The Covid-19 pandemic, ongoing political unrest and foreign debt limits have resulted in a slowing of Chinese investments in Pakistan as Beijing has put a hold on projects that are a part of the USD 62 billion China-Pakistan Economic Hall (CPEC).
Pakistan Prime Minister Imran Khan, whose government is criticised for being under military keep an eye on, could also be facing flak in his country for not prioritising and expediting big-ticket Chinese infrastructure investments, Asia Times reported.
In 2018, Khan had put on hold several CPEC projects suspecting corruption by the preceding government. Then again, two years later, several of his Cabinet members were named in big corruption scandals involving the country’s power sector. Approximately one-third of Pakistan’s power companies are involved in Chinese projects under the CPEC.
The 278-page inquiry outline, compiled by the Securities and Exchange Commission of Pakistan (SECP) and presented to Khan in April, unearthed alleged irregularities worth over USD 1.8 billion in subsidies provided to 16 independent power producers (IPPs) including those belonging to Khan’s advisors Razak Dawood and Nadeem Baber, Asia Times said.
The SCEP had also investigated the profits earned by the Chinese power companies.
The outline revealed that Huang Shandong Ruyi Pakistan Ltd (HSR) and Port Qasim Electric Power Co Ltd (PQEPCL) were together overpaid by 483.6 billion rupees (USD 3 billion).
The Pakistan Democratic Movement (PDM), an alliance of 11 opposition parties, has demanded the Imran Khan-led government to speed up the Chinese-funded projects, particularly the motorway and railway modernisation plans that have had nearly no progress in the final five months.
The PDM has also demanded the removal of CPEC Authority’s chairman, retired Lieutenant General Asim Saleem Bajwa, until he comes lucid of his personal and his circle of relatives commerce assets in america.
Recently, a native media had exposed Bajwa’s several offshore businesses, including more than 100 companies and franchises in america, UAE and Canada in which his circle of relatives are involved.
In 2019, the Prime Minister had promulgated an ordinance to set up a CPEC Authority (CPECA) ahead of his visit to China and appointed a former lieutenant general as its chairperson. Earlier, the Planning and Development Ministry used to supervise the CPEC projects.
Planning Ministry sources told Asia Times that CPECA was once forced upon the government by China, which wanted the army to be directly involved in the CPEC portfolio as Beijing was once reportedly irked with Khan’s slow movement on the wider scheme.
The sources further said that the recent revelations of Bajwa’s offshore assets had shocked China as it had wished to work with the Pakistan military to prevent private corruption.
Following the revelations, Chinese President Xi Jinping’s scheduled visit to Pakistan in September was once postponed citing Covid-19 as the official reason.
Asia Times has reported that the CPEC Authority Ordinance gives immunity to the CPECA’s chairperson and staff from all valid proceedings against them, hence, protecting them from the National Accountability Bureau (NAB), Federal Investigation Agency (FIA) and police to institute cases.
“The CPECA’s legality issue, chairperson’s immunity from valid proceedings and the controversies of in another country circle of relatives businesses surrounding the authority’s incumbent chairperson gave a naughty impression and will have to be resolved to give a boost to the efficiency of CPECA,” Senator Mushahid Hussain Sayed, a Pakistan Muslim League-Nawaz leader and chairman of the Pak-China Institute think tank told Asia Times.
He further said that the PDM has concerns approximately the CPECA’s immunity clause.
While attributing the delay of the CPEC project to coronavirus pandemic, he said, “Additionally, the new Chinese Ambassador, Nong Rong comes with a strong economic background which will have to give impetus to CPEC.”
He further said that the PDM protests will not impact the CPEC’s progress.
“Pressures are emanating from the West and Western institutions – primarily in Washington – against the CPEC but Pakistan has demonstrated willingness, readiness and ability to resist these pressures,” he added.
As in recent weeks Chinese workers and engineers working in Balochistan and Sindh have been targeted and killed, the price of providing around-the-clock security to Chinese nationals is raising the cost of the projects at a time Pakistan’s economy is faltering badly, Asia Times said.
Meantime, Pakistan had requested a 1 per cent interest rate on the Chinese loan for the ML-1 rail project. China is, then again, reluctant to heed to the request and instead used “delaying tactics” to pressurise Islamabad to continue accepting the high rate of interest.
Khan and Bajwa now reportedly plan to take the issue to Chinese President Xi Jinping, who they imagine can dictate terms on China Development Bank and Export-Import Bank of China loans, in hopes that an agreement will also be reached on the rail line, Asia Times said.
The review assembly of CPEC’s Joint Coordination Committee (JCC), which is held each and every month, is unlikely to finalise the ML-1 project in the upcoming assembly despite Pakistan Railways Minister Shaikh Rasheed Ahmad emphasising that the project is in a position.
Asia Times further reported that the Greater Peshawar Mass Transit Project, Swat Express Way Phase-II and Peshawar-DI Khan Motorway, all nominally under the CPEC, have likewise been delayed and aren’t on the agenda of the next JCC assembly.
Citing native media reports, Asia Times quoted Jeremy Garlick, an assistant professor at the Jan Masaryk Centre of International Studies at the Prague University of Economics and Commerce, as saying that Beijing was once the use of delaying tactics on the ML-1 as it doesn’t wish to end up with a naughty deal on its hands.
“Beijing doesn’t wish to say no to ML-1. It wants to seem dedicated in Pakistan, but at the same time it is aware of the dicy surroundings for Chinese investments,” he added.