Pakistan, China working out ways to counter CPEC bottlenecks

ISLAMABAD: In the wake of emerging bottlenecks for finalising financing mechanism of multibillion dollars projects going to be included into China Pakistan Economic Corridor (CPEC), both the countries are striving to come up with new mechanism for ensuring completion of projects without any delays.

From Pakistani prospective, there has been increased recognition that the financing agreements should be thoroughly checked before signing any future agreements. The Ministry of Finance highlighted certain issues at the highest level after which the government took up this issue with Chinese counterparts because Islamabad fears current account deficit were bound to face more risks when repartition of investments and loan repayment would start from the next fiscal year.

There are complaints from both sides on the financing mechanism so it has been decided that preparatory work will be done to streamline financing mechanism because the existing framework is causing undue delay in execution of projects.

The political transition has been taking place in Pakistan as elections are around the corner. There is ample time when both the countries at technical level should sit together and devise financing mechanism to align their priorities and execute projects after few months.

“Now the CPEC has been gaining momentum and more ministries and their officials are involved so the demand has emerged to streamline financing mechanism for execution of future projects that will be made part of the CPEC,” one top official confided to The News here on Monday.

The Planning Commission on Monday arranged a meeting with different ministries/divisions and attached departments in order to review the financing mechanism for CPEC projects.

Chinese side complained that there were duplication of forums in approving process that might take more time so this cumbersome approving process need to be streamlined for CPEC specific projects.

Islamabad raised objection over financing mechanism of ML-1 whereby Ministry of Finance asked that terms and conditions should be obtained in writing and it should be made clear how much money will be given in cash, equipment, human resource and on basis of which conditions.

“Pakistan and China are sorting out ways and means for finalising financing mechanism for future multibillion dollar projects including Mainline-1 (ML-1) of Pakistan Railways under much hyped $60 billion CPEC,” said the official.

Secretary Planning Commission Shoaib Siddiqui said that the financing mechanism was streamlined with the objective to complete CPEC projects well on stipulated timeframe. To another query regarding dropping approval of ML-1 from the CDWP meeting held last week, he said that it was withdrawn by Ministry of Railways because they wanted more consultations with relevant stakeholders. He concluded that this project would be approved soon.