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Govt is Considering to Renegotiate CPEC Contracts and Projects: FT Report

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Financial Times has claimed that Pakistan is rethinking its role in China’s Belt and Road Initiative, known in Pakistan as the China Pakistan Economic Corridor (CPEC), citing adviser to the Prime Minister for Commerce, Textile and Investment Abdul Razzaq Dawood that Pakistan negotiated poorly with China which helped Chinese firms benefit heavily putting Pakistan at a slight disadvantage.

The London-based paper says that the Pakistani ministers and other authorities involved are reviewing the trade agreement with Chinese authorities, which exempt Chinese firms from various taxes, effectively putting Pakistani companies at a disadvantage.

The trade deal which took place in 2006 can be opened to renegotiations, said the Chinese Foreign Minister who visited Pakistan on the weekend. He also iterated that the project would mean a huge economic boost for Pakistan:

"CPEC has not inflicted a debt burden on Pakistan. When these projects get completed and enter into operation, they will unleash huge economic benefits."

Mr Dawood said that Pakistan is taking a closer look at all the agreements signed in the previous government following the orders of the Prime Minister Imran Khan to lay out the liabilities and benefits of the project before proceeding further. Taking a break for a year is also under consideration.

"I think we should put everything on hold for a year so we can get our act together. Perhaps we can stretch CPEC out over another five years or so."

Other officials are of the view that cancellation of the project is not the way forward rather stretching the projects over a longer time frame can be a preferred choice.

Finance Minister Asad Umar said that Pakistan will not handle the project like Malaysia, which recently decided to review a a massive rail-link project, in addition to cancelling three pipeline projects backed by China.

https://propakistani.pk/2018/09/10/...otiate-cpec-contracts-and-projects-ft-report/

Don't know how much we can re-negotiate but this is important.
 
we should not put it on hold..that would be a bad idea..renegotiating is the best option and China is up for it..
 
I would like to see details and transparency. Last Govt was completely silent about the terms and conditions. In Democracy this should be public information and there should be lot more debate about CPEC... I hope more transparency this time around. I would also like to know the role of Army in all this...
 
It is long overdue. For example, 93% of Gwadar’s income will go to China.
 
Watch Zara Hut Kay 10th September. They covered this topic really well and makes lot of sense.

There are so many factors involved to blindly either support or oppose this massive project, need balanced approach.

In short, PTI government is trying to limit the divert some of the investment from infrastructure to human development projects. Clean water, technical training and education, health etc are being promoted.
 
It is long overdue. For example, 93% of Gwadar’s income will go to China.

Such things need to be renegotiated. While CPEC will help develop Pakistan, it is not going to help Pakistan's economy grow in the long run if so many of Pakistan's assets are Chinese owned and operated. Rather, it will make Pakistan dependant on China, and hence, not truly independent.
 
Pakistan, China agree to broaden CPEC base

ISLAMABAD: Pakistan and China on Sunday agreed to formally invite “third-country” investors to be part of the $60 billion China-Pakistan Economic Corridor and add social sector and regional development schemes to the existing portfolio of CPEC projects.

The understanding on addition of “two major dimensions” to the CPEC projects came about at a long meeting between the Planning, Development and Reforms Commission of Pakistan and the National Development and Reforms Commission (NDRC) of China on Sunday.

At the four-hour meeting, the Pakistani team was led by Minister for Planning Makhdoom Khusro Bakhtiar while the NDRC’s vice-chairman, Ning Jizhe, led the Chinese delegation. Planning Secretary Zafar Hassan, CPEC’s project director Hassan Daud and officials of the NDRC and Chinese Embassy also attended the meeting.

Sources said that Beijing wanted involvement in the upcoming special economic zones (SEZs) of countries friendly to both Pakistan and China because it wished to steer clear of adverse criticism, particularly from the US and India, about possibility of secretive deals that “remain beyond public eye”.

No country was specifically mentioned in this regard and Central Asian, European and other countries including Turkey, Russia and Saudi Arabia could invest in the nine SEZs proposed, said an official.


