CHINA – PAKISTAN

ECONOMIC CORRIDOR
(CPEC) 10 YEARS
“Issues & Challenges”
ALI HAIDER BHUTTO

1
 Sequence
• CPEC Background
• Rationale, Scope & Framework of CPEC
• Political consensus
• CPEC Projects
– Early Harvest Projects
--Long Term perspective
• Challenges of Energy Sector Projects
– Industrial Parks/Special Economic Zones (SEZs)
• Security Challenges to CPEC
• Conclusion
2
• Pakistan current affairs season 4
• special CSS and CSS pcs 2024
• Registration open now.. 03003372236
• Features
1 most important topics 25 cover
2 past paper analysis with outline discuss
3 topics wise notes
4 10 expected full length questions
• Only 8 seats...
•

ONLY: 4k

3
 CPEC Background
1. Initial Concept in 1950s
2. Karakorum Highway Project 1959
3. Gwadar deep water port construction 2002~2006
4. General Musharraf government pushed the project
5. Concrete progress during PML(N) government
6. Chinese Government announcement to
launch the $46b project in Nov 2014
7. Agreement to commence the project in April
2015
8. China included CPEC in its 13th ADP
4
Scope & Rationale of CPEC

5
 INTRODCUATION
• On 21st April, 2015, in the
inaugural ceremony of the China-
Pakistan Economic Corridor
(CPEC), President Xi Jinping
addressed the parliament of
Pakistan.
• During his address, he signified
the nature of the relationship
between China and Pakistan with
a Chinese saying: “Strong wind
reveals the strength of grass,
and genuine gold stands the
test of fire.”

6
 SCOPE OF CPEC

 China-PakistanEconomic Corridor
is a fusion of multiple corridors:
 Investment Corridor
 Trade Corridor
 Energy Corridor
 Transport Corridor
 Infrastructure Corridor
 Industrial Corridor

7
 Rationale of CPEC

• Strengthening of bilateral Strategic Economic

Cooperation.
• Short Term Project portfolio (Gwadar, Energy,
Tranport Infrastructure, Industrial
infrastructure) US $ 46 Billion.
• Long Term Project portfolio
(Telecommunication, Agriculture, Industries,
Water, Tourism, Finance) being finalized in
October 2016.
8
 Rationale for China

_ Safe, secure and efficient land route for trade

from Arabian Sea to Western China & vice versa
– Promote West China’s economic and social
development
– Speed up “One Belt and One Road” Initiative,
CPEC is flagship project
– Give greater role to China in the affairs of South
East Asia, Central Asia and Middle East
– Counter US growing influence

9
 GWADAR
GATEWAY TO GLOBAL MARKET
 Connectivity - Pakistan – China – Middle East – Africa
 Mobility - Cut 13,000 Km route from Middle East to China
 Activity – Trade – Investment – Opportunities
 Gwadar Port started operations for commercial export on May 11,2015

ST
RA
IT
SO
FM
AL
AC
CA
 Rationale for Pakistan

– Major boost to economic activity & growth in Pakistan

– Expected addition to GDP by 2.5%
– Job creation by 70,000 approximately
– Strengthen infrastructure (energy & transport)
– Shape new industry clusters / SEZs along with the
Routes
– Balance regional economic development
– Enhance domestic economic stability

11
 CPEC - Regional Connectivity
• New International logistics network and
better industrial distribution
• Improve status of South Asia and their division
of labour within the global economy of
industrial investment
• Promote regional economic integration
through stable trade growth, international
economic and technological cooperation and
people exchanges

12
CPEC - Context
Regional Connectivity
is the 7th Pillar of
Pakistan Vision 2025

One Belt
one Road
Integrates/links Silk Road
Economic Belt and
21st Century Maritime Silk
Route
Rising Asia

Serves Asia’s over 3 Billion population

IMPLEMENTATION FRAMEWORK
Joint Cooperation Committee
Pakistan Minister for Planning & Development & Co-Chaired by
Chinese Minister PDR and Vice Chairman NDRC

