Latest

CPEC opening up new economic horizons

Gwadar_Port.jpg

Sierra Exif JPEG

By Najam ul Hassan

Under the dynamic leadership of former Prime Minister Muhammad Nawaz Sharif, the Pakistan Muslim League (Nawaz) led government worked tirelessly for turning the dream of China Pakistan Economic Corridor (CPEC) into reality. The project is not only leading the country to new heights of economic development but also promoting peace and prosperity in the region.

The CPEC is part of China’s One Belt and One Road Initiatives (OBORI), a mighty  regional trade and diplomatic venture that covers both land and maritime routes linking China to the rest of Asia and Europe.

The CPEC is a 3000-kilometre corridor from Kashgar in Western China to Gwadar in Pakistan on the Arabian Sea. The Chinese funded power plants, infrastructure projects, Special Economic Zones (SEZs) are being built along the CPEC route. The mega project was originally valued $46 billion; however, due to special efforts made by the PML-N led government, a number of new projects were made part of the CPEC in 6th Joint Coordination Committee of China and Pakistan. Thus its value increased to $62 billion.

Under CPEC, the construction of new road and rail networks in all four provinces will help improving connectivity within Pakistan and beyond. Besides huge economic benefits of connectivity, social and regional cohesion will also increase within the country and in the region. After resolving the energy and infrastructure problems, it is estimated that the GDP will increase by more than 2 per cent from its current trend in the next few years.

The government has also prepared a long term plan of CPEC on the basis of seven pillar including connectivity, energy, industries and industrial parks, agricultural development and poverty alleviation, tourism, and cooperation in areas related to people’s livelihood and financial cooperation.

Gwadar:

Gwadar port is the shortest route to sea for most of the Central Asian Countries, Afghanistan, and Russia, especially during the winter season when most of the ports at cold waters are closed. Furthermore, using CPEC route to Gwadar from Kashghar would generate huge economic activity in Pakistan, especially in Balochistan province.

After completion of the required infrastructure at Gwadar sea port, it would also be proved as an ideal destination for transshipment of cargo for a number of other countries. The port’s ideal location and natural deep water is likely to attract big ships to upload their cargo to transfer it to other countries.

According to sources, Qasim and Karachi ports jointly handles roughly 67 million tons of maritime trade, whereas, after 10 years, Gwadar’s trade potential may exceed 60 million tons and in long term (by 2050), the maritime trade through Gwadar port may reach beyond 300 million tons.

The PML-N led government enjoys the credit of transforming CPEC and Gwadar port into a reality and due to untiring efforts of the government machinery, most of the short term projects of the CPEC are under implementation process and some have already completed in record short time period. For example, the 650 kilometer long Quetta-Gwadar road has been completed under CPEC, and its completion has helped reducing the traveling period from 48 hours to only 10 hours besides creating economic activities along the road.

Furthermore, keeping in view the increasing economic as well as social activities in Gwadar city, the government has also planned to construct a state-of-the-art International Airport in the city. The airport would be completed at a cost of $230 million which will be capable of handling a combination of ATR 72, Airbus, (A-300), Boeing (B-737) and Boeing (B-747) for domestic as well international routes.

Likewise, the construction of Gwadar Eastbay Expressway is also included in CPEC, which will link Gwadar Port with the main artery of national highway network and smooth logistic transportation of import, export and transit goods. This 6-lane expressway along with a provision of 30 meters wide railway corridor shall connect the port with the Mekran Coastal Highway (N-20) through the 2300 acres Free Trade Zone of Gwadar Port Minutes for both the above mentioned projects have been signed with China and work on the projects would start soon.

The other projects under CPEC in Gwadar city include construction of breakwaters, dredging of berthing areas and channels, development of free zone, necessary facilities of fresh water treatment, water supply and distribution, Pak-China Friendship Hospital, Technical and Vocational Institute, Gwadar Smart Port City Master Plan, Bao Steel Park, petrochemicals, stainless steel and other industries, development of Gwadar University (Social Sector Development) and up-gradation and development of fishing, boat making and maintenance services to protect and promote livelihoods of local population.

Energy Projects:

When the PML-N took over the charge of federal government, the country was facing acute energy shortage and was witnessing load-shedding of 18 hours a day. Industries were being shifted to other countries; resultantly, the people were losing their jobs.

By realizing that energy serves as oxygen for the modern economy and without resolving energy problems, the country could not get fruitful benefits from CPEC, the government decided to include numerous energy projects in early harvest programme of CPEC to end load-shedding in the country by 2018 as additional 10,000 MW electricity would be added to the national grid by that time.

Due to completion of some CPEC energy projects in the shortest time period, the electricity load shedding has now reduced significantly to even less than 4 hours a day. The CPEC brings $35 billion investment in energy sectors which will help improve the overall structure of transmission and distribution of electricity besides producing thousands of megawatt electricity.

The 1000 MW Quid-e-Azam Solar Park and 1320 MW Sahiwal Coap Power Plant had already been completed under CPEC with a cost of $1.302 billion and $1.6 billion, respectively.

