ISLAMABAD   -  Convenor Special Committee on CPEC Senator Sherry Rehman Thursday proposed setting up of separate secretariat and autonomous well-resourced CPEC Authority.

The idea of separate China-Pakistan Economic Corridor (CPEC) secretariat and autonomous well-resourced CPEC Authority was also supported by Federal Minister for Parliamentary Affairs Azam Swati. However, the Federal Minister for Planning, Development and Reforms Khusro Bakhtyar did not comment on this suggestion.

The Special Committee on CPEC that met here with Senator Sherry Rehman in chair was informed by official of the planning ministry that repayment to China on the infrastructure loans will begin in 2021.

The committee discussed all loans and potential indebtedness of Pakistan if CPEC meets its full potential. The Planning Ministry provided details after questions were sent by the chair, and said that they estimate that in full flow $49 billion worth of projects can be realized. Secretary Planning disclosed that Pakistan’s liability was restricted only to the non-private sector projects. At the moment, those projects fell under infrastructure only, and were worth $5.8 billion. Secretary planning said seven schemes including ML-I and six projects of Balochistan were in pipeline. For ML-I, negotiations with China were underway. Gwadar projects were being funded through Chinese grants or interest-free loans, he added. The total cost of KKH Phase-II Thakoat Havelian was $1.3 billion. For the project there was 2 percent interest rate on the government concessional loan with buyer credit 5.2 percent. Similarly for Orange Line Train Project, the interest rate for government concessional loan was 2 percent and buyer credit rate was 5.2 percent.

Senator Kabir Shahi asked that why CPEC projects in Gwadar were still in pipeline. He questioned that why Gwadar was not being considered part of Pakistan. Federal Minister for planning Khusro Bakhtyar said that during previous five years there was no focus on Gwadar and coastal areas. The issue of land acquisition for 300 MW coal power had been resolved. Roads from Hakla to D.I. Khan and Zhob to Quetta were under construction. Similarly, new project worth Rs 7 billion was being initiated in Balochistan, the minister maintained. Senator Usman Kakar said that the biggest problem of Balochistan was provision of water supply.”Just give us dams we don’t need anything else,” he added.  

The secretary planning also disclosed that all energy projects were in IPP financing mode, and therefore not part of the government’s liabilities. Preferential Buyer’s Credit will be utilised for some items, which is a practice where the lender restricts the borrower to using country-specific suppliers, but not in any way different from certain American and Japanese lending practices. It was also disclosed that China had set up an aid agency on the lines of USAID, called CIDCA, and will be providing pure grants, with no repayment, to many of the Gwadar projects as well as to socio-economic component of CPEC, because these were aimed at poverty alleviation and development assistance in key sectors identified by the government of Pakistan.

Senator Sherry Rehman said the Ambassador of China had already explained many of these funding streams to her, and had also said that China had never called in funds it had placed in Pakistan’s treasury to assist its balance of payments. The Chinese government had also been helpful in disclosing all queries made by IMF on Pakistan’s debts in order to assist Islamabad in achieving economic stability.

Deliberating over CPEC’s cocio-economic plan and financing, Senator Rehman strongly objected to the aggregated, non-transparent clutter of information presented by the ministry as a plan. She said, “This inability to coordinate between provinces and lay out their priorities is disturbing. It seems that the planning ministry will barely issue pro-forma letters to provinces seeking their input, and then just put together their own plan as one that the China will approve by July. It is not the Chinese government’s job to build stakeholder consensus on where the grant money will go and to which sector in which province. This input has to come from the federal government where the CPEC is nested. At the moment the power point and information shared by the planning ministry is like a model of Pakistani misgovernance. All the money and goodwill put in by China will just be frittered away in poor allocations and nothing will show on the ground, if this level of consultation with provinces is maintained,” said Rahman.

It was noted that only KP province had so far been consulted, eliciting loud objections from senators from the other three provinces. Senator Kakar objected to this high-handed planning which left out on-ground priorities and grassroots concerns by the federal government.  

Sherry expressed her displeasure over lack of coordination and capacity evident in briefing given by Ministry of Planning, Development and Reforms. She once again suggested that planning function of CPEC from federal government required a separate secretariat and autonomous well-resourced CPEC Authority. Rehman said, “It is crucial for the ministry to set its priorities right. Placing the responsibility of implementation on the Chinese administration is unfair. The China have done their job”.  The convenor of the committee directed the ministry that all information must be disaggregated and must be presented to the committee with timelines in two weeks. It was also decided that the focal persons from provinces should be present as well.

The meeting was attended among others by Senator Dr Sikandar Mandhro, Senator Muhammad Akram, Senator Dr. Ghous Muhammad Niazi, Senator Dr. Asad Ashraf, Senator Muhammad Usman Khan Kakar, Seantor Muhammad Azam Khan Swati, Senator Mir Kabir Ahmed Muhammad Shahi, Senator Maulana Ataur Rehman and senior officers from the Ministry of Planning, Development and Reforms along with all concerned.