Some vital projects under the China-Pakistan Economic Corridor (CPEC) are swinging between hopes and despair although the PML-N leadership has described it a game changer for the country. Construction work on certain road projects in Khyber Pukhtunkhwa and Baluchistan hit snags last year. Then Chairman WAPDA disclosed before the National Assembly Standing Committee on Water and Power that Diya Mir Basha Dam has been withdrawn from CPEC frame work because Chinese terms of financing were against the national interest. And now the fate of expansion and refurbishment of main line M-1is in dole drum.
The 1782 kilometer Karaci-Peshawar railway track was to be refurbished and expanded under CFEC framework at cost of $ 8.2 billion but the financing modalities for the project has not been finalized. According to May 2017 frame work the project was to be financed by China by giving loans to the central government. But now the Ministry of Finance wants to give sovereign guarantees to the Ministry of railway for the construction of mainline Ml-1.The central government is reluctant to acquire loans directly for the project because it does not want to make the $ 8.2 billion Chinese high interest bearing loans a part of its ballooning external debt of $85 billion. The Ministry of Planning is of the view that an internal agreement on the exact financing modalities between the concerned ministries is essential before making a request to China for processing loan. The implementation of the project is being delayed because of disagreement between the Railway and 0ther Ministries. The Ministry of Finance insists that Railway Ministry itself finance the project by acquiring loans for which the federal government will provide sovereign guarantee. But the Railway Ministry wants central government to acquire loans, which will not only make it a part of central debt but will also shift loan servicing responsibility on to the central government.
The mainline Ml-1 railway track project was scheduled to be completed between 206-2020. Now the revised plan suggests that the project can not be completed before 2022 provided the government starts construction work this year. The Minister for Planning and Development, Ahsan announced last month that ground breaking ceremony of this important railway project will be performed in March 2018 but the event is not in sight as the Railway Ministry has not submitted PC-1 to the Panning Ministry. Hence, the Minister’s announcement about the ground breaking ceremony is merely a political gimmick of raising false hope for the early construction of mainline Ml-1 railway track
As a matter of fact CPEC was mainly a connectivity project but its earlier contours agreed with China by General Musharaff and previous PPP governments were drastically changed by PML-N government making CPEC largely an energy project because construction of environment polluting and health hazardous coal based thermal power plants was give top priority. The major conetivity projects on the western route and Ml-1 railway track project were relegated to the background. Even the length of Ml-1 was shortened between Karachi and Lahore excluding the track from Peshawar to Lahore. Moreover, multidimensional hydropower projects of Diya Mir Basha and Dasu dams were virtually abandoned.
Like Pakistan International Air Line (PIA), the financial condition of Pakistan Railway is for from satisfactory. It also incurs huge losses and is confronted with shortage of locomotive engines and goods boogies. How losses incurring railway can raise foreign loans against governments sovereign guarantees. The bad health of PIA is a classic example. The government should directly acquire Chinese loans for the financing the mainline Ml-1 railway track project from Karachi to Peshawar.
