Dysfunctional CPEC Projects Causing Frustration Among Pakistanis
Initially gullible Pakistanis believed that CPEC would herald development and prosperity through the Chinese magic wand. However the magic spell had failed and the rift between Islamabad and Beijing is widening every day over the functioning of the CPEC.
As it is, an important portion of the CEPC is passing through the illegally occupied territory which belongs to India. One day India is surely going to take back that territory by using force if necessary. Chinese will not be able to defend the area even if they choose to do so.
The CPEC had been launched as part of the bigger Belt and Road Initiative (BRI), introduced by Chinese President Xi Jinping in 2013 drawing worldwide attention. The POK chapter was soundly opposed by India on grounds of Sovereignty alone. Also India had strong economic, environmental and social points against the overall initiative itself.
No wonder things did not go as planned, and as Pakistan’s economic situation deteriorated, the country was pushed into debt. Seeing that many of the USD 62 billion CPEC mega projects have not even started after all these years.
The once much celebrated China-Pakistan Economic Corridor (CPEC) from China’s Xinjiang province, running up to Gwadar in Baluchistan ( through India territory in Kashmir and Chinese Occupied Ladhak ), is increasingly becoming dysfunctional leading to increasing frustration in both the countries. Amid long delays in the completion of projects and building up arrears are economical, social, political and environmental tensions.
The big projects under the project are having problems raising the required funds and the completed projects are being shut down. A media portal has reported, that the government of Pakistan has now also abolished the CPEC authority, which was set up for smooth and rapid development.
Beijing on its part is not releasing adequate funds as promised for infrastructure projects. Meanwhile, Chinese companies have also stopped generating electricity in CPEC projects demanding payment of arrears. High-interest rates on CPEC loans has virtually enslaved Pakistan, in addition the rising project costs, weak projects, and attacks on CPEC infrastructure are major issues in what has become a white elephant dream.
This has led to growing frustration in Pakistan with the Federal Minister for Planning and Development Ahsan Iqbal recently expressing dissatisfaction over the slow progress of important projects.
Many Pakistani politicians and experts were concerned about its potential, as the CPEC projects and its tough loan terms were a matter of concern since the beginning, the report said.
Pakistan has also been considering abandoning the CPEC altogether if the US provides similar financial assistance.
The energy crisis has given Islamabad a strong reason to cut the size of the CPEC, as Chinese companies have decided to cut off power generation. The shortage was more than 6,000 MW when 15,500 MW of energy was produced, the report said.
Chinese companies have decided to cut power generation by 1980 MW. Due to the non-payment of PKR 300 billion, the installed capacity has increased by only 37 percent and a new wave of power crisis has emerged in Pakistan.
Islamabad’s response to the removal of the CPEC has given a clear signal that it does not want China’s influence in Pakistan to continue, the report said, adding that, Pakistan has spent a large portion of its revenue on repaying loans for the CPEC project. However, many CPEC projects have been delayed or failed.
China has stopped paying for the final stages of major projects putting even more pressure on Pakistan, and a new wave of energy crisis has gripped Pakistan as Chinese companies will not generate electricity until their payments are made, the report said.
Thus, there is no doubt that CPEC would be a huge responsibility and a source of huge costs for Pakistan if Pakistan delays in paying Chinese companies, the report further said, adding, that Pakistan’s current account deficit has already reached USD13.2 billion and is expected to be 5-6 percent of the country’s GDP in the first nine months of the current fiscal year.
