ISLAMABAD: China has said the $8.1 billion mainline (ML-I) project of Pakistan Railways (PR) will be concluded under a sovereign bilateral deal since it refused the suggestion of constructing this scheme via third-party contractors.
Also, China didn’t welcome the suggestion of finishing the ML-I project on a build-operate-transfer basis according to officials in the Ministry of Railways and Ministry of Communications, reports Express Tribune.
In the joint working group level deliberations that happened in October, China believed the project should be executed in compliance with the framework agreement, the officials said.
And Pakistan agreed to the Chinese request for making no changes to the agreement reached in May last year.
According to the Ministry of Planning and Development Spokesman on CPEC affairs, Hassan Daud said the financing model is contingent on the finalization of the technical design, which hadn’t yet been finished.
He added, once the decision is final, a decision would be made on the financing model.
Minister for Planning and Development Khusro Bakhtiar after taking the position had stated the government is exploring the possibility of finishing the $9 billion ML-I project on a build-operate-transfer basis.
Mr Bakhtiar had added it wanted to transfer the financial risks of the multibillion-dollar railway project to the contractors.
Both countries had issued a joint statement at the weekend saying both the nation understood the significance of CPEC as a signature project of the BRI and its fast development had played a critical role in the Belt and Road cooperation.
Furthermore, officials stated ML-I’s construction on BoT basis wasn’t possible without undertaking a financial feasibility study and Pakistan hadn’t carried out any.
In the joint working group discussions, the Pakistani side raised the problem of variances in preliminary design between Pakistan and China, said the officials.
To appease and address Pakistani worries, a Chinese technical team is currently visiting Pakistan and their consultants have begun to share details of the projects preliminary design, which were previously not available to the country.
