Pakistan seek $8 billion from China on defence loans terms

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Pakistan seek $8 billion from China on defence loans terms

ISLAMABAD - Pakistan seek $8 billion from China on defence loans terms for the strategic ML 1 project of the Pakistan Railways.

Pakistan wants China to take the $8.2 billion Pakistan Railways’ (PR) Main Line project (ML-1), which is declared a strategic project under the China-Pakistan Economic Corridor (CPEC), on the same loan terms as defense and other military-related projects.

This was revealed by Secretary Railways Sikandar Sultan Raja while briefing the Senate Standing Committee on Railways, with Muhammad Asad Ali Khan Junejo in the chair.

The secretary also revealed that the Sindh government is willing to take the $2.6 billion Karachi Circular Railway (KCR) project with Japan International Cooperation Agency (JICA) again, which is offering a loan at favorable terms compared to China.

PR’s director general (DG) (Planning) informed the committee that the project will consist of ML-1 upgrade and establishment of a dry port as short term goals, establishing new rail link from Gwadar to Mastung and Besima to Jacobabad for mid-term goals and establishing new rail link from Havelian to Khunjrab (China border) as the long term goal – with an estimated cost of $8.2 billion in three packages over five years.

He said the first package would cost $2.248 billion while the cost of the second and third packages would be cleared after completion of preliminary design. The PC-1 or Package-1 is based on cost estimates validated by third-party review consultants.

The committee expressed serious concern over the $8.2 billion costs due to the rupee depreciating against the dollar, saying the country would pay a much higher price. The committee was informed that out of the $8.2 billion, a major chunk would be spent on imports where PR would pay around 33 percent duty/taxes on imports.