WEB DESK: China Pakistan Economic Corridor (CPEC) was put on the planning and implementation canvas in 2013 when notion of the Silk Road was reformulated and re-phrased by China under “One Road, one Belt initiative”.
The CPEC is the most significant part of this global vision of integrating nations from East to West and South to North. Pakistan is positioned as the key partner of this vision.
The corridor is meant to provide economic advantage to Pakistan, a land route to China from warm waters of the Persian Gulf and integration with nations falling under its influence. Above all, it is of strategic value to the defence institutions of Pakistan and China.
For China, there is an urgency for the completion of the CPEC and so is the case with the military establishment of Pakistan and both are on the same page insofar as this subject is concerned. The first priority of China is to operationalise Gwadar port and build up the road network to China. Supported by the military of Pakistan through security to the Chinese workers and completion of road network by Frontiers Works Organisation (FWO), the Chinese are making good progress and are happy with this partnership.
It is reported that the political leadership is failing to provide the kind of government co-ordination and efficiency that the Chinese government is seeking and the military leadership is demanding. To speed up work and achieve better efficiency, there is a move to set up “CPEC Development Authority” to manage CPEC projects. These projects are currently being handled from the special cell operating from the Prime-Minister’s office with the assistance of Ministry of Planning and Development. Both want CPEC to be isolated from political turmoil and controversies.
The total funding offered by China to Pakistan under the CPEC is $46 billion. Of this, $34.4 billion is allocated to energy sector to add 17,045MW to the national grid whereas $9.8 billion would be made available for transport infrastructure projects and around $0.8 billion for Gwadar Port-related projects.
Around 76 percent of the funding is focused on energy projects. The list of CPEC energy projects bifurcated into two sections: Priority Energy Projects and Actively Promoted Energy Projects.
CPEC Priority Energy Projects include over 7000MW of coal-based power projects costing over $13 billion, Thar Coal Mining and Power project of 1320MW costing $3.3 billion, hydropower projects of 1590MW costing $3.2 billion, 1000MW solar project costing $1.4 billion and wind power generation projects of 250MW costing $0.5 billion and transmission line projects of $3 billion. CPEC Actively Promoted Energy Projects include coal-based power projects of 3,600MW costing over $7 billion, Thar coal power project of 1320MW costing $1.3 billion, wind power of 100MW costing $0.15 billion and hydropower projects of 1100MW costing $2.4 billion.
In total, under pursuit is 10,400MW of priority projects costing $21.5 billion and 6,645MW of promoted projects costing $12.9 billion. To manage 17,000MW of additional capacity on the grid and disbursement of $34.4 billion for the purpose is a very challenging task considering the fact that the existing power installed capacity of Pakistan is 23,000MW built up over 65 years. It requires very high level of professional skills, management based on merit and a transparent financial conduct. Presently, all of this is missing both in the private and public sectors.
There is a lack of good governance in the energy sector, whereas the role of regulators is passive and subservient, to say the least. There is a lack of a strategic approach and planning and there is a serious mismatch between power generation capacity and power evacuation capacity. The wind power generated at Jhampir, Sindh, cannot be evacuated as there is no transmission line to do so. There are many similar examples.
An efficient management of 10,000MW of coal-based power projects requires a large jetty and infrastructure at port and rolling stock for its transportation on rail to power plants. Although, $1.2 billion has been dedicated for jetty and infrastructure support under actively promoted project, no work is reported to have commenced on these areas. This activity should have been placed in the category of Priority Project. The planners were required to start work on it before the work on coal-based power plants. Pakistan Railways is reported to have acquired some rolling stock to manage a few of the coal-based power plant. But this ad hoc solution can help meet the requirements of coal-based power plants. The much-hyped Gaddani Power Park to generate over 6000MW of coal-based power was abandoned as the Chinese lenders withdrew financing due to lack of availability of coal and transportation infrastructure that the government has promised to put in place within two years.
Construction work on 969MW Neelum-Jhelum hydropower plant started in 2008 when Wapda awarded the contract to a Chinese Consortium of contractors. The project suffered unprecedented delays and phenomenal cost over-runs – largely unexplained. The PML-N will gain much by maximising the implementing of projects in its remaining tenure till 2018. Managing the CPEC from a cell in the PM’s House is an unacceptable mode of managing projects of unprecedented volumes under the focus of China and military establishment of Pakistan. The government has to establish an autonomous institution to manage this humongous task requiring transparency and urgency.
(The writer is former President Overseas Investors Chamber of Commerce and Industry (OICCI).)
Source: Business Recorder