China to fund construction of a road in Pakistan through huge grant

ISLAMABAD:

China on Thursday gave a $100 million grant to Pakistan for rehabilitating a road that had been damaged by floods 10 years ago, indicating a shift in Beijing’s policy of only extending loans to its strategic ally.

The $100 million grant was the highest amount given by China in recent years to Pakistan, announced Ministry of Economic Affairs.

A Letter of Exchange for rehabilitation of specific sections of National Highway N-5 project was signed by both sides, according to the ministry.

Minister for Economic Affairs Makhdum Khusro Bakhtyar and Chinese Ambassador to Pakistan Nong Rong witnessed the signing ceremony.

Under this agreement, Government of China will provide grant assistance of RMB 659.8 million or $100 million for rehabilitation of four sections having 66 kilometer length in total of National Highway (N-5) between Hala, district Matiari and Moro, District Naushahro Feroze, in Sindh province. The project will help to improve road infrastructure and augment the north-south connectivity.

Earlier, China had committed to give a grant for New Gwadar International Airport construction that has a total estimated value of $230 million.

The Ministry of Planning documents suggested that China was providing a grant of 1.67 billion yuan for the airport and the share of Chinese grant in total construction cost was 63.3%.

China also agreed to extend debt relief worth $732 million to Pakistan under G-20 debt relief initiative on loans and interest payments maturing between the period May 2020 to June 2021.

In recent years, China has become the single largest bilateral lender to Pakistan due to a gradual shift in Pakistan’s policy from west to east. Chinese authorities have been giving commercial loans, concessional loans and project loans to Pakistan to meet its financing needs.

The National Highway 5 (N5) is an important road that extends from the south part to the north and west border in Pakistan, and carries a large amount of traffic capacity. Unfortunately, this road was seriously damaged by the record flood in 2010.

At the request of the Pakistani government, the Chinese government helped in repairing parts of N5 and N55 sections during 2011 and 2016.

With the joint efforts by the Pakistani and Chinese workers, the rehabilitation work was completed at the end of 2016, and greatly improved the road conditions of the relevant sections.

Considering the importance of the N5 road, the Chinese government agrees to rehabilitate the remaining 66 kilometers of the N5 road with Chinese grant in accordance with the previous bilateral agreement, said the Chinese ambassador.

The ambassador added that the new project of rehabilitation of N5 road was the largest road project funded by Chinese grant in recent years in Pakistan.

The implementation of this project will further increase the traffic capacity, while facilitating people’s travel along the route.

The construction project will also create considerable employment, and promote related building materials and transportation sectors along the route, he added.

The embassy will work closely with EAD and other relevant departments to ensure that the project starts at the earliest. “To be rich, build roads first,” Rong said.

During the meeting between Chinese ambassador and economic affairs minister, Pakistan-China economic relations, CPEC projects and other matters of mutual interest were also discussed.

Pakistan and China have been planning to hold next round of Joint Cooperation Committee of the CPEC. Pakistan proposed January 12 for holding the 10th JCC meeting but the final decision will be taken by Beijing, being host this time.

The minister appreciated the significant work of Joint Working Groups on Socio-economic Development and Transport Infrastructure under the CPEC.

He highlighted that the socioeconomic projects agreed therein were in line with the vision of the PTI government for socio-economic uplift of the common people and enhanced economic activities in the country.

Both the sides also discussed the progress of on-going projects financed by the Government of China The economic affairs minister also appreciated the Chinese assistance for combating coronavirus pandemic and locust attack.