CHINA PAKISTAN ECONOMIC CORRIDOR

China Pakistan Economic Corridor

Is a collection of infrastructure projects that are currently under construction throughout
Pakistan. Originally valued at $46 billion, the value of CPEC projects is worth $62 billion as
of 2017. CPEC is intended to rapidly modernize Pakistani infrastructure and strengthen its
economy by the construction of modern transportation networks, numerous energy projects,
and special economic zones. On 13 November 2016, CPEC became partly operational when
Chinese cargo was transported overland to Gwadar Port for onward maritime shipment to
Africa and West Asia while some major power projects were commissioned by late 2017.
China-Pakistan Economic Corridor is a framework of regional connectivity. CPEC will not
only benefit China and Pakistan but will have positive impact on Iran, Afghanistan, India,
Central Asian Republic, and the region. The enhancement of geographical linkages having
improved road, rail and air transportation system with frequent and free exchanges of growth
and people to people contact, enhancing understanding through academic, cultural and regional
knowledge and culture, activity of higher volume of flow of trade and businesses, producing
and moving energy to have more optimal businesses and enhancement of co-operation by win-
win model will result in well connected, integrated region of shared destiny, harmony and
development.

China Pakistan Economic Corridor is journey towards economic regionalization in the

globalized world. It founded peace, development, and win-win model for all of them.

China Pakistan Economic Corridor is hope of better region of the future with peace,
development and growth of economy.

According to official statistics, 20% of CPEC is debt-based finance, while 80% of CPEC is
investment with the project contributing to 70,000 jobs for local Pakistanis and 80,000 jobs for
Chinese. Official statistics suggested a return of US$6 billion to 8 billion from taxes per annum
such as road and bridge tolls. The total CPEC loan is 6% of Pakistan's GDP, however critics
have labelled the project a debt-trap. Nevertheless, officials countered that 3.5% of Pakistani
GDP per annum is lost due to poor transportation networks, which the CPEC investment aims
to remedy leading to added benefits for any lag in Pakistan's growth statistic.

CPEC Projects:
Chinese Finance Projects:
 Energy
 INFRASTRUCTURE
 GAWADAR
 OTHER PROJECTS
 RAIL BASED MASS TRANSIT PROJECTS

PSDP (Public Sector Development Program) Projects:

 WESTREN ROUTE

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Chinese Finance Projects:

Energy projects :

There are many energy projects under CPEC. Some of them are as follow:

I. 2×660MW Coal-fired Power Plants at Port Qasim Karachi (1320MW)

Estimated Cost (US $ Million): 1912.2
Current status : operational

II. Suki kinari hydropower station , Naran ,Khyber Pakhtunkhwa

Estimated Cost (US $ Million): 1707
Completion status : Expected Commercial Operation Date (COD) December 2022

III. Hydro china Dawood wind (49.5MW)

Estimated Cost (US $ Million): 112.65
Completion status: operational
IV. Karot hydropower station (720MW)
Estimated Cost (US $ Million): 1698.26
Completion status: Expected Commercial Operation Date (COD) December 2021.

INFRASTRUCTURE:
I. Peshawar Karachi Motorway (Multan Sukkur Section) (392KM)

Karachi – Peshawar Motorway envisages construction / development of 6-Lane access

controlled Motorway having total length of 1,100 Km. The proposed Motorway shall be a
tolled facility. It shall originate from Karachi through Motorway M-9 (136 Km) up to
Hyderabad. From Hyderabad onwards, the proposed alignment shall follow a virgin alignment
for 345 Km up to Sukkur. The Sukkur Multan section, 392 Km essentially follows the Left
Bank of River Indus.
Type of Road: 06 Lane Access Controlled Motorway
Start Point: Multan
End Point: Sukkar

