ISLAMABAD: Pakistan has defaulted in paying the commitment charges of $1.408 million over the loan of $114.3 million that Pakistan Railways got independently from China.
Pakistan Railways got the loan bypassing the Economic Affairs Division (EAD) under which the Railways had to purchase 110 coaches. Pakistan Railways has so far purchased 55 carriages, and 45 coaches are yet to be purchased.
A top official at EAD confirmed this news and said the finance ministry has been intimated so that it could immediately pay to minimise the impact of the default. The official said the Chinese government has taken this default very seriously.
He said that being a defaulter of China will have severe financial implications over obtaining future loans on various projects.
“Right now the portfolio of Chinese loans is the biggest one and owing to this default, Chinese authorities, under usual practice, halt other loans for various projects. In this way Pakistan would suffer greatly,” he said.
The News contacted finance secretary Abdul Wajid Rana repeatedly through text messages and phone calls to know his view point over the development but failed to get his response. EAD secretary Javed Iqbal also gave no comments.
Another senior official said he feared that China will now further delay the loan of $448 million Pakistan has been seeking since long for Neelum-Jehlum project.
The completion of this project is a must before the project of Kishanganga hydropower project being built by India on the same river in held Kashmir because incase Pakistan delays the completion, India will clinch the water priority rights of Neelum river