost to a great extent trade relations between China and Pakistan, China will be able to receive cargo to and from Gwadar along the shortest route from Gwadar to Khunjrab.
He further pointed out that this rail link can also be used to supply oil from Persian Gulf to all Pakistan and Xianjiang China, can also provide access to China to Iran, enhance tourism in Northern Areas and Balochistan besides generating employment opportunities in the Northern Areas of Pakistan.
Making the presentation, the Consortium representative strongly pleaded for electric traction as compared to present diesel traction on which Pakistan Railways is being run and said that the adoption of electric traction can provide electricity for train lighting and air-conditioning and also to the railway stations for operational purposes in this era of power shortage.
He said electric traction also has substantial financial benefits estimated to be around Rs32 billion per annum through saving on account of fuel and lube oil, maintenance and overhauling, less staff required, elimination of power vans, non-transportation of diesel oil, long life and short turn around time.
Highly appreciating the presentation and the offer of financial assistance to implement Gwadar –Khunjrab Rail Link, Railways Minister Khwaja Saad Rafique said that China is a great time tested friend of Pakistan and number of Chinese companies are already working in different sectors in Pakistan for various years. He said Prime Minister Nawaz Sharif has more than once highlighted strategic importance of Gwadar-Khunjrab Rail Link adding that the offer of the Chinese companies consortium will be given due consideration on top priority basis by all concerned and a decision taken as soon as possible. He said the govt is attaching high priority to put the Pakistan Railways back on track and make it financially as well as commercial viable and profitable once again ensuring provision of best possible facilities and amenities to the travelling people across the country.
It may be mentioned here that CREC (China Railway Engineering Corporation) is the third largest construction company in the world, has built more than 50 thousand kilometers of rail lines, over 5760 kilometers of bridges, 4700 km of tunnels, 3400 km motorways and 566 km metropolitan railways in different countries .

Chinese firms offer Gwadar-Khunjrab rail link
 
I do not think that this thing is doable with 250 billion rupees. It might actually cost quite a bit more. The needed infrastructure investment is mind-boggling. The terms of payback are risky. Pakistan would have difficulty repaying 250 billion rupees in seven years. If our country gets to a 6% growth rate, then I think this project would be doable. So, the question is: does our government see a high growth rate in five years? If yes, we should commit. If not, then its best to let it pass.

If this thing happens, it would change our fortunes and work wonders for regional engagement. Chinese diplomacy stresses projection of soft power with money and development to engage everyone in their sphere of influence. They never offered anything to Zardari government because they did not trust the corrupt PPP government.

So, we could have goods from Western China travelling to Europe via Pakistan, Iran, and Turkey. That would be marvelous.
 
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