The Asian Development Bank (ADB) has offered to bankroll the $10 billionMainline-I (ML-I) project of the China-Pakistan Economic Corridor (CPEC), amove that may require Beijing’s approval in order to bring on a secondfinancier.
This is the second time the ADB has made the offer for the schemedesignated as strategically important under the CPEC framework.
ADB offered to finance the aforementioned scheme nearly eight years ago,but China declined. The crisis lender has only offered to finance theportion of the ML-I project that has been severely damaged by the recentfloods. Understandably, the terms of financing and scope of the ADB offerhaven’t yet been finalized at this time. Pakistan planned to borrow $8.4billion from China, but negotiations have yet to be completed, andIslamabad will arrange the remaining $1.5 billion.
In rupee terms, the project’s cost has risen to Rs. 2.7 trillion at today’sexchange rate. Pakistan had initially decided to implement the project instages and stagger the $8.4 billion loan accordingly to ensure smoothconstruction while also booking loans as needed. However, authorities haveso far failed to bring the scheme to fruition.
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During Prime Minister Shehbaz Sharif’s visit to China last year, thePakistani side proposed signing a joint memorandum outlining projectmilestones, but nothing was finalized. A 1,733 km-long route will berehabilitated as part of the project, as well as 482 underpasses, 53flyovers, 130 biker bridges, and 130 stations. The ML-I route begins inKarachi and travels through Kotri/Hyderabad, Rohri, Multan, Lahore, andRawalpindi.
The ML-I project was initially green-lit by the Executive Committee of theNational Economic Council (ECNEC) in August 2020 at a cost of $6.8 billion,including a $6 billion Chinese loan. The project, however, was unable toprogress due to a disagreement over loan terms and China’s exceptions tothe cost.
