Pakistan denies FT report it is reviewing CPEC agreements

ISLAMABAD: Pakistan on  Monday denied a Financial Times report that it was reviewing projects pertaining to the China Pakistan Economic Corridor (CPEC).

Abdul Razak Dawood, the Prime Minister’s advisor on commerce, textiles, industries and investment, issued a detailed clarification on Monday contradicting the report published in Financial Times on September 9th with the title “Pakistan rethinks its role in China’s Belt and Road plan”.

Dawood said that his statements were taken out of context, adding during the visit of Chinese Foreign Minister Wang Yi, the two had stressed on advancing the enterprise.

He reiterated that the country’s commitments to CPEC would remain the same and would be honored.

The report claimed that Pakistan was contemplating evaluating the CPEC agreement with China claiming that Beijing-owned corporations were being given unfair benefits. 

It quoted Dawood saying  the agreement "unfairly benefits Chinese companies."

“The previous government did a bad job negotiating with China on CPEC — they didn’t do their homework correctly and didn’t negotiate correctly so they gave away a lot,” The Financial Times cited him.

Dawood was reported to have said; “Chinese companies received tax breaks, many breaks and have an undue advantage in Pakistan; this is one of the things we’re looking at because it’s not fair that Pakistan companies should be disadvantaged.”

The adviser was quoted as saying: “I think we should put everything on hold for a year so we can get our act together,” he added. “Perhaps we can stretch CPEC out over another five years or so.”

Dawood is a renowned businessmen who founded Descon Engineering, which is involved in Engineering and Construction, Chemicals, Power and Inspection. It is perhaps the first Pakistani multinational company which is operating in six countries, according to commerce ministry.

The projects concerned are part of the $62bn China-Pakistan Economic Corridor plan — by far the largest and most ambitious part of the BRI, which seeks to connect Asia and Europe along the ancient silk road. It also includes a huge expansion of the Gwadar port on Pakistan’s south coast, as well as road and rail links and $30bn worth of power plants.

As per the report, Chinese foreign minister Wang Yi, who visited Islamabad at the weekend, indicated that Beijing could be open to renegotiating its 2006 trade deal with Pakistan.

However, Foreign Minister Shah Mehmood Qureshi assured his Chinese counterpart that the new government considers CPEC project as 'immensely strategic and of national importance for Pakistan'.

"We are highly grateful for the personal attention Chinese leadership has accorded to the implementation of CPEC. CPEC will remain a priority for the Government. We will ensure that ongoing projects are implemented at the earliest and at the same time, we will explore new avenues of cooperation under CPEC," he said during a joint press conference with Wang Yi after the two sides held detailed talks.

Moreover, Finance Minister Asad Umar and Advisor Dawood said Pakistan would be careful not to offend Beijing. “We don’t intend to handle this process like Mahathir”, Umar told FT.

It is pertinent to note that Malaysia has cancelled three China-backed pipeline projects and put a showpiece BRI rail link under review.