Similarly, the commercial operation of Hydro China dawood 50 MW Wind Farm Gharo, Sachal 50 MW wind farm Jhimpir, and UEP 100 MW wind farm Jhimpir had also been completed under CPEC.

Sources in Planning minister informed that the 1320 MW coal fired Port Qasim Power Plant will achieve its commercial operation by June 2018, whereas, the 660 MW Engro Coal Power Plant would start its commercial operation by early 2019. Another energy projects include CPHGC 1,320 MW Coal-fired power plant, Hub Balochistan, which is likely to be completed by the end of next year and 1320 MW Rahimyar Khan imported fuel power plant which is under its initial stage.

Among hydro power projects of CPEC, Karot Hudro power station with installed capacity of 720 MW is to be completed by 2020 with a cost of $1.42 billion.  Work on 1100 MW Kohala Hydel Project is also underway which is estimated to be completed by 2023 with cost of $2.397 billion, the sources added. Additionally, in order to carry the additional load of electricity, the government has also planned to upgrade the transmission line for power supply. In this regard, two projects, Matiari-Lahore and Matiari to Faisalabad Transmission lines projects with overall capacity to transport 4000 MW electricity are scheduled to be completed by early 2019 with a cost of $3 billion.

It is pertinent to mention here that energy projects under CPEC are not funded by Chinese loans instead they are undertaken in the IPP mode regulated as per NEPRA tariffs. Average cost of these projects is lower than the current cost of production of energy.

Infrastructure:

In order to ensure smooth flow of goods and cargo from Khunjrab to Gwadar port via raod, the government identified three major routes-Western, Eastern and Centeral routes. The shortest of these routes is Western Alignment of the CPEC which has 2,463 km length and starts from Khunjrab, passing through Burhan (Hakla), DI Khan (Yarik), Zhob, Quetta,Surab and Hoshab and terminates at Gwadar.

Its 615 Khunjrab- Raikot section has already been completed, work on 188 km Thakot-Havelian section is ongoing and it is scheduled to be completed by 2020. While Havelian-Abotabad-Manshehra (40 km) section will be completed by May, 2018.

The Central Alignment of the project which has 1633 km length begins from Burhan (Hakla), passes through Pindigheb,Kot Addu,DG Khan,Rajanpur, Wangu Hills, Khuzdar, Basima and Hoshab and terminated at Gwadar.

As far as Eastern Alignment of the CPEC is concerned it has total distance of 2,686 km and it starts from Khunjrab and passes through Thakot, Mansehra, Burhan,
PindiBhatian, Faisalabad, Multan, Sukkur Shikarpur, Ratto Dero,Khuzdar, Basima and Hoshab and terminates at Gwadar.

Work on the 392 kilometer Multan-Sukkur section of Karachi-Peshawar Motorway is in full pace and it is likely to be completed by the end of next year at a cost of $2980 million.

Industry:

One of the most important components of the CPEC framework is industrial cooperation between China and Pakistan. As many as 9 industrial zones have been planned to be built under the CPEC with equal representation from all four provinces, Gilgit Baltistan, FATA and Azad Kashmir.

Due to the increasing cost of doing business in China, the country has decided to relocate its major portion of industries to the neighboring countries where labor wages and other sources of doing business are comparatively low. Pakistan being the key strategic partnership of China, especially after embarking upon the mega project of CPEC, will get major share of Chinese industrial relocation.

These Chinese industries would be relocated in all the 9 SEZs which will create millions of new job opportunities for the people of Pakistan. Moreover, Pakistani industrialists would also be benefited by transfer of technology and innovation in production sector from their Chinese counterparts.

Railway Network:

For ensuring better connectivity and good transportation facilities, the government in collaboration with China has also planned to upgrade the existing railway network from Karachi to Peshawar. Physical work in ML-1 project is likely to start in few months.

According to sources in Pakistan Railways, the initial design of the railways CPEC projects initiated by Chinese experts have been completed which will cost Rs 870 billion.

At least four projects in the first phase will be initiated from Sept-Oct which includes rehabilitation and up-gradation of 339 km Lahore-Multan track, 185 km Nawabshah-Rohri track, and re-alighnment of Kaluwal-Pindora track which will reduce the duration of traveling time between Rawalpindi and Lahore by one hour. The track between Rawalpindi and Lahore will also be taken up at the same time.

Meanwhile, all railway crossings would be abolished by constructing overhead bridges and under passes. Sources said that after completion, the average speed of trains would be doubled from existing 80 km per hour to 160 km per hour. In the long term plan of CPEC, a new 682 kilomter railway track is also scheduled to be laid from Havelian to Khunjrab. This track would not only improve connectivity between the two countries but would also promote tourism in the natural scenic beauties of Gilgti-Baltistan and Khyber Pakhtunkhwa, thus creating huge employment opportunities in the area.

The mega project of CPEC is a win-win situation for all parties and whosoever is interested to be part of this mega project will reap fruits of the project. Pakistan would become economic hub of the region due to its geographical location while connecting the Middle East and the Persian Gulf with Afghanistan, China, Russia, Central Asian States and the Europe.

Share this post

Leave a Reply

Your email address will not be published. Required fields are marked *

Top