ISLAMABAD: A parliamentary committee on Thursday observed that China is charging only 2 to 2.5pc on government-to-government loans with a repayment term that goes into a long tenure.
“Sovereign guarantees are also only required on government projects. There are currently 21 ongoing projects worth $19 billion,” PPP Senator Sherry Rehman informed the Senate Committee on China-Pakistan Economic Corridor (CPEC).
The special committee met for details on CPEC financing and debt uptake besides the benefits of the project for the Gwadar Port City.
Says Beijing is charging 2 to 2.5pc on loans with a repayment term that goes into a long tenure
While the committee showed concerns about Pakistan’s growing debts to China under CPEC, the members conveyed apprehensions of provinces that have arisen as a result of the capacity and coordination deficit of the current government.
Ms Rehman informed the members that China was still concerned about the current government’s seriousness about CPEC projects and to take it forward.
Secretary Planning and Development Zafar Hasan briefed the members on the $49 billion CPEC. He said repayment of infrastructure development would start in 2021. The total cost of the phase two of Thakot to Havelian section of Karakuram Highway was $1.3 billion.
Minister for Planning Khusro Bakhtyar conceded that Balochistan had been neglected under CPEC.
“However, the government is now focused on Balochistan starting with the installation of a Rs17 billion electricity grid besides developing highways, small dams and the Rs80 billion Kachi Canal. The government has given top priority to development of Balochistan before moving on to the erstwhile Fata and southern Punjab which have also been neglected in the past,” Mr Bakhtyar said.
Similarly, he added, the western corridor of Balochistan had been neglected.
The members were also informed that under CPEC Gwadar was being transformed into an oil city while encouraging foreign investors to inject money into different projects.
Industrial development and modernisation of agriculture practices were all included in CPEC. Rejuvenation of industrial development and stimulating the agriculture sector besides other projects will generate 400,000 direct and indirect jobs.
However, the committee was displeased with the planning of the $1bn fast track project which included advancements in health, education, water supply and poverty alleviation throughout the country. The committee will invite chief secretaries of all provinces for their feedback on these projects.
Planning and Development Department officials explained that Pakistan had also taken up the relocation of Chinese export-focused light manufacturer and consumer products industry to add to exports.
Under the CPEC, five special economic zones (SEZs) will be set up with Chinese industrial relocation.