ChinaPakistan Economic Corridor

The ChinaPakistan Economic Corridor (Chinese:

- ; Urdu:

-
; also known as CPEC) is an economic corridor
comprising a collection of projects currently under construction at a cost of $51 billion.* [1] CPEC aims to facilitate trade along an overland route that connects Kashgar
and Gwadar, through the construction of a network of
highways, railways, and pipelines.* [2]* [3]

Over $33 billion worth of energy infrastructure are to be

constructed by private consortia to help alleviate Pakistan's chronic energy shortages,* [19] which regularly
amount to over 4,500MW,* [20] and have shed an estimated 22.5% o Pakistan's annual gross domestic product.* [21] Over 10,400MW of energy generating capacity is to be developed between 2018 and 2020 as part of
the corridor's fast-tracked Early Harvest projects in
The corridor is intended to rapidly expand and upgrade conjunction with four projects* under construction prior to
Pakistani infrastructure, as well as deepen and broaden the announcement of CPEC. [22] Electricity from these
economic links between Pakistan and the People's Re- projects will primarily be generated by coal, though wind
public of China.* [4] It is considered to be an extension projects are included under CPEC, as is the construction
*
of China's ambitious One Belt, One Road initiative,* [5] of one of the world's largest solar energy plants. [23]
and the importance of CPEC to China is reected by its On 13 November 2016 the rst trade activity took place
inclusion as part of China's 13th ve-year development through CPEC. Cargo from China was trucked down
plan.* [6]* [7]
via the corridor and loaded on to ships at Gwadar port,
*
Pakistani ocials predict that the project will result headed to markets in West Asia and Africa. [24] In
in the creation of upwards of 700,000 direct jobs be- November 2016, China announced an additional $8.5 biltween 20152030, and add 2 to 2.5 percentage points to lion investment in Pakistan with $4.5 billion allocated to
the country's annual economic growth.* [8] Were all the upgrade Pakistan's main railway line from Karachi to Peplanned projects to be implemented, the value of those shawar including tracks, speed and signalling. And $4
billion toward an LNG terminal and transmission lines to
projects would be equal to all foreign direct investment in
taking the total level of
*
Pakistan since 1970, [9] and would be equivalent to 17% help alleviate energy shortages,
investment to $55 billion.* [25]
*
of Pakistan's 2015 gross domestic product. [10]
Infrastructure projects under the aegis of CPEC will China stands to gain an alternative route for trade rather
span the length and breadth of Pakistan, and will even- than the South China sea, with shorter distance saving
tually link the city of Gwadar in southwestern Pakistan transport costs (distance will be reduced by 9000 km) and
to China's northwestern autonomous region of Xinjiang less uncertainty and risk (Pakistan is allied with China)
via a vast network of highways and railways.* [11] Pro- whereas in South-east Asia China is in dispute with its
posed infrastructure projects are worth approximately neighbours. Pakistan stands to gain due to upgrade of
$11 billion, and will be nanced by heavily-subsidized infrastructure on the Lahore-Karachi railway helping to
concessionary loans* [12] that will be dispersed to the make exports more competitive in terms of travel time
Government of Pakistan by the Exim Bank of China, and transport costs and the development of the PakChina Development Bank, and the Industrial and Com- istan's road, air and port infrastructure to transport goods
mercial Bank of China.* [13] As part of the broad pack- and will remove the energy shortages which will lead
age of infrastructure projects under CPEC, a 1,100 kilo- to complete industrialistion of Pakistan's economy from
around 8000
metre long motorway will be constructed between the the current semi-industrialised economy,
*
*
Megawatts
of
energy
will
be
generated.
[26]
[27]
*
cities of Karachi and Lahore, [14] while the Karakoram
Highway between Rawalpindi and the Chinese border
will be completely reconstructed and overhauled.* [9] The
KarachiPeshawar main railway line will also be upgraded to allow for train travel at up to 160 kilometres
per hour by December 2019.* [15]* [16] Pakistan's railway network will also be extended to eventually connect
to China's Southern Xinjiang Railway in Kashgar.* [17]
A network of pipelines to transport liqueed natural gas
and oil will also be laid as part of the project, including a
$2.5 billion pipeline between Gwadar and Nawabshah to
eventually transport gas from Iran.* [18]

Pakistan Navy and Chinese Navy ships are to jointly

guard the safety and security of the trade corridor, as Pakistan seeks to expand the role of its maritime forces.* [28]

1 History
Plans for a corridor stretching from the Chinese border
to Pakistan's deep water ports on the Arabian Sea date
back to the 1950s, and motivated construction of the
1

PROJECTS IN GWADAR PORT AND CITY

Karakoram Highway beginning in 1959.* [29] Chinese interest in Pakistan's deep-water harbour at Gwadar had
been rekindled by 1998 and in 2002 China began construction at Gwadar port which was completed in 2006.
Expansion of Gwadar Port then ceased thereafter owing to political instability in Pakistan following the fall
of General Pervez Musharraf and subsequent conict between the Pakistani state and Baloch militants.* [30]

Government of Pakistan for construction of roadways

that are complementary to CPEC.* [43]* [44] In November 2015, China included the CPEC into its 13th veyear development plan,* [45] while in December 2015,
China and Pakistan agreed on a further $1.5 billion investment to set up an information and technology park
as part of the CPEC project.* [46] On 8 April 2016, during the visit of Xinjiang's Communist Party chief Zhang
Chunxian companies from Xinjiang with their Pakistan
The current form of the project was rst proposed by
*
General Pervez Musharraf, [31] however it was post- counterparts signed $2 billion of additional agreements
covering infrastructure, solar power and logistics.* [47]
poned owing to the political instability in the country that
followed Musharraf's step down. The subsequent gov- The rst convoy under CPEC came from China, carryernment of the Pakistan Peoples Party proposed it again ing almost 250 containers meant for export to ports in
when President Asif Ali Zardari invited heads of all the Bangladesh, Sri Lanka, the UAE and the EU arrived in
political parties to a Luncheon in honour of the Chi- Gwadar on November 13, 2016.* [48] On December 2,
nese Premier Li Keqiang at the Aiwan-e-Sadr on 22 May 2016, the rst cargo train, launching the direct rail route
2013.* [32] Chinese Premier Li Keqiang and the Pak- and sea freight service between China and Pakistan, deistani President Asif Ali Zardari have agreed to build an parted from Yunnan. A cargo train loaded with 500
economic corridor between the two countries. Both sides tonnes of commodities left Kunming for the port city of
have decided to further enhance mutual connectivity and Guangzhou from where the cargo will be loaded on ships
both sides are connected to develop the long term plan for and transported to Karachi, marking the opening of the
a China-Pakistan economic corridor.* [32]
new route.* [49] The new rail, sea freight will cut logistics
*
In February 2014, Pakistani President Mamnoon Hus- cost, including that of transport, by 50 per cent. [50]
sain visited China to discuss the plans for an economic
corridor in Pakistan.* [33] Two months later, Pakistan
Prime Minister Nawaz Sharif met with Premier Li Kequiang in China to discuss further plans,* [34] resulting in
the full scope of the project to be devised under Sharif's
tenure.* [35] In November 2014, Chinese government announced its intention to nance Chinese companies as
part of its $45.6 billion energy and infrastructure projects
in Pakistan as part of CPEC.
During the state visit of Xi Jinping to Pakistan in April
2015, he wrote in an open editorial stating: This will
be my rst trip to Pakistan, but I feel as if I am going to
visit the home of my own brother.On 20 April 2015,
Pakistan and China signed an agreement to commence
work on the $46 billion agreement, which is roughly 20%
of Pakistan's annual GDP,* [36] with approximately $28
billion worth of fast-tracked Early Harvestprojects
to be developed by the end of 2018.* [37] As a gesture
of friendship, the Pakistani capital at that time was dotted with slogans and signboards such asPakistan-China
friendship is higher than the mountains, deeper than the
oceans, sweeter than honey, and stronger than steel* [38]
an oft repeated phrase coined by the Chinese to describe
their deep ties to Pakistan.

2 Projects in Gwadar Port and City

Gwadar Port has been fully operational since 2007.

Gwadar forms the crux of the CPEC project, as it is envisaged to be the link between China's ambitious One
Belt, One Road project, and its Maritime Silk Road
project.* [51] In total, more than $1 billion worth of
On 12 August 2015 in the city of Karamay, China and projects are to be developed around the port of Gwadar
Pakistan signed 20 more agreements worth $1.6 billion by December 2017.
to further augment the scale and scope of CPEC.* [39]
Details of the plan are opaque,* [40] but are said to mainly
2.1 Gwadar Port Complex
focus on increasing energy generation capacity.* [41] As
part of the agreement, Pakistan and China have agreed to
Main article: Gwadar Port
co-operate in the eld of space research.* [42]
In September and October 2015, the government of the
Initial infrastructure works at Gwadar Port commenced
United Kingdom announced two separate grants to the
in 2002 and were completed in 2007,* [30] however

3
plans to upgrade and expand Gwadar's port stalled. Under CPEC agreement, Gwadar Port will initially be expanded and upgraded to allow for docking of larger ships
with deadweight tonnage of up to 70,000.* [52] Improvement plans also include construction of a $130 million
breakwater around the port,* [53] as well as the construction of a oating liqueed natural gas facility that
will have a capacity of 500 million cubic feet of liquied natural gas per day and will be connected to the
Gwadar-Nawabshah segment of the IranPakistan gas
pipeline.* [54]

Gwadar Port to the Makran Coastal Highway.* [66] These

additional projects are estimated to cost $800 million, and
are to be nanced by 0% interest loans extended by the
Exim Bank of China to Pakistan.* [65]

