Pakistan to float tenders for $6.8 billion CPEC railway project in November

KARACHI: The government would float tenders for the largest and costliest Main Line 1 (ML1) railway project under the China-Pakistan Economic Corridor (CPEC) infrastructure development plan by the second week of the next month, Pakistan’s Railways Minister Sheikh Rashid Ahmad told Arab News while trying to dispel the impression that the project had been delayed.
“There is no problem at all … and the tender will be floated by 12th or 15th November,” he said, adding that “the project will hopefully start by the end of December.”
ML-1 is likely to cost $6.8 billion, and 90 percent of the financing will come from China’s Government Concessional Loan scheme. The project will upgrade and dualize the existing railway tracks connecting the port city of Karachi in the southeast to Peshawar in the northwest.
The railways minister also denied reports in the international media that the project had been delayed due to the interest rate disagreement between the two countries.
“The interest rate has not been finalized yet,” Rashid said. “Talks with them [Chinese] are underway, and we will listen to them and accept what they offer us.”
According to independent experts, however, the situation may be more complex.
“This is a huge project — even larger than the size of the IMF program which Pakistan cannot afford — and the Chinese are insisting to extend the loan on commercial terms,” Khurram Hussain, business editor of Dawn newspaper, told Arab News. “The main thing is money. If you don’t have it, you can’t get it.”
However, Chairman of Pakistan-China Institute Mushahid Hussain Syed said that CPEC was perfectly “on track.”
“The ML-1 financing will be in RMB [renminbi, the official Chinese currency] and the project awaits a high-profile visit to move further,” he added. “The confusion was caused by the irresponsible statements from some ministers that were baseless and unwarranted.”
He confirmed that the country’s army chief had to play his role to ensure the smooth flow of CPEC projects.
“General Qamar Javed Bajwa had to intervene and now things are on track. CPEC is a national strategic project that is bigger than any party or province. So, all stakeholders — whether they are the armed forces, parliament, political parties or government — are on board,” he explained.
The railway minister told Arab News that the project would provide job opportunities to more than 150,000 people, adding that 90 percent of them would be Pakistanis while 10 percent would be Chinese nationals.