Gwadar would be re-prioritised as a centre of industries for export markets where these countries could invest alone or in partnership with Pakistan or China, to take advantage of the city’s trans-shipment potential and location apart from the free-zone incentives it offered.

The government led by the Pakistan Tehreek-i-Insaf (PTI) wished to include in the project portfolio social sector schemes — involving clean drinking water, health, education and technical training — to bring the huge initiative in line with Prime Minister Imran Khan’s priority areas of human development. This could be done by making some changes in the seven central pillars of the CPEC’s Long Term Plan.

The official, however, agreed that China and Pakistan had so far not been able to settle key issues about development of the Rashakai or Hattar SEZ in the first phase of industrial cooperation. Thus, it would be difficult to attract “third-country” investors immediately.

He insisted that the two sides would work from now on to achieve the big objective and recalled that even the basic issues of CPEC were not settled in the first meeting.

Mr Bakhtiar, he said, had already ordered the relevant agencies to take the various SEZ projects to the groundbreaking stage within three months as a lot of time had already been wasted.

“Realigning the goals of CPEC, Pakistan has introduced new targets of socioeconomic and regional development under this unprecedented mega project,” said the Planning Commission in an official statement.

The minister reaffirmed his government’s commitment to the CPEC and “categorically said that all-out efforts would be made for the success of this project of economic development and prosperity. CPEC is a reality... aimed at initiating a modern era of trade and economic growth”, said the statement.

To achieve the new targets, the government was dedicated to putting all its energies together to make progress at the earliest, said the official.

During the meeting, both the sides said that CPEC — “an icon of the Belt and Road Initiative” — was an engine of rapid growth for Pakistan and a manifestation of the strong Pak-China relations that would continue to promote inclusiveness.

The Pakistani team also told the visiting dignitaries that the PTI-led government accorded top priority to the development of Gwadar as a standalone project. The port city would be transformed into a trans-shipment hub and a centre for industrialisation with special focus on industrial units enjoying incentives that could produce a high rate of return.

The two sides agreed that industrial cooperation should be the main area of attention so that efforts were made to encourage relocation of Chinese industries with a view to increasing exports and maximising employment opportunities.

The Pakistani side said that progress had now been expedited and investors from across the world were being encouraged to populate the SEZs.

Mr Bakhtyar said his government intended to encourage projects based on indigenous sources of energy, including Thar Coal.

On the occasion, Mr Ning praised the PTI-led government’s agenda and its efforts for socioeconomic development of the country. He reiterated the commitment that Chinese companies would effectively work for completion of the CPEC projects.

The two sides also decided to further expedite key development projects in Gwadar and ensure groundbreaking this year of the New Gwadar International Airport, a technical institute and a hospital there.

Published in Dawn, September 10th, 2018

https://www.dawn.com/news/1432000
 
Why not include Basha and Diamer Dam as part of CPEC?
 
Why not include Basha and Diamer Dam as part of CPEC?

I heard rumors that China demanded a very unfair agreement for it and some of the bureaucracy and WAPDA stepped in to prevent it. China wanted full control over the dam which would let them dictate the electricity prices and have control over when to open the spillway. That situation would pose a serious security threat and compromise on Pakistan's solidarity. Reason behind this is that China knows we are desperate and they would be seriously pissing off India.

Though these are rumors, keep that in mind.
 
CPEC deals need to be made public ASAP.... so we can judge whose been doing what.
 
My understanding is that the CPEC deal was signed under PPP but the ground work started under PML-N. Both parties need to be on the dock for a deal detrimental to Pakistan's economy.
 
Most of the agreements and profit-sharing models signed under the CPEC are heavily tilted towards China. For example, most/all of the road toll income on roads constructed under the CPEC will go directly to China.

I did make a thread on the exploitative nature on CPEC but I cannot seem to unearth it.
 
It is long overdue. For example, 93% of Gwadar’s income will go to China.


I am surprised other countries which are competing with China for regional influence such as India for example, don't see the opportunity here. Why could they not offer better terms than the Chinese allowing Pakistan to keep say, 15% of the income, that would still leave a healthy 85% for India?
 
