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Pakistan to get Chinese funds for upgrading rail links, building pipeline

world Updated: Jun 10, 2016 11:16 IST

ISLAMABAD: Pakistan has cleared two projects worth billions of dollars for building a gas pipeline and upgrading the main line of Pakistan Railways to improve traffic for a bilateral economic corridor, the media reported on Thursday.

The Central Development Working Party (CDWP), a finance arm of the government, gave the nod for both projects ahead of loan negotiations with China, The Express Tribune reported. China will provide loans equivalent to 85% of the cost of both project.

According to documents, the cost of upgrading Pakistan Railways main line and establishing a dry port near Havelian is $8.2 billion, which the Chinese government will finance with a $7-billion concessionary loan.

The project is part of the $46-billion China-Pakistan Economic Corridor (CPEC) and is covered by the framework agreement for the corridor that was signed during the April 2015 visit of the Chinese president to Pakistan.

In the railway project, 15% of the cost will be borne by Pakistan and 85% will be financed by Chinese financial institutions. Pakistan Railways currently accounts for less than 4% of the country’s traffic volume, which the government intends to increase to at least 20% by 2025.

The project envisages upgrading the railway’s main line from Karachi to Peshawar with a length of 1,872 km, including the 91-km Lodhran-Khanewal section and 55-km Taxila-Havelian section.

The major work will involve upgrading 1,598 km of double and single track and overhauling 930 km of double line. The construction of a 676-km new track from Lalamusa to Peshawar, construction of tunnels, bridges and culverts along with allied structures and facilities for 25-ton axle load capacity are also part of the project. The project is planned to be completed in two phases in five years by 2021. The first phase will be completed by December 2017 and the second by 2021.

The CDWP also cleared the Gwadar-Nawabshah LNG terminal and pipeline project at an estimated cost of roughly $2 billion, including a $1.4-billion Chinese loan.

First Published: Jun 10, 2016 11:16 IST