CHINA PAKISTAN

ECONOMIC CORRIDOR
(CPEC)
Issues & Challenges

1
 Sequence
CPEC Background
Rationale, Scope & Framework of CPEC
Political consensus
CPEC Projects
Early Harvest Projects
--Long Term perspective
Challenges of Energy Sector Projects
Industrial Parks/Special Economic Zones (SEZs)
Security Challenges to CPEC
Conclusion
2
 CPEC Background
1. Initial Concept in 1950s
2. Karakarom Highway Project 1959
3. Gwader deep water port construction 2002~2006
4. General Musharraf government pushed the project
5. Concrete progress during PML(N) government
6. Chinese Government announcement to
launch the $46b project in Nov 2014
7. Agreement to commence the project in April
2015
8. China included CPEC in its 13th ADP
3
Scope & Rationale of CPEC

4
 SCOPE OF CPEC

China-PakistanEconomic Corridor
is a fusion of multiple corridors:
Investment Corridor
Trade Corridor
Energy Corridor
Transport Corridor
Infrastructure Corridor
Industrial Corridor

5
 Rationale of CPEC

Strengthening of bilateral Strategic Economic

Cooperation.
Short Term Project portfolio (Gwadar, Energy,
Tranport Infrastructure, Industrial
infrastructure) US $ 46 Billion.
Long Term Project portfolio
(Telecommunication, Agriculture, Industries,
Water, Tourism, Finance) being finalized in
October 2016.
6
 Rationale for China

_ Safe, secure and efficient land route for trade

from Arabian Sea to Western China & vice versa
Promote West Chinas economic and social
development
Speed up One Belt and One Road Initiative,
CPEC is flagship project
Give greater role to China in the affairs of South
East Asia, Central Asia and Middle East
Counter US growing influence

7
 GWADAR
GATEWAY TO GLOBAL MARKET
Connectivity - Pakistan China Middle East Africa
Mobility - Cut 13,000 Km route from Middle East to China
Activity Trade Investment Opportunities
Gwadar Port started operations for commercial export on May 11,2015
 Rationale for Pakistan

Major boost to economic activity & growth in Pakistan

Expected addition to GDP by 2.5%
Job creation by 70,000 approximately
Strengthen infrastructure (energy & transport)
Shape new industry clusters / SEZs along with the
Routes
Balance regional economic development
Enhance domestic economic stability
9
 CPEC - Regional Connectivity
New International logistics network and
better industrial distribution
Improve status of South Asia and their division
of labour within the global economy of
industrial investment
Promote regional economic integration
through stable trade growth, international
economic and technological cooperation and
people exchanges

10
CPEC - Context
Regional Connectivity
is the 7th Pillar of
Pakistan Vision 2025

Integrates/links Silk Road

Economic Belt and
21st Century Maritime
Silk Route

Serves Asias over 3 Billion population

IMPLEMENTATION FRAMEWORK
Joint Cooperation Committee
Pakistan Minister for Planning & Development & Co-Chaired by
Chinese Minister PDR and Vice Chairman NDRC

Planning Energy
Joint Working Group Joint Working Group

Transport Infrastructure Gwadar

Joint Working Group Joint Working Group

Industrial Cooperation
Joint Working Group (To be formulated)
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CPEC Portfolio-Projects &
Mode of Financing

13
 CPEC Portfolio-Projects &
Mode of Financing
Projects Estimated Cost:
US$ Millions
Energy (IPP Mode financing) 34,413
Transport and Infrastructure
Roads (Government Concessional loan- 6,100
GCL financing)
Rail Network(Government Concessional 3,690
loan)
Gwadar Port (Grant/GCL/Interest free 793
loan)
Others (GCL) 44
Total 45,040
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CPEC
PROJECTS

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 AN INVESTMENT OF
US$ 46 BILLION
51 MoUs of commitments signed during Chinese Presidents visit in April, 2015

