CPEC

Infrastructure projects under the aegis of CPEC will span the length and breadth of Pakistan, and
will eventually link the city of Gwadar in southwestern Pakistan to China's northwestern
autonomous region of Xinjiang via a vast network of highways and railways. Proposed
infrastructure projects are worth approximately $11 billion, and will be financed by heavilysubsidized concessionary loans that will be dispersed to the Government of Pakistan by the Exim
Bank of China, China Development Bank, and the Industrial and Commercial Bank of China. As
part of the broad package of infrastructure projects under CPEC, a 1,100 kilometre long
motorway will be constructed between the cities of Karachi and Lahore, while the Karakoram
Highway between Rawalpindi and the Chinese border will be completely reconstructed and
overhauled.[9] The KarachiPeshawar main railway line will also be upgraded to allow for train
travel at up to 160 kilometres per hour by December 2019. Pakistan's railway network will also
be extended to eventually connect to China's Southern Xinjiang Railway in Kashgar. A network
of pipelines to transport liquefied natural gas and oil will also be laid as part of the project,
including a $2.5 billion pipeline between Gwadar and Nawabshah to eventually transport gas
from Iran.
Over $33 billion worth of energy infrastructure are to be constructed by private consortia to help
alleviate Pakistan's chronic energy shortages, which regularly amount to over 4,500MW, and
have shed an estimated 22.5% off Pakistan's annual gross domestic product. Over 10,400MW
of energy generating capacity is to be developed between 2018 and 2020 as part of the corridor's
fast-tracked "Early Harvest" projects in conjunction with four projects under construction prior
to the announcement of CPEC. Electricity from these projects will primarily be generated by
coal, though wind projects are included under CPEC, as is the construction of one of the world's
largest solar energy plants. On 13 November 2016 the first trade activity took place through
CPEC. Cargo from China was trucked down via the corridor and loaded on to ships at Gwadar
port, headed to markets in West Asia and Africa. In November 2016, China announced an
additional $8.5 billion investment in Pakistan with $4.5 billion allocated to upgrade Pakistan's
main railway line from Karachi to Peshawar including tracks, speed and signaling. And $4
billion toward an LNG terminal and transmission lines to help alleviate energy shortages, taking
the total level of investment to $55 billion.
China stands to gain an alternative route for trade rather than the South China sea, with shorter
distance saving transport costs (distance will be reduced by 9000 km) and less uncertainty and
risk (Pakistan is allied with China) whereas in South-east Asia China is in dispute with its
neighbors. Pakistan stands to gain due to upgrade of infrastructure on the Lahore-Karachi
railway helping to make exports more competitive in terms of travel time and transport costs and
the development of the Pakistan's road, air and port infrastructure to transport goods and will
remove the energy shortages which will lead to complete industrialist ion of Pakistan's economy

from the current semi-industrialized economy, around 8000 Megawatts of energy will be
generated.

Projects in Gwadar city

China will grant Pakistan $230 million to construct a new international airport in Gwadar which
is to be operational by December 2017. The provincial government of Baluchistan has set aside
4000 acres for the construction of the new $230 million Gwadar International Airport which will
require an estimated 30 months for construction, the costs of which are to be fully funded by
grants from the Chinese government which Pakistan will not be obliged to repay.
The city of Gwadar is further being developed by the construction of a 300MW coal power plant,
a desalinization plant, and a new 300 bed hospital. Plans for Gwadar city also include
construction of the East Bay Expressway a 19 kilometre controlled-access road that will
connect Gwadar Port to the Makran Coastal Highway. These additional projects are estimated to
cost $800 million, and are to be financed by 0% interest loans extended by the Exim Bank of
China to Pakistan.
In addition to the aforementioned infrastructure works, the Pakistani government announced in
September 2015 its intention to establish a training institute named Pak-China Technical and
Vocational Institute at Gwadar, which is to be developed by the Gwadar Port Authority. The
institute is to be completed by March 2016 at the cost of 943 million rupees, and is designed to
impart to local residents the skills required to operate and work at the expanded Gwadar Port.

Karakoram Highway reconstruction

The CPEC projects call for reconstruction and upgrade works on National Highway 35 (N-35),
which forms the Pakistani portion of the Karakoram Highway (KKH). The KKH spans the 887
kilometre long distance between the China-Pakistan border and the town of Burhan, near Hasan
Abdal. At Burhan, the existing M1 motorway will intersect the N-35 at the Shah Maqsood
Interchange. From there, access onwards to Islamabad and Lahore continues as part of the
existing M1 and M2 motorways. Burhan will also be at intersection of the Eastern Alignment,
and Western Alignment.
Upgrades to the 487 kilometer long section between Burhan and Raikot of the Karakoram
Highway are officially referred to in Pakistan as the Karakoram Highway Phase 2 project. At the
southern end of the N-35, works are already underway to construct a 59-kilometer-long, 4lane controlled-access highway between Burhan and Havelian which upon completion will be
officially referred to as the E-35 expressway. North of Havelian, the next 66 kilometres of road

will be upgraded to a 4-lane dual carriage way between Havelian and Shinkiari, Groundbreaking
on this portion commenced in April 2016.

Railway Projects
The CPEC project emphasizes major upgrades to Pakistan's ageing railway system, including
rebuilding of the entire Main Line 1 railway between Karachi and Peshawar by 2020; this single
railway currently handles 70% of Pakistan Railways traffic. In addition to the Main Line 1
railway, upgrades and expansions are slated for the Main Line 2 railway, Main Line 3 railway.
The CPEC plan also calls for completion of a rail link over the 4,693-meter high Khunjerab Pass.
The railway will provide direct access for Chinese and East Asian goods to Pakistani seaports at
Karachi and Gwadar by 2030.
Procurement of an initial 250 new passenger coaches, and reconstruction of 21 train stations are
also planned as part of the first phase of the project bringing the total investment in Pakistan's
railway system to approximately $5 billion by the end of 2019. 180 of the coaches are to be built
at the Pakistan Railways Carriage Factory near Islamabad, while the Government of Pakistan
intends to procure an additional 800 coaches at a later date, with the intention of building 595 of
those coaches in Pakistan.

Energy Project
Pakistan's current energy generating capacity is 24,830 MW, though the country currently faces
energy shortfalls of over 4,500MW on a regular basis with routine power cuts of up to 5 hours
per day, which has shed an estimated 22.5% off its annual GDP.[21] Energy generation will be a
major focus of the CPEC project, with approximately $33 billion expected to be invested in this
sector. As part of the "Early Harvest" scheme of the CPEC, an estimated 10,400 MW of
electricity are slated for generation by March 2018 as part of CPEC's "Early Harvest" projects.
The energy projects under CPEC will be constructed by private Independent Power Producers,
rather than by the governments of either China or Pakistan. The Exim Bank of China will finance

these private investments at 56% interest rates, while the government of Pakistan will be
contractually obliged to purchase electricity from those firms at pre-negotiated rates.