Pakistan Observer

Chinese mega projects in Pakistan

Malik M Ashraf

Saturday, July 16, 2011 - China has played a significant role in the economic progress of Pakistan ever since the establishment of diplomatic ties between them. The first major initiative in this regard was the setting up of Heavy Mechanical Complex at Taxila; a project of immense importance that nudged the process of industrial development in Pakistan and continues to contribute to the overall progress of the country in a big way. The construction of KKH Highway, termed as the eighth wonder of the world not only laid the foundation for an infallible and eternal friendship between the two neighbours but also generated tremendous economic activity in Gilgit-Baltistan besides boosting trade between the two countries.

Currently China is working on a plan for the up-gradation of KKH at an approximate cost of $500 million and in building 165 Km Jaglot-Skardu and 135 KM Thakot-Sazin roads in Gilgit-Baltistan at a cost of Rs.45 billion. China would pay 85% of the cost while Pakistan will contribute 15%. A rail link between the two countries is also envisaged to be built. Besides these monumental projects, China is also helping Pakistan to tide over the energy crisis. Currently the Chinese are working on 15 mega projects in the energy sector in Gilgit-Baltistan and Azad Kashmir. A very significant project in hand is the upraising of the Mangla Dam reservoir by sixty feet. As part of resettlement of the dam affectees, the Chinese firm, International Water and Electric Corporation ( CIW&EC) is also working on the construction of a bridge over Jhelum river in the same area. Another very vital project is Neelum-Jhelum Hydroelectric Power Project which aims at diversion of the water of Neelum river through a tunnel into Jhelum river, at a cost of US$12.6 billion.

The Chinese are also entrusted with the responsibility to commission Kohala Power Project at a cost of US$ 2.155 billion with a capacity to generate 1050 MW of electricity. China’s Three Gorges Project Corporation is constructing Diamir-Bhasha Dam on the Indus river with a total investment of US$ 12.6 billion. In addition to these undertakings the Chinese firms are also working on six other mega power projects in Gilgit-Baltistan that include : US$7.8 billion Dasu Hydropower Project, US$ 70 million Phandar Project, US$ 40.01 million Bashu Hydropower Project, US$ 44.608 million Harpo Hydropower Project and US$ 6 billion Yulbo Hydropower Project. China is also investing an amount of US$ 300 million in housing, communication sectors. The Indians are very wary of Chinese involvement in development projects in Gilgit-Baltistan and Azad Kashmir and view it as a calculated move to build Chinese influence in these areas, a charge vehemently dismissed by China. China is also helping Pakistan in the nuclear power sector. A nuclear power plant at Chashma with a power generating capacity of 330 MW of electricity has already been completed and integrated with the National Grid recently and two more similar plants are scheduled to be completed by 2016-17. The agreement for these projects was signed on June 8, 2010 during President Zardari’s visit to China, notwithstanding the fact that US raised objections on the nuclear cooperation between the two countries. The Chinese brushed aside the apprehensions on this account by informing the Nuclear Suppliers Group (NSG) during its meeting at Christchurch, of its decision to build Chashma IV and V in Pakistan. In the backdrop of US-India agreement for cooperation in the field of civilian nuclear technology, which Pakistan views as a discriminatory act, the Chinese help assumes a great significance and reflects the strength of friendship between the two countries. These two plants are part of the PAEC programme to generate 8800 MW of nuclear power for the country to supplement other sources of power generation. An arrangement for soft Chinese loan to fund the construction has also been inked. The participation of China in exploiting copper reserves at Sandak and the development of Gawadar Port in Balochistan, though not liked by some regional and international powers, are undertakings of immense economic benefit to the people of the province and the overall development of Pakistan.

The trade between the two countries has also been expanding. China is the fifth largest source for Pakistani imports. The bilateral trade between the two countries touched US $7 billion mark in 2008.Under a five year programme lunched in 2006 this volume is proposed to be enhanced to $ 15 billion by 2012. In the past few years, the Chinese have made an investment of US$ 1.3 billion in Pakistan. A number of Chinese companies are working in the oil and gas, IT, Telecom, Engineering, and mining sectors.

As is evident, China has made an unfathomable contribution to the economic progress of Pakistan and with the completion of the new ventures, especially in the energy sector, Pakistan can rightly aspire for an era of sustainable economic growth in the country. It is an irrefutable reality that relations between Pakistan and China have been growing from strength to strength irrespective of who was in power in Pakistan. However the exponential expansion in these relations during the present regime reflects a marked departure from our perennial propensity to look up to the West, particularly US for our security and economic progress.

The enhanced economic, political and strategic cooperation between China and Pakistan will contribute immensely to warding off the lurking dangers and consolidating the gains of the efforts made for changing the economic situations of the people of both the countries. This renewed and vigorous engagement between the two countries is an encouraging development as it will greatly benefit Pakistan by re-invigorating commercial and industrial activities and creating new jobs. This might also restore the confidence of the international community in Pakistan as a safe place to invest.

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