A BEGINNER’S GUIDE TO THE CPEC

WHAT IS CPEC?

With mammoth Chinese investment coming into Pakistan there is much confusion surrounding what the CPEC actually is. The Ministry for Planning, Development and Reform has made some conscientious efforts in this regard but it seems as if the general populace is still largely negligent of the actual facets of the Corridor. This article will seek to clarify the confusion regarding the CPEC and present the project details in a simple, easy-to-digest manner.

THE FOUR PILLARS

Part of Chinese President Xi Jinping’s Belt and Road Initiative, an effort to revive the Eurasian Silk Route he CPEC edifice rests on four main pillars: Gwadar Port, power projects, infrastructure projects and industrial collaboration. Lying near the strategically important Strait of Hormuz the magnum opus of the CPEC is perhaps the 400 million ton Gwadar Port. Located close to the key shipping routes of the Persian Gulf an estimated 3% of CPEC funds have been allotted to the development of Gwadar. Its potential as a deep sea port was first identified in the United States Geological Survey of 1954. With construction on the 2292 acre Gwadar Special Economic Zone underway the Port has been lease, to Chinese authorities till 2059. Apart from its inimitable value as a port, Gwadar will also play host to a floating liquefied natural gas facility that will be built as part of the larger $2.5 billion Gwadar-Nawabshah segment of the Iran-Pakistan gas pipeline project. Nearly 60% of Chinese energy needs are met through oil extracted from the Persian Gulf. The infrastructure constructed under the CPEC will cut costs, an estimated 10,000 km in shipping distance and 30 days of shipping time for China and also allow Pakistan to earn handsome royalties from the transport of this refined oil across her land.

ENERGY INFRASTRUCTURE

Secondly, there is an array of power projects being set up all across Pakistan with the help of Chinese investment. China has realized the fact that the energy shortfall is one of the major impediments to economic growth in Pakistan with DAWN reporting that chronic power outages have cost the Pakistani economy up to $14bn, roughly 7% of national GDP. Central to the cumulative Sino-Pak effort to ease the shortfall situation has been the construction of Pakistan’s first supercritical steam engine coal powered station in Sahiwal. With a generation capacity of 1320 MW the Sahiwal Coal Power Plant is one of the first operational projects under the guise of the CPEC. According to Punjab Chief Minister Shehbaz Sharif Sahiwal has reduced loadshedding up to 25%. As far as non-renewable energy sources are considered there are five more coal powered plants to be built with Chinese investments. These include plants in Tharparkar, Gwadar, Port Qasim, Muzaffargarh and Rahim Yar Khan bringing the tally of coal powered energy generated under CPEC to around 9540 MW.

Particularly vulnerable to climate change and rising global temperatures Pakistan is also seeing sizable investments being made in the renewable power sector, all of which will play a role in reducing the power shortfall. The grandest of these is the Quaid-e-Azam Solar Park in Bahawalpur which is touted to be the largest solar park in the world with 1000 MW generation capacity of which 300 MW is operational. As far as going green is concerned is expected to decrease carbon emissions by 90,750 tons annually. Furthermore Pakistan is also producing 200 MW from wind farms in the Thatta region in Sindh. Developed by a Turkish firm, these two projects are a significant addition to Pakistan’s green energy profile. Moreover, Chinese investment is also making possible two hydroelectric projects in Northeastern Pakistan amounting to a capacity of 1590 MW. These include the Suki Kinari Hydel Project and Karot. Both of these are expected to go operational by 2020. Additionally, Pakistan is also slated to receive 1300 MW from Central Asian countries via the CASA 1000 project which is independent of CPEC but constitutes an investment of $1.16 billion.

TRANSPORTATION INFRASTRUCTURE

As far as transportation infrastructure is concerned, China has earmarked $11 billion for the upgrading and new construction of Pakistan’s transportation infrastructure. As part of the Eastern Route of CPEC, a 1,152 Km long motorway will connect Pakistan’s two largest cities, Karachi and Lahore with 4 to 6-lane controlled access highway designed for travel speeds up to 120 Kmph. The entire project will cost approximately $6.6 billion, with the bulk of financing to be distributed by various Chinese state-owned banks. Furthermore the upgrading of the 887-km Karakoram Highway is also included in the project as well as the construction of the 1,153 km Western Route which largely passes through the province of Balochistan.

Moreover nine economic zones have been set up under the auspices of the CPEC to attract Chinese and Pakistani industries to set up shop. These include economic zones in Sheikhupura, Dhabeji, Rakashai and Moqpondass as well as industrial zones in Bostan, Bhimber and Islamabad.

Reference:

Mir Shehrbaz Khetran. “The Potential and Prospects of Gwadar Port” Institute of Strategic Studies Islamabad
Dawn.com. “7 Facts about Pakistan’s Energy Crisis ─ and How You Can Help End It.” 7 Facts about Pakistan’s Energy Crisis ─ and How You Can Help End It, 5 Aug. 2016, www.dawn.com/news/1275116.
Webmaster. “Sahiwal Power Plant to Reduce Loadshedding by 25pc: Shahbaz.” PakObserver, 8 May 2017, pakobserver.net/sahiwal-power-plant-reduce-loadshedding-25pc-shahbaz/.
“CASA-1000: Opportunities and Challenges.” Centre for Strategic and Contemporary Research, 1 Nov. 2017, cscr.pk/explore/themes/trade-economics/casa-1000-opportunities-challenges/

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