Latest news with #CPEC
Business Recorder
a day ago
- Business
- Business Recorder
PDP for building Karachi-Hyderabad, Karachi-Keti Bander corridors
KARACHI: Megacity Karachi is facing acute joblessness and to mitigate it, the government should construct the proposed Karachi-Hyderabad and Karachi-Keti Bander industrial corridors on priority, said Pasban Democratic Party (PDP) Chairman Altaf Shakoor here Sunday. He said industrial corridors are crucial drivers of economic development and infrastructure growth, as they stimulate large-scale industrial development by providing planned infrastructure. They attract domestic and foreign investment, boosting GDP and employment. They promote cluster-based development where industries benefit from being located near each other. Altaf Shakoor said these corridors involve world-class roads, railways, ports, and power supply, improving connectivity and thus lead to development of smart cities, logistics hubs, and industrial parks. They help in decongesting major cities by promoting growth in lesser-developed regions. He said new industries and infrastructure projects create millions of direct and indirect jobs, and support skill development through training centers and vocational institutions. They also spur urbanization in a planned manner, preventing chaotic city expansion. He said industrial corridors are PPP-friendly (Public-Private Partnership), promoting efficiency and innovation. They create policy frameworks and single-window clearances that make it easier to do business. He urged the government to study various models of industrial corridors particularly the Delhi-Mumbai Industrial Corridor (DMIC). He said Karachi is suitable for industrial corridors due to port access, existing Industrial base, and availability of skilled labour, suppliers, and service providers. Karachi is already linked to national highways (N-5, Super Highway/M9) and railway lines. He said the proposed Karachi-Hyderabad Industrial Corridor would be connecting the existing industrial areas and developing new ones along the Super Highway (M-9). He said the proposed Karachi–Keti Bandar corridor will link Thar's coal resources to a new seaport at Keti Bandar, along with rail, power, and industrial infrastructure. He said this project has been under active consideration under CPEC (China Pakistan Economic Corridor) frameworks since 2016, but now it is time to implement this highly important project. He said this corridor would complement Karachi's industrial ecosystem in a great way. He said this project has already been officially recognized under CPEC and has past feasibility, but now needs serious execution commitment, sustainable environmental planning, and private public coordination to move from paper to reality. Copyright Business Recorder, 2025
Express Tribune
2 days ago
- Business
- Express Tribune
ADB assesses feasibility of financing ML-1 project
Listen to article Experts from the Asian Development Bank (ADB) on Saturday inspected the Karachi to Rohri railway line, which forms a key section of the long-delayed Main Line-1 (ML-1) up-gradation project. ADB Chief Transport Planner Sangyoon Kim, accompanied by Pakistan Railways' chief engineer open lines, examined the 480-kilometre track. Senior railway officials including infrastructure specialists, divisional superintendents of Karachi and Sukkur and other representatives were also present. The ADB team is expected to meet the chief executive officer of Pakistan Railways, the additional general manager for infrastructure and Chinese experts currently working on the ML-1 project. According to officials, the ADB's fact-finding specialists are preparing a detailed report to assess the feasibility and potential of financing the Karachi-Rohri segment, which is part of the first ML-1 package. The proposed upgrading is vital not just for improving the country's railway system but also to support key economic projects. The completion of this section will ensure smoother and faster transportation of coal from Thar and easier access to strategic mineral resources like those in Reko Diq. The ML-1 project has been in the pipeline for nearly two decades. Its first feasibility report was prepared in the early 2000s but progress remained slow due to the lack of political will and consistent financial constraints. The project regained momentum after the launch of the China-Pakistan Economic Corridor (CPEC) project in 2015, when ML-1 was included as a strategic infrastructure scheme. Initially, China had shown keen interest in financing the entire ML-1 through concessionary loans. However, in later years, Beijing became hesitant, mainly due to Pakistan's worsening financial health, concerns over loan repayments and delays in other CPEC-related projects. The original ML-1 stretches over 1,872 kilometres, running from Karachi to Peshawar and passing through major cities like Hyderabad, Rohri, Multan, Lahore and Rawalpindi. It connects over 90 railway stations and has the capacity to handle more than 75% of passenger and freight traffic. Once completed, the project is expected to transform Pakistan Railways by reducing travel time by half, improving safety standards, increasing train speed up to 160 km per hour and significantly boosting freight capacity. It is expected to turn the country's outdated rail network into a modern, reliable and efficient transport system. Initially, the cost of upgrading ML-1 was estimated at around $6.8 billion. However, due to changing designs, economic instability and currency depreciation, the financial estimate has been revised multiple times. The current estimated cost is around $6.6 billion, though further changes are possible depending on scope adjustments and financing terms. China's reluctance to move forward with ML-1 financing has led Pakistan to approach other lenders, including the ADB. While the ADB has not yet committed funding for the entire project, their recent inspection and meetings indicate a strong interest in exploring different possibilities. Officials believe that if Pakistan is able to present a well-structured proposal and show improved project management capacity, the ADB may step in either fully or partially to fund initial phases. Pakistan Railways views ML-1 as a turning point for the sector's revival, but it is still unclear whether international lenders will step forward at a time when China has apparently pulled back. According to the officials, it will take some time – no one knows how much – before the ADB decides whether to finance the project or not, however, the railways at all levels is trying its best to get financing either entirely or partially, as train derailments in some sections are now becoming a routine, resulting in less passenger traffic.
