@FinancialTimes story has reignited the debate on CPEC in Pak. Impassioned & heated debate on the subject has precluded nuanced discussion. CPEC is neither another East India Co nor a game changer. It is an opportunity that can go in our favour if we do our homework & vice versa
Few areas of legitimate concern reg CPEC are:
Sovereign guarantee crisis related to FDI in energy sector
High project costs proposed by Chinese feasibilities nd conflict of interest issues
Uncertainty abt mpact on local industries & regional disparities
Lack of transparency
Sovereign guarantee crisis related to FDI in energy sector
High project costs proposed by Chinese feasibilities nd conflict of interest issues
Uncertainty abt mpact on local industries & regional disparities
Lack of transparency
All infrastructure CPEC projects are financed through soft loans. Problem is tht feasibility for these projects is also often carried out by Chinese side-a case of conflict of interest. Not surprisingly, costs proposed in feasibility are outrageously high. Couple of examples are:
Differences over cost & scope have impeded progress on upgradation of ML-1. Initial costs suggested by China were Rs 1 trillion. Pak objected to high costs nd set up consortium of Chinese nd Pak firms to do joint feasibility for phase 1 of the project.
Still costs proposed by Chinese Co for Phase 1 were Rs 77 million more than those estimated by Pak firm. Same is case with Quetta Mass Transit. Chinese Company proposed a cost of Rs 100 billion--more than the total annual development budget of Balochistan (Rs 86 billion FY 2018)
That Chinese firms, which r providing loans 4 infrastructure projects, are also doing feasibility nd thus determining costs is a clear case of conflict of interest. Feasibility nd project design shall be prepared by ind party. Chinese Cos have an interest in proposing high costs
