Dar-led ECNEC defers $6.7 billion ML-I CPEC project due to financing issues

The Executive Committee of the National Economic Council (ECNEC),  led by Deputy Prime Minister Ishaq Dar, has deferred the approval of the $6.7 billion Mainline-I (ML-I) project under the China-Pakistan Economic Corridor (CPEC) due to financing issues.

The Express Tribune reported that Dar instructed the Railways Division and relevant authorities to present a new summary with detailed financing and to divide the project into manageable packages. 

This announcement follows a statement from the planning ministry, which clarified that ECNEC had not deferred the ML-I project approval, attributing any discrepancies to a misunderstanding. 

Despite this, Ishaq Dar confirmed that the project was indeed sent back for further refinement. He instructed the Railways Division must resubmit PC-I for the first phase, the Karachi-Multan section, which is estimated to cost $3.3 billion.

The Railways Division submitted the ML-I project summary to ECNEC without arranging finances from the Public Sector Development Programme, China, or any international financial institution. The proposal also reduced the original 1,872-kilometre track to 1,726 kilometres.

The ML-I project, which aims to refurbish Pakistan’s rail track from Karachi to Peshawar, was initially approved two years ago at a cost of $9.9 billion. 

However, China requested a cost reduction due to Pakistan’s economic vulnerabilities, leading to a revised estimate of $6.7 billion. Despite this reduction, financing remains unsecured.

China has shown willingness to finance the first phase from Karachi to Hyderabad, worth over $1.1 billion. However, Pakistan seeks financing for the Karachi-Multan segment. 

Instead of submitting a phased plan, the Railways Division presented the entire $6.7 billion project, which Dar directed to revise.