What Atif Mian thinks of CPEC.

<blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">1/ On Pakistan's <a href="https://twitter.com/hashtag/IndependenceDay2018?src=hash&ref_src=twsrc%5Etfw">#IndependenceDay2018</a> , why is the country still far from economic independence? (e.g. seeking its largest bail out ever this year) <br><br>I'll focus on last 5 years as an example ... it will get a bit technical but i'll try to be clear.</p>— Atif Mian (@AtifRMian) <a href="https://twitter.com/AtifRMian/status/1029237456414154752?ref_src=twsrc%5Etfw">August 14, 2018</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
<blockquote class="twitter-tweet" data-conversation="none" data-lang="en"><p lang="en" dir="ltr">2/ Economic growth is almost entirely a function of *domestic* productivity growth. What matters is investment in building your institutions and people. <br><br>Instead pak govts have increasingly looked *outside* in what i'd call an attempt at "import-led" growth ... it doesn't work</p>— Atif Mian (@AtifRMian) <a href="https://twitter.com/AtifRMian/status/1029237457924091904?ref_src=twsrc%5Etfw">August 14, 2018</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
<blockquote class="twitter-tweet" data-conversation="none" data-lang="en"><p lang="en" dir="ltr">3/ The idea is to borrow from outside, and task another country with building your infrastructure or institutions, and hope some magic others .<br><br>The latest example starts in 2013, when PML-N comes to power and decides to outsource growth to China. I'd explain why it doesn't work</p>— Atif Mian (@AtifRMian) <a href="https://twitter.com/AtifRMian/status/1029237459765391360?ref_src=twsrc%5Etfw">August 14, 2018</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
<blockquote class="twitter-tweet" data-conversation="none" data-lang="en"><p lang="en" dir="ltr">4/ Gov funds large infrastructure projects through China's Belt and Road Initiative (CPEC in pakistan), external debt rises from 62 to 90 billion $. The borrowing raises domestic demand "artificially", making Pakistan more expensive and less competitive globally.</p>— Atif Mian (@AtifRMian) <a href="https://twitter.com/AtifRMian/status/1029237461107519488?ref_src=twsrc%5Etfw">August 14, 2018</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
<blockquote class="twitter-tweet" data-conversation="none" data-lang="en"><p lang="en" dir="ltr">5/ This is a variant of the famous "dutch disease" and Pak suffered an extreme version of it. Poof? <br><br>Real effective exchange rate (pak prices relative to trading partners) increased by 20+ % and total exports DID NOT INCREASE over past 5 years.</p>— Atif Mian (@AtifRMian) <a href="https://twitter.com/AtifRMian/status/1029237462445506561?ref_src=twsrc%5Etfw">August 14, 2018</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
<blockquote class="twitter-tweet" data-conversation="none" data-lang="en"><p lang="en" dir="ltr">6/ To make matters worse, Pakistan's "in-law" finance minister strips away independence of the central bank and sets the terrible policy of keeping the exchange rate appreciated. Now Pakistan has the dutch disease, on steroids.</p>— Atif Mian (@AtifRMian) <a href="https://twitter.com/AtifRMian/status/1029237463737356288?ref_src=twsrc%5Etfw">August 14, 2018</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
<blockquote class="twitter-tweet" data-conversation="none" data-lang="en"><p lang="en" dir="ltr">7/ Meanwhile there is a blanket ban on any objective assessment of CPEC. Ask a question, and you'd be accused of conspiring against national interest. <br><br>Media feeds the frenzy that its a "game changer" & a big bubble develops in the port city (currently largely sand) of Gawadar.</p>— Atif Mian (@AtifRMian) <a href="https://twitter.com/AtifRMian/status/1029237465339645952?ref_src=twsrc%5Etfw">August 14, 2018</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
