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Pakistan's $8.2 Billion Rail Upgrade to Link with China, Russia, Central Asia & Europe
Pakistan government has approved an $ 8.2 billion project to upgrade the 1,872 km Karachi - Peshawar rail track, bridges, tunnels, and culverts, according to International Railway Journal.
The new track will support increased axle load of up to 25 tons, up from 22.8 tons which is now the norm in South Asian countries. The higher axle load capacity will allow heavier freight trains carrying more freight per train for greater trade overland.
China will provide 85% of the financing for the project. It will be done in two phases, with the first due for completion in December 2017 and the second in 2021.
It will be part of an international rail link that will connect Pakistan with China, Russia, Central Asia and Europe. It will extend south from the city of Kashgar in the Xinjiang Uygur autonomous region in Western China to Pakistan's deep-sea Gwadar Port on the Arabian Sea, according to Zhang Chunlin, director of Xinjiang's regional development and reform commission.
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A study for the plans for this international rail link was first presented in 2014 at a two-day International Seminar on the Silk Road Economic Belt in Urumqi, Xinjiang's capital, according to China Daily.
"The 1,800-kilometer China-Pakistan railway is planned to also pass through Pakistan's capital of Islamabad and Karachi," Zhang Chunlin said. "Although the cost of constructing the railway is expected to be high due to the hostile environment and complicated geographic conditions, the study of the (international rail link) project has already started," Zhang said. "China and Pakistan will co-fund the railway construction. Building oil and gas pipelines between Gwadar Port and China is also on the agenda," Zhang added.
The Pak-China link announcement was part of the discussion on China's broader effort to revive the historic Silk Route by building three main corridors through southern, central and northern Xinjiang to connect China with Russia, Europe and Pakistan. The Silk Road Economic Belt International seminar which concluded on Friday in Urumqi, Xinjinag was jointly sponsored by the State Council Information Office, China International Publishing Group (CIPG), China Academy of Social Sciences (CASS) and Xinjiang Academy of Social Sciences.
In a 2013 report, China's State-owned Xinhua News Agency articulated China's motivation to expand land trade in addition to building its navy to protect its sea trade. Here's what it said:
“As a global economic power, China has a tremendous number of economic sea lanes to protect. China is justified to develop its military capabilities to safeguard its sovereignty and protect its vast interests around the world."
The Xinhua report has for the first time shed light on China's growing concerns with US pivot to Asia which could threaten China's international trade and its economic lifeline of energy and other natural resources it needs to sustain and grow its economy. This concern has been further reinforced by the following:
1. Frequent US statements to "check" China's rise. For example, former US Defense Secretary Leon Panetta said in a 2011 address to the Naval Postgraduate School in California: "We try everything we can to cooperate with these rising powers and to work with them, but to make sure at the same time that they do not threaten stability in the world, to be able to project our power, to be able to say to the world that we continue to be a force to be reckoned with." He added that "we continue to confront rising powers in the world - China, India, Brazil, Russia, countries that we need to cooperate with. We need to hopefully work with. But in the end, we also need to make sure do not threaten the stability of the world."
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2. Chinese strategists see a long chain of islands from Japan in the north, all the way down to Australia, all United States allies, all potential controlling chokepoints that could block Chinese sea lanes and cripple its economy, business and industry.
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Karakoram Highway-World's Highest Paved International Road at 15000 ft. |
Chinese Premier's emphasis on "connectivity and maritime sectors" and "China-Pakistan economic corridor project" is mainly driven by their paranoia about the US intentions to "check China's rise" It is intended to establish greater maritime presence at Gwadar, located close to the strategic Strait of Hormuz, and to build land routes (motorways, rail links, pipelines) from the Persian Gulf through Pakistan to Western China. This is China's insurance to continue trade with West Asia and the Middle East in case of hostilities with the United States and its allies in Asia.
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Pakistan's Gawadar Port- located 400 Km from the Strait of Hormuz |
As to the benefits for Pakistanis, expanded trade and the Chinese investment in "connectivity and maritime sectors" and "China-Pakistan economic corridor project" will help build infrastructure, stimulate Pakistan's economy and create millions of badly needed jobs.
Clearly, China-Pakistan ties have now become much more strategic than the US-Pakistan ties, particularly since 2011 because, as American Journalist Mark Mazzetti of New York Times put it, the Obama administration's heavy handed policies "turned Pakistan against the United States". A similar view is offered by a former State Department official Vali Nasr in his book "The Dispensable Nation".
Related Links:
Comparison of Chabahar and Gwadar
How Strategic Are Pak-China Ties?
China-Pakistan Industrial Corridor
US-Pakistan Ties and New Silk Route
Riaz Haq
Exclusive: ADB to back Pakistan rail upgrade as China financing stalls, sources say | Reuters
https://www.reuters.com/sustainability/boards-policy-regulation/adb...
ADB to lead $2 billion railway network upgrade
ADB steps in after decade of Chinese delays
Officials say move will not upset China
Karachi–Rohri upgrade key for Pakistan's copper-gold mine
ISLAMABAD, Aug 22 (Reuters) - The Asian Development Bank will fund upgrades to part of Pakistan's creaking railway system, replacing China, after prolonged delays in securing financing from Beijing threatened to put a strain on a strategic mining project, two sources said on Friday.
An extensive revamp of 1,800 km (1,118 miles) of railways has been the centrepiece of a $60 billion Chinese investment programme in Pakistan announced in 2015 as part of Beijing's Belt and Road Initiative global infrastructure push.
A decade of negotiations, however, have yet to produce a finance package for the rail upgrades - the single biggest project under the programme with China. And Pakistan is, meanwhile, struggling to repay Chinese debtowed for other projects.