In addition to the aforementioned infrastructure works,

the Pakistani government announced in September
2015 its intention to establish a training institute
named Pak-China Technical and Vocational Institute at
Gwadar,* [30] which is to be developed by the Gwadar
Port Authority.* [67] The institute is to be completed by
March 2016 at the cost of 943 million rupees,* [30] and
The expanded port is located near a 2,282 acre free trade is designed to impart to local residents the skills required
area in Gwadar which is being modelled on the lines of to operate and work at the expanded Gwadar Port.* [30]
the Special Economic Zones of China.* [55] The swathe
of land was handed to the China Overseas Port Holding Company in November 2015 as part of a 43-year 3 Roadway projects
lease.* [56] The site will include manufacturing zones, logistics hubs, warehouses, and display centres.* [57] Businesses located in the zone would be exempt from customs authorities as well as many provincial and federal taxes.* [58] Business established in the special economic zone will be exempt from Pakistani income, sales,
and federal excise taxes for 23 years.* [59] Contractors
and subcontractors associated with China Overseas Port
Holding Company will be exempted from such taxes for
20 years,* [60] while a 40-year tax holiday will be granted
for imports of equipment, materials, plant/machinery,
appliances and accessories that are to be for construction
of Gwadar Port and special economic zone.* [61]
The special economic zone will be completed in three
phases. By 2025, it is envisaged that manufacturing
and processing industries will be developed, while further expansion of the zone is intended to be complete by
2030.* [30] On 10 April 2016, Zhang Baozhong, chairman of China Overseas Port Holding Company said in a
conversation with The Washington Post that his company
planned to spend $4.5 billion on roads, power, hotels and
other infrastructure for the industrial zone as well as other
projects in Gwadar city.* [8]

2.2

Projects in Gwadar city

China will grant Pakistan $230 million to construct a new

international airport in Gwadar which is to be operational
by December 2017.* [62] The provincial government of
Balochistan has set aside 4000 acres for the construction
of the new $230 million Gwadar International Airport
which will require an estimated 30 months for construction,* [63] the costs of which are to be fully funded by
grants from the Chinese government which Pakistan will
not be obliged to repay.* [64]

A map of the CPEC roadway network.

The CPEC project envisages major upgrades and overhauls to Pakistan's transportation infrastructure. Under
the CPEC project, China has announced nancing for
$10.63 billion worth of transportation infrastructure so
far; $6.1 billion have been allocated for constructing
Early Harvestroadway projects at an interest rate of 1.6
percent.* [68] The remainder of funds will be allocated
when the Pakistani government awards contracts for construction of road segments which are still in the planning
phase.
Three corridors have been identied for cargo transport: the Eastern Alignment though the heavily populated provinces of Sindh and Punjab where most industries are located, the Western Alignment through the
less developed and more sparsely populated provinces
of Khyber Pakhtunkhwa and Balochistan, and the future Central Alignment which will pass through Khyber
Pakhtunkhwa, Punjab, and Balochistan.* [69]

The city of Gwadar is further being developed by the construction of a 300MW coal power plant, a desalinisation 3.1 Karakoram Highway reconstruction
plant, and a new 300 bed hospital.* [65] Plans for Gwadar
city also include construction of the East Bay Expressway Main article: Reconstruction of the Karakoram Highway
a 19 kilometre controlled-access road that will connect

3 ROADWAY PROJECTS
tions of the N-35 around these projects will be completely
rebuilt in tandem with dam construction.* [77] In the interim, this section of the N-35 is currently being upgraded
from its current state until dam construction commences
in full force at a later date. Improvement projects on this
section are expected to be completed by January 2017 at
a cost of approximately $72 million.* [78]* [79] The next
335 kilometres of roadway connect Raikot to the ChinaPakistan border. Reconstruction works on this section
of roadway preceded the CPEC, and were initiated after severe damage to roadways in the area following the
2010 Pakistan oods. Most of this section of roadway
was completed in September 2012 at a cost of $510 million.* [80]

Highlighted in red is the route of National Highway 35, which

is to be completely rebuilt and upgraded under the CPEC agreement. Highlighted in blue is the 175 kilometre road between Gilgit
and Skardu which is to be upgraded to a 4-lane highway.

The CPEC projects call for reconstruction and upgrade

works on National Highway 35 (N-35), which forms the
Pakistani portion of the Karakoram Highway (KKH).
The KKH spans the 887 kilometre long distance between
the China-Pakistan border and the town of Burhan, near
Hasan Abdal. At Burhan, the existing M1 motorway
will intersect the N-35 at the Shah Maqsood Interchange.
From there, access onwards to Islamabad and Lahore
continues as part of the existing M1 and M2 motorways.
Burhan will also be at intersection of the Eastern Alignment, and Western Alignment.
Upgrades to the 487 kilometer long section between
Burhan and Raikot of the Karakoram Highway are ofcially referred to in Pakistan as the Karakoram Highway Phase 2 project. At the southern end of the
N-35, works are already underway to construct a 59kilometer-long, 4-lane controlled-access highway between Burhan and Havelian which upon completion will
be ocially referred to as the E-35 expressway.* [70]
North of Havelian, the next 66 kilometres of road will be
upgraded to a 4-lane dual carriageway between Havelian
and Shinkiari,* [71] Groundbreaking on this portion commenced in April 2016.* [72]

A large earthquake rocked the region nearest to the

China-Pakistan border in 2010, triggering massive landslides which dammed the Indus River, resulting in the formation of the Attabad Lake. Portions of the Karakoram
Highway were submerged in the lake, forcing all vehicular trac onto barges to traverse the new reservoir. Construction on a 24 kilometre series of bridges and tunnels
to Attabad Lake began in 2012 and required 36 months
for completion. The bypass consists of 2 large bridges and
5 kilometres worth of tunnels that were inaugurated for
public use on 14 September 2015 at a cost of $275 million.* [81]* [82] The 175 kilometre road between Gilgit
and Skardu will be upgraded to a 4-lane road at a cost of
$475 million to provide direct access to Skardu from the
N-35.* [83]* [84]

3.2 Eastern Alignment

Main article: M5 motorway (Pakistan)
Main article: M-9 Super Highway

The term Eastern Alignment of CPEC refers to roadway

projects located in Sindh and Punjab provinces - some
of which were rst envisioned in 1991.* [85] As part of
the Eastern Alignment, a 1,152 km long motorway will
connect Pakistan's two largest cities, Karachi and Lahore
with 4 to 6-lane controlled access highway designed for
travel speeds up to 120 kilometres per hour.* [86] The
The entire 354 kilometres of roadway north of Shinkiari entire project will cost approximately $6.6 billion, with
to be distributed by various Chinese
and ending in Raikot, near Chilas will be constructed as the bulk of nancing
*
[87]
state-owned
banks.
*
a 2-lane highway. [73] Construction on the rst section
between Shinkiari and Thakot commenced in April 2016 The entire Eastern Alignment motorway project is dijointly with construction of the Havelian to Shinkiari 4- vided into four sections: a 136 kilometre long section
lane dual carriageway further south.* [74] Construction on between Karachi and Hyderabad also known as the M9
both these sections is expected to be completed with 42 motorway, a 296 kilometre long section between Hydermonths at a cost of approximately $1.26 billion with 90% abad and Sukkur, a 387 kilometre long section between
of funding to come from China's EXIM bank in the form Sukkur and Multan, and a 333 kilometre section between
Multan and Lahore via the town of Abdul Hakeem.* [88]
of low interest rate concessional loans.* [74]* [75]* [76]
Between Thakot and Raikot spans an area in which the
government of Pakistan is currently either planning or
actively constructing several hydropower projects, most
notably the Diamer-Bhasha Dam and Dasu Dam. Sec-

The rst section of the project will provide high speed

road access from the Port of Karachi to the city of Hyderabad and interior Sindh. Upgrade and construction
works on this section currently known as Super Highway

3.3

Western Alignment

between Karachi and Hyderabad began in March 2015,

and will convert the road into the 4-lane controlled access
M9 Motorway which will be completed in an estimated
30 months.* [89]
At the terminus of the M9 motorway in Hyderabad,
the Karachi-Lahore Motorway will continue onwards
to Sukkur as a six lane controlled-access motorway
known also as M6 motorway that will be 296 kilometers long,* [90] The planned cost for this project is $1.7
billion,* [91] and will provide high speed road access to
interior Sindh especially near the towns of Matiari,
Nawabshah, and Khairpur. The project will require the
construction of seven interchanges, and 25 bridges on the
Indus river and irrigation canals.* [90] The planned route
of the motorway runs roughly parallel to the existing National Highway and Indus Highway at various portions.
In July 2016, the Pakistani government announced that
the project would be open to international bidders on a The Western Alignment of CPEC is depicted by the red line. The
build-operate-transfer basis, with Chinese and South Ko- 1,153 kilometer route will link the Brahma Bahtar Interchange
rean companies expressing interest in the project.* [92]
of the M1 Motorway with the city of Gwadar in Balochistan
The 392 kilometre Sukkur to Multan section of the
motorway is estimated to cost $2.89 billion,* [86] with
construction works inaugurated on this section of roadway on May 6, 2016.* [93] The road will be a six lane
wide controlled access highway,* [94] with 11 planned interchanges, 10 rest facilities, 492 underpasses, and 54
bridges along its route.* [93] The Pakistani government
in January 2016 awarded the contact to build this section to China State Construction Engineering,* [86] but
nal approvals required for disbursement of funds were
not granted by the Government of the People's Republic
of China until May 2016.* [76]* [86] 90% of the project's
cost is to be nanced by concessionary loans from China,
with the remaining 10% to be nanced by the government of Pakistan.* [95] Construction on this segment is
expected to last 36 months.* [86]
Construction of the portion between Multan and Lahore
costing approximately $1.5 billion* [96] was launched in
November 2015* [97] as a joint venture between the
China Railway Construction Corporation Limited and
Pakistan's Zahir Khan and Brothers Engineers* [98] The
total length of this motorway section is 333 kilometres;
however, the rst 102 kilometres of the road between
Khanewal and Abdul Hakeem is designed as part of the
M4 Motorway, and is being funded by the Asian Development Bank.* [99]* [100] The portion of motorway between Abdul Hakeem and Lahore that is under construction as part of CPEC will consist of the remaining 231
kilometers.* [101]

