CPEC Project Brief
The China Pakistan Economic Corridor (CPEC), a mega project of USD 46+ billion is a 3000 Kilometers long route consisting of highways, railways and pipelines that will connect China's Xinjiang province to rest of the world through Pakistan's Gwadar port. This is eventually the biggest investment in any foreign land by China. The project has been divided into different phases. The first phase of project was the expansion of Gwadar deep sea Port and International Airport. According to sources the target is to make the Gwadar SEZ (Special Economic Zone) that spreads over an area of 3,000 acres, fully functional by end of year 2017. The zone shall be constructed by China and will accommodate industrial units for mines and minerals, food processing, agriculture, livestock and energy. The remaining SEZs would be designed and developed on similar lines.
CPEC is a game-changer for Pakistan. The project is serving as an extremely attractive destination for international and local investors. The huge contribution towards the economic growth and development of country is expected to bring-in consumer finance products, mortgage products, manpower development, correspondent banking, technology transfer, international trade. Above all, this massive transformation shall be generating 700,000 jobs by year 2030. As per Chinese agenda their cooperation is not limited to economic ties but it encompasses people-to-people contact, cultural exchanges, health and education. The other key sectors of CPEC include investments & finance, energy, infrastructure, telecommunication, industrial cooperation.
The newly expanded Gwadar deep-water port which is a key to CPEC is complete and expects to process about a million tons of cargo next year as per recent reports. Most of the cargo will be incoming construction materials to be used in projects related to the CPEC, which envisions linking far-western Chinese production regions by road through Pakistan for shipment through Gwadar port to overseas markets. The Chinese company China Overseas Ports Holding Company Limited took over Gwadar's operations in 2013 and since then they have started associated development works for port operations on war footings.
The Infrastructure projects under aegis of CPEC are spread in length and breadth of Pakistan. The proposed infrastructure projects are worth $11 billion, and are being financed by heavily-subsidized concessionary loans at an interest rate of 1.6%. As part of infrastructure projects an 1,100-kilometer-long motorway will be constructed between the cities of Karachi and Lahore, while the Karakoram Highway between Rawalpindi and the Chinese border will be completely reconstructed and overhauled. The Karachi-Peshawar main railway line will also be upgraded by December 2019. Pakistan's railway network will also be extended in order to eventually connect to China's Southern Xinjiang Railway in Kashgar. A network of pipelines to transport liquefied natural gas and oil will also be laid as part of the project. Besides, $2.5 billion have been allocated for pipeline project to be laid between Gwadar and Nawabshah to transport gas from Iran.
Over $33 billion worth of energy infrastructure will be constructed by private consortia in order to help alleviate Pakistan's chronic energy shortages. Over 10,400 MW of energy generating capacity is to be developed between 2018 and 2020 as part of the corridor's fast-tracked “Early Harvest” projects. In continuation, the Pakistan-China Optical Fiber Project will make Pakistan a hub of telecommunication in the region. This telecommunication project costs nearly US$44 million and will have 820-kilometre long cable starting from Rawalpindi to Khunjarab.
The loans for projects under the aegis of CPEC shall be dispersed to the Government of Pakistan by the Exim Bank of China, China Development Bank, the Industrial and Commercial Bank of China and the probable Asian Development Bank. The CPEC's positive effects on Pakistan's economy can already be witnessed. Gwadar has started witnessing a hot demand in the hope of better times to come as property prices have hiked by more than 200% in compressed time frame.