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The Corridor of Hope
07-25-2014, 01:16 PM
Post: #1
The Corridor of Hope
The Corridor of Hope


It is pretty much confusing when even educated people say that they don’t need motorways, roads and modern means of transportation...in-spite they need better economy. Confusing, because infrastructure and economy are inter-linked, both are part of a package. If highways and connecting roads were not important U.S.A would not have constructed over 47000 miles of them and China, the 2nd world power, would not be planning to complete the construction of 55000 miles of highways/connecting roads within next few years.
A country’s economic growth depends exceedingly on it’s effective infrastructure. Provision of better infrastructure is one of the major obligations of governments. Development of infrastructure does not only enhance a country’s own productivity but also boosts overall economy of the region. It augments means of communication, energy, transportation and production thus providing increasingly healthy environment for business entities and public sector. Infrastructure is one of the leading attractions for foreign investments.
Pakistan has potentials which most countries would consider prized treasures. It’s strategic importance, natural resources, weather and terrain offers the best of opportunities. It is an irony that we could not capitalize on our potentiality, partly due to circumstances beyond our control such as lack of economic resources. But now governments seem to be taking better initiatives in removing constraints, which have been holding us back. Getting into partnership with economic powers to initiate and complete mega projects is one of them. China clearly stands out in that list. It has rapidly growing economy and huge foreign reserves, which can be used as cash infusion to Pakistan’s relatively weak economy. Pakistan is the first South Asian Country to sign free trade agreement and currency swap with China. Pakistan is currently the largest destination of Chinese investment in South Asia.
A better example of the latter is China-Pakistan Economic Corridor (CPEC). CPEC has the potential to turn Pakistan into a hub of economic activity within the region and beyond. The corridor would be beneficent to both the countries. It would allow China the cheapest inflow of supply and outbound cargo besides other benefits. It could well prove to be a game changer for Pakistan altogether. Pakistan is bound to emerge as an economic power in the region, being the regional hub for trade and commerce between China/Central Asia, South Asia/Middle East and beyond, as it provides the shortest route to Xinjiang (Western China) and Central Asian Republics. Physically the corridor will be around 2700-Km, against approximately 12000-Km from Kashghar to Gwadar through Khunjrab. Motorways, Railway tracks, Stations, economic zones, Airports, Pipelines and other development projects are to be constructed. Results of long-term projects will be achieved by 2030 whereas short-term projects including motorways and energy projects are to be completed by 2017-2018. Total investment in China-Pakistan Economic Corridor is estimated to be around $32 billion. At the sideline of Boao Conference Prime Minister Nawaz Sharif and Chinese Premier Li Keqiang reviewed bilateral ties particularly with reference to Pakistan-China Economic Corridor reassuring the cooperation between the two countries.
High priority early harvest projects of CPEC comprise both of infrastructure and energy sectors. These projects include Raikot-Islamabad Highway (Karakoram Highway), Babusar-Muzaffarabad link, Karachi-Lahore Motorway, Multan-Sukkur Motorway, Gwadar Airport and hospitals. Energy sector projects encompass 20,000MW in IPP mode, 10 power plants at Gadani 660MW each amounting to 6600MW, 1320MW coal-fired power plant each in Sahiwal, Muzaffargarh, Rahim Yar Khan and Faisalabad, 1000MW in Bahawalpur Solar Park, 660MW Port Qasim power plant, 660MW coal-fired project in Thar, 250MW wind power project in Gharo and 220MW renewable solar energy project near Karachi and many other. Over Rs73 billion are allocated in budget for Public Sector Development Program (PSDP) to execute development projects under China-Pakistan Economic Corridor during this fiscal year. Over Rs 49 billion for construction of motorway and connecting roads, Rs 6 billion for Lahore-Abdul Hakeem Khanewal Section (276 km) on BOT basis with GOP share of 30%. A high-speed railway track will be laid from Peshawar to Karachi at a cost of 2.8 billion dollars, Rs 5.5 billion for Multan - Sukkur Section (387 km) with credit financing share of 90:10 percent, Islamabad will provide 10% of the total cost. Rs 4.5 billion for Raikot - Havelian - Islamabad Section (460km) of the Karakorum Highway with credit financing of 90:10, plus land, by Chinese bank and GOP respectively. Rs 3 billion for Sukkur - Hyderabad Section (296 km) on BOT basis against total cost of Rs 44.400 billion. Rs 691 million are kept for acquisition of land for Gwadar Port Free Zone. In addition expenditures of Rs 50 million for construction of Brakish water plant, Rs 50 million for dredging of berthing area and channel for additional terminal, Rs 400 million for construction of Expressway, Rs 400 million for Necessary Facilities of Fresh Water Treatment, Supply and Distribution, Rs 200 million for Pak-China Technical & Vocational Institute and Rs 100 million for Up-gradation of Existing 50 Bed Hospital to 300 beds at Gwadar.
