Long-term CPEC to cost a whopping $300b

by Fawad Yousafzai in The Nation,May 25, 2017
ISLAMABAD – The CPEC long-term plan will cost hundreds of billions of dollars, much more than the $60 billion dollar estimated for the ongoing short-term plan.

The China-Pakistan Economic Corridor (CPEC) project has been divided into three phases: short-term plan to be completed by 2020, mid-term plan to be completed by 2025 and long-term plan to be completed by 2030.

“As per our estimates, the execution of mid-term and long-term plans will increase the cost of the CPEC above $300 billion,” an informed source told The Nation.

The long-term plan has seven pillars and it is not about a particular project; rather, it identifies the broader areas for the cooperation between China and Pakistan till 2030.

The latest version of the long-term plan, detailed out on just 32 pages, has been forwarded to the Chinese and hopefully they will sign it soon, the source said. The old version of around 67 pages prepared in 2015 has already been redundant, the source added.

According the latest version of CPEC’s long-term plan available with The Nation, the seven pillars are: connectivity, energy, industries & industrial parks, agricultural development and poverty alleviation, tourism, cooperation in the areas concerning people’s livelihood and financial cooperation have been identified for future cooperation.

The connectivity pillar includes the construction of an integrated transport system and information network infrastructure. In the construction of an integrated transport system, it has been planned to construct and develop Kashgar-Islamabad, Peshawar-Islamabad-Karachi, Sukkur-Gwadar Port and Dera Ismail Khan and Quetta-Sohrab Road infrastructure to enhance road safety and service levels. Capacity expansion of existing railway lines and construction of new projects, promoting the modernisation of the railway is also part of the integrated transport plan.

It has been proposed to build a consolidated distribution transport system, continuously improve the infrastructure of the port and accelerate the construction of East Bay Expressway and the new international airport.

In information network infrastructure, it has been proposed that China and Pakistan will boost information connectivity and promote pragmatic cooperation through construction and operation of local communication networks and broadcast and TV networks, besides strengthening information and communication industries in both countries and synchronous construction of information, road and railway infrastructures.

In the energy-related fields, it is suggested that China and Pakistan will strengthen cooperation in the sectors of oil and gas, electricity and power grids. It is proposed to promote the cooperation in the development of oil and gas resources and conduct preliminary research on China-Pakistan oil and gas pipeline projects. The options of establishing oil refineries & storages at Gwadar and along CPEC route will also be considered. It also includes actively promoting river planning and preparatory work of major projects to accelerate the hydropower development process, develop wind and solar energy based on local conditions, and establish diversified energy supply channels.

It is proposed that China will help Pakistan to promote the quality and efficiency improvement of the textile and clothing industry, expand the size of the textile industry, increase the supply of high value-added products, promote the Kashgar Economic and Technological Development Zone, and Caohu Industrial Park to adopt the means like export processing to establish a regional cooperation and development model based on complementary advantages and mutual benefits.

It was also proposed to promote the industrial capacity cooperation in sectors such as chemicals, engineering, agro, iron & steel and construction materials.

In agricultural development and poverty alleviation, it is proposed in the plan that China and Pakistan will give full play to their own comparative advantages to strengthen agricultural infrastructure construction within the CPEC coverage and play their own roles in agricultural personnel training, technical exchanges and cooperation. They will cooperate in key construction areas such as biological breeding, production, processing, storage and transportation, infrastructure construction, disease prevention and control, water resources development and utilisation, land development and remediation, ICT-enabled agriculture and marketing of agricultural products to promote the systematic, large-scale, standardised and intensified construction of the agricultural industry. They will promote the transition from traditional agriculture to modern agriculture in the regions along the CPEC to effectively boost the development of local agricultural economy and help local people get rid of poverty.

As regards tourism, it is proposed that China and Pakistan will further exploit the potential advantages of the tourism resources in the regions along the CPEC, especially the China-Pakistan border areas. They will actively promote comprehensive development of coastal tourism as well as northern Pakistan tourism, expand cross-border tourism and improve the quality of tourism services to effectively promote the socio-economic development of the two countries, help the residents along the coastal tourism belt end poverty and promote marine development. The plan will help exploit the potential advantages of the tourism resources in the regions along the China-Pakistan Economic Corridor, especially the China-Pakistan border areas, promote the development and construction of cross-border tourism routes along the railways and highways.

As regards the areas concerning people’s livelihood and non-governmental exchanges, it is proposed that China and Pakistan will expand cooperation and enhance comprehensive service capability of the cities along the CPEC. For this purpose, international and China’s new urbanisation concepts will be applied to the municipal construction of the node cities along the CPEC such as the construction of the public transport system and water supply and drainage systems.

The scale of training programmes will be expanded in China for Pakistani government officials, outstanding Pakistani students will be selected from regions along the CPEC for higher studies in the universities in Xinjiang and cultural exchanges will be made to increase basic education facilities by implementing assistance projects for basic education within the CPEC coverage.

In financial cooperation, it is decided that the two countries will explore the establishment of multi-level cooperation mechanisms and strengthen policy coordination. They will also strengthen their own financial reforms and opening up, innovate in their own financial products and financial services, and control financial risks to create a good financial environment for the CPEC building.

The two countries will continue to sign currency swap agreements, expand the amount of currency swap under the agreements and enrich the scope of the foreign currency from currency swap, assign the foreign currency to domestic banks through credit-based bids to support the financing for projects along the CPEC; establish a bilateral payment and settlement system to reduce the demand for third-party currency, explore the establishment of a bilateral foreign exchange reserve pool to form an effective mechanism for stabilising the exchange rate, strengthen the cooperation between the central banks and financial regulatory agencies of the two countries and promote the establishment of a settlement platform for RMB cross-border trade and investment and a monitoring and early warning platform for cross-border cash flow.

The two countries will promote the opening and development of the securities markets, support the multi-currency direct financing of Pakistan’s central and local governments, enterprises and financial institutions in China, strengthen the cooperation between stock exchanges of the two countries and support the two countries’ enterprises and financial institutions in carrying out direct financing for projects along the CPEC in each other’s capital markets.

that the two countries will explore the establishment of multi-level cooperation mechanisms and strengthen policy coordination. They will also strengthen their own financial reforms and opening up, innovate in their own financial products and financial services, and control financial risks to create a good financial environment for the CPEC building.