Arab News
2 days ago
- Business
- Arab News
Pakistan mulls ADB role in CPEC's flagship Main Line‑1 railway upgrade
KARACHI: Pakistan is considering financial support from the Asian Development Bank (ADB) for the long-delayed Main Line‑1 (ML‑1) railway upgrade — part of the China‑Pakistan Economic Corridor (CPEC) — as an ADB fact-finding team inspected a section of the track on Saturday, according to an official statement. ML‑1, a $6.7 billion upgrade of Pakistan's 1,687-kilometer Karachi–Peshawar rail artery, is central to CPEC. The overhaul, involving track doubling, advanced signaling and higher-speed trains, is expected to boost cargo and passenger capacity while easing the transport of trade goods to and from the country's southern ports. 'Experts from the Asian Development Bank inspected the Karachi to Rohri railway line today,' Pakistan Railways said in a statement. 'The Bank's Chief Transport Planner, Sangyoon Kim, conducted the 480-kilometer track inspection alongside the chief engineer (open lines) of Pakistan Railways.' 'ADB's fact-finding specialists will prepare a report on the readiness of the Main Line-1 (ML-1) project, following which a final decision regarding the project's financing will be made,' the statement added. ML‑1 underpins Pakistan's main rail connectivity, carrying a major bulk of the country's cargo and passenger traffic. The project was approved by the Economic Coordination Committee in 2020 but has repeatedly stalled amid funding hitches. Speaking to Arab News, Babar Ali Raza, spokesperson at the railways ministry, said ADB was currently only preparing the feasibility. 'The main financier is China,' he continued. 'The team conducting the inspection is assessing its own feasibility to determine whether ADB can provide financing or not.' 'This would be ADB's own financing,' he added, 'however much they want to contribute.' Pakistan and China have described CPEC as a 'game-changer' for growth. The corridor comprises multibillion-dollar infrastructure initiatives covering roads, energy and rail. The two countries are also striving for regional connectivity, with Pakistan actively pursuing economic diplomacy in the neighborhood and offering its southern ports to landlocked Central Asian countries for global trade.
Express Tribune
3 days ago
- Business
- Express Tribune
'BRI states must adopt diversified supply chain'
Listen to article In the current environment, the global supply chain has been continuously upgrading digitally, ie, achieving innovative and sustainable development, which is also a major responsibility that Pakistan and China should shoulder together, remarked National Bank of Pakistan (NBP) Beijing Office Chief Representative Shaikh Muhammad Shariq. Speaking at a panel discussion on supply chain services held during the 3rd China International Supply Chain Expo, the chief representative pointed out that the key link is to provide complete localised financial services and reduce conflicts between traders, which is crucial for both large leading enterprises and small startups. "The global supply chain must take a diversified path, not only for industrial powers like China, but also for all countries participating in the Belt and Road Initiative (BRI), and of course Pakistan, which is jointly developing CPEC (China-Pakistan Economic Corridor)." Shariq emphasised, "The optimised financing mechanism will allow us to have smoother capital flow and reduce our reliance on a single path, helping us to seek better financing strategies." Talking specifically about financial links between China and Pakistan, Shariq elaborated on NBP's efforts. "In 1981, we entered the Chinese market and opened a representative office in Beijing. Since then, we have been helping Chinese companies in different fields that are interested in doing business in Pakistan." "From a deeper perspective, policymakers in China and Pakistan have established very deep connections to simplify all financial-related processes, assisting us to confidently provide comprehensive services in the current complex and changing international environment, solving financial problems and of course the most important liquidity problem for enterprises. In a nutshell, a very stable supply chain ecosystem allows better cross-border cooperation between our two countries."
