One of Pakistan's major railway modernization projects to be built under CPEC is in trouble due to International Monetary Fund (IMF) conditions. This information was given in local media reports on Saturday.
Main Line-1 (ML-1) aims to modernize the 1,726-km-long colonial-era railway line stretching from Karachi to Peshawar, with IMF approval and US$6.67 billion from China, a leading newspaper in the country reported. The loan depends on the ability of the Finance Ministry to provide sovereign guarantee for the loan.
However, the project budget has been cut by 32 percent. The China–Pakistan Economic Corridor (CPEC) is a collection of infrastructure and other projects under construction in Pakistan since 2013.
Pakistan received a $3 billion bailout package from the International Monetary Fund (IMF) on June 30, which later released an initial advance installment of about $1.2 billion. The country, burdened with debt, had assured the IMF of eight billion dollars for external payments.
A senior official said during a media briefing that the framework agreement for ML-1 was signed in May 2017 for an estimated cost of $9.8 billion, for which PC-1 (Planning Commission's approval) was approved by the Executive Committee of the National Economic Council. The preliminary plan) was approved in August 2020.
However, the project has gone through ups and downs amid changing priorities and governments in Islamabad. The cost of the project has now been revised to USD 6.67 billion by both the parties.
Caretaker Prime Minister Anwar ul Haq Kakkar is likely to visit Beijing next to represent Pakistan at the Belt and Road Initiative (BRI) conference. During this time both the countries are expected to make a formal announcement and sign an addendum to the Framework Agreement.