ISLAMABAD: Amid increased security concerns and piling up of circular debt of Chinese independent power producers (IPPs) rising up to Rs570 billion, Pakistan has decided to propose the upcoming Joint Cooperation Committee (JCC) next month in Islamabad under the China Pakistan Economic Corridor (CPEC).
The proposed JCC meeting is expected to be held in Islamabad on May 23 and 24 just ahead of the high-level official delegation visit to China under Prime Minister Shehbaz Sharif.
Pakistan is all set to propose to the Chinese side to shift coal-based power plants from imported coal to local coal to reduce the cost from $1.5 billion to $500 million. The government wants to divert the saved $1 billion towards payment of circular debt of Chinese IPPs.
The government on Friday convened a high-powered meeting of ministries/ divisions and relevant departments to prepare for the upcoming JCC meeting in which it was decided that Pakistan would propose an upcoming meeting on May 23 and 24 subject to the consent of Chinese side. Planning Minister Ahsan Iqbal chaired the meeting.
Shehbaz is expected to visit China in June where Islamabad would make efforts to achieve a breakthrough in finalising the much-delayed Mainline-1 (ML-1) project for construction of the rail link under which the revised cost of the project for the first phase has been estimated at $6.9 billion. The revised PC-1 of ML-1 is ready and expected to get approval from the relevant forums, including the Central Development Working Party (CDWP) and Ecnec before the upcoming visit of prime minister to China.
Now it has been agreed that Islamabad will accept financing of ML-1 in Chinese currency (RMB) instead of demanding 50 percent amount in US dollars.
Top official sources said the Chinese side was expressing concerns over the recent terrorist attack in Dasu on Chinese engineers and raising concerns on overall Standard Operating Procedures (SOPs). There are three categories of Chinese nationals who are staying in Pakistan -- first under CPEC projects, second under non-CPEC projects and third are independent Chinese nationals. The Chinese are asking to revise and improve the SOPs of all the three categories and ensure foolproof arrangements for them.
Another issue that might come under discussion is the increasing outstanding amount of circular debt of Chinese IPPs which now stands at Rs570 billion and would cross Rs600 billion with reconciliation of figures.
The Friday’s meeting also discussed the development of Gwadar port and industrial zones.
Iqbal outlined the incorporation of five corridors for future collaboration, with emphasis on job creation, innovation, green energy and inclusive regional development. Projects under scrutiny included ML-1, Thakot-Raikot Section of KKH, Gwadar Airport, Orange Line and KCR. Recommendations for new projects and initiatives were encouraged for submission to the JCC for consideration. The minister suggested forming a proficient team to ensure readiness for negotiations in China.
Officials from the National Highways Authority disclosed that the cabinet had sanctioned an MoU for the cost-free feasibility studies of four projects, the Mirpur-Muzaffarabad-Mansehra road; Babusar tunnel on N-15 highway; DI Khan-Zhob section on N-50 highway, and New Karachi-Hyderabad Motorway. These projects are poised to substantially reduce transportation costs.
While reviewing the progress of infrastructural projects in Gwadar, it was ascertained that Phase I of the Gwadar Expressway is complete and operational, while work on Phase II will commence shortly.