Govt mulls plan B to execute ML-1 amid China’s indecisiveness

Amid the Chinese authorities’ indecision to initiate the tendering process for the long-awaited Main Line-I (ML-1) railway project of the CPEC, the government has started giving serious consideration to plan B to bring investment for the multi-billion dollar project.

An official of the planning ministry informed the National Assembly on Thursday that the negotiations with China will yield positive results and work on the construction of the long-delayed ML-1 project will start soon.

However, the official said that in case the talks with China remain unsuccessful, plan B is to engage Russia or any other country to bring the investment for the multi-billion dollar project.

It is pertinent to mention here that since the $6.8 billion project has already been approved by the government, the decision now is with the Chinese authorities.. There is nothing pending on part of Pakistan.

The meeting, which was presided over by the committee chairman Junaid Akbar, who was informed that the government was fully prepared to float the tender for the project as it had completed all the initial requirements including preliminary design and the feasibility reports.

The ministry official said the government to government framework agreement between Pakistan and China had also been signed so, “as soon as the loan agreement is signed, we will float the tenders for the project within 50 days”.

The ML-1 project which is included among the early harvest projects of the CPEC, has faced delay due to some technical differences between the two sides.

The meeting was informed that the cost of the original PC-1 of ML-1 project agreed during the previous government was $9.172 billion, but the incumbent government negotiated and managed to slash the project cost by 25 per cent to $6.8 billion.

It is further informed that the Chinese side is demanding that the project financing should be made totally in the Chinese currency, however the financing committee from Pakistan had proposed a mix of Chinese currency and USD.

Similarly the Chinese had demanded that the total tenor of the loan should be 15-20 years while the financing committee had proposed 25 years’ tenor.

With regard to loan share, the financing committee had agreed to the Chinese demand of 85 per cent. Now the Chinese are also demanding that the 1 per cent interest rate on the loan was too low while the financing committee had proposed to keep the rate less than other CPEC projects (average 2.38 per cent).

The meeting was informed that under the project, the 1872 km long railway track from Karachi to Peshawar would be up-graded and doubled and the new track would be laid to improve the speed limit of the passenger trains up to 160 km per hour.