Others
$1.84b 4%

Transport
&
Infrastruct
ure
$10.6b 23%

Energy
$33.7b
73%

16 CHINA - PAKISTAN ECONOMIC CORRIDOR

 CPEC Major Projects
Gwader Port
Gwader City
Roadway / Motorway
Railway Sector
Energy Generation
Energy Sector Transmission
Other Sectors

17
 Gwader Port & City Projects
Gwader Port Complex
Gwader Free Trade Zone
Gwadwer International Airport
Coal Power Project
Eastbay Expressway
Pak-China Technical & Vocational Training
Institute

18
 CPEC-Gwadar Port Related Projects
Sr. Estimated Cost
Projects
No (US$ M)
1 Eastbay Expressway 140.60

2 Gwadar International Airport 230.00

3 Construction of Breakwaters 123.00

4 Dredging of berthing areas & channels 27.00

Infrastructure for Free Zone & EPZs port related
5 32.00
industries
6 Necessary Facilities of Fresh Water Treatment and Supply 130.00

7 Hospital at Gwadar 100.00

8 Technical and Vocational Institute at Gwadar 10.00

Total Gwadar Port Projects 793.00

19
 Roadway / Motorway Projects

Karakorum Highway Reconstruction

Eastern Alignment
Western Alignment
Central Alignment

20
 CHINA PAKISTAN ECONOMIC
CORRIDOR

21
 CPEC-Transport Infrastructure Sector Projects
Sr. Length Estimated Cost
Projects
No (km) (US$ M)

Roads

1 KKH Phase II (Raikot Islamabad Section) 440 3,500

2 Lahore-Karachi Motorway (Multan-Sukkur Section) 392 2,600

Rail Sector Projects

1 Expansion and reconstruction of existing Line ML-1 1736 3,650

2 Havelian Dry port (450 M. Twenty-Foot Equivalent Units) 40

TOTAL 9,790
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 Railway Projects
Overhaul of Main Line MI
Overhaul of Main Line M2
Overhaul of Main Line M3
Orange Line Metro
Khunjerab Railway

23
 Energy Sector Projects

Renewable Energy
Coal
Liquefied Natural Gas

24
 CPEC-Energy Priority Projects
Sr. Estimated Cost
Projects MW
No (US$ M)
1 Port Qasim Electric Company Coal Fired, 2X660, Sindh 1320 1,980
2 Sahiwal 2x660MW Coal-fired Power Plant, Punjab 1320 1,600
Engro thar 4x330MW Coal-fired, Thar, Sindh 1320 2,000
3 Surface mine in Block II of Thar Coal field, 6.5 mtpa,
1470
Thar Sindh
4 Gawadar Coal Power Project, Gwadar 300 360
5 HUBCO coal power plant 1X660 MW, Hub Balochistan 660 970
6 Rahimyar Khan Coal Power Project, Punjab 1320 1,600

SSRL Thar Coal Block 1-6.5mpta Thar, Sindh 1,300

7
SSRL 2x660 MW Mine Mouth Power Plant, 1320 2,000
8 Quaid-e-Azam 1000MW Solar Park, Bahawalpur, Punjab 1000 1,350
25
 CPEC-Energy Priority Projects
Sr. Estimated Cost
Projects MW
No (US$ M)

9 Dawood 50MW wind Farm, Bhambore, Sindh 50 125

10 UEP 100MW wind Farm, Jhimpir, Sindh 100 250

11 Sachal 50MW Wind Farm, Jhimpir, Sindh 50 134

12 Sunnec 50MW wind Farm, Jhimpir, Sindh 50 125

13 Suki Kinari Hydropower Station, KPK 870 1,802

14 Karot Hydropower Station, AJK & Punjab 720 1,420

15 Matiari to Lahore Transmission line 1,500

16 Matiari to Faisalabad Transmission line 1,500

Total (Priority) 10400 21,486

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 CPEC-Energy Actively Promoted Projects
Estimated Cost
Sr. No Projects MW
(US$ M)