Business Recorder
3 days ago
- Business
- Business Recorder
Power sector sitting on ticking time bomb
'The off-grid solar revolution' and 'the surplus-grid capacity crisis' constitute a ticking time bomb for Pakistan's power sector. Pakistan is witnessing a silent but powerful transformation in its energy consumption patterns. In an environment plagued by high electricity tariffs, inconsistent power supply, and policy unpredictability, both industrial and agricultural sectors are increasingly turning to solar power solutions - discreetly or overtly. This off-grid shift, while rational for individual consumers, is rapidly morphing into a systemic crisis for Pakistan's already fragile power sector, particularly the national grid – which now finds itself caught in a spiral of under-utilization, rising capacity payments, and financial instability. Driven by prohibitively high electricity prices (now exceeding Rs. 60/unit in many regions), heavy fuel cost adjustments, unreliable power delivery, and the government's inability to offer competitive industrial rates, Pakistan's manufacturers and large-scale farmers have found an obvious solution: solarized operations. Otherwise, the choice to go solar – once seen as a solution – may inadvertently accelerate the collapse of a system still vital to national stability and economic growth. In agriculture, solar-powered tube wells are now replacing conventional grid-connected pumping systems. In cities like Lahore, Faisalabad, Sialkot, and Karachi, textile and export-oriented industries are installing private solar systems and microgrids at record levels. This is no longer a fringe movement; Pakistan imported over USD 1.3 billion worth of solar equipment in FY2024 alone. But while solar provides independence and predictability for users, it simultaneously erodes demand for grid electricity. This undermines the financial viability of the national power system, which is burdened by massive capacity expansion projects undertaken during CPEC years – based on projections that no longer match market realities. Paradoxically, Pakistan today has excess installed power generation capacity, roughly 43,000 MW, while peak demand hovers between 28,000–30,000 MW in summer and drops drastically in winter. Yet the grid remains in financial agony. Why? The problem lies in Pakistan's power purchase agreements (PPAs), which obligate the government to make capacity payments to independent power producers (IPPs) regardless of whether electricity is consumed or not. These payments – now exceeding Rs 2 trillion annually – are fixed costs passed on to consumers through tariffs. With demand shrinking due to solarization and theft or inefficiency still rampant, fewer units are being sold to recover the ballooning capacity payments. This raises the per-unit cost even further, triggering more defections from the grid. It's a vicious cycle: higher costs drive lower consumption which, in turn, raises costs again. For the private sector, going solar is a logical economic decision. Industries save money, reduce carbon footprints, and hedge against grid unreliability. Farmers avoid diesel costs and reduce irrigation risks. But when entire subsectors defect from the grid, the burden of the system falls disproportionately on domestic and low-income consumers – many of whom cannot afford off-grid alternatives. This is exacerbating inequality in access and increasing the pressure on the government to provide subsidies, which it cannot sustainably finance. The state is now stuck in a policy trap: it must either allow power tariffs to spiral, prompting more defections, or absorb the costs through unsustainable borrowing and fiscal deficits. What's unfolding is a classic 'death spiral' scenario. The grid's fixed costs, especially in the form of dollar-denominated IPP contracts and imported fuel linkages, are now being recovered from a shrinking user base. As industries and agriculture reduce their dependency, it becomes harder to justify and sustain grid-scale infrastructure investments. Ironically, if this continues unchecked, Pakistan's grid could become a relic – a stranded, expensive infrastructure incapable of serving even its core users. The long-term consequences could include: de-industrialization for those unable to afford off-grid alternatives, grid defunding leading to power outages and infrastructure degradation and Increase in circular debt, as revenue shortfalls balloon. Despite the scale of the crisis, policymaking remains reactive and fragmented. The government has neither embraced solar as a formal part of the energy ecosystem nor has it devised a strategy to manage the transition - not to forget that 'to go solar', once seen as an ultimate solution, was advocated and incentivised by the government of the day. Pakistan lacks a net metering and feed-in tariff reform strategy that aligns distributed solar with grid health. Moreover, attempts to restrict solar imports or tax solar panels are short-sighted and only increase informal installations like mushrooming in the agricultural sector and slums of the cities. Much of it is out of the reach of the government. The solar revolution in Pakistan is irreversible – and greater national and public interest demands that it should be welcomed. A managed transition is essential. If not, the collapse of the national grid under the weight of underutilization and rising costs could create a national power disaster that will certainly affect every citizen and sector. Pakistan needs an integrated energy transition roadmap, balancing grid and off-grid development. Policymakers must urgently move beyond tariff adjustments and subsidy mantra. They must restructure how Pakistan produces, distributes, and consumes power in the 21st century. Copyright Business Recorder, 2025