Planning Energy
Joint Working Group Joint Working Group

Transport Infrastructure Gwadar

Joint Working Group Joint Working Group

Industrial Cooperation
Joint Working Group (To be formulated)
14
CPEC Portfolio-Projects &
Mode of Financing

15
 CPEC Portfolio-Projects &
Mode of Financing
Projects Estimated Cost:
US$ Millions
Energy (IPP Mode financing) 34,413
Transport and Infrastructure
Roads (Government Concessional loan- 6,100
GCL financing)
Rail Network(Government Concessional 3,690
loan)
Gwadar Port (Grant/GCL/Interest free 793
loan)
Others (GCL) 44
Total 45,040

16
CPEC
PROJECTS

17
 AN INVESTMENT OF
US$ 46 BILLION
51 MoUs of commitments signed during Chinese President’s visit in April, 2015

Others
$1.84b 4%

Transport
& Infra-
structure
$10.6b
23%

Energy
$33.7b
73%

18 CHINA - PAKISTAN ECONOMIC CORRIDOR

 CPEC Major Projects
• Gwader Port
• Gwader City
• Roadway / Motorway
• Railway Sector
• Energy Generation
• Energy Sector Transmission
• Other Sectors

19
 Gwader Port & City Projects
• Gwader Port Complex
• Gwader Free Trade Zone
• Gwadwer International Airport
• Coal Power Project
• Eastbay Expressway
• Pak-China Technical & Vocational Training
Institute

20
 CPEC-Gwadar Port Related Projects
Sr. Estimated Cost
No Projects (US$ M)
1 Eastbay Expressway 140.60

2 Gwadar International Airport 230.00

3 Construction of Breakwaters 123.00

4 Dredging of berthing areas & channels 27.00

5 Infrastructure for Free Zone & EPZs port related 32.00

industries
6 Necessary Facilities of Fresh Water Treatment and Supply 130.00

7 Hospital at Gwadar 100.00

8 Technical and Vocational Institute at Gwadar 10.00

Total Gwadar Port Projects 793.00

21
 Roadway / Motorway Projects

• Karakorum Highway Reconstruction

• Eastern Alignment
• Western Alignment
• Central Alignment

22
 CHINA PAKISTAN ECONOMIC
CORRIDOR

23
 CPEC-Transport Infrastructure Sector Projects
Sr. Length Estimated Cost
Projects
No (km) (US$ M)

Roads

1 KKH Phase II (Raikot – Islamabad Section) 440 3,500

2 Lahore-Karachi Motorway (Multan-Sukkur Section) 392 2,600

Rail Sector Projects

1 Expansion and reconstruction of existing Line ML-1 1736 3,650

2 Havelian Dry port (450 M. Twenty-Foot Equivalent Units) 40

TOTAL 9,790
24
 Railway Projects
• Overhaul of Main Line MI
• Overhaul of Main Line M2
• Overhaul of Main Line M3
• Orange Line Metro
• Khunjerab Railway

25
 Energy Sector Projects

• Renewable Energy
• Coal
• Liquefied Natural Gas

26
 CPEC-Energy Priority Projects
Sr. Projects MW Estimated Cost
No (US$ M)
1 Port Qasim Electric Company Coal Fired, 2X660, Sindh 1320 1,980
2 Sahiwal 2x660MW Coal-fired Power Plant, Punjab 1320 1,600
Engro thar 4x330MW Coal-fired, Thar, Sindh 1320 2,000
3 Surface mine in Block II of Thar Coal field, 6.5 mtpa,
Thar Sindh 1470

