Suggestion rejected by China for engaging third party in $8.2bn ML-I project

ISLAMABAD: The mainline (ML-I) project of Pakistan Railways of worth almost $8.2-billion is projected for completion under a sovereign mutual arrangement, as Beijing is not in the favor of constructing the largest China-Pakistan Economic Corridor (CPEC) scheme by means of any third-party contractors.

According to sources in the Ministry of Railways and the Ministry of Communications, it is observed that China was not interested in accommodating on the suggestion of implementing the ML-I scheme on build-operate-transfer basis.

Also, during the previous month combined working group-level discussions, China initiated the mater that the project should be executed in line with the structure agreed. However, Pakistan had also then settled on to the Chinese demand for abiding with the presented arrangement as agreed in May 2017.

Minister for Planning and Development Khusro Bakhtiar had stated, “The government is discovering the opportunities for finishing the $9 billion ML-I project on build-operate-transfer (BOT) basis.”

The minister also added, Pakistan is keen to transfer the financial hazard of the multi billion-dollar railway project to the third party contractors. However, such decision will be needing alteration to the framework agreed between China and Pakistan, signed in May 2017.

According to the outline agreed for the ML-I project, China will endow with 85% of the project cost as a concessionary loan. Since, this project is deliberately significant for both the countries, therefore it was not prudent to engage third party.

It needs to be mention here that China was enthusiastic to complete the project on a fast track basis, but this project had already taken much time than the original agenda.

The development and renovation of Karachi-Lahore-Peshawar railway track, also known as ML-I project, is a planned project of the CPEC structure.

The ML-I project is based on total length of 1,872 kilometers. However, the preceding Pakistan Muslim League-Nawaz (PML-N) government had decided to divide the project into two, because of its elevated cost and widespread work which necessitate renovation and extension of the main railway line.