3.3

Western Alignment

Main article: Western Alignment

Main article: Brahma Bahtar-Yarik Motorway

province. The portion depicted by the orange line between

Basima and Shahdadkot is sometimes regarded as part of the
Western Alignment.

road network in the Pakistani provinces of Balochistan,

Khyber Pakhtunkhwa, and western Punjab Province as
part of the Western Alignment. The Western Alignment
project will result in the upgrading of several hundred
kilometres worth of road into 2 and 4-lane divided highways by mid-2018, with land acquisition sucient for upgrading parts of the road to a 6-lane motorway in the
future.* [102] In total, the CPEC project envisages reconstruction of 870 kilometres of road in Balochistan
province alone as part of the Western Alignment. Of
those 870 kilometres of road, 620 kilometres have already been rebuilt as of January 2016.* [103]
The Western Alignment roadway network will begin
at the Barahma Bahtar Interchange on the M1 Motorway near the towns of Burhan and Hasan Abdal
in northern Punjab province.* [104] The newly reconstructed Karakoram Highway will connect to the Western Alignment at Burhan, near where the new 285 kilometre long controlled-access Brahma Bahtar-Yarik Motorway will commence.* [105] The motorway will terminate near the town of Yarik, just north of Dera Ismail
Khan.* [106] Groundbreaking for the project took place
on May 17, 2016.* [107] The motorway will traverse
the Sindh Sagar Doab region, and cross the Indus River
at Mianwali before entering into Khyber Pakhtunkhwa
province. It will consist of 11 interchanges, 74 culverts, and 3 major bridges spanning the Indus, Soan, and
Kurram Rivers.* [108] Total costs for the project are expected to be $1.05 billion.* [109]

At the southern terminus of the new Brahma BahtarYarik motorway, the N50 National Highway will also
The CPEC project envisages an expanded and upgraded be upgraded between Dera Ismail Khan in Khyber

Pakhtunkhwa and Zhob in neighbouring Balochistan

province, with eventual reconstruction between Zhob and
Quetta.* [110] The upgraded roadway will consist of a 4
lane dual-carriageway spanning the 205 kilometre distance between the two cities.* [111] The rst portion of
the N50 to be upgraded will be the 81 kilometre portion of the N50 between Zhob and Mughal Kot, with
construction works having begun in January 2016.* [112]
Construction on this portion is expected to be completed
by 2018 at a cost of $86 million.* [113] While the project
is considered a vital link in the CPEC's Western Alignment,* [112] the project's cost will not be nanced by
Chinese state-owned banks, but instead by Asian Development Bank under a 2014 agreement which preceded
CPEC,* [114]* [115] as well as by a grant provided by the
United Kingdom's Department for International Development.* [116]

RAILWAY PROJECTS

is considered to be a crucial part of the route between

Gwadar and China, the E35 will not be nanced by CPEC
funds. The project will instead be nanced by the Asian
Development Bank* [123] with a $121.6 million grant
from the United Kingdom towards the project.* [124]
Once completed, the E35 Expressway, the M4 Motorway, and Karachi-Lahore Motorway will provide continuous high-speed road travel on controlled-access motorways from Mansehra to Karachi 1,550 kilometres away.
Approximately halfway between Zhob and Quetta, the
town of Qilla Saifullah in Balochistan lies at the intersection of the N50 National Highway and the N70 National Highway. The two roads form the 447 kilometre route between Quetta and Multan in southern Punjab. While the N70 project is not ocially a part of
CPEC, it will connect the CPEC's Western Alignment to
the Karachi-Lahore Motorway at Multan. Reconstruction works on the 126 kilometre portion of the N70 between Qilla Saifullah and Wagum are slated for completion by 2018,* [125] and are nanced as part of a $195
million package by the Asian Development Bank,* [115]
and by a $72.4 million grant from the United Kingdom's
Department for International Development.* [126]

Heading south from Quetta, the Western Alignment of

the CPEC will continue to the town of Surab in central Balochistan as the N25 National Highway. From
Surab, a 470 kilometre long route known as the N85
National Highway will connect central Balochistan with
the town of Hoshab in southwestern Balochistan province
near the city of Turbat. This portion of roadway between Surab and Hoshab is 51% complete as of January
2016,* [117] and is expected to be completed in Decem- 3.4.2 Future Central Alignment
ber 2016.* [118]
Long-term plans for aCentral Alignmentof the CPEC
Along the Western Alignment route, the towns of Hoshab consist of a network of roads which will commence in
and Gwadar are connected by a newly-built 193 kilome- Gwadar and travel upcountry via the cities of Basima,
tre long portion of the M8 Motorway the Hoshab to Khuzdar, Sukkur, Rajanpur, Layyah, Muzaargarh, and
Gwadar portion of the motorway was completed and in- terminating in Dera Ismail Khan, with onward connecaugurated in February 2016 by Prime Minister Nawaz tions to Karakoram Highway via the Brahma Bahtar
Sharif.* [119] The Western Alignment will be anked by Yarik Motorway.* [127]
special economic zones along its route,* [120] with at least
seven special economic zones planned to be established in
Khyber Pakhtunkhwa.* [102]

4 Railway projects

3.4
3.4.1

Other roadway projects associated

with CPEC
Asian Development Bank funded projects

The 184 kilometre long M-4 Motorway between Faisalabad and Multan does not fall under the scope of CPEC
projects, but is nevertheless considered vital to the CPEC
transportation project. It will instead be nanced by the
Asian Development Bank and the Asian Infrastructure
Investment Bank,* [99] and will be the rst project jointly
nanced by those banks.* [121] Further funding comes
from an additional $90.7 million grant announced in October 2015 by the government of the United Kingdom
towards the construction of portion of the M4 Motorway
Phase 1 of the ML-1 overhaul and reconstruction is highlighted
project.* [122]
black between Peshawar and Multan. Overhauling and recon-

The Karakoram Highway south of the city of Mansehra struction of the line will allow trains to travel at up to 160 kilowill also be upgrade into a controlled-access highway to metres per hour.
ocially be known as the E-35 expressway. While it

4.2

Overhaul of Main Line 2 Railway

7
Upgrading of the railway line will permit train travel at
speeds of 160 kilometres per hour, versus the average
60 to 105 km per hour speed currently possible on existing track,* [134] and is expected to increase Pakistan
Railways' annual revenues by approximately $480 million.* [129]* [135] The upgrades are also expected to cut
transit times from Karachi to Peshawar by half.* [136]
Pakistani railways currently account for 4% of freight
trac in the country, and upon completion of CPEC,
Pakistani railways are expected to transport 20% of the
country's freight trac by 2025.* [137]

The rst part of the expedited rst phase of the project

will focus on upgrading the Multan to Peshawar section,
which will then be followed by the Hyderabad to MulPhase 2 of the ML-1 overhaul between Multan and Hyderabad tan section, and nally by the Hyderabad to Karachi secis marked in orange. Phase 3 of the project is indicated by the tion.* [138]
green line between Hyderabad and Karachi.

The CPEC project emphasises major upgrades to Pakistan's ageing railway system, including rebuilding of the
entire Main Line 1 railway between Karachi and Peshawar by 2020;* [128] this single railway currently handles 70% of Pakistan Railways trac.* [129] In addition
to the Main Line 1 railway, upgrades and expansions are
slated for the Main Line 2 railway, Main Line 3 railway.
The CPEC plan also calls for completion of a rail link
over the 4,693-meter high Khunjerab Pass. The railway
will provide direct access for Chinese and East Asian
goods to Pakistani seaports at Karachi and Gwadar by
2030.* [129]
Procurement of an initial 250 new passenger coaches, and
reconstruction of 21 train stations are also planned as part
of the rst phase of the project bringing the total investment in Pakistan's railway system to approximately
$5 billion by the end of 2019.* [130] 180 of the coaches
are to be built at the Pakistan Railways Carriage Factory
near Islamabad,* [131] while the Government of Pakistan
intends to procure an additional 800 coaches at a later
date, with the intention of building 595 of those coaches
in Pakistan.* [131]

4.1

Overhaul of Main Line 1 Railway

At the time of CPEC's announcement, the ML-1 consisted of mostly dual track railway between Karachi, and
the Lahore suburb of Shahdara, with long stretches of single track. From Shahdara, the track mainly consisted of a
single track until the city Peshawar. Construction works
to dualize the entire track between Karachi to Shahdara
were completed and inaugurated in January 2016.* [139]
As part of the rst phase of the CPEC railway project,
the remaining stretch of track between Shahdara and Peshawar is to upgraded to a dual track railway.* [140]
The 676 kilometer portion between Lalamusa, north of
Lahore, and Peshawar will require complete reconstruction with the addition of tunnels, culverts, and bridges,
while over 900 kilometers south of Lalamusa towards
Karachi will be upgraded to handle cars with a 25-ton
axle load capacity.* [141] A spur from Taxila to Havelian
will also be constructed, with a dry port to be established near the city of Havelian.* [142] Further, the entire length of track will have computerised signal systems,
with stretches of track in urban areas to also be fenced o
to prevent pedestrians and vehicles from crossing tracks
in unauthorised areas.* [143]

4.2 Overhaul of Main Line 2 Railway

Main article: KarachiPeshawar main railway line

The CPEC Early Harvestplan includes a complete
overhaul of the 1,687 kilometre long Main Line 1 railway (ML-1) between Karachi and Peshawar at a cost of
$3.65 billion for the rst phase of the project,* [68] with
the rst phase expected to be completed by December
2017.* [132] In June 2016, China and Pakistan unveiled
plans for the second phase of the project, with a total cost
of $8.2 billion for both phases of the project.* [133] The
second phase of the ML-1 overhaul project is expected to
be completed in 2021.* [133]

In addition to upgrading the ML-1, the CPEC project

also calls for similar major upgrade on the 1,254 kilometre long Main Line 2 (ML-2) railway between Kotri in
Sindh province, and Attock in northern Punjab province
via the cities of Larkana and Dera Ghazi Khan.* [144]
The route towards northern Pakistan roughly parallels
the Indus River, as opposed to the ML-1 which takes
a more eastward course towards Lahore. The project
also includes a plan to connect Gwadar, to the town of
Jacobabad, Sindh* [145] which lies at the intersection of
the ML-2 and ML-3 railways.

