ISLAMABAD: Pakistan’s top economic body on Wednesday approved its costliest project to date as part of the multibillion-dollar China-Pakistan Economic Corridor (CPEC) agreement, giving the go-ahead for a $6.8 billion project to upgrade its railway lines, the government said.
CPEC has seen Beijing pledge over $60 billion for infrastructure projects in Pakistan, central to China’s wider Belt and Road Initiative (BRI) to develop land and sea trade routes in Asia and beyond.
The Executive Committee of the National Economic Council (ECNEC) approved the railway project, known as Mainline-1 (ML-1), on a cost-sharing basis between Islamabad and Beijing, Pakistan’s finance division said in a statement.
Under the project, Pakistan’s existing 2,655 km railway tracks will be upgraded to allow trains to move up to 165 km per hour — twice as fast as they currently do — while the line capacity will increase from 34 to over 150 trains each way per day.
“The execution of the project shall be in three packages and in order to avoid commitment charges, the loan amount for each package will be separately contracted.”
CPEC has come in for criticism from some western countries, particularly the United States, which says that the projects under it are not sufficiently transparent and will saddle Pakistan with the burden of expensive Chinese loans.
Both China and Pakistan have continuously downplayed such concerns over the years. The move ahead on ML-1, which has been on hold for years, will dispel notions that the government of Prime Minister Imran Khan is seeking to roll back some of the mega projects that he himself had questioned when in opposition.
At $6.8 billion, the ML-1 project alone is almost equal to Pakistan’s entire development budget for fiscal year 2020-21, which stands at Rs1.32 trillion ($7.9 billion).
Pakistan approves most expensive China-aided project to date
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Pakistan approves most expensive China-aided project to date
- At $6.8 billion, the ML-1 project alone is almost equal to Pakistan’s entire development budget for fiscal year 2020-21
- Pakistan’s 2,655 km railway tracks will be upgraded to allow trains to move up to 165 km per hour, while line capacity will increase from 34 to over 150 trains each way per day
Power minister defends solar net-metering overhaul after Pakistan PM orders review
- Leghari says 466,000 net-meter users earn up to 50% returns while 35.5 million consumers bear higher costs
- NEPRA’s new rules require full grid tariffs for usage and lower, market-linked rates for excess solar exports
ISLAMABAD: Pakistan’s power minister on Thursday defended controversial changes to rooftop solar net-metering rules, arguing that generous returns for a small number of users were unfairly burdening millions of other electricity consumers, as Prime Minister Shehbaz Sharif ordered a review a day earlier.
The dispute centers on changes to the net-metering regime, under which households and businesses with rooftop solar panels can sell excess electricity to the national grid. The National Electric Power Regulatory Authority's (NEPRA) new compensation rules require consumers to pay full tariffs for electricity drawn from the grid while receiving a lower, market-linked rate for excess power they export.
Critics have called the revisions “anti-solar” and warned they would undermine renewable energy adoption and hurt household finances.
Power Minister Sardar Owais Ahmed Khan Leghari told the National Assembly that only 6,000-7,000 megawatts of Pakistan’s estimated 22,000 megawatts of installed solar capacity fall under net-metering, covering around 466,000 consumers out of 35.5 million nationwide electricity users.
“If a net-metering consumer earns a 50% return on his investment because of the savings he gets as a meter user, while IPPs [independent power producers] get 17% and bank deposits earn 8%, isn’t a 50% return a good rate,” he asked.
“I generate electricity at Rs. 5 and send it to the grid at Rs. 27,” he continued. “The average price at which we buy electricity from the rest of the grid is Rs. 8.31. Is buying at Rs. 27 justified?”
Leghari said under the revised framework, returns for net-meter users would fall to around 37%, adding that even at that level, rooftop solar power generation remains financially attractive.
He said the changes were aimed at ensuring “fair pricing” and reducing cross-subsidies borne by the broader consumer base.
“Besides them, there are 35.5 million other consumers who do not even use net-metering,” he said, adding that if electricity costs for the wider public fell by up to Rs. 1.50 per unit, the adjustment would be justified.
Leghari's statement follows the prime minister's instructions to file a review in response to the new NEPRA rules, as he directed his administration to protect existing consumer contracts while ensuring the policy does not shift the financial burden onto non-solar electricity users.
