Three CPEC projects in jeopardy after China suspends funding

  • Initial reports suggest Rs1 trillion road projects of NHA could face delay

ISLAMABAD – At least three road projects under the umbrella of the China-Pakistan Economic Corridor (CPEC) will face a delay as China has suspended funding till the issuance of new guidelines by Beijing.

According to Dawn News, it is unclear yet whether the new guidelines would affect more projects, but initial reports suggest that three road projects worth Rs1 trillion pertaining to the National Highway Authority (NHA) could face interruption.

An official talking to the media outlet revealed that increased news reporting in Pakistan regarding alleged corruption in CPEC projects has forced China to conduct a review and suspend funding.

The delay is going to affect the 210-km Dera Ismail Khan-Zhob Road project, 136-km remaining portion of Karakarom Highway (KKH) from Raikot to Thakot and 110-km Khuzdar-Basima Road. The estimated cost of the projects is Rs81 billion, Rs8.5bn and Rs19.76bn respectively.

All the projects were part of the Pakistani side’s programme, but the NHA authorities in 2016 disclosed that these were going to be part of the CPEC in order to receive concessionary finance from China.

During the previous year, China approved funding for the three road network projects during the sixth meeting of the JCC and Pakistan was hopeful that the funds would be finalized in the meeting of the Joint Working Group (JWG) on Nov 20. However, the Chinese side informed counterpart that the funds will be finalized after issuance of new guidelines from Beijing, besides suspending the funds under the prevailing procedure.

“In fact the Chinese authorities informed us that the previous procedure of release of funds was meant for early harvest projects only and new guidelines will be issued for future projects of the CPEC,” the official told Dawn News.

The official added that the move has stunned Pakistan as it is happening for the first time.