ENERGY SECTOR PROJECTS

The proposed route of the Khunjerab Railway is indicated by the

brown line.

ML-2 of Pakistan Railways is marked in purple, while ML-3 is

marked in orange. Other lines are in blue.

4.3

Overhaul of Main Line 3 Railway

The cost of the entire project is estimated to be approximately $12 billion, and will require 5 years for completion. A 300 million rupee study to establish nal feasibility of constructing the rail line between Havelian and the
Chinese border is already underway.* [153] A preliminary
feasibility study was completed in 2008 by the Austrian
engineering rm TBAC.* [154]

Medium term plans for the Main Line 3 (ML-3) railway

line will also include construction of a 560 kilometre long
railway line between Bostan near Quetta, to Kotla Jam
near the city of Dera Ismail Khan,* [146] which will pro- 5 Energy sector projects
vide access to southern Afghanistan. The railway route
will pass through the city of Quetta and Zhob before ter- Pakistan's current energy generating capacity is 24,830
minating in Kotla Jam, and is expected to be constructed MW,* [155] though the country currently faces energy
by 2025.* [129]
shortfalls of over 4,500MW on a regular basis* [20] with
routine power cuts of up to 5 hours per day,* [21] which
has shed an estimated 22.5% o its annual GDP.* [21]
4.4 Orange Line Metro
Energy generation will be a major focus of the CPEC
project, with approximately $33 billion expected to be
The $1.6 billion Orange Line of the Lahore Metro is invested in this sector.* [19] As part of the Early Harunder construction and is regarded as a commercial vestscheme of the CPEC, an estimated 10,400 MW of
project under CPEC.* [147] Construction on the line electricity are slated for generation by March 2018 as part
has already begun, with planned completion by Winter of CPEC's Early Harvestprojects.* [22]
2017.* [148]* [149] The line will be 27.1-kilometre (16.8
The energy projects under CPEC will be constructed
mi) long, of which 25.4 kilometres (15.8 mi) will be elby private Independent Power Producers, rather than by
evated, with the remaining portion to be underground
the governments of either China or Pakistan.* [156] The
*
between Jain Mandir and Lakshmi Chowk. [150] When
Exim Bank of China will nance these private investcomplete, the project will have the capacity to transport
ments at 56% interest rates, while the government of
250,000 commuters per day, with plans to increase caPakistan will be contractually obliged to purchase elecpacity to 500,000 commuters per day by 2025.* [151]
tricity from those rms at pre-negotiated rates.* [157]

4.5

Khunjerab Railway

Main article: Khunjerab Railway

Longer term projects under CPEC also call for construction of the 682 kilometre long Khunjerab Railway line between the city of Havelian, to the Khunjerab Pass on the
Chinese border,* [152] with extension to China's Lanxin
Railway in Kashgar, Xinjiang. The railway will roughly
parallel the Karakoram Highway, and is expected to be
complete in 2030.* [129]

5.1 Renewable-energy projects

China's Zonergy company will complete construction on
the world's largest solar power plant the 6,500 acre
Quaid-e-Azam Solar Park near the city of Bahawalpur
with an estimated capacity of 1000MW is expected
to be completed in December 2016.* [158]* [159] The
rst phase of the project has been completed by Xinjiang SunOasis, and has a generating capacity of 100
MW.* [160] The remaining 900 MW capacity will be installed by Zonergy under CPEC.* [160]

5.2

Coal

The Jhimpir Wind Power Plant, built by the Turkish

company Zorlu Enerji has already begun to sell 56.4
MW of electricity to the government of Pakistan,* [161]
though under CPEC, another 250MW of electricity are to
be produced by the Chinese-Pakistan consortium United
Energy Pakistan and others at a cost of $659 million.* [162]* [163] Another wind farm, the Dawood wind
power project is under development by HydroChina at a
cost of $115 million, and will generate 50 MW of electricity by August 2016.* [164]

the simultaneous construction of two 660MW power

plants) as well as developing a coal mine capable of producing up to 3.8 million tons of coal per year as part of
the rst phase of the project.* [177] The rst phase is
expected to be complete by early 2019,* [178] at a cost
of $1.95 billion.* [179] Subsequent phases will eventually generate an additional 3,960MW of electricity over
the course of ten years.* [172] As part of infrastructure
required for electricity distribution from the Thar l and
ll Projects, the $2.1 billion Matiari to Lahore Transmission Line, and $1.5 billion in Matiari to Faisalabad transSK Hydro Consortium is constructing the 870 MW Suki
Kinari Hydropower Project in the Kaghan Valley of Pak- mission* line are also to be built as part of the CPEC
project. [22]
istan's Khyber Pakhtunkhwa province at a cost of $1.8
*
billion, [165] SK Hydro will construct the project with The 1,320MW $2.08 billion Pakistan Port Qasim Power
nancing by China's EXIM bank.* [166]
Project near Port Qasim will be a joint venture of AlThe $1.6 billion 720 MW Karot Dam which is under con- Mirqab Capital from Qatar, and China's Power Construc a subsidiary of Sinohydro Resources
struction is part of the CPEC plan, but is to be nanced tion Corporation
*
*
Limited.
[180]
[181]
Pakistan's NEPRA and SinoHydro
*
separately by China's Silk Road Fund. [167]
agreed to set the levelized tari for electricity purchased
Pakistan and China have also discussed the inclusion of from the consortium at 8.12 US cents/kWh.* [182]
the 4,500MW $14 billion Diamer-Bhasha Dam as part of
the CPEC project,* [168] though as of December 2015,
no rm decision has been made though Pakistani o- 5.2.2 Projects in Punjab
cials remain optimistic at its eventual inclusion.* [169]
The $1.8 billion Sahiwal Coal Power Project is an under
The $2.4 billion, 1,100 MW Kohala Hydropower Project construction project in central Punjab that will have a cabeing constructed by China's Three Gorges Corporation pacity of 1,320MW. It is being constructed by a joint venpredates the announcement of CPEC, though funding for ture of two Chinese rms: the Huaneng Shandong comthe project will now come from CPEC fund.* [170]
pany and Shandong Ruyi Science & Technology Group,
who will jointly own and operate the plant.* [183] Pakistan will purchase electricity from the consortium at a
5.2 Coal
tari of 8.36 US cents/kWh.* [184]
Despite several renewable energy projects, the bulk of
new energy generation capacity under CPEC will be
coal-based plants, with $5.8 billion worth of coal power
projects expected to be completed by early 2019 as part
of the CPEC's Early Harvestprojects.
5.2.1

Projects in Sindh

The Shanghai Electric company of China will construct two 660MW power plants as part of the TharIproject in the Thar coaleld of Sindh province,
while Thar-llwill be developed by a separate consortium.* [171]* [172] The facility will be powered by locally
sourced coal,* [173] and is expected to be put into commercial use in 2018.* [174] Pakistan's National Electric
Power Regulatory Authority (NEPRA) has agreed to purchase electricity from both Thar-l and Thar-ll at a tari
of 8.50 US cents/kWh for the rst 330 MW of electricity, 8.33 US cents/kWh for the next 660 MW, and 7.99
US cents/kWh for the next 1,099 MW as further phases
are developed.* [175]* [176]

The $589 million project to establish a coal mine and a

relatively small 300MW coal power plant to be built in the
town of Pind Dadan Khan by China Machinery Engineering Corporation in Punjab's Salt Range.* [185] Pakistan's
NEPRA has been criticized for considering a relatively
high tari of 11.57 US cents/kWH proposed by the Chinese rm,* [186] which had been initially agreed at 8.25
US cents/kWH in 2014.* [187] The Chinese rm argued
that coal transportation costs had greatly increased due
to the nonavailability of coal from nearby mines which
had initially been regarded as the primary coal source for
the project. The company argued that coal would instead
have to be transported from distant Sindh province, which
along with ineciencies in mining procedures, increased
the cost of fuel by 30.5%.* [188]
5.2.3 Projects in Balochistan

In Balochistan province, a $970 million coal power plant

at Hub, near Karachi, with a capacity of 660MW to be
built by a joint consortium of China's China Power InNear the Thar-I Project, the China Machinery Engineer- vestment Corporation and the Pakistani rm Hub Power
ing Corporation in conjunction with Pakistan's Engro Company as part of a*larger $2 billion project to produce
Corporation will construct two 330MW power plants as 1,320MW from coal. [189]
part of the Thar-ll Project (having initially proposed A 300MW coal power plant is also being developed in

