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PAKISTAN’s planning minister, Mr Ahsan Iqbal, has made a renewed request for finance from China to undertake the $US 6.8bn Mainline-1 (ML-1) project.
The request was made in a meeting with the Chinese chargé d’affaires to Pakistan, Miss Pang Chunxue, who assured Iqbal that her government would consider the proposal, according to the Express Tribune newspaper.
The ML-1 project involves track doubling and upgrades on 1872km of railway split into three sections: the 527km northern section between Peshawar, Rawalpindi and Lahore; 521km of track between Lahore and Hyderabad; and 740km of track upgrades along the Rawalpindi - Peshawar and Hyderabad - Multan lines. Work will also include improvements to signalling and control systems. The project is part of the China - Pakistan Economic Corridor (CPEC), a subsection of the Belt and Road Initiative.
ML-1 was initially costed at $US 9bn and later revised downwards to $US 6.8bn. However, the Chinese government expressed its concerns over Pakistan’s ability to repay the debt of $US 6bn it would incur for the project.
Pakistan’s public finances are in a poor condition, with government debt standing at 87.2% of GDP at the end of the last financial year and 60% of tax revenue being used for debt servicing.
The Chinese government has also highlighted the poor financial condition of Pakistan Railways that would not allow the state operator to take on $US 6bn of debt, according to the Express Tribune.
Negotiations over Chinese loan finance have been continuing for over two years, meaning that the ML-1 project is now more than four years behind its original schedule.
“My top priority is to expedite the CPEC projects to restore the confidence of the Chinese investors,” Iqbal says.
This article first appeared on www.railjournal.com
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