4 Gawadar Coal Power Project, Gwadar 300 360

5 HUBCO coal power plant 1X660 MW, Hub Balochistan 660 970
6 Rahimyar Khan Coal Power Project, Punjab 1320 1,600
SSRL Thar Coal Block 1-6.5mpta Thar, Sindh 1,300
7
SSRL 2x660 MW Mine Mouth Power Plant, 1320 2,000
8 Quaid-e-Azam 1000MW Solar Park, Bahawalpur, Punjab 1000 1,350
27
 CPEC-Energy Priority Projects
Sr. Projects MW Estimated Cost
No (US$ M)

9 Dawood 50MW wind Farm, Bhambore, Sindh 50 125

10 UEP 100MW wind Farm, Jhimpir, Sindh 100 250

11 Sachal 50MW Wind Farm, Jhimpir, Sindh 50 134

12 Sunnec 50MW wind Farm, Jhimpir, Sindh 50 125

13 Suki Kinari Hydropower Station, KPK 870 1,802

14 Karot Hydropower Station, AJK & Punjab 720 1,420

15 Matiari to Lahore Transmission line 1,500

16 Matiari to Faisalabad Transmission line 1,500

Total (Priority) 10400 21,486

28
 CPEC-Energy Actively Promoted Projects
Estimated Cost
Sr. No Projects MW (US$ M)

17 Gaddani Power Park Project

(i) 2×660MW 1320 3,960

(ii) Jetty + Infrastructure 1,200

18 HUBCO coal power plant 1X660 MW, Hub Balochistan 660 970

29
 CPEC-Energy Actively Promoted Projects
Sr. Estimated Cost
No Projects MW (US$ M)
Salt Range Mine Mouth Power Project including mining,
19 Punjab 300 800

20 Kohala Hydel Project, AJK 1100 2,397

21 Pakistan Wind Farm II 2X50 MW(Jhampir, Thatta, Sindh) 100 150

22 Thar mine mouth oracle, Thar Sindh 1320 1,300

23 Muzaffargarh Coal Power Project, Punjab 1320 1,600

24 Gas Power Plant 525 MW 525 550

Total (Actively Promoted) 6645 12,927

TOTAL Energy Projects 17045 34,413

30
 EARLY HARVEST PROJECTS
Projects Capacity Location
Pakistan Port Qasim Power Project 1320MWs (660X2) Sindh
Thar -1 Project 1320 MWs (4x330) Sindh
Thar -2 Project 1320 MWs (2x660) Sindh
Thar Engro Coal Power Project 660 MWs (330x2) Sindh
UEP Windfarm 10MWs Sindh
Dawood Windpower Project 50MWs Sindh
Sachal Windfarm 50MWs Sindh
Sunnec Eindfarm 50 MWs Sindh
Sahiwal Coal Power Project 1320 MWs (2x660) Punjab
Rahim Yar Khan Coal power Project 1320 MWs (2x660) Punjab
Quaid e Azam Solar Power Project 1000 MWs Punjab
Karot Hydro Power Project 72MWs (2020) Punjab
Suki Kinari Hydropower Project 870MWs (2020) KPK
HUBCO Coal Power Project 660MWs Baluchistan
Gwader Coal Power Project 300 MWs Baluchistan
Mitiari to Faisalabad transmission Line 660 KWs Sindh & Punjab
Mitiari to Lahore Transmission Line 660 KWs Sindh & Punjab
31
 Other Projects

Sr. Estimated
No Projects Length (km) Cost (US$ M)

1 Cross Border Optical Fiber Cable 44

2 DTMB

Total 44

Total Cost of CPEC Projects 45,040

32
 Industrial Cooperation

• Textile Industry
• Household appliances (assembly to production)
• Cement (export to China, Europe and Middle
East)
• Mineral Exploitation(Balochistan & KP)

33
10 years of CPEC: successes

34
 Mid/Long Term Perspective (2025/30)
• Highways/Railways networks
• Energy
• Gwadar
• industrial Parks
• Telecommunications
• Oil & Gas pipelines
• Trade, investment, industry, agriculture
• Tourism, Services
• Maritime
• Water Resources
• Finance
35
Issues relating to CPEC &
Its Implementation Status