10

6 OTHER AREAS OF COOPERATION

the city of Gwadar, and is being nanced by a 0% interest someEarly Harvestprojects will not be complete unloan.* [65]
til 2020, the government of Pakistan plans to add approximately 10,000 MW of energy-generating capacity
to Pakistan's electric grid by 2018 through the completion
of projects which complement CPEC. Although not o5.3 Liquied natural gas
cially under the scope of CPEC, the 1,223 MW Balloki
Liqueed natural gas power LNG projects are also con- power plant, and the 1,180 MW Bhakki powerplants are
*
*
sidered vital to CPEC. The Chinese government has an- also under construction, [195] [197] which along with
nounced its intention to build a $2.5 billion 711 kilo- the under-construction 969 MW NeelumJhelum Hymetre long liquid natural gas pipeline from Gwadar to dropower Plant and 1,410 MW Tarbela IV Extension
Nawabshah in province as part of CPEC.* [190] The Project will result in an additional 10,000 MW being
pipeline is designed to be a part of the 2,775 kilometre added to Pakistan's electricity grid by 2018 by a com*
long IranPakistan gas pipeline, with the 80 kilometre bination of CPEC and non-CPEC projects. [198] A furportion between Gwadar and the Iranian border to be con- ther 1,000 MW of electricity will be imported to Pakistan
nected when sanctions against Tehran are eased; Iran has from Tajikistan and Kyrgyzstan as part of the CASAalready completed a 900 kilometre long portion of the 1000 project, which is expected to be completed in late
2018.* [199]
pipeline on its side of the border.* [18]
The Pakistani portion of the pipeline is to be constructed by the state-owned China Petroleum Pipelines
Bureau.* [191] It will be 42 inches in diameter, and have
the capacity to transport 1 billion cubic feet of liquied
natural gas every day, with an additional 500 million cubic feet of additional capacity when the planned o-shore
LNG terminal is also completed* [192] The project will
not only provide gas exporters with access to the Pakistani market, but will also allow China to secure a route
for its own imports.* [193]
The project should not be confused with the $2 billion
1,100 kilometre North-South Pipeline liquied natural
gas pipeline which is to be constructed with Russian assistance between Karachi and Lahore with anticipated completion by 2018.* [194] Nor should it be confused with the
planned $7.5 billion TAPI Pipeline which is a planned
project involving Turkmenistan, Afghanistan, Pakistan,
and India.
Other LNG projects are currently under construction with
Chinese assistance and nancing that will augment the
scope of CPEC, but are neither funded by nor ocially
considered a part of CPEC. The 1,223MW Balloki Power
Plant is currently under construction near Kasur, and
is being constructed by China's Harbin Electric Company with nancing from the China's EXIM bank, is one
such example. In October 2015, Prime Minister Nawaz
Sharif also inaugurated construction of the 1,180MW
Bhikhi Power Plant near Sheikhupura,* [195] which is to
be jointly constructed by China's Harbin Electric Company and General Electric from the United States.* [196]
It is expected to be Pakistan's most ecient power plant,
and will provide enough power for an estimated 6 million
homes.* [196]

5.4

Early Harvestenergy projects

5.4.1 Table of projects

6 Other areas of cooperation

The CPEC announcement encompassed not only infrastructure works, but also addressed areas of co-operation
between China and Pakistan.

6.1 Agriculture
The long-term plan for the period 2025-30 during the
CPEC summit held in Islamabad on August 30, 2016.
The plan includes coperation over livelihood, water resources, livestock, people-to-people communications and
nancial matters. Under the plan, agricultural information project, storage and distribution of agricultural
equipment and construction project, agricultural mechanisation, demonstration and machinery leasing project
and fertiliser production project for producing 800,000
tons of fertiliser and 100,000 tons of bio-organic fertiliser
will be implemented.* [203]* [204]

6.2 Science and technology cooperation

As part of CPEC, the two countries signed an Economic
and Technical Cooperation Agreement,* [205] as well as
pledged toChina-Pakistan Joint Cotton Bio-Tech Laboratory* [205] The two countries also pledged to establish
theChina-Pakistan Joint Marine Research Centerwith
State Oceanic Administration and Pakistan's Ministry of
Science and Technology* [205] Also as part of the CPEC
agreement, Pakistan and China have agreed to co-operate
in the eld of space research.* [206]

In February 2016, the two countries agreed to establish

As part of the Early Harvestscheme of the CPEC, the Pak-China Science, Technology, Commerce and
over 10,000 megawatts of electricity-generating capacity Logistic Parknear Islamabad at an estimated cost of $1.5
is to be developed between 2018 and 2020.* [22] While billion.* [207] The park will be situated on 500 hectares,

7.2

Interest-free loans for Gwadar projects

which will be provided by Pakistan to China's Xinjiang

Production and Construction Corps, with all investments
expected to come from the Chinese side over the course
of ten years.* [208]

11
that contractors arrived on site soon after the loan received nal approval.* [76]

The China Development Bank will nance the $920 million towards the cost of reconstruction of the 487 kilomeIn May 2016, construction began on the $44 million 820 ter portion of the Karakoram Highway between Burhan
kilometer long Pakistan-China Fiber Optic Project, an and Raikot.* [217]* [218] An addition $1.26 billion will
optical ber cable that will enhance telecommunication be lent by the China Exim Bank for the construction
in the Gilgit-Baltistan region, while oering Pakistan a of the Havelian to Thakot portion of this 487 kilometer
fth route by which to transmit telecommunication traf- stretch of roadway,* [74]* [219] to be dispersed as lowc.* [209]
interest rate concessionary loans.* [76]

6.3

$7 billion of the planned $8.2 billion overhaul of the Main

Line 1 railway is to be nanced by concessionary loans,
Government-to-government coopera- which extended by China's state owned banks.* [220]

tion

The long-planned 27.1 km long $1.6 billion Orange

Line of the Lahore Metro is regarded as a commercial
project,* [205] and does not qualify for the Exim Bank's
1.6% interest rate. It will instead by nanced at a 2.4%
interest rate* [148] after China agreed to reduce interest
rates from an originally planned rate of 3.4%.* [221]

The two nations also pledged co-operation in eld ranging

from anti-narcotic eorts,* [205] to co-operation in an effort to reduce climate change.* [205] The two nations also
agreed to increase co-operating between the banking sectors of the two countries, as well as to establish closer ties
between China Central Television and the Pakistan Tele- The $44 million Pakistan-China Fiber Optic Project, a
820 km long bre optic wire connecting Pakistan and
vision Corporation.* [205]
China, will be constructed using concessionary loans at
an interest rate of 2%, rather than the 1.6% rate applied
to other projects.* [222]

7.1

Project nancing

Loans to the Pakistani Government

Approximately $11 billion worth of infrastructure

projects being developed by the Pakistani government
will be nanced by concessionary loans, with composite
interest rates of 1.6%,* [210] after Pakistan successfully
lobbied the Chinese government to reduce interest rates
from an initial 3%.* [211] The loans are subsidised by the
government of China, and are to be dispersed by the Exim
Bank of China and the China Development Bank. For
comparison, loans for previous Pakistani infrastructure
projects nanced by the World Bank carried an interest
rate between 5% and 8.5%,* [212] while interest rates on
market loans approach 12%.* [213]

7.2 Interest-free loans for Gwadar projects

The government of China in August 2015 announced
that concessionary loans for several projects in Gwadar
totalling $757 million would be converted 0% interest
loans.* [223] The projects which are now to nanced by
the 0% interest loans include: the construction of the
$140 million East Bay Expressway project, installation
of breakwaters in Gwadar which will cost $130 million,
a $360 million coal power plant in Gwadar, a $27 million
project to dredge berths in Gwadar harbour, and a $100
million 300-bed hospital in Gwadar.* [224] Pakistan will
only repay the principle on these loans.

In September 2015, the government of China also announced that the $230 million Gwadar International AirThe loan money would be used to nance projects which
port project would no longer be nanced by loans, but
are planned and executed by the Pakistani government.
would instead be constructed by grants which the gov*
Portions of the approximately $6.6 billion [87] Karachi
ernment of Pakistan will not be required to repay.* [211]
*
Lahore Motorway are already under construction. [214]
The $2.9 billion phase which will connect the city of Multan to the city of Sukkur over a distance of 392 kilometres
7.3 Loans to private consortia
has also been approved,* [215] with 90% of costs to be
nanced by the Chinese government at concessionary interest rates, while the remaining 10% is to be nanced by $15.5 billion worth of energy projects are to be conthe Public Sector Development Programme of the Pak- structed by joint Chinese-Pakistani rms, rather than by
istani government.* [216] In May 2016, the $2.9 billion the governments of either China or Pakistan. The Exim
loan were given nal approvals required prior to disburse- Bank of China will nance those investments at 56%
ment of the funds were given by the Government of the interest rates, while the government of Pakistan will be
electricity from those
People's Republic of China on May 4, 2016, and will be contractually obliged to purchase
*
[157]
rms
at
pre-negotiated
rates.
*
concessionary loans with an interest rate of 2.0%. [76]
The National Highway Authority of Pakistan reported As an example, the 1,223MW Balloki Power Plant does

12

8 GEOSTRATEGIC IMPACT

not fall under the concessionary loan rate of 1.6%, as

the project is not being developed by the Pakistani government. Instead, it is considered to be a private sector investment as its construction will be undertaken by a
consortium of Harbin Electric and Habib Raq Limited
after they successfully bid against international competitors.* [225] Chinese state-owned banks will provide loans
to the consortium that are subsidised by the Chinese government. In the case of the Balloki Power Plant, stateowned banks will nance the project at an interest rate
of 5%,* [226] while the Pakistani government will purchase electricity at the lowest bid rate of 7.973 cents per
unit.* [225]

