ISLAMABAD - China has agreed to finance the western route of the China Pakistan Economic Corridor (CPEC), currently being funded by Pakistan from its own Public Sector Development Plan (PSDP), it was learnt here on Monday.

China has also agreed to fund three Special Economic Zones (SEZs), out of the total nine in the first phase, one each in Punjab, Sindh and Khyber Pakhtunkhwa, while the Karachi Circular Railway (KCR) is likely to be dropped from the CPEC portfolio of projects, official sources told The Nation.

The decision in this regard was made at a preliminary meeting, prior to the commencement of the 7th meeting of the Joint Cooperation Committee (JCC) on the CPEC to be held today. The joint working groups on a long-term plan, industrial cooperation, Gwadar, transport infrastructure, energy, and security, reviewed the progress on ongoing projects and finalise proposals in their respective areas. These proposals would be tabled to the JCC meeting today for a final acceptance and formal approval to make them part of the CPEC framework. The meeting of senior officials was jointly chaired by Planning Commission Secretary Shoaib Siddiqui and his Chinese counterpart.

The official said that it was agreed to table the Railway ML-I project for the JCC approval, while the KCR was likely to be dropped from the CPEC portfolio. The total cost of the ML-1 has been estimated at $8.130 billion and the first phase will start in 2018. It was agreed to fund the western route of the CPEC portfolio projects. Currently, the government is funding the CPEC western route from its own Public Sector Development Plan (PSDP), which if approved, will get funding from the corridor portfolio. It is going to be a good decision as most of the western route is passing through the areas less affected by the recent smog. Majority of areas, from where CPEC eastern route is passing, was affected by smog in recent weeks.

The shortest of all CPEC routes is the western alignment which starts from Burhan (Hakla), DI Khan (Yarik), Zhob, Quetta, Surab and Hoshab and culminates at Gwadar. It was also agreed by the Chinese side to fund three SEZs. The mode of financing for the SEZs has yet to be decided, sources said. It was earlier agreed to fund nine SEZs; however, due to incomplete feasibility studies, it was decided to approve the SEZs which were ready for execution. The SEZs, on which the agreement was reached, include one each in Faisalabad, Dhabeji, Sindh and Rashakai KP. The rest will be approved as soon their feasibility studies were ready, said the sources.

Similarly, it was agreed to forward two wind power plants in Sindh, one coal power plant in Rahim Yar Khan and Kohala hydropower project for the approval of the JCC, the sources said. The Havelian Dry Port and the Karakoram Highway will also be presented to the JCC for their incorporation in the CPEC portfolio, the sources said.

Meanwhile, a press release issued here said that in his inaugural address, the planning secretary said that the pace of work and fast-track execution of the projects was quite satisfactory since most of the ongoing projects were meeting the timelines agreed between the Chinese and Pakistani side. He hoped that keeping in view the progress of projects in the energy, infrastructure sectors and Gawadar, the completion of early harvest projects would be in time and on par with the international standards. He said that Gwadar was the most important element of CPEC which guarantees regional prosperity and the well-being of the natives in particular.

Siddiqui said that the economic corridor was entering the next phase of industrial cooperation which would make Pakistan a manufacturing hub and the epicentre of connectivity in the region. The planning secretary expressed satisfaction over the performance of the joint working groups.

The Board of Investment (BoI), in its press statement, said that at the meeting on industrial cooperation, the Chinese side was led by China International Engineering Consulting Corporation Director Dou Hao and the BoI was led by Secretary Azher Ali Choudhry. Both sides agreed to initiate the first phase of development of SEZs. Representatives of provincial governments, Gilgit-Baltistan and FATA also highlighted their priorities and current status of their SEZs. The Pakistani side also highlighted the importance of skill development for the successful implementation of industrial projects and requested Chinese assistance for the establishment of centres for vocational training in Islamabad and other cities on the CPEC route.

The NAVTTC executive director also proposed the upgradation of the National Training Bureau. Both sides agreed to enhance cooperation in various sectors such as petrochemical, steel, textile, leather processing and machinery etc with specific reference to the relocation of industries from China to SEZs. The Chinese side will motivate their enterprises for setting up their industries in SEZs. Both sides also agreed to have frequent face-to-face interaction preferably on a quarterly basis.