The ADB is in advanced talks to lead the financing of a $2 billion upgrade of a 500-km stretch of the railway line from Karachi to Rohri in the country's south that had previously been part of the Chinese project, two sources with direct knowledge of the discussions told Reuters.
The upgrade has become urgent, they said, as it is needed to transport copper ore from the Reko Diq mine currently being developed by Canada's Barrick Mining Corp (ABX.TO), opens new tab.
"We will have a crisis. How will you evacuate output from Reko Diq? The exhausted line will come under even more pressure," one of the sources, a senior government official, said.
There was no immediate comment from Pakistan's railways ministry or China's foreign ministry.
The ADB would not confirm the finance package, which is being reported for the first time by Reuters. But it said Pakistan's government and the regional lender "have regular discussions on railway sector development".
"Any potential ADB assistance would be subject to comprehensive due diligence and consideration under ADB's policies and procedures before any commitment is made," it wrote in a statement to Reuters.
The deal, expected to be announced later this month, would see the ADB lead a consortium to finance the project and bring in an international engineering contractor to carry out the work through a competitive bidding process, the sources said.
The ADB announced $410 million in financing for the Reko Diq mine itself earlier this week. And its president is due to visit Islamabad next week, the sources said.
CHINA AND PAKISTAN: 'IRONCLAD FRIENDS'?
The sources said the plan is diplomatically tricky but has been squared with China.
"We would never do anything to jeopardise that relationship," the senior Pakistani official said.
China rolled out major power and infrastructure projects after the 2015 launch of the investment programme, known locally as the China-Pakistan Economic Corridor. But momentum has stalled, with the last big project - the Gwadar East Bay Expressway - inaugurated in 2022.
Islamabad has fallen behind on payments for electricity generated by Chinese-built power plants. And following a government report looking at the cost of the power stations, Islamabad has for the past year sought to reschedule debt payments for the plants.
"China and Pakistan are ironclad friends and all-weather strategic cooperative partners," China's foreign ministry said on August 19, ahead of a visit by Foreign Minister Wang Yi to Islamabad this week.
In Wang's meeting with Pakistan's Prime Minister Shehbaz Sharif on Thursday, both sides said they sought to deepen ties and move on to the next phase of CPEC.
Aug 25
Riaz Haq
Pakistan, China agree on $7bn ML-1 financing consortium - World - DAWN.COM
https://www.dawn.com/news/1940653
https://youtu.be/Amw9o9rVRgs
ISLAMABAD: The government announced on Monday that Pakistan and China had agreed to form a consortium of bilateral and multilateral partners to finance the $7 billion Mainline-1 (ML-1) railway project, along with a four-year action plan (2025-29) for the second phase of the China-Pakistan Economic Corridor (CPEC).
Speaking at a news conference, Planning and Development Minister Ahsan Iqbal said that during Prime Minister Shehbaz Sharif’s recent visit to China, the two sides had agreed to constitute a consortium of financiers, including the Asian Development Bank (ADB), Asian Infrastructure Investment Bank (AIIB), China and Pakistan, for the 1,700-km Karachi-Peshawar railway line.
He said China had assured financing not only for ML-1 but also for the Karakoram Highway. Negotiations with multiple financiers would be concluded within a month. He added that ML-1 and the Sukkur-Hyderabad Motorway would already have been completed, had it not been for the 2018 political change, alleging that the subsequent PTI government “destroyed the process”.
The minister said Pakistan and China had agreed to develop and implement a four-year action plan to build, between 2025 and 2029, a “China-Pakistan community with a shared future” with stronger political trust, closer trade ties, deeper security cooperation and stronger people-to-people links. Agriculture modernisation and industrial development would be prioritised under CPEC’s second phase, with space for third-party participation.
The next meeting of the Joint Cooperation Council (JCC) of CPEC will be held on Sept 26 in Beijing. Both sides also agreed to advance industrial park development in line with local needs, support enterprise investment in special economic zones (SEZs) — particularly in Karachi and Islamabad — and offer preferential policies and a supportive business environment.
Mr Iqbal said the action plan was a “solid development” of leadership-level meetings aimed at deepening strategic cooperation and advancing the shared vision of an even closer partnership in the new era between two “time-tested, friendly countries.”
The two sides agreed to make full use of the Framework Agreement on Industrial Cooperation to accelerate industrialisation, support exports and encourage Chinese firms to invest in Pakistan, including in the mining sector and building mining industrial parks.
They also agreed to promote cooperation in crop cultivation, animal husbandry, epidemic control for plants and animals, aquaculture, agro-processing, agricultural mechanisation and capacity building in seed technology and drip irrigation.
The plan includes aligning the Belt and Road Initiative (BRI) with Pakistan’s 5Es Framework, implementing both large-scale landmark projects and “small and beautiful” livelihood projects, while ensuring both high-quality development and robust security.
on Thursday
Riaz Haq
Pakistan seeks $2 billion Chinese funding for CPEC
The federal government has finalised the agenda for the upcoming Joint Coordination Committee (JCC) meeting with China, seeking financing of over $2 billion for major infrastructure projects under the China-Pakistan Economic Corridor (CPEC).
https://tribune.com.pk/story/2566723/pakistan-seeks-2-billion-chine...
According to sources, the agenda includes the Karakoram Highway (KKH) Phase II, the Main Line-1 (ML-1) railway project, and the East Bay Expressway.
Pakistan has requested $1.5 billion in financing for KKH Phase II and the East Bay Expressway, while an additional $500 million has been proposed for the Rohri-Multan section of the ML-1 track.
The realignment of KKH Phase II alone is estimated to cost around Rs500 billion, while the 14-kilometre East Bay Expressway is projected to require over Rs30 billion.
Sources added that China will cover 85 per cent of the expenses for both the KKH Phase II and the East Bay Expressway projects.
yesterday