36
 Political Consensus

• All Parties Conference

• Parliamentary Committee on CPEC
• Provincial representation / input at all
important CPEC events
• CPEC Summit on 29th August, 2016 was
attended by all Chief Ministers/representative
of provinces

37
 Implementation Issues
Security
• security is another concern
hampering smooth
implementation of the second
phase. The security apparatus was
excellent during the first phase of
CPEC. However, dynamics of the
second phase are entirely
different.
Capacity of Institutions
• the institutional framework is
complicated. It makes the business
environment unfriendly, which
discourages investment. Even
registering a company takes many
days and the applicant has to deal
with numerous departments. If the
applicant is a foreigner, he has to
go the extra mile.
38
 Implementation Issues
•
Coordination / Creating better environment
Human Resource Development

• Poverty Alleviation
• Education
• Medical Treatment
• Water Supply
• Vocational Training
• Tourism including coastal Tourism
• Educational linkage
• Human resource development
• People to people contact
• Increase in livelihood opportunities
• Enhance Security and stability of the
region

39
 Challenges of Energy Projects
• National / Master plan of Energy
• Integrated implementation plan
• Boosting of green energy
• Promoting indigenous coal based energy - Thar
• Problem of Hydel Energy
• Solar / Wind Energy
• Transmission of Energy
• Distribution of Energy
• Reducing losses
• Cost of Energy
40
 Security Challenges of Economic
Corridor
• External Environment
• Internal Environment
• Cost of security
• Coordination of security
• Deployment of Special Security Division (SSD)
•

41
 Challenges of Economic Corridor
• 3.0 challenges
3.1 Domestic challenges
a) Law and order
b) Political instability
c) Civil-military relations
d) Inter-provincial issues regarding CPEC
e) Baluchistan factor
3.2 International challenges
a) India’s hostile attitude towards CPEC
b) Indo Afghan nexus.
c) Iran (Chabahar port v/s Gwadar)
d) Involvement of big powers.

42
 Benefits & Impact – Economic,
Social & Political

• Economy 2.5% GDP

• Socio – Economic Development
• Peace and stability
• Revenue bottle neck in Energy and Transport
Infrastructure
• Employment through Industrial / Investment
Cooperation

43
 Benefits & Impact – Economic,
Social & Political - 2
• Inclusive Development
• Regional Integration
• Jobs Creation
• Energy Security
• Trade & Commerce

44
 CPEC Framework 1+4
• Energy Cooperation
• Infrastructure Development
• Gwadar
• Industrial Cooperation
 Suggestions
• a) Security measures
b) Political stability
c) Reconciliation process with Afghanistan
d) Transparency and openness to public
and accountability
e) Addressing grievances of provinces
f) Stability in balochistan

46
 conclusions
• CPEC is the framework of regional connectivity which is a well thought out framework
that will escort great economic/trade activity in the region and will reshape many
economic policies in the coming years.
• For Pakistan, it is a catalyst for change and for China, it is meant to showcase its
comprehensive economic reach to the regions for its successful culmination of ‘One
Belt, One Road’ policy.
• Even though the project faces many challenges, which include, the absence of rule of
law, political instability, western interference in domestic affairs, perpetual political
instability, and lack of impartial accountability institutions.
• However, the prospects it presents are also massive which include, economic boost,
energy transformation, infrastructure development, employment generation, regional
connectivity and others.
• Moreover, coupled with these opportunities Pakistan and China will get the maximum
extract of this joint step of China Pakistan economic corridor.

47
 Class start from 6 september
Further details and information
• Pakistan current affairs season 4
• special CSS and CSS pcs 2024
• Registration open now.. 03003372236
• Features
1 most important topics 25 cover
2 past paper analysis with outline discuss
3 topics wise notes
4 10 expected full length questions
• Only 8 seats...
•

ONLY: 4k

48