Estimated Cost (US $ Million): 2889

Completion status: Completion planned in August 2019
II. Khuzdar-Basima Road N-30 (110 km) (110KM):
The project is located in District Khuzdar in Baluchistan province. The project is construction
of 2-lane highway from Basima to Khuzdar. The project length is 110 km.
Estimated Cost (US $ Million): 19.19Billion Rs
Completion status: operational

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GWADAR:
I. Gwadar East-Bay Expressway:
Currently, Gwadar Deep-Sea Port is connected through a narrow 16 feet wide thoroughfare of
Gwadar town at the West-Bay. All the trawlers/trucks loaded with imported shipments pass
through this strip causing disruption of normal traffic. The port has not a dedicated wide
highway to cater the transporting requirements of the post. The port operationalization, even
with the available 3 multi-purpose berths, necessitates construction of the planned East-Bay
expressway. This 6-lane expressway along with a provision of 30 meters wide railway corridor
shall connect the port with the Mekran Coastal Highway (N-20) through the 2300 acres Free
Trade Zone of Gwadar Port.
Estimated cost (US$M):168
Completion status: Date of Completion October, 2020
II. New Gwadar International Airport
Construction of New Gwadar International Airport (NGIA), along with allied facilities for new
airport that will be capable of handling a combination of ATR 72, Airbus, (A-300), Boeing (B-
737) and Boeing (B-747) for domestic as well international routes.
Estimated cost (US$M): 230
Completion status: Operational
III. Pak China friendship hospital :
This project is proposed for implementation of Phase-II of 50-bedded hospital constructed
under GDA Business Plan (Federal PSDP). The hospital is planned on 68 acres of land. One
out of six medical blocks (each 50 bedded) and almost 20% of the residential blocks are
completed. Under the proposed project remaining medical blocks, nursing and paramedical
institutes, medical college, central laboratory, and other allied facilities are to be constructed
with supply of medical equipment and machinery.
Estimated cost (US$M): 100
Completion status: Implementation minutes signed on 29th March 2019

Other Projects:
I. Cross Border Optical Fibber Cable:
The fibber optical cable covers an area of 820 KM. The project will help improve the telecom
and ICT industry of Pakistan, promote tourism and create trading opportunities for northern
areas of the country. It will also provide the ICT infrastructure for 3G/4G services in the
northern areas and enhance communication security with an alternative fibre route.
Estimated cost (US$M): 37
Completion status: Project Completed and inaugurated by Prime Minister in july 2018

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RAIL BASED MASS TRANSIT PROJECTS:

I. Orange line Lahore

 Length = 27.12 KM (Cut and Cover Section = 1.72 KM; Elevated = 25.4 KM)
 Elevated Viaduct = U Shape Girders
 Stations = 26 (Elevated = 24; Underground= 2)
 Rolling Stock = 27 Train sets ( 5 Cars /train set=135)
 Depot at Dera Gujran (Operation Control Center, workshops with overhauling facility,
training center, parking facility)

Estimated cost (US$M):1626

Completion status: Orange line project will be complete in 2019

PSDP Projects:

CPEC Westren Route Projects:

I. Hakla D.I Khan Motorway: (285KM)
Estimated Cost:
 Construction: Rs.110,208 million
 Land Acquisition, properties compensation and shifting of utilities: Rs.11,973 million
 Total: Rs.122,181 million

Completion status: Date of Completion Planned: December 2019

II. Surab-Hoshab (N-85) (449KM)

Estimated cost (US$M): Rs. 17.97 Billion

Completion status: completed

Scope of CPEC:

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Benefits of CPEC to China:

Interest on Huge Loan:

Pakistan’s economic sovereignty is essentially mortgaged to China - The CPEC is based on a
$46 Billion loan (now it $62 Billion) that Pakistan has taken from China. It is not an FDI that
China will recover from the proceeds of the CPEC. Loans offered by China for CPEC is to be
paid back with an interest at 27%.

