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Pakistan Gets Chinese Fund for Upgradation of Rail Links & Pipeline
Jul 09, 2016

Pakistan has cleared two projects worth billions of dollars for building a gas pipeline and upgrading the main line of Pakistan Railways to improve traffic for a bilateral economic corridor.The Central Development Working Party (CDWP), a finance arm of the government, gave the nod for both projects ahead of loan negotiations with China,

  • China will provide loans equivalent to 85% of the cost of both project.
  • The cost of upgrading Pakistan Railways main line and establishing a dry port near Havelian is $8.2 billion, which the Chinese government will finance with a $7-billion concessionary loan.
  • The project is part of the $46-billion China-Pakistan Economic Corridor (CPEC) and is covered by the framework agreement for the corridor that was signed during the April 2015 visit of the Chinese president to Pakistan.
  • In the railway project, 15% of the cost will be borne by Pakistan and 85% will be financed by Chinese financial institutions. Pakistan Railways currently accounts for less than 4% of the country’s traffic volume, which the government intends to increase to at least 20% by 2025.
  • The project envisages upgrading the railway’s main line from Karachi to Peshawar with a length of 1,872 km, including the 91-km Lodhran-Khanewal section and 55-km Taxila-Havelian section.
  • The major work will involve upgrading 1,598 km of double and single track and overhauling 930 km of double line.
  • The construction of a 676-km new track from Lalamusa to Peshawar. The project is planned to be completed in two phases in five years by 2021.
  • The first phase will be completed by December 2017 and the second by 2021.
  • The CDWP also cleared the Gwadar-Nawabshah LNG terminal and pipeline project at an estimated cost of roughly $2 billion, including a $1.4-billion Chinese loan.


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