17 Gaddani Power Park Project

(i) 2660MW 1320 3,960

(ii) Jetty + Infrastructure 1,200

18 HUBCO coal power plant 1X660 MW, Hub Balochistan 660 970

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 CPEC-Energy Actively Promoted Projects
Sr. Estimated Cost
Projects MW
No (US$ M)
Salt Range Mine Mouth Power Project including mining,
19 300 800
Punjab
20 Kohala Hydel Project, AJK 1100 2,397

21 Pakistan Wind Farm II 2X50 MW(Jhampir, Thatta, Sindh) 100 150

22 Thar mine mouth oracle, Thar Sindh 1320 1,300

23 Muzaffargarh Coal Power Project, Punjab 1320 1,600

24 Gas Power Plant 525 MW 525 550

Total (Actively Promoted) 6645 12,927

TOTAL Energy Projects 17045 34,413

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 EARLY HARVEST PROJECTS
Projects Capacity Location
Pakistan Port Qasim Power Project 1320MWs (660X2) Sindh
Thar -1 Project 1320 MWs (4x330) Sindh
Thar -2 Project 1320 MWs (2x660) Sindh
Thar Engro Coal Power Project 660 MWs (330x2) Sindh
UEP Windfarm 10MWs Sindh
Dawood Windpower Project 50MWs Sindh
Sachal Windfarm 50MWs Sindh
Sunnec Eindfarm 50 MWs Sindh
Sahiwal Coal Power Project 1320 MWs (2x660) Punjab
Rahim Yar Khan Coal power Project 1320 MWs (2x660) Punjab
Quaid e Azam Solar Power Project 1000 MWs Punjab
Karot Hydro Power Project 72MWs (2020) Punjab
Suki Kinari Hydropower Project 870MWs (2020) KPK
HUBCO Coal Power Project 660MWs Balochistan
Gwader Coal Power Project 300 MWs Balochistan
Mitiari to Faisalabad transmission Line 660 KWs Sindh & Punjab
Mitiari to Lahore Transmission Line 660 KWs Sindh & Punjab
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 Other Projects

Sr. Estimated
Projects Length (km)
No Cost (US$ M)
1 Cross Border Optical Fiber Cable 44

2 DTMB

Total 44

Total Cost of CPEC Projects 45,040

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 Industrial Cooperation

Textile Industry
Household appliances (assembly to production)
Cement (export to China, Europe and Middle
East)
Mineral Exploitation(Balochistan & KP)

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 Mid/Long Term Perspective (2025/30)

Highways/Railways networks
Energy
Gwadar
industrial Parks
Telecommunications
Oil & Gas pipelines
Trade, investment, industry, agriculture
Tourism, Services
Maritime
Water Resources
Finance 32
Issues relating to CPEC &
Its Implementation Status

33
 Political Consensus

All Parties Conference

Parliamentary Committee on CPEC
Provincial representation / input at all
important CPEC events
CPEC Summit on 29th August, 2016 was
attended by all Chief Ministers/representative
of provinces

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 Implementation Issues
Professionalism
Capacity of Institutions
Human Resource Development
Security
Synergy of efforts
Coordination / Creating better environment

35
 Challenges of Energy Projects
National / Master plan of Energy
Integrated implementation plan
Boosting of green energy
Promoting indigenous coal based energy - Thar
Problem of Hydel Energy
Solar / Wind Energy
Transmission of Energy
Distribution of Energy
Reducing losses
Cost of Energy
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 Security Challenges of Economic
Corridor
External Environment
Internal Environment
Cost of security
Coordination of security
Deployment of Special Security Division (SSD)

37
 Benefits & Impact Economic,
Social & Political

Economy 2.5% GDP

Socio Economic Development
Peace and stability
Revenue bottle neck in Energy and Transport
Infrastructure
Employment through Industrial / Investment
Cooperation

38
 Benefits & Impact Economic,
Social & Political - 2
Inclusive Development
Regional Integration
Jobs Creation
Energy Security
Trade & Commerce

39
 CPEC Framework 1+4
Energy Cooperation
Infrastructure Development
Gwadar
Industrial Cooperation