7.4

Asian Development Bank assistance

While the E-35 expressway is considered to be a crucial

part of the route between Gwadar and China, the E35 will
not be nanced by CPEC funds. The project will instead
be nanced by the Asian Development Bank.* [123]
The N70 project is not ocially a part of CPEC but will
connect the CPEC's Western Alignment to the KarachiLahore Motorway at Multan. The project will be nanced
as part of a $195 million package by the Asian Development Bank announced in May 2015 to upgrade the N70
National Highway and N50 National Highway.* [115] In
January 2016, The United Kingdom's Department for International Development announced a $72.4 million grant
to Pakistan for roadway improvements in the province
of Balochistan, thereby reducing the total Asian Development Bank loan from $195 million to $122.6 million.* [227]
The M-4 Motorway between Faisalabad and Multan is
not to be nanced by the Chinese government as part of
CPEC, but will instead be the rst infrastructure project
partially nanced by the Asian Infrastructure Investment
Bank, and will be co-nanced along with the Asian Development Bank for a total of approximately $275 million.* [99] Portions of the project will also be funded by
a $90.7 million grant announced in October 2015 by the
government of the United Kingdom towards the construction of the Gojra-Shorkot section of the M4 Motorway
project.* [122]

China and Pakistan intend that the massive investment

plan will transform Pakistan into a regional economic hub
and further boost the deepening ties between the two countries.* [232] Approximately 1 year after the announcement
of CPEC, Zhang Baozhong, chairman of China Overseas
Port Holding Company told The Washington Post that his
company planned to spend an additional $4.5 billion on
roads, power, hotels and other infrastructure for Gwadar's
industrial zone,* [8] which would be one of the largest ever
sums of foreign direct investment into Pakistan.
Pakistan currently faces energy shortfalls of over
4,500MW on a regular basis* [20] with routine power cuts
of up to 12 hours per day,* [21] which has shed an estimated 2-2.5% o its annual GDP.* [21] The Financial
Times notes that Pakistan's electricity shortages are a major hindrance to foreign investment, and that Chinese investments in Pakistani infrastructure and power projects
will lead to avirtuous cyclethat will make the country
more attractive for foreign investment in a variety of sectors.* [233] Poor availability of electricity is considered
by the World Bank to be a main constraint to both economic growth and investment in Pakistan.* [234]
Pakistan's large textile industry has also been negatively
eected by several-hour long power cuts, with almost
20% of textile factories in the city of Faisalabad shutting down on account of power shortages.* [235] The
CPEC's Early Harvestprojects are expected to resolve shortages in power generation by 2018 by increasing Pakistan's power generation capacity by over 10,000
megawatts.* [22] As a result of improved infrastructure
and energy supplies, the Pakistani government expects
that economic growth rates will reach 7% by 2018.* [236]
Former Pakistan Prime Minister Shaukat Aziz also stated
in May 2016 that predicted economic growth from CPEC
projects would result in stabilization of Pakistan's security
situation,* [237] which has also been cited by the World
Bank as hindrance to sustained economic growth in Pakistan.* [238]

According to Chinese Foreign Ministry Spokesperson

Hua Chunying, the corridor will serve as a driver
for connectivity between South Asia and East Asia.
Mushahid Hussain, chairman of the Pakistan-China Institute, told China Daily that the economic corridorwill
play a crucial role in regional integration of the 'Greater
South Asia', which includes China, Iran, Afghanistan, and
stretches all the way to Myanmar.* [33] When fully built,
8 Geostrategic impact
the corridor is expected to generate signicant revenue
from transit fees levied on Chinese goods to the tune
*
8.1 A stimulus for economic growth in of several billion dollars per annum. [239] According to
The Guardian,The Chinese are not just oering to build
Pakistan
much-needed infrastructure but also make Pakistan a key
partner in its grand economic and strategic ambitions.
*
[240]
CPEC is considered economically vital to Pakistan in helpMoody's Investors Service has described the project as
ing it drive economic growth.* [229] The Pakistani media
acredit positivefor Pakistan. In 2015, the agency acand government have called CPEC investments a game
knowledged that much of the project's key benets would
*
*
and fate changerfor the region, [230] [231] while both

8.3

Improved access to western China

13

not materialise until 2017, but stated that it believes at

least some of the benets from the economic corridor
would likely begin accruing even before then.* [241] The
Asian Development Bank stated CPEC will connect
economic agents along a dened geography. It will provide connection between economic nodes or hubs, centered on urban landscapes, in which large amount of economic resources and actors are concentrated. They link
the supply and demand sides of markets.* [242]

yse the Chinese economy in a scenario that is frequently

referred to as the Malacca Dilemma.* [245] In addition to vulnerabilities faced in the Straits of Malacca
region, China is heavily dependent upon sea-routes that
pass through the South China Sea, near the disputed
Spratly Islands and Paracel Islands, which are currently
a source of tension between China, Taiwan, Vietnam,
the Philippines, and the United States.* [247] The CPEC
project will allow Chinese energy imports to circumvent
On November 14, 2016, Hyatt Hotels Corporation an- these contentious areas and nd a new artery in the west,
and thereby decrease the possibility of confrontation benounced plan's to open four properties in Pakistan, in
*
partnership with Bahria Town Group, citing the invest- tween the United States and China. [248]
ment of CPEC as the reason behind the $600 million in- In addition to potential weaknesses in regards to the
United States' Navy, the Indian Navy has recently investment.* [243]
creased maritime surveillance of the Straits of Malacca
region from its base on Great Nicobar Island.* [249] In8.2 CPEC to circumvent the Straits of dia has expressed fears of a Chinese String of Pearls
Malacca
encircling it.* [250]* [251] Were conict to erupt, India could potentially impede Chinese imports through
the straits.* [252] Indian maritime surveillance in the
Andaman Sea could possibly enhance Chinese interest
in Pakistan's Gwadar Port the Kyaukpyu Port, which
is currently being developed in Myanmar by the Chinese government as another alternate route around the
Straits of Malacca, will likely be vulnerable to similar advances by the Indian Navy. The proposed BangladeshChina-India-Myanmar Corridor (BCIM) would also be
vulnerable to Indian advances against China in the event
of conict, thereby potentially limiting the BCIM Corridor's usefulness to China's energy security, and thereby
increasing Chinese interest in CPEC.
China's stake in Gwadar will also allow it to expand its
inuence in the Indian Ocean, a vital route for oil transportation between the Atlantic and the Pacic. Another
advantage to China is that it will be able to bypass the
Strait of Malacca. As of now, 60 percent of China's imported oil comes from the Middle East, and 80 percent of
that is transported to China through this strait, the dangerous, piracy-rife maritime route through the South China,
East China, and Yellow Seas.
Council on Foreign Relations* [253]
Map showing territorial claims in South China Sea. A high percentage of Chinese energy imports pass through this disputed region, rendering much of China's energy imports vulnerable to
conict.

8.3 Improved access to western China

The CPEC Alignments will improve connectivity to

restive Xinjiang, thereby increasing the region's potential to attract public and private investment.* [244] CPEC
is considered central to ChinaPakistan relations; its
central importance is reected by China's inclusion of
the project as part of its 13th ve-year development
plan.* [254]* [255] The CPEC projects will also complement China's Western Development plan, which includes
not only Xinjiang, but also the neighbouring regions of
*
In the event that China were to face hostile actions from a Tibet and Qinghai. [256]
state or non-state actor, energy imports through the Straits In addition to its signicance to reduce Chinese depenof Malacca could be halted, which in turn would paral- dence on the Sea of Malacca and South China Sea routes,
The Straits of Malacca provide China with its shortest maritime access to Europe, Africa, and the Middle East.* [244] Approximately 80% pass of its Middle
Eastern energy imports also pass through the Straits of
Malacca.* [245] As the world's biggest oil importer,* [36]
energy security is a key concern for China while current sea routes used to import Middle Eastern oil are frequently patrolled by the United States' Navy.* [246]

14
CPEC will provide China an alternative and shorter route
for energy imports from the Middle East, thereby reducing shipping costs and transit times. The currently available sea-route to China is roughly 12,000 kilometres long,
while the distance from Gwadar Port to Xinjiang province
is approximately 3,000 kilometres, with another 3,500
kilometres from Xinjiang to China's eastern coast.* [245]
As a result of CPEC, Chinese imports and exports to
the Middle East, Africa, and Europe would require much
shorter shipment times and distances.

