China wants to downgrade status of ML-I from ‘strategic project’

Chinese are irked over delays in execution of various CPEC projects including SEZs

ISLAMABAD: China wants to relegate the status of ML-I from ‘strategic project’, which would change the dynamics of financing for this project, according to sources in Ministry of Planning, Development and Reform.

With the Chinese voicing anger over delays in progress of Special Economic Zones (SEZs) on part of provinces, the federal government decided to take the responsibility of constructing them.

Also, other major infrastructure projects like the $8.2 billion ML-I railway line from Peshawar-Karachi remain in jeopardy along with $2 billion Karachi Circular Railway (KCR) project, reported Express Tribune.

The govt is beset by financial challenges regarding ML-I and delays in resolving deadlock over KCR haven’t been a bane for the authorities.

Continuing delays in execution of prioritized SEZs has irked the Chinese, which were supposed to strategize deep economic cooperation between the two countries.

As Chinese angers deepens, the government will be sending a team comprising officials from Board of Investment, Planning Ministry, National Highway Authority and Economic Affairs Division (EAD) in coming week to China for resolving the differences.

In a Cabinet Committee on CPEC meeting held on Friday under supervision of Prime Minister Shahid Khaqan Abbasi, it was decided BOI would carry out a feasibility study for taking over control of prioritized SEZs and provide a report in this regard quickly.

The decision on take over of these SEZs is contingent on BOI’s report and from reactions received from Pakistani team visiting China. The initial proposal envisages federal government will establish those SEZs which suit both countries and income will be shared with respective provincial governments.

Differences have arisen over the sites construction in Khyber-Pakhtunkhwa with the provincial government favouring Rashakai industrial zone, which lies on CPEC’s western wing and the Chinese favouring development of those on the eastern wing.

The Chinese however for economic and strategic reasons want to develop SEZs falling on the eastern wing of CPEC. In the 7th CPEC Joint-Cooperation Committee (JCC) meeting, the Chinese told their Pakistani counterparts that M3 Faisalabad, Dhabeji Industrial Park in Thatta and Hattar Industrial Estate-II possessed more advantages compared to other suggested sites.

Impediments have also arisen in execution of $8.2 billon ML-I and $2 billion KCR project, which have been marred by delays. The financial arrangements are yet to be agreed upon for these two projects and ML-I project is facing major issues in regard to financing.

Reservations have been raised by Sindh government over the company selected for construction of KCR project and provincial government wants to nominate a company of its own choosing for this project.

 

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