One sided bids for Chinese Companies:

The contracts for investments in CPEC are all one sided, no bid contracts against Chinese
companies. There will be no Global Tenders and contracts are confined to Chinese companies
with Pakistani sub contractors are the only ones who are getting the after meal leftovers that
the Chinese would leave on their plates. There are also report that some of the projects are
awarded to black listed companies in China, and substandard construction of Chinese
Companies never sure the quality. Khanpur and Nandipur hydroelectricity Power Plants are
prime examples.

Preference for Chinese Workforce:

China is now having huge under-utilised capacity of industrial production and workforce. In
CPEC majority of workers, goods & materials are all Chinese. China is constructing quarters
for their own work force in Pakistan. No assurances could be given that Pakistani labour would
be recruited to work. So the money China is investing comes back to China and with interest.

Not Toll for Chinese:

Chinese trucks are exempted from paying toll tax. As Pakistan has very less to export to China,
Pakistan will get very less profit from this arrangement. Under CPEC, Pakistan has to take care
of maintenance and security of the road. The expenses Govt. of Pakistan has to bear from its
own pocket. Pakistan plans to train 12,000 security personnel to protect Chinese workers on
the corridor. Presently, 8,000 Pakistani security officials are deployed for the protection of over
8,100 Chinese workers in Pakistan. So Govt of Pakistan has to do without a single penny worth
benefit getting out of it.

Transfer of Coal Plants:

Through CPEC China is installing Coal Based Power Plants in Pakistan which has adverse
effects on human health, do major disregard for the environment and utter destruction of
ecological systems. In one side China is trying to close their own coal based power plants and
they are transferring same on the Pakistani sides.

Distance reduction:
Currently, goods shipped to Europe from central China travel a cumulative distance of 19,132
miles of which 16,507 is by sea, and 2,625 miles by land (distance from Shanghai port to central
China). After completion of CPEC, the goods from Central Asia to Europe would have to
travel a cumulative distance of 9,579 miles, of which 7,847 miles will be through sea, and 1,750
by land (distance from Karachi to central China).

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Besides reduction of mileage, the time required to transport the goods from the current route
to the CPEC route would reduce by 50 percent from 50 days to 25 days.

The shipment to and from Middle East would also gain substantial benefits in transportation
costs and time. Currently, the goods dispatched from central China to Middle East have to
travel a cumulative distance of 12,537 miles, of which 9,912 miles is by sea, and 2,625 miles
through road.
After completion of the CPEC, the distance would be drastically reduced to 2,295 miles, of
which 545 miles would be through the sea, and 1,750 miles on road. The distance between
central China and Middle East would thus be reduced by 80 percent.

CPEC Benefits to Pakistan:

This China Pakistan Economic Corridor has created a positive impact and rapid growth in the
different sectors and industries of Pakistan. Through CPEC China is determined to provide
Pakistan with the best of assistance, financial help, and mutual cooperation to bring the
economic prosperity in the country.

CPEC helps the Country in Overcoming Losses

While combating the war on terror, Pakistan has suffered a lot. The country has been facing
political, monetary, social and human losses because of its domestic regional conflicts. The
intervention of US in Afghanistan has also forced Pakistan to take an active part in a war on
terror against Taliban which led to developing extremism in the country that stopped the
economic development in the country.
Through CPEC, Pakistan has been offered new opportunities it needed to recover its losses. It
has not only helped the country overcome the missed economic opportunities due to being
involved in a war on terror but has also facilitated Pakistan to transform it into a future’s
economic hub.

CPEC brings Economic Benefits

There are various benefits of CPEC to Pakistan in the economic sector. The magnitude of
investment and loans rendered to Pakistan under CPEC shows a sheer commitment of China
to facilitate Pakistan in improving its economy and infrastructure which is required for the
economic development of Pakistan. This close bonding and assistance from China are helping
Pakistan to overcome the scars of decades’ long war on terror in many areas of the country.
CPEC has also taken remarkable initiatives to overcome the power issues of the country by
developing many power projects in the country, CPEC benefits to Pakistan will increase
rapidly. The Economist heights in January 2017 that Pakistan is the world’s fastest-growing
Muslim economy which is ahead of Malaysia, Indonesia, Egypt and Turkey.

