Trade through the corridor will surpass $3 trillion; toll income would be 3 times the annual budget of Pakistan ~ $135+ billion
May 5, 2018 (BE2C2) — The Project Director for China Pakistan Economic Corridor (CPEC) under the Ministry of Planning, Development and Reform, has said that Pakistan is the center of three engines of growth and will benefit the maximum from the successful operationalization of the CPEC as the trade through this corridor will surpass US $3 trillion.
It was the first time an official figure on cost of Chinese loans under the CPEC was made public.
In October, the Board of Investment (BOI) claimed that the CPEC toll income would be three times the budget of Pakistan after completion by 2030. It was the first time an official figure on CPEC toll estimates was made public.
Pakistan’s budget last year stood at Rs4.75 trillion. Thrice this amount would mean Rs14+ trillion ($135+ billion)– an annual expected revenue stream that is 2-3 times the total CPEC portfolio of $52 to $62 billion.
Hassan Daud Butt, the CPEC Project Director, while addressing a seminar jointly organized by The Center for International Studies (CIS), Bahauddin Zakariya University Multan, in collaboration with the Institute of Peace and Diplomatic Studies (IPDS) Islamabad, on “Socio-Economic Impact of China Pakistan Economic Corridor” in Karachi on Wednesday, also informed the audience that all projects under the CPEC came with an interest of 2.39 percent loan which Pakistan would return within the next 25 years to China.
He however pointed out that the challenges faced by the CPEC include energy, road connectivity and capacity of human resource to undertake the development coming to Pakistan and optimize the revenue stream.
“According to estimates, in future, the total trade will exceed 3 trillion USD. The CPEC will prove a big game changer for Pakistan as Gwadar port has the potential to surpass neighboring ports in terms of trading activity,” he said.
“CPEC would attract FDI into Pakistan in infrastructure, power and construction sector,” Butt added.
China’s role remains pivotal to rising FDI into Pakistan, many observers also say.
Several infrastructure projects are in the pipeline for fast-tracking Gwadar city”s development. They include the Gwadar International Airport, desalination plant for clean drinking water, upgradation of existing 50-bed hospital to 300 beds, development of Gwadar export processing zone, and building of China Pakistan Economic Corridor (CPEC) Institute.
Gwadar Port Authority Chairman Dostain Khan Jamaldini said work on the new airport will start soon. The state company that has been nominated by the government of China for the development of the airport has got the clearance for financing and execution of the project. China Airport Construction Group Engineering Company’s representative Jianxin Liao informed media that the New International Airport in Gwadar will be the biggest airport of Pakistan. It will be situated on 4,300 acres.
In September 2015, China converted $230 million loan for the airport to a grant– a first in China’s history on overseas projects it finances and builds.
The Center for Aviation report says, “The New Gwadar Airport is a joint venture between Pakistan, Oman and China. The Sultanate of Oman provided USD17.5 million for the airport project, whilst China plans to invest USD662 million for land development, sea port and airport works in and around Gwadar. Pakistan plans to develop the new facility on a 4000-acre land plot 25km away from the existing Gwadar International Airport. The China Communications Construction Company has been awarded the USD246m project, which is expected to be complete within a 30-month period (Dec 2019).”
Meanwhile, the federal government has rejected Balochistan government proposal to start new housing and commercial societies in Gwadar by private investors. The center has asked the provincial government to wait till the Gwadar City Master Plan is finalized by Chinese consultants in August.