Officials agree to explore options to use RMB currency for Main Line-I Railway project

ISLAMABAD: Recognising that financing had become bottleneck for execution of CPEC projects, Pakistan and China have taken decision to use RMB financing through signed minutes of Joint Cooperation Committee (JCC) under the ambit of CPEC.

Top official sources confirmed to The News while quoting signed minutes of 9th JCC meeting under China Pakistan Economic Corridor (CPEC) held here in Islamabad on November 5, 2019 disclosed that the two sides recognised that financing had always been a bottleneck for CPEC project execution but there was no mention of anything what kind of difficulties the authorities concerned faced because of using US dollar.

“In order to fundamentally resolve the financing issue, based on the important consensus reached by leaders of the two countries, the two sides agreed to drive RMB financing in CPEC projects,” said the top official.

The Chinese side, the official said, has set up an inter-department working mechanism for RMB financing at the secretariat level. In terms of ML-1, a separate work mechanism for ML-1 is set up under Joint Working Group (JWG) on Transport Infrastructure, responsible for both technical issues and financing coordination.

Both sides will work through their respective inter-department teams to finalise the financing arrangement.

The Joint Cooperation Committee also showed satisfaction with the progress of ML-1 project. The Pakistani side informed that the umbrella PC-1 of the project has been submitted to the Planning Commission and will be approved expeditiously.

It was further added that bidding documents are under process and will be finalised by Dec 15, 2019. “The Pakistani side proposed that the project financing may be considered through Chinese currency RMB,” said the official sources.

The JCC expressed satisfaction with the completion of the review of the Preliminary Design Phase I for ML-1 and agreed to expedite the preliminary design and review of the remaining sub projects. Both sides agreed that the Pakistani side shall complete the project approval process (PC-1), formulate the bidding documents.

In order to facilitate ML-1 financing, Pakistani side has established ML-1 Inter-Departmental Financing Committee. The Chinese side agreed to constitute a high-level financing committee for financing negotiation in the near future. It was also agreed that RMB financing for the project shall be considered, said the official.

Regarding the three mass transit projects in Karachi, Quetta and Peshawar, both sides agreed to move forward based on the readiness of each project. For Karachi Circular Railway project, the Pakistani side will shortly submit the financing request to the Chinese side.

Regarding Quetta Mass Transit and Greater Peshawar Mass Transit, both sides agreed to consider the projects in next JWG meeting after approval of the PC-Is.

Both sides agreed that D I Khan-Zhob highway project will be placed in priority list. The Pakistani side requested Chinese side to consider signing a framework agreement for commencement of this project in 2020 and the Chinese side agreed to have internal consultation and to keep in touch with the Pakistani side on this issue.

Pakistani side proposed to constitute a joint technical working group at G to G level to prepare a proposal for the re-alignment of Thakot-Raikot section of KKH. The Chinese side agreed to consider it in the next JWG meeting.

Both sides agreed to deliberate the projects (i) Gilgit-Shandoor-Chitral (359km), (ii) Mirpur-Muzaffarabad-Mansehra (MMM) (200km) and (iii) Nokundi-Mashkel-Panjgur Road (290km) at the 8th JWG on Transport Infrastructure after approval of the PC-Is.

Both sides were satisfied with the progress of the five-year action plan for Technical Cooperation on Highway (2018-2022) and agreed to convene the annual meeting between the two executive organisations in Pakistan in the first quarter of 2020. The Pakistani side informed that a concept paper explaining all projects in the Action Plan and their financial implications has been drawn up to be submitted to the Chinese Embassy for the formal application for foreign aid of the Chinese government. The application for aid/grant shall be submitted to the Chinese Embassy by the first quarter of 2020 upon approval by related Pakistani authorities.

Both sides agreed to the all-weather opening of KKH at Khunjerab. The Pakistani side informed that it will prepare a proposal for consideration at the next JWG. At the moment, the Khunjerab border is closed for four to six months in the wake of extreme winter season every year.

The JCC agreed that new projects will be considered in the next JWG after approval of the PC-Is including Swat Express Way Phase-II and Peshawar-D I Khan Motorway.