<blockquote class="twitter-tweet" data-conversation="none" data-lang="en"><p lang="en" dir="ltr">8/ Real estate bubbles further artificially raise domestic demand, & given the senseless exchange rate policy, it makes the dutch disease sclerotic<br><br>Notice we haven't even gotten into whether the $$ borrowing is "sustainable", the damage is being done before any repayment is due</p>— Atif Mian (@AtifRMian) <a href="https://twitter.com/AtifRMian/status/1029237466631467008?ref_src=twsrc%5Etfw">August 14, 2018</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
<blockquote class="twitter-tweet" data-conversation="none" data-lang="en"><p lang="en" dir="ltr">9/ So lets talk about debt sustainability now. <br><br>The first thing to remember is, you are borrowing in dollars, while most revenue from the projects are in rupees (think domestic transportation use and local energy consumption) <br><br>This is a big problem for two reasons.</p>— Atif Mian (@AtifRMian) <a href="https://twitter.com/AtifRMian/status/1029237467961024512?ref_src=twsrc%5Etfw">August 14, 2018</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
<blockquote class="twitter-tweet" data-conversation="none" data-lang="en"><p lang="en" dir="ltr">10/ First, the whole enterprise is exposed to exchange rate (ER) risk. A future depreciation of the currency, which is almost certain to happen given the inane ER policy, will jeopardize profitability.</p>— Atif Mian (@AtifRMian) <a href="https://twitter.com/AtifRMian/status/1029237469336743936?ref_src=twsrc%5Etfw">August 14, 2018</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
<blockquote class="twitter-tweet" data-conversation="none" data-lang="en"><p lang="en" dir="ltr">11/ Second, the country must generate sufficient additional exports to pay back, or else it will be forced to become poorer in order to generate an export surplus to pay back. <br><br>This, again, makes things more difficult given the dutch disease in the first place.</p>— Atif Mian (@AtifRMian) <a href="https://twitter.com/AtifRMian/status/1029237470607671296?ref_src=twsrc%5Etfw">August 14, 2018</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
<blockquote class="twitter-tweet" data-conversation="none" data-lang="en"><p lang="en" dir="ltr">12/ Another big ? on sustainability is that the borrowing and spending deals are highly opaque. No one really knows what's going on. <br><br>For example, what is the cost of capital in CPEC? A loan contract may report a "concessional" rate of 2%. But is it really 2%? Consider this ...</p>— Atif Mian (@AtifRMian) <a href="https://twitter.com/AtifRMian/status/1029237472025300993?ref_src=twsrc%5Etfw">August 14, 2018</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
<blockquote class="twitter-tweet" data-conversation="none" data-lang="en"><p lang="en" dir="ltr">13/ There is no open bidding and Chinese companies decide everything. They charge 100$ for equipment, but put in place lower quality equipment worth only $80. <br><br>Guess what, the "true" cost of capital just went up to (2+20)/80=27.5%!</p>— Atif Mian (@AtifRMian) <a href="https://twitter.com/AtifRMian/status/1029237473451421696?ref_src=twsrc%5Etfw">August 14, 2018</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
<blockquote class="twitter-tweet" data-conversation="none" data-lang="en"><p lang="en" dir="ltr">14/ There is a lot China and Pakistan can gain from each other. But deals have to be structured properly, with proper macro-prudential framework. Unfortunately, none of that was done. <br><br>The govt wanted a shiny new road real bad before the next election, which they lost anyways.</p>— Atif Mian (@AtifRMian) <a href="https://twitter.com/AtifRMian/status/1029237474772635648?ref_src=twsrc%5Etfw">August 14, 2018</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
<blockquote class="twitter-tweet" data-conversation="none" data-lang="en"><p lang="und" dir="ltr">15/ Let's hope for better economic sense this time. <br><br>&#55356;&#56821;&#55356;&#56816;پاکستان زنده باد</p>— Atif Mian (@AtifRMian) <a href="https://twitter.com/AtifRMian/status/1029237476165124096?ref_src=twsrc%5Etfw">August 14, 2018</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
 
