The Economic Affairs Division (EAD) has advised the government to go slow in finalising a financing agreement for nearly $6 billion in Chinese loan for the Mainline-I (ML-I) project of the China-Pakistan Economic Corridor (CPEC) aimed at avoiding complications in implementation of the mega scheme.
The advice came amid serious objections raised by the deputy chairman of the Planning Commission against bypassing the commission in revising downward the project cost, according to sources privy to the developments. These issues were raised during a meeting held to review the status of the ML-I project a few days ago.
Pakistan and China have agreed to revise downward the cost of the ML-I project to $6.67 billion, a reduction of $3.2 billion, or one-third, through a reduced scope and design aimed at making it commercially viable. However, all those changes were made without taking approval of relevant forums.
Pakistan expects 85% of the project cost, or about $5.8 billion, in Chinese loan. Beijing wants to first finalise the financing agreement and then start bidding process. But the sources said that EAD officials opposed the finalisation of financing terms before completing other requirements.
