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Event Title: Meeting of the Special Committee on Project of China Pakistan Economic Corridor

Event Date: 2019-06-13

Convenor Special Committee on Project of China Pakistan Economic Corridor (CPEC) and Parliamentary Party Leader PPP-P Senator Sherry Rehman in a meeting on Thursday, expressed her displeasure over the lack of coordination and capacity evident in the briefing of the Ministry of Planning, Development and Reforms. She once again suggested that the planning function of CPEC from federal government required a separate secretariat and autonomous well-resourced CPEC Authority, an idea which was supported by Minister Swati who is a member of that Committee. The Planning Minister Khusro Bakhtiyar did not comment on this suggestion. 

Rehman said, “It is crucial for the Ministry to set its priorities right. Placing the responsibility of implementation on the Chinese administration is unfair. The Chinese have done their part”. 

The Committee also discussed all loans and potential indebtedness of Pakistan if CPEC meets its full potential. The Planning Ministry provided details after questions were sent by the Chair, and said that they estimate that in full flow $49 billion worth of projects can be realised. The government disclosed that Pakistan’s liability is restricted to only the non-private sector projects. At the moment those projects fall under infrastructure only, and are worth $5.8 billion. The terms of lending are quite soft, at 2-2.25 percent, and have long repayment schedules. 

The Secretary Planning also disclosed that all energy projects are in IPP financing mode, and therefore not part of the government’s liabilities. Preferential Buyer’s Credit will be utilised for some items, which is a practice where the lender restricts the borrower to using country-specific suppliers, but not in any way different from certain American and Japanese lending practices.    

It was also disclosed that China had set up an aid agency on the lines of USAID, called CIDCA, and will be providing pure grants, with no repayment, to many of the Gwadar projects as well as to the Socio-Economic component of CPEC, because these are aimed at poverty alleviation and development assistance in key sectors identified by the government of Pakistan. 

Senator Sherry Rehman said that the Ambassador of China had already explained many of these funding streams to her, and had also said that China has never called in funds it has placed in Pakistan’s treasury to assist its balance of payments. The Chinese government has also been helpful in disclosing all queries made by IMF on Pakistan’s debts in order to assist Islamabad in achieving economic stability. 

While deliberating over CPEC’s Socio-Economic plan and financing, Senator Rehman strongly objected to the aggregated, non-transparent clutter of information presented by the Ministry as a plan. She said, “This inability to coordinate between provinces and lay out their priorities is disturbing. It seems that the Planning Ministry will barely issue pro forma letters to the provinces seeking their input, and then just put together their own plan as one that the Chinese will approve by July. It is not the Chinese government’s job to build stakeholder consensus on where the grant money will go and to which sector in which province. This input has to come from the federal government where the CPEC is nested. At the moment the powerpoint and information shared by the Planning Ministry is like a model of Pakistani misgovernance. All the money and goodwill put in by China will just be frittered away in poor allocations and nothing will show on the ground, if this level of consultation with provinces is maintained,” said Rahman. 

It was noted that only KP province had so far been consulted, eliciting loud objections from Senators from the other three provinces. Senator Kakar objected to this high-handed planning which left out on-ground priorities and grassroots concerns by the federal government.   

Federal Minister for Parliamentary Affairs, Senator Azam Khan Swati asserted that CPEC is Pakistan’s lifeblood. He stressed the need for people to people connectivity and said that this was the basis of CPEC. 
The Committee Chair directed the Ministry that all information must be disaggregated and must be presented to the Committee with timelines in two weeks.  It was also decided that the focal persons from the provinces should be present as well.

Convened by Senator Sherry Rehman, the meeting was attended amongst others by Senator Dr. Sikandar Mandhro, Senator Muhammad Akram, Senator Dr. Ghous Muhammad Niazi, Senator Dr. Asad Ashraf, Senator Muhammad Usman Khan Kakar, Seantor Muhammad Azam Khan Swati, Senator Mir Kabir Ahmed Muhammad Shahi, Senator Molana Atta ur Rehman and senior officers from the Ministry of Planning Development and Reform along with all concerned. The Minister for Planning, Development and Reforms, Mr.  Khusro Bakhtiar, was also present.