Big setback for Pakistan: China blocked CPEC funding over corruption allegation

NewsBharati    06-Dec-2017
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Islamabad, December 6: In a major setback to Pakistan, Chinese government has decided to temporarily stopped funds allocated for the construction of roads under China Pak Economic Corridor (CPEC). The decision follows reports of corruption.

According to the Dawn newspaper, the decision by the Chinese government is likely to hit over one trillion Pakistani rupees worth of road projects of Pakistan. Senior Pakistan official, the fund would be released after Beijing issues new guidelines. 

The projects affected include a flagship project of China's One Road One Belt passing through PoK. It was to link China's restive Xinjiang region with Pakistan's Balochistan province.

The projects which would affect may include D.I.Khan to Zhob 210 km long road, for which Rs 81 billion have been estimated. Rs 66 billion would be spent on the construction of road while remaining Rs 15 billion would be spent for purchase of required land.

Besides this, Khudzar road which is constructed with the total cost of Rs 19.76 billion would also be affected. The remaining portion of Karakum High way from Rai Kot to Tha Kot which is 136 km long and constructed with the cost of over Rs 8 billion would be affected.

The Pakistani official said that funds for three projects were sanctioned in the 6th meeting of Joint Cabinet Committee and it was hoped that funds for the said projects would be sanctioned in the meeting of Joint Working Group but Pakistan was told in the meeting that new instructions would be issued by Beijing and new procedure for the release of funds be introduced.

Interestingly, China has also emerged as the single largest lender of money to Pakistan ever since the two countries decided to undertake the CPEC project a little more than two years back.

The CPEC project comprises a network of railways, roads and pipelines that would connect Pakistan’s port city of Gwadar in the province of Balochistan, with the Chinese city of Kashgar in landlocked Xinjiang Uyghur Autonomous Region (XUAR).

Beijing will provide loans of Rs 168.3 bn, including Rs1.3bn as grants for the international airport and a vocational training centre in the port city of Gwadar, to Islamabad next year. Over 55 percent of the Chinese loan, or Rs 93.4 bn, is meant for the controversial orange line metro train project in Lahore.