China has provided $5b loan, $2b grant for CPEC, Senate body told

ISLAMABAD: China has so far extended $5 billion loan under CPEC project on an average interest of 2.29 percent for 25 years period with a grace period of seven years and 1 billion dollars as grant, Hassan Daud Butt, Coordinator CPEC of the Planning Commission told a Senate committee here on Monday.

However, top notches of the National Highway Authority (NHA) and Ministry of Communications said their cheques worth Rs25 billion have bounced as the Finance Ministry has not released funds of the fourth quarter of the last fiscal. Secretary Planning Commission said that it was the interim government’s decision to slow down the releases keeping in the view the increasing fiscal deficits. The NHA officials said this is also the main reason for halting the construction work on the western route.

The western route starts from Burhan/Hakla to Gwadar via Dera Ismail Khan, Mughalkot, Zhob, Qilla Saifullah, Ktuchlak/Quetta, Matung, Kalat, Sorab, Basima, Panjgur, Hoshab and Turbat mainly because of the land acquisition issues, finalisation of feasibility studies by Chinese companies and delay in making the PC-1 of various projects.

The construction work on the 1,282 kilometres route from Burhan to Khuzdar has not yet started. Senators from Balochistan came down heavily on the Planning Commission and Ministry of Communications for delay on the western route. They asked why the coal-based power plants have not been initiated on the local coal available in various pockets of Balochistan.

Coming to the energy sector, Hassan Daud told that so far $ 22 billion has been spent on CPEC projects out of which $ 5 billion is loan and $1 billion is grant. He said the estimated cost of CPEC projects stands at $48 billion out of which 72 percent, which amounts to $34.746 billion, purely belongs to energy projects. In the energy sector, there is no loan amount at all from Chinese side as it is investment from China under IPP mode. He also told that in CPEC projects, as many as 65,000 Pakistanis have got employment directly and indirectly, whereas 10,000 Chinese nationals are also working.

In transport and infrastructure sector, there are concessional loans amounting of Rs4.179 billion and in Railways sector, ML-I project, which is yet to take off, will also be having the government concessional loan of $8.2 billion. He also told that Gwadar Port is being built with grant, concessionary and interest-free loan amounting to $780 million out of which $230 million is grant being spent on the International Airport at Gwadar. In energy sector, under CPEC umbrella, so far 2,840MW electricity has been added as Qasim power plant, coal-based Sahiwal power plant, Sachel wind, hydro China Dawood power wind and UEP wind power plant have been completed and giving their dividends.

He also disclosed that no China fully funded project is being installed in Pakistan rather the project is being erected here in joint venture of Chinese, Pakistan and other foreign companies. However, he said, the energy prioritised projects require $22 billion investment and after their completion they will generate 17,000MW electricity.