CPEC: Pakistan slashes Chinese investment in railways by USD 2 billion citing burden of loans

Pakistan has slashed the Chinese investment in railways by USD 2 billion citing a huge burden of loans, giving credence to reports that the new government led by Prime Minister Imran Khan may scrutinise the multi-billion dollar CPEC, a media report said Tuesday.

Railways Minister Sheikh Rasheed Ahmad said that the share of the China-Pakistan Economic Corridor (CPEC) in the railways has been reduced from USD 8.2 billion to USD 6.2 billion.

"Pakistan is a poor country that cannot afford the huge burden of the loans," Rasheed told reporters in Lahore.

"Therefore, we have reduced the loan from China under the CPEC for rail projects from USD 8.2 billion to USD 6.2 billion. The CPEC is like the backbone for Pakistan, but our eyes and ears are open," he said.

The announcement gives credence to reports that the new government led by Khan intends to scrutinise the USD 62 billion infrastructure and power projects, which the PML-N government had initiated under the CPEC.

The Express Tribune reported that CPEC's investment share for Pakistan Railways was USD 8.2 billion, which was to be utilised for upgrading Main Line-1 (ML-1) a colonial-era line stretching 1,872 km from Karachi to Peshawar.

Previous railways minister Saad Rafique had termed the upgrading of ML-1 as vital for railways future as it would bring as many as 171 trains on track per day against the current 32.

Railways Minister Sheikh Rasheed Ahmad, however, said that the CPEC share has been reduced to USD 6.2 billion.

"Pakistan is a poor country that cannot afford the huge burden of the loans," Rasheed told a news conference in Lahore.

"Therefore, we have reduced the loan from China under the CPEC for rail projects from USD 8.2 billion to USD 6.2 billion. The CPEC is like the backbone for Pakistan, but our eyes and ears are open," he said.

Rasheed said the government remains committed to the Karachi-Peshawar project but he wishes to further reduce the cost to USD 4.2 billion from USD 6.2 billion.