CPEC has different components, which include Energy (coal, hydel, wind, solar, LNG, and transmission), infrastructure (road, rail, aviation, and data connectivity), industrial cooperation (Gwadar Free Zone and SEZs), as well as the development of Gwadar port and city. The CPEC projects have been divided into Early Harvest Projects (EHP) (2017-18), short-term projects (including EHP) (2014-2020), medium-term projects (2021-2025) and long-term projects (2026-2030).
The overall portfolio of CPEC projects are as follows: (i) energy (IPP financing mode) estimated cost $ 34.746 billion, 72%; (ii) roads (government concessional loan) estimated cost $ 4.179 billion, 9%; (iii) rail network ML-1 (GCL under discussion) estimated cost $ 8.212 billion, 17%; (iv) Gwadar Port (Grant/GCL/ Interest free loan) estimated cost $ 780.6 million, 1.9%; and (v) Fibre Optic and Gwadar City Master Plan estimated cost $ 48 million, 0.1%. The total estimated cost is $ 47.965.6 billion, 100%.
These were categorised as: (i) prioritized energy projects, 15, capacity 11,110 MW; (ii) actively promoted projects, 4, capacity 2,544 MW; and (iii) balance capacity, capacity 3,415 MW, totaling it to 17,045 MW. The sources said, Ministry of Foreign Affairs has been conveyed the concerns of Chinese ambassador Yao Jing over the issue of nonpayment of dues of over $ 200 million for CPEC energy projects.
The sources quoted the Ambassador as saying that eight energy projects have been completed but are facing financial crises due to non-payment of dues. However, infrastructure projects are in a better position and the payment of loans taken for these projects would become due in ten years for which good financial planning is needed.
According to the Ambassador, the financial viability of projects such as ML-1 and Karachi circular Railways is under question due to Pakistan''s financial situation, as these projects are to be financed through commercial loans. Work on Gwadar airport continues and is being finalised by a grant from the Chinese government. Environmental report of the project is awaited.
The Ambassador urged the two countries to focus on Special Economic Zones (SEZs) and encourage Chinese private companies to participate in the SEZs rather than Chinese state-owned enterprises.
The discussion on the remaining twenty one projects should commence, he further stated. Projects in the area of education, health and culture should also be promoted. Frontier Works Organisation (FWO), Fauji Foundation, National Logistic Cell (NLC) and other such entities interested in participating in the CPEC-related projects must be encouraged.
The Chinese side is expecting slow movement on CPEC projects this year because China has concerns with regard to uncertainty of policies in Pakistan. The sources further stated that China has requested that the payment of dues of power projects may be expedited at the earliest. Non fulfillment of contractual obligations and non- payment to Chinese companies working on power projects will not only negatively affect Pakistan''s credibility but will also create difficulties in seeking Chinese pledges for additional funding for CPEC and other projects.