Under CPEC initiatives, the government has reserved Rs 100 million for conducting Feasibility Study to connect Gwadar with Karachi, Feasibility Study from Gwadar to Besima and from Besima to Jacobabad via Khuzdar. Rs 250 million for feasibility study for up-gradation/restoration of Mainline 1 (MLI) and New Dry Port at Havelian in District Haripur under CPEC project. Another Rs 300 million are assigned for Feasibility study (PC-II) for Construction of New Rail Link (682 K.M) from Havelian to Pakistan-China Border .In order to meet requirements of power sector under CPEC, the government has further earmarked Rs 1 billion for jetty plus infrastructure at Gaddani, Rs 10 billion for Power Evacuation from Gaddani to National Grid (Faisalabad) and Rs 10 billion for Power Evacuation from Gaddani to National Grid.
More than Rs 30 billion are kept for land acquisition, relocation of utilities and compensation for 859 kilometre long Lahore-Karachi Motorway. According to the sources, the Lahore-Karachi Motorway project is going to be accomplished in next 3-4 years on cost sharing basis.
In recent developments Pakistan and China have agreed to speed up work on the Pak-China Economic Corridor Project. The agreement was reached at a high-level Pak-China dialogue. Both the countries agreed to build energy projects in Pakistan on priority basis. Chinese authorities are urged to engage local workforce in development projects and ensure transfer of technology so that employment could be generated and people could take ownership of these projects. Federal Minister of Planning, Development and Reform Ahsan Iqbal and Punjab Chief Minister Shahbaz Sharif held several meetings on their three-day visit to China to discuss the progress on energy and infrastructure projects of the CPEC. They held meetings with the Chinese National Development and Reform Commission, National Energy Administration, China Development Bank, Industrial and Commercial Bank of China, Exim Bank,and heads of Chinese corporate sector. Iqbal said the meetings helped particularly in reference to the mode of financing and developing a road map for faster execution of projects. Almost all the groundwork including land acquisition, policy making and other necessary arrangements have been finalised. “Gwadar is the gateway to the economic corridor and it will be developed into a modern port city,” added the Minister. China is the 16th largest trade partner of Pakistan and after completion of these projects this cooperation would double trade between Pakistan and China, making China, Pakistan’s biggest trade partner. Prime Minister Muhammad Nawaz Sharif has said that Pakistan-China economic corridor will open up the underdeveloped areas of the country to a new era of economic development. Terming Pakistan-China economic corridor as the future of the world, the prime minister said that three billion people, which is almost half of the world’s population, from China, South Asia, Central Asia could benefit from this economic corridor.
There have been some reservations of a few Pakistani senators over recent change of route of the corridor, saying that China is taking maximum advantage whereas Pakistan’s interests are being undermined. In response to that Minister for P&D Ahsan Iqbal has said “We want to tag ourselves with the project to take advantage of the development in western part of China”, “while it gives advantage to China, Pakistan also gets opportunity to take benefit”, he added. In projects as grand like CPEC, all stakeholders try to take maximum advantages and as long as they benefit from the venture, the more important factor remains the completion and success of the project.
Moody’s Investors Service has revised the outlook on Pakistan’s rating to stable from negative, affirming it at Caa1, which is a good sign. The opposition is getting impatient for agitation nowadays and is staging street protests. Some groups are even threatening to derail the whole system. They have to understand that the country cannot afford any turmoil at this stage, as foreign investors and mega projects demand stability and consistency at all levels. Opposition has every right to keep an eye on the policies and performance of the government and debate or even protest on suitable forums, but street agitation and use of any undemocratic means to come into power will not to be welcomed.
Mian Nawaz Sharif seemingly is a firm believer of constitution, rule of law and civilian supremacy, but he also has to prioritise the constancy factor, completing tenure has to be the most important determinant, even if it means enduring some of the bullying by undemocratic forces. It is rather commendable how Asif Ali Zardari has stood by democracy in order to strengthen democratic process. The nation wants and need coherence, progress and continuity of the system. People want to see mega projects completed, as they have high hopes towards them. Any derailment could create an anagram which we might not be able to disentangle any time soon.
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