Pakistan shared all CPEC loans details with IMF: Umar

ISLAMABAD: Pakistan had shared all the details of loans under China-Pakistan Economic Corridor (CPEC) with the International Monetary Fund (IMF) before entering its $6 billion Extended Fund Facility (EFF), a minister said on Wednesday.

“There are no secret or expensive loans obtained through CPEC as Chinese debts are cheaper than other countries,” said Asad Umar, Federal Minister for Planning, Development & Special Initiatives addressing a news conference at P-Block.

“It is a wrong perception that foreign loans increased because of Chinese loans. We shared CPEC details with the IMF officials and they raised no further questions.”

A US think-tank in one of its recent reports claimed the CPEC loans were borrowed at excessive interest rates, which contributed to a massive increase the country’s debt burden. Pakistani authorities ruled out any such possibility and argued that all such perceptions were wrong as Chinese was just 26 percent of total outstanding foreign loans, while 10 percent of total public debt was owed by Islamabad.

Flanked by Special Assistant to Prime Minister on CPEC Khalid Mansoor, Umar said the CPEC got immense importance, so all eyes were focused on this important project.

“There are deliberate efforts to spread wrong information about the CPEC,” he added.

The CPEC projects, he said, were executed in a transparent manner and Parliamentary supervision was also being done. The minister said the details of the power tariff were lying with the regulator National Electric Power Regulatory Authority (NEPRA).

He said Pakistan would welcome investment in CPEC projects from other countries.

Umar refuted the think-tank report and dispelled the impression the debt burden went up mainly because of CPEC’s expansive loans.

The minister said Pakistan had offered China for making investments, which were also offered to other countries.

The share of Chinese loans stood at 26 percent of total loans, while the share of other world is 74 percent, he said.

“If there is no danger from 74 percent share of loans then how could 26 percent become so dangerous,” he questioned

He said the government provided sovereign guarantees and there were no secret loans obtained from China.

There were many projects, which were accomplished with Chinese investments along with the guarantee provided by the government, Umar added.

“There is only on average 4.25 percent markup on Chinese loans,” he said.

The minister said that Pakistan had obtained the IMF loan so it shared all details, adding some quarters wanted the CPEC to fail but their wishes would never be granted.

The minister was of the view that some CPEC projects got delayed in the aftermath of the Covid-19 pandemic; however, many projects were accomplished during the tenure of PTI led government.

A joint parliamentary committee also scrutinised the CPEC related projects.

“No unusual guarantee or step has been taken by the government for CPEC projects that is different from the terms and conditions of other or non-CPEC schemes,” said Umar and added that such incentives were provided to all other IPPs (Independent Power Projects).

To another query about Afghanistan, he said, “Pakistan wants all other countries to establish diplomatic and economic relations with Afghanistan and take part in development work in the war-ravaged country”.

He said the government would welcome other countries in the CPEC as its expansion would serve the purpose of using it as a regional corridor.

The CPEC provided employment to thousands of people in the first phase and more people would get jobs down the line, the planning minister added.