8 GEOSTRATEGIC IMPACT

8.5 A new corridor to the Central Asian

Republics

The heads of various Central Asian republics have expressed their desire to connect their infrastructure networks to the CPEC project via China. During the August
2015 visit of Pakistani Prime Minister Nawaz Sharif to
Kazakhstan, the Kazakh Prime Minister Karim Massimov, conveyed Kazakhstan's desire to link its road network to the CPEC project.* [262] During the November 2015 visit of Tajikistan President Emomali Rahmon to Pakistan, the Tajik premier also expressed his
government's desire to join the Quadrilateral Agree8.4 A route to circumvent Afghanistan
ment on Trac in Transit to use CPEC as a conduit
for imports and exports to Tajikistan by circumventing
Negotiations to provide an alternate route to the Central
Afghanistan;* [263] the request received political backing
Asian republics by way of China predate the announceby the Pakistani Prime Minister.* [263]
ment of CPEC. The AfghanistanPakistan Transit Trade
Agreement of 2010 provided Pakistan access to Central With the advent of CPEC-related infrastructure projects,
Asia via Afghanistan, however, the full agreement has transit times between Kashgar and Pakistan's coast will
yet to be fully implemented. The Quadrilateral Agree- be greatly reduced, which in turn will also reduce tranment on Trac in Transit(QATT) was rst devised in sit times to the Kyrgyzstan and hydrocarbon-rich Kaza1995, and signed in 2004 by the governments of China, khstan through already existing overland routes. The
Pakistan, Kazakhstan, and Kyrgyzstan to facilitate tran- Chinese government has already upgraded the road linksit trade between the various countries, with no inclu- ing Kashgar to Osh in Kyrgyzstan via the Kyrgyz town
sion of Afghanistan.* [257] Despite signing of the QATT, of Erkeshtam while a railway between Urumqi, China
the agreements full potential was never realised, largely and Almaty, Kazakhstan has also been completed as part
on account of poor infrastructure links between the four of China's One Belt One Road initiative.* [264] Numerous land crossings already exist between Kazakhstan and
countries prior to the announcement of CPEC.
China as well. Additionally, the Chinese government
During the visit of Afghan President Ashraf Ghani to
has announced plans to lay railway track from Tashkent,
India in April 2015, he stated We will not proUzbekistan, towards Kyrgyzstan with onwards connecvide equal transit access to Central Asia for Pakistani
tions to China and Pakistan.* [265] Further, the Pamir
trucksunless the Pakistani government included India
Highway already provides Tajikistan access to Kashgar
as part of the 2010 AfghanistanPakistan Transit Trade
via the Kulma Pass. These crossings complement the
*
Agreement. [258] The Transit Trade Agreement proCPEC project to provide Central Asian states access
vides Afghanistan access to the Port of Karachi to conto Pakistan's deepwater ports by completely bypassing
duct export trade with India, and allows Afghan goods to
Afghanistan a country which has been ravaged by civil
be transited up to any border of Pakistan, but does not
war and political instability since the late 1970s.
guarantee Afghan trucks the right to traverse the Wagah
Border, nor does the agreement permit Indian goods to
be exported to Afghanistan via Pakistan.* [259] Owing to
continued tensions between India and Pakistan, the Pak- 8.6 Comparison to Chabahar Port
istani government expressed reluctance to include India
in any trade negotiations with Afghanistan, and as a re- In May 2016, Indian Prime Minister Narendra Modi
sult, little progress was made between the Afghan and and his counterpart, Iranian President Hassan Rouhani,
signed a series of twelve agreements in Tehran, in which
Pakistani sides.
In February 2016, the Pakistani government signalled its India oered to refurbish one of Chabahar's ten existing
and reconstruct another berth the Port of Chabaintention to completely bypass Afghanistan in its quest to berths,
*
har,
[266]
in order to allow Indian goods to be exported
access Central Asia by announcing its intent to revive the
to
Iran,
with
the possibility of onward connections to
QATT so that Central Asian states could access Pakistani
Afghanistan
and
Central Asia.* [267] A section of the
*
ports via Kashgar instead of Afghanistan, [260] thereby
counter to the Chinaallowing the Central Asian republics to access Pakistan's Indian media described it as a
*
[268]
although the total
Pakistan
Economic
Corridor,
deep water ports without having to rely on a politically unmonetary
value
of
projects
has
been
noted
to be signistable Afghanistan as a transit corridor. In early March
*
[269]
cantly
less
than
that
of
CPEC.
2016, the Afghan government reportedly acquiesced to
Pakistani requests to use Afghanistan as a corridor to As part of the twelve memorandums of understanding
Tajikistan, after having dropped demands from recipro- signed by Indian and Iranian delegations as per text released by India's Ministry of External Aairs, India will
cal access to India via Pakistan.* [261]

15
not nished,and that Iran would welcome the inclusion
of both Pakistan and China in the project.* [288] While
clarifying that Chabahar Port would not be a rival or enemy to Pakistan's Gwadar Port,* [289] he further stated
that Pakistan and China had both been invited to conChina nor
Under the agreement, India Ports Global will refurbish tribute to the project before India, but neither
*
*
Pakistan
had
expressed
interest
in
joining.
[290]
[291]
a 640 meter long container handling facility, and recon*
struct a 600 meter long berth at the port. [266] India further agreed to extend a $400 million line of credit to be
8.6.1 Security issues
used for the import of steel for the construction of a rail
*
link between Chabahar and Zahedan, [274] while India's
Afghanistan's politically instability could limit the potenIRCON and Iran's Construction, Development of Transtial usefulness of transit corridors to population centers
port and Infrastructure Company signed a memorandum
near Kabul or Kandahar,* [292] as those routes traverse
of understanding regarding the construction and nance
southern and eastern Afghanistan, where the Taliban is
of the Chabahar to Zahedan rail line at a cost of $1.6 bilmost active.* [293] The Chabahar plan relies upon con*
lion. [275]
nections to the Afghan Ring Road.* [294] By August
India's Highways and Shipping Minister, Nitin Gadkari 2016, the Taliban was noted to have captured large
suggested that the free trade zone in Chabahar had the swathes of land in Helmand Province, and threatened
potential to attract upwards of $15 billion worth of in- to capture the provincial capital of Lashkar Gah,* [295]
vestment in the future,* [276] although he stated that such which lies on the portion of the Afghan Ring Road coninvestments are predicated upon Iran oering India nat- necting Chabahar to Kandahar and Kabul. As a result,
ural gas at a rate of $1.50 per million British Thermal portions of the Afghan Ring Road were closed due to
Units,* [277] which is substantially lower than the rate Taliban insurgent activity.* [296] Also in August 2016,
of $2.95 per million British Thermal Units oered by the Taliban claimed responsibility for an attack which
Iran.* [278] The two countries also signed a memoran- left twelve foreign tourists dead as they were traveling
dum of understanding to explore the possibility of setting on an alternative route to the Afghan Ring Road, beup an aluminum smelter at a cost of $2 billion,* [279] as tween Kabul and Herat.* [297] In September 2016, Iran's
well as establishing a urea processing facility in Chahba- president Hassan Rouhani expressed his country's inhar,* [280] although these investments are also contingent terest in joining CPEC during a meeting with Nawaz
upon Iran supplying low-cost natural gas for operation of Sharif.* [298]
those facilities.* [281]
oer a $150 million line of credit extended by the Exim
Bank of India,* [270] while India Ports Global also signed
a contract with Iran's Aria Banader to develop berths at
the port,* [271] at a cost of $85 million * [272] over the
course of 18 months.* [273]

India, Iran, and Afghanistan also signed an agreement

with the intention of simplifying transit procedures between the three countries.* [272] Despite the expressed
desire to circumvent Pakistan in order to augment Iranian and Indian economic ties, Indian goods destined for
Iran currently do not require transit through Pakistan, as
those goods can be exported to Iran via Bandar Abbas,
where India also currently maintains a diplomatic mission.* [282] Bandar Abbas is also consider a key node
on the NorthSouth Transport Corridor, backed by India and Russia since 2002.* [283]* [284] Indian goods also
can be imported and transited across Iran upon arrival at
Bandar-e Emam Khomeyni near the Iraqi border.

9 Security

China has expressed concern that some separatist groups

in Xinjiang may be collaborating with insurgents in
Pakistan, and has expressed a desire to strengthen security ties.* [36]* [299] The outlawed terrorist organisation Tehrik-i-Taliban has claimed responsibility for
past attacks on some Chinese nationals,* [300] and Chinese commentators have raised concerns that construction workers could be kidnapped and ransomed.* [301]
The Express Tribune reports that Pakistan plans to train
12,000 security personnel to protect Chinese workers on
As per the AfghanistanPakistan Transit Trade Agree- the corridor.* [302]* [303]* [304] Presently, 8,000 Pakment, Afghan goods can be transited across Pakistan for istani security ocials are deployed for the protection of
export to India as well, though Indian goods cannot be ex- over 8,100 Chinese workers in Pakistan.* [305]
ported to Afghanistan via Pakistan.* [285] Upon compleOther terrorist organisations operate in Balochistan, intion of Chabahar, Indian exporters will benet from the
cluding the Balochistan Liberation Army and Jundallah,
potential ability to export goods to Afghanistan, a counwhich have carried out attacks in the province,* [306] and
try with an annual gross domestic product estimated at
are allegedly backed by India.* [307] Exiled Baloch na$60.6 billion.* [286] While agreements have specically
tionalist Hyrbyair Marri in an interview with Indian news
cited improvements for Afghan connectivity to the world
stated that the safety of Chinese nationals working on the
*
as a benet of Indian investment in the region, [287]
project could not be guaranteed.* [308]
After signing the agreement, Iran's ambassador to PakCPEC passes though the disputed region of Kashistan, Mehdi Honerdoost, stated that the agreement was
mir where Indian and Pakistani border guards have

16
occasionally exchanged re across the Line of Control,* [309]* [310] although no CPEC project is located
near the Line of Control. Chinese intelligence agencies
reportedly also shared information with Pakistani authorities regarding alleged eorts by the India's Research and
Analysis Wing to subvert the project.* [311]* [311]

