China stops funding CPEC road projects in Pakistan over graft issue: Report

Pakistan-based Dawn newspaper reported that this decision by Beijing will likely hit over Rs 1 trillion-worth road projects of the Pakistan's National Highway Authority (NHA), and may delay at least three such ventures.

By: Express Web Desk | New Delhi | Published: December 5, 2017 3:03 pm
Chinese official expresses concern over political unrest in Pakistan  Chinese official have expressed weariness over the prevailing political instability in Pakistan that could negatively impact the pace of the projects under CPEC (File photo)

In a move that has left officials in Islamabad ‘stunned’, China on Tuesday decided to temporarily stop funding at least three major road projects in Pakistan, which are being built as part of the USD 50 billion China-Pakistan Economic Corridor (CPEC), as per a media report. Pakistan-based Dawn newspaper reported that this decision by Beijing will likely hit over Rs 1 trillion-worth road projects of the Pakistan’s National Highway Authority (NHA), and may delay at least three such ventures.

As per a senior government official, Beijing will release the funds after issuing ‘new guidelines’. The approximately USD 60 billion CPEC, a flagship project of China’s prestigious One Belt One Road, passes through Pakistan-occupied Kashmir (PoK). It links Pakistan’s restive Balcohistan province with China’s Xinjiang region. Due to the temporary halt on funding, the 210-km-long Dera Ismail Khan-Zhob Road will be affected. It is being built at an estimated cost of Rs 81 billion. Out of this, Rs 66 billion would be spent on construction of road while Rs 15 billion on land acquisition.

The other project which is going to be hit is 110-km-long Khuzdar-Basima Road, having an estimated cost of Rs 19.76 billion. The third project is Rs 8.5 billion worth, the remaining 136-km of Karakarom Highway (KKH) from Raikot to Thakot. Initially, these three projects were part of the Pakistan government’s own development programme. However, back in December 2016, the NHA spokesperson had announced that they would be included under the CPEC umbrella so it becomes eligible for concessionary finance from China.

“The funds for the three road projects were approved in the 6th Joint Cooperation Committee meeting held last year, pending necessary procedural formalities. “It was expected that the funding of the three projects would be finalised during the Joint Working Group (JWG) meeting held on November 20, but Pakistan was informed in the meeting that ‘new guidelines’ will be issued from Beijing under which new modus operandi for release of the funds will be described,” PTI quoted the Dawn as saying.

China’s decision was conveyed to Pakistan in the JWG meeting and the existing procedure for release of funds had been abolished, he said. Under the previous procedure, the projects were to be approved by six different forums after which the funds were released, the official added. “In fact, the Chinese authorities informed us that the previous procedure of release of funds was meant for early harvest projects only and new guidelines will be issued for future projects of the CPEC,” the official said.

The official said the Pakistani side was left “stunned” when informed about this development, as it was the first time they were hearing it. He, however, claimed that Chinese side was quite disturbed with media reports, published in Pakistan, about corruption in the CPEC projects and and that was the reason Beijing has temporarily halted release of funds for the corridor.

The ambitious CPEC was launched in 2015 when Chinese President Xi Jinping visited Pakistan.

(With PTI inputs)

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