Government to Hold Talks with China over Inclusion of Mega Projects in CPEC

ISLAMABAD: Amid a perceived slowdown on China-Pakistan Economic Corridor (CPEC), the federal Minister for Planning, Development and Reforms Makhdum Khusro Bakhtyar on Sunday said Pakistan would engage China at the highest level for talks on several big projects in the fields of hydropower, oil refinery and steel mills.

Speaking at a press conference a day before Prime Minister Imran Khan’s three-day visit to Beijing, Mr Bakhtyar said Pakistan would start formal negotiations on additional projects, including a major overland LNG terminal, 7,000-megawatt Bunji hydropower project, Pakistan Steel Mills, oil refineries as well as joint ventures in businesses and science and technology, for agreements.

“All the existing projects under the CPEC portfolio have been streamlined and there is no slowdown anywhere,” the minister said in his opening statement.

Imran leaves for Beijing today on three-day visit

“In particular, about 4,300MW of energy projects are currently under construction and additional 2,500MW projects are in the planning phase,” he said, apparently in reference to recent reports that the $52bn bilateral arrangement had slowed down after Islamabad’s renewed engagements with the United States and the International Monetary Fund.

The minister said: “There will be meaningful engagement on all aspects of Pakistan-China relations during the visit”, expressing the hope that it would take CPEC cooperation to new heights so that benefits from Pakistan’s economic progress could reach the people at the earliest.

The Gwadar Master Plan had already been finalised, he said, adding that as matters pertaining to Gwadar Free Trade Zone had also been addressed, 19 Chinese companies were ready to move in with their investments in Gwadar. Likewise, a 300MW power project had been approved for the coastal city for which grid connectivity was being provided, he added.

The minister said that Prime Minister Imran Khan, during his meetings with the president and the prime minister of China, would take up a number of projects, while technical discussions would follow later this month at joint working group level and then during the Joint Coordination Committee (JCC) meeting in November.

In the first phase, he said, Pakistan was offering to China 7,000MW Bunji hydropower project, which would be followed by other projects on the Indus cascade. Also, he added, the government would offer the steel sector to China for bilateral cooperation in an effort to reduce about $2bn current imports on account of scrap and steel products. The cooperation in this field would help the country enhance Pakistan Steel Mills capacity to three million tonnes, he said, explaining that Pakistan’s steel requirement was currently nine million tonnes and was estimated to increase to 12m tonnes within a few years as economy starts to grow. At present, the country’s total steel production stood at 4.5m tonnes.

He added that Pakistan would also request China to help increase the capacity of its oil refineries to reduce the current oil import bill of $14bn a year by $1.5bn.

An official said the Karachi-based Pakistan Refinery Limited (PRL) and PSM were being proposed to China for a government-to-government agreement after going through the procurement rules. He said Pakistan was also proposing LNG overland terminal to increase regasification capacity by one billion cubic feet a day.

Mr Bakhtyar said the Main Line (ML-1) of Railways from Karachi to Lahore had been in the cold storage for the past five years, but the government decided to “start formal engagements for negotiations” on the project despite challenges of external debt and current account deficit. However, he parried questions if controversies within the government over $8.5bn pricing review had been settled.

Similarly, the minister said, Pakistan was also proposing about $200 million worth of new projects in the agriculture sector for business-to-business agreements on fisheries and shrimps in the coastal areas to be followed up at the JWG and JCC discussions for business cooperation in livestock sector.

He said Pakistan was focusing on making special economic zones operational to benefit from China’s industrial relocation that would also be done through joint ventures between the businesses of the two countries.

The minister said the government was trying to take maximum advantage of the Chinese cutting edge technology and thus proposed a few new areas in science and technology sector for cooperation. He agreed that the inauguration of industrial zones had been delayed, but said the Faisalabad industrial zone would be inaugurated by December. A major company would establish its factory there, he added.

The minister announced that the CPEC Authority would be made operational immediately as it had been approved by the cabinet. Besides, he said, several agreements would be signed within two to three weeks to launch the Rashakai zone.

He said the soft opening of Multan-Sukkur Motorway had been done, but its formal inauguration was being arranged on the sidelines of JCC meeting in November when the Chinese vice president would be visiting Pakistan.