China about to start $35 bn Silk Road plan in Pakistan

LONDON: More than three quarters of $46 billion of the planned Chinese-led investment in Pakistan will be implemented by next year as part of the world’s second-largest economy’s flagship Silk Road plan.

“Out of this $46 billion, we have been so far able to energize about $35 billion,” Pakistan’s Planning, Development and Reforms Minister Ahsan Iqbal said in an interview in London. “By energising means these are projects either in advanced implementation or in a stage of financial closing.”

It’s part of an initiative the Chinese government calls “One Belt, One Road” that aims to revive trade across Central Asia and into Europe via a network of railways, ports and highways.

About $11 billion had been allocated to infrastructure projects including roads, with concessional loans provided at about 2 per cent with payback in 20 years, along with a five-year grace period, said Iqbal, who is heading investment plans in Pakistan.

The rest has been earmarked for generating electricity, with about 11,000 megawatts expected to be added by 2018 to end Pakistan’s  chronic power outages. In September, Iqbal said, a further $8 billion would be provided by China and the Asian Development Bank to update Pakistan’s dilapidated railway network.

He said the government also expected to privatize state-owned power distribution companies after the 2018 elections, when Nawaz Sharif will go to the polls again in a bid for a successive term. Pakistan’s growth will rise to 5.5 per cent in the current year ending June helped by these investments and between 5.5 to 6 per cent next year, he said.

Iqbal played down security concerns that have plagued the investment plans after recent attacks in Balochistan which is the final road towards the flagship port of Gwadar. The first consignment of Chinese goods was shipped from the port this month after trucks from China made 3,000km journey from Xinjiang.  

“We have raised a special force of about 9,000-plus personnel that has been specially created to augment the present security apparatus in the country,” he said.