CPEC Enhanced Global Image of Pakistan:

The global image of Pakistan has been enhanced because of CPEC. Pakistan was considered
as “the world’s most dangerous country” has now changed to “becoming a next success story”.
CPEC aims to enhance Islamabad’s significance in a quickly transforming world order.
Pakistan views CPEC and investment made on this project as a great opportunity to balance its
complex relationship with US and India.

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CPEC offers safe Trade and Investment Opportunities:

CPEC intends to offer financially viable and safe investments and deeply connected
assimilations with the global markets. Due to the high potential of CPEC, it has not only
attracted the local investment but has grabbed a huge foreign investment too. This will raise
the economy of Pakistan and will help the country to progress. Gwadar port project will bring
a network of roads and highways that will provide the much-needed infrastructure for the
economic development of country .
CPEC aims to strengthen PAK china relations with regard to trade in particular. The deep and
sincere cooperation between the two ‘iron brothers’ for CPEC needs no words to prove its truth.
CPEC benefits to Pakistan in trading and investment opportunities. Gwadar port is expected to
expand into a full-fledged state of the art deep-water commercial hub. The CPEC will open
new avenues of mutual cooperation that will help to stabilize the economic development in the
future. Through CPEC the trade of Pakistan is expected to multiply. Pakistan could become the
major global channel for petrochemical trade which will lead to its economic progression.

CPEC will boost the Power Sector:

The energy crisis has been a major hurdle for Pakistan on its way to development. The main
focus of CPEC is to improve the power sector of Pakistan. Under CPEC almost 60% of the
investment has been allocated for the development of energy infrastructure in order to enhance
the power transmission networks and capacity distribution. China has taken a progressive
initiative to build independent power producers which are funded by Exim Bank of China at a
minimum interest rate. In the future, Pakistan will purchase the power from these power
projects on the pre-negotiated rates. Power projects under CPEC are expected to add 17,045
Mega Watt of energy by the end of the year 2020. Obviously, these power projects will help
Pakistan to overcome power crisis and will make it self-sufficient in the energy sector.

CPEC will improve the Ways of Communication:

The mega CPEC project will also install the new infrastructure of roads, highways and railway
networks in the country. CPEC benefits to Pakistan that it will help to enhance the quality of
lives of the people of Pakistan. This network of huge infrastructure will help Pakistan to
transform into a developed country and will also attract the global markets for their high-valued
investments. After the completion of CPEC, Pakistan will emerge as an economic powerhouse
and will be an inspiration for its neighbouring states. CPEC will let them use this corridor route
to diversify their economic endeavours all across the Africa and Europe through Middle
Eastern states.

CPEC has created around 70,000 Job Opportunities:

The multi-billion dollars China-Pakistan Economic Corridor project has provided jobs to
almost 70,000 Pakistanis so far during the last five years. It will keep generating more
employment opportunities in future too. The CPEC aims to give Pakistan more than 20 special
economic zones. These SEZ’s will aim to improve the following sectors of Pakistan by
installing the infrastructure in diversified business industries of the country. These industries
include; Food Processing, Food Packaging, Textile Stitching/Knitting, Fruit Processing,
Agriculture machinery, Pharmaceutical, Motor Bikes Assembly, Chromite’s, Cooking Oil,

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Ceramic industries, Ice and Cold storage, Electric Appliance, Halal Food Industry, Textile,
Steel, Engineering, Chemicals, Plastics, Agriculture Implements and much more.

These SEZ’s are aimed to bring about prosperity through economic development and therefore
it will create millions of job opportunities for the people of Pakistan. The special economic
zones being developed under the CPEC project would increase local exports as well.

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