Atif Mian is on the mark with those comments, he seems to have a good knowledge of finance.
 
Are the cpec projects now in full flow? Any PP’ers working on them?

This is from a couple of days ago. Multan-Sukkur highway completed 2 weeks ahead of schedule.



So Peshawar-Islamabad was completed in the 2000s, Islamabad-Lahore was completed in the 90s, Lahore-Multan is nearing completion its part of CPEC, Multan-Sukkur is completed, Sukkur-Hyderabad hasn't started yet it'll start this year, Hyderabad-Karachi is completed.


Once the final two pieces of the jigsaw, that is, Lahore-Multan and Sukkur-Hyderabad are completed then somebody can sit in their car in Karachi and be in Peshawar in 15-18 hours.

CPEC is also entering second phase with 9 industrial zones under construction atm. As it is, 90% of power loadshedding has been eliminated due to CPEC.
 
Thanks for the info.

Seems the Chinese don’t mess around - if they say they’ll do something they do it quickly.

Chinese are not actively involved in CPEC Roads/Motorways. Chinese companies are working into dams and power projects.
 
<blockquote class="twitter-tweet"><p lang="en" dir="ltr">Pakistan-China relations have gone from strength to strength & CPEC is a reflection of our mutual commitment to this enduring relationship.</p>— Imran Khan (@ImranKhanPTI) <a href="https://twitter.com/ImranKhanPTI/status/1179071045317398528?ref_src=twsrc%5Etfw">October 1, 2019</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
 
They completed the sukkur multan highway in 3 years, and the thar coal power plant as well.
 
A real son of the Asian bloc will always be happy to see prosperity across the border.

Great scenes guts keep it up

Infrastructural development will lead to better growth.

Wish you nothing but more sustainable success
 
ISLAMABAD: Prime Minister Imran Khan will pay an official visit to China on Oct 7-8 with the main agenda of ‘revival’ of stalled China-Pakistan Economic Corridor (CPEC) projects.

“Removal of all bottlenecks in CPEC projects and their timely completion is the top priority of the government,” the prime minister reiterated while chairing a meeting on the economic corridor on Wednesday. He said he would soon visit China and meet its leadership to strengthen friendship between the two countries.

It has been learnt that most of CPEC-related projects have stalled due to certain reasons, including prevailing financial crunch confronting the government and ‘non-cooperation’ of the bureaucracy due to ‘fear of the National Accountability Bureau’.

Minister for Planning and Development Khusro Bakhtiar apprised the meeting about CPEC-related projects and the progress so far made on it.

Railway Minister Sheikh Rashid Ahmed briefed the meeting on Main Line-1 (ML-1) projects being executed to lay a new railway track from Karachi to Peshawar under the umbrella of the CPEC.

Speaking at a prize distribution ceremony for seminary students, Imran says uniform curriculum to be introduced by March next year

Education

Addressing a prize distribution ceremony for madressah students who had performed distinctively in the examinations of contemporary education boards and seminaries, the PM said the government’s plan to introduce uniform curriculum in the country would be implemented by March next year so that all graduates could have equal opportunities to grow in their practical life.

“The graduates of the new education system will have understanding of religion, contemporary knowledge and science and technology.”

He said the government planned to synchronise the entire education system to create social harmony in the country, adding that reforms were being introduced in the education system which would help uplift the lower section of the society with the provision of equal opportunities to progress.

Highlighting the plight of the Kashmiris, the PM said eight million people had been locked in an open jail that Occupied Kashmir had become for two months.

At present, Prime Minister Khan said, three education systems were in vogue in Pakistan, which was leading to injustices and divisions in the society. “The Pakistan Tehreek-i-Insaf government had decided in its early days that the students of seminaries will be imparted contemporary modern education so that they too can get important positions in different professions,” he added.

Underlining importance of education, the prime minister said Islam laid special emphasis on education and that the “Muslims had ruled the world for 700 years not because of sword but education”. “Muslims are weak today mainly due to lack of education,” he deplored.

Speaking on the occasion, Federal Education Minister Shafqat Mahmood said a uniform curriculum was being prepared for government-run and private schools as well as madressahs.

He said measures were also being taken to ensure that students of seminaries took examinations of contemporary education boards, and this process would hopefully be completed in three to four years.

https://www.dawn.com/news/1508708/pm-to-visit-china-next-week-to-revive-stalled-cpec-projects
 
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