Pakistan Railway Project Developed By China Will Have No 3rd Party Contractors: Beijing

The $8.2-billion Pakistan Railways project will be developed under a bilateral deal as China has rejected the recommendation of constructing the largest China-Pakistan Economic Corridor (CPEC) scheme through third-party contractors. The ML-I project of the Pakistan Railways has a total length of 1,872 kilometres. 

Beijing was not keen on the proposal of developing the ML-I scheme on a build-operate-transfer basis, said officials in the Ministry of Railways and the Ministry of Communications. During the joint working group-level discussions, Beijing affirmed that the project should be completed in line with the bilateral agreement. Islamabad also consequently agreed to the Chinese demand for staying with the existing arrangement that had been signed in May 2017.

Minister for Planning and Development Khusro Bakhtiar stated, “The government is exploring the possibility of completing the $9-billion ML-I project on build-operate-transfer (BOT) basis.” The minister further stated that Islamabad wanted to shift the financial risks of the dollar Pakistan railway project to the contractors.

According to the agreement, China will finance 85% of the project as part of a concessionary loan. The project has been declared strategically vital for both China and Pakistan. Due to the critical nature of the project, it was not desirable to involve a third party, the officials said.

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