10

CONTROVERSY AND MISCELLANEOUS ISSUES

10.2 Controversy over nances

In addition to the aforementioned issues, some sources

have inappropriately suggested that the interest rate for
CPEC related loans would be high, with India's Daily
News and Analysis paper suggesting that Pakistan had unIn August 2016, Quetta, which lies on the Western Align- wittingly accepted loans that would be oered at very
ment of CPEC was struck by a suicide bombing which high rates of interest,* [319] although the actual interest
killed 70 people.* [312]
rates were negotiated prior to acceptance, and for most
projects will be 1.6%.* [320] Several articles in Pakistan
have criticised the project's nances as being shrouded
in mystery, while one article suggested that there is
far too much secrecy and far too little transparency.
*
[321] The Private Power and Infrastructure Board has
also been accused of irregularities in the approval process
10 Controversy and miscellaneous for coal power plants and the taris at which Pakistan is
contractually obliged to purchase electricity from those
issues
plants,* [322] with special concern regarding potential irregularities in the tari approved for the 300MW coal
Khan by China
10.1 Allegations by KPK provincial as- power plant to be built in Pind Dadan
*
[323]
Machinery
Engineering
Corporation.
sembly
Some planning aspects and technicalities associated
with the route have been criticised in political forums
and by the media.The Provincial Assembly of Khyber
Pakhtunkhwa province adopted a resolution against the
alleged decision of the central government to change the
multibillion route of the proposed project by diverting
it away from Khyber Pakhtunkhwa province.* [313] The
supposed change in CPEC routing was rst highlighted
by journalist Farman Nawaz (editor Border Times Pakistan) in an article published in July 2013 by China's
Global Times newspaper,* [314] two years before the ofcial announcement of CPEC when levels of violence
were much higher in that province, which he acknowledged could factor into any decision to re-route the corridor from KPK.* [314]
The federal Minister of Planning Development and Reform Ahsan Iqbal formally denied any change in the
alignment.* [35]* [315]* [316] As a rebuttal to this argument, Wu Zhaoli, an assistant research fellow at
the National Institute of International Strategy, Chinese
Academy of Social Sciences, in his article also published
in Global Times, stated that security concerns are a
critical cause which helps to determine the path of this
corridor,* [301] implying that security concerns, rather
than political bias, would be responsible for any route
changes. According to Dr Ahmad Rashid Malik, Senior
Research Fellow at the Institute of Strategic Studies Islamabad (ISSi), the route controversy is baseless and
an unfounded reality....* [317]
As a result of frequent objections to CPEC conveyed by
the government of Khyber Pakhtunkhwa province, the
Chinese government in 2015 issued a statement urging
Pakistani political parties to end their dierences over the
project.* [318]

10.3 Opposition from Baloch nationalists

Some Baloch nationalists have opposed the large-scale
development projects envisioned by CPEC, fearing that
such developments in the province would eventually result in local residents losing controlover natural resources.* [324] Others have alleged that CPEC is aconspiracymeant to stimulate the settlement of migrants
from other regions of Pakistan in order to render ethnic
Baloch a minority in the province.* [325]
In reference to the Pakistani Government's announcement of its intent to issue resident cards to the city's
inhabitants as a security measure to prevent the movement of rearms into the city,* [326] former Chief Minister of Balochistan province, Akhtar Mengal, suggested
at a political rally in November 2015, that execution
of CPEC projects and the resident card policy would
eventually result in ethnic Baloch being denied entry
into the city.* [327] The resident cards measure would
require any non-resident visitor to the city to register
at designated security checkpoints prior to entering the
city by road,* [326] without any reference to ethnicity.
The former Chief Minister did, however, clarify that he
would not oppose development projects in the province
that he believed would uplift the plight of local residents.* [328] Shortly thereafter, the Pakistani government
announced its intention to establish a training institute
named Pak-China Technical and Vocational Institute at
Gwadar which is to be completed at the cost of 943 million rupees to impart skills to local residents to train them
to operate machinery at the port.* [30]

10.5

10.4

Indian objections to CPEC

17

Concerns expressed by Gwadar resi- nese Premier dismissed the concerns, describing CPEC
as a commercial project* [340] that would not target
dents
any third party.* [341]

While nationalists openly oppose CPEC, some local leaders and residents of Gwadar city have also expressed concern in regards to the project the head of Gwadar's local sherman association stated in an interview with NBC
News that Development is good, China is our great
friend, this CPEC thing sounds amazing, but don't forget
that this is our land, rst.* [329] Other residents doubt
they will see any of the benets promised by CPEC, while
others fear they will be evicted from their homes in order
to make way for infrastructure works.* [330]
In response to concerns of local residents, Lt. General
Amer Riaz who heads security operations in the province,
stated that locals would not be deprived of benets, and
that local Gwadar residents would havethe rst right to
everything.* [331] Pakistan's Minister of Planning, National Reforms, and Development, Ahsan Iqbal, further
stated in May 2016 that Gwadar residents would be regarded as main stakeholdersin the city's master plan,
and that shermen specically would also be accommodated by the plan.* [332] The developer of Gwadar Port,
COPHC, has also announced that it will assist Gwadar's
shermen to help boost the region's seafood industry
by developing programs to improve the quality of local
seafoods.* [333]

10.5

Indian objections to CPEC

In March 2016, Indian Foreign Secretary Subrahmanyam

Jaishankar, in reference to China's ambitious One Road
One Belt project and CPEC, stated that India's vision
of Asian connectivity was that of a consultative process
rather than that of unilateral decisions,and that they
should not add to regional tensions.* [342]
In May 2016, India's Minister of State and External Affairs, Vijay Kumar Singh, stated that while India had
raised its concerns regarding CPEC, that it was still awaiting a response from China.* [343] Despite Indian objections, China and Pakistan initiated works on the $44
million Pakistan-China Fiber Optic Project on May 19,
2016 which will require passage through Gilgit-Baltistan;
the same region for which India expressed concerns to
China.* [344] Former Indian National Security Advisor
M. K. Narayanan also in May 2016 stated CPEC must
be viewed as a major threat. Both countries [China and
Pakistan] have a common intention to undermine India`s
position in the region.* [343]
Despite objections, segments of the Indian public, as exemplied by former Indian Ambassador Melkulangara
Bhadrakumar, regard the project as in India's interest vis-vis Central Asia, and warn that India mightlose heavilywere India to remain opposed and isolated from the
project.* [345]
On August 28, the China Institutes of Contemporary
International Relations suggested that China will have
to get involvedif any Indian plotdisrupts the
$46 billion ChinaPakistan Economic Corridor (CPEC)
in restive Balochistan.* [346] Indian National Congress
leader Manish Tewari said that if ultimately the CPEC
is going to threaten India, then Modi needs to stand up to
it.* [347]

The Government of India, which shares tense relations

with Pakistan, regards portions of the CPEC project negatively as they pass through the Pakistani-administered
side of Kashmir; territory that India disputes. Former Indian ambassador, Phunchok Stobdan, alleged that China
and Pakistan intended to develop the corridor not just
for its economic benets, but also is motivated by the
strategic intent of besieging India,though he also stated
that India can do little to scuttle CPEC, and that avoiding 10.5.1 Allegations of Indian subversion against
CPEC
China's One Road One Belt project altogether would be
*
to the detriment of India. [334]
In March 2016, Pakistan announced that it had arrested a
During the visit of Indian Prime Minister Narendra suspected spy from India's Research and Analysis Wing,
Modi to China in 2015, the Indian Foreign Minis- Kulbhushan Yadav, who Pakistan accused of entering
ter, Sushma Swaraj reportedly told Chinese Premier Pakistan from Iran specically to destabilize regions in
Xi Jinping that projects passing through Gilgit-Baltistan Pakistan's Balochistan province in order to hinder imare unacceptableas they require construction in the plementation of CPEC projects.* [348] Pakistan's Chief
claimed territory.* [335]* [336] India's Foreign Secretary of Army Sta General Raheel Sharif in April 2016 acSubrahmanyam Jaishankar also conrmed that the issue cused India's Research and Analysis Wing of destabihad been raised with the Chinese government on the lizing Pakistan in an attempt to disrupt and stymie imtrip.* [337] Swaraj reiterated this stance during a meet- plementation of various CPEC projects.* [349] Pakistan's
ing in August 2016 with Chinese foreign minister Wang Secretary of Defense Lieutenant General Alam Khattak
Yi, stating India wouldresolutely opposethe corridor stated in April 2016 that the arrest of Kulbhushan Yain Kashmir.* [338]
dav indicated Indian interference in CPEC, and further
The Indian Ministry of External Aairs in May 2015 alleged that India's Research and Analysis Wing, in collualso summoned the Chinese envoy in New Delhi to sion with Afghanistan's National Directorate of Security,
lodge India's opposition to the project.* [339] The Chi- had set up a dedicated espionage unit with express intent

18

13

to sabotage CPEC.* [350]

11

List of major projects

12

See also

One Belt, One Road

Maritime Silk Road
Bangladesh-China-India-Myanmar Economic Corridor
ChinaPakistan relations

13

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Shinkiari section will be 74 km in length wherein existing 2-Lane KKH will be upgraded and improved.

13

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22

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the project.

23

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CAL COAL FIRED POWER PROJECT IN PIND
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24

13

[188] TARIFF REVIEW PETITION FOR 1X330MW LOCAL COAL FIRED POWER PROJECT IN PIND
DADAN KHAN, SALT RANGE, PUNJAB (PDF).
NEPRA. Retrieved 11 August 2016. In addition, the Authority did not include the transportation or beneciation
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86.95/t (assuming the per Mmbtu price of Thar coal).
Since the 6/20 Petitioner has assumed an average of 50km
transportation distance from the coal mines to the power
plant, the transportation costs will work out to be US$
13.5, assuming the transportation cost of US$ 0.27/t/km
approved for Thar coal. This plus the assumed levelized
beneciation cost of US$ 11/t required for Salt Range
coal, will work out to be US$ 111.45/t. From the above
analysis, it is clear that in light of the approved coal price
for Thar Coal, and the much smaller production scale and
additional transportation & beneciation costs required
for Salt Range coal, the Petitioner's assumed coal price
US$ 111.86/t in its tari petition is reasonable and justied.

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Text and image sources, contributors, and licenses

Text

ChinaPakistan Economic Corridor Source: https://en.wikipedia.org/wiki/China%E2%80%93Pakistan_Economic_Corridor?oldid=

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