Pakistan seems to be taking the path of Maldives, Sri Lanka, and several other nations and seeking large loans from China. Imran Khan-led Pakistan govt is seeking USD 2.7 billion loan from the Chinese govt to complete construction projects of package-I of the Mainline-1 project of China Pakistan Economic Corridor (CPEC). According to the Pakistani media, during the sixth meeting of the financing committee on the ML-1 project, it was decided that Pakistan would request to sanction USD 2.73 billion out of the total USD 6.1 billion worth of Chinese funding the neighbour would need for the project.
Under the project, Pakistan’s existing 2,655 km railway tracks will be upgraded to allow trains to move up to 165km per hour, which will be double the speed of the capacity of the current network. Moreover, the line capacity will increase from 34 to over 150 trains each way per day. 90% of the project cost is being financed by China.
Pakistan’s economy is sitting on the crumble that can collapse anytime, and the Covid-19 situation worsens the condition further. The Ministry of Economic Affairs Pakistan will send a request to China next week as China will finalize 2021 financing plans by the end of November.
In August this year, Pakistan had borrowed $1 Billion from its all-weather ally China to repay loan of $1 Billion to Saudi Arabia to avoid default on international debt obligations.
Misappropriation of 100 billion Pakistani rupees
In May 2020, a 278-page report “Committee for Power Sector Audit, Circular Debt Reservation, and Future RoadMap” was handed over to Khan. It listed the malpractices worth 100 billion Pakistani rupees in the independent power generating sector. The nine-member committee was formed to find the causes of the steep cost of electricity in Pakistan. As per the report, the sponsors misrepresented the deduction of ‘Interest During Construction’ or IDC and did not consider the early completion of the projects in the cost estimate.
As a result, Pakistan ended up paying 32.46 billion Pakistan rupees to the two Chinese coal-based plants. The interest deduction was allowed for 48 months, but the project was completed in 27-29 months. It resulted in an additional payment of USD 27.4 million annually for the entire life of the Sahiwal plant, i.e., 30 years. Though the agency that brought the report into the public eye did not directly name CPEC, Pakistan’s former Ambassador Hussain Haqqani in an article revealed the report did mention CPEC.
India’s stand on CPEC and PoK
Over time, India has protested the CPEC as it also covers Pakistan occupied Kashmir. The Ministry of External Affairs has said several times that Pakistan was informed that the entire Jammu and Kashmir and Ladakh, including areas of Gilgit and Baltistan, are an integral part of India. Pakistan has recently given province status to PoK to clear the path for CPEC. India has categorically told Pakistan to revoke the status and vacate PoK.
Pakistan is moving fast on the path to becoming pray to China’s land-grabbing policies
The dragon is famous for its land-grabbing techniques in the pretext of loans for development. Countries like the Maldives and Sri Lanka, among several others, have already lost a chunk of their land to China as they failed to repay the loans. China is playing the same tactics in African countries and expanding its territories quickly. If Pakistan continues to take a loan from China, it will soon start to lose land to the Communist dragon.