Grey Areas of CPEC

The veil of secrecy surrounding CPEC (China Pakistan Economic Corridor) is both misty and mysterious. While the Chinese government traditionally holds all such state business matters behind closed doors, Pakistani government of Mr Nawaz Sharif is also fighting hard to keep wraps on the CPEC mega billion dollars project.

The Chinese businesses in collaboration with their Pakistani counterparts in CPEC related projects in particular where the majority of 46 billion USD financing is being utilized, that is the energy and power sector wants the details of these projects to be kept under the shrouds.         

 Most interestingly, the CPEC "turf wars" in Pakistan has taken a prominent turn when the political government of Mr Nawaz Sharif refused to share the CPEC project details in its entirety with the Pakistani military establishment which is the basic security stake holder of the project.

Chinese foreign investments where Chinese state finances are involved like in CPEC project are considered free from any competitive bidding process or any other scrutiny as a pre-requisite by the Chinese state bank. 

Against popular belief, China is also not interested in involving the Pakistani security establishment beyond the security paradigm of the project. The Chinese businesses in collaboration with their Pakistani counterparts in CPEC related projects in particular where the majority of 46 billion USD financing is being utilized, that is the energy and power sector wants the details of these projects to be kept under the shrouds.

China is putting in 46 billion USD in the CPEC as an investment upon which, China is looking to extract almost 60% profits in 15 years time period with complete return of investment.

Chinese foreign investments where Chinese state finances are involved like in CPEC project are considered free from any competitive bidding process or any other scrutiny as a pre-requisite by the Chinese state bank. Under this scenario the Pakistani public procurement rules/regulations (PP&RA Laws) are thrown in the bin out-rightly for all CPEC related projects.

CPEC is the part and pilot project of China's One Belt One Road initiative

China is putting 46 billion USD in the CPEC as an investment upon which, China is looking to extract almost 60% profits in 15 years time period with complete return of investment. Almost 36 billion USD out of this amount will be invested in energy and power sector with establishment of power plants all across the CPEC for proposed economic zones which would certainly attract further foreign direct investments, but at a certain cost.

In the most recent G-20 summit in China, the only internationally hailed news was the signing of the environmental protection accord or the so called Paris accord/Kyoto protocol by both China and the USA. Under this agreement China must decommission its ageing coal based power plants causing most of the nefarious smog in the Chinese mainland. China was looking a way to head in this direction for quite some time now. But the incurring costs on the said decommissioning obviously doesn't suit the business competitiveness model of the Chinese economy upon which the "Red Empire" rose to her current status. Not until now, the Chinese had an opportunity to decommission their ageing coal based power plants and shift them to Pakistan as part of the CPEC related power projects. The Chinese would not only sell these coal based power plants to the energy starved Pakistan but also make 60% more profit from this junk which will reportedly reach 20% of its total capacity by 2028 requiring a complete overhaul.

While Pakistan would be provided with the severely short electricity its economy and in particular the CPEC requires to flourish, China would be getting rid of its ageing power plants on huge profit margins. Its a win-win situation for both sides until we consider the disastrous environmental impact, these projects would cause to Pakistan. These concerns have already been aired by the commander of the Pakistani Army Southern command in a seminar on CPEC earlier this year.

The cost of these projects related to CPEC is the second biggest grey area well hidden by both the governments of China and Pakistan protected by the Chinese state bank clauses and thus remain free from any public scrutiny in Pakistan or for that matter China. With the track record of corruption and nepotism, Chinese and in particular the Pakistani officials led by Pakistani Prime Minister Mr Nawaz Sharif, it is evident that another billion dollar scandal is in the making.

It is a very genuine demand of the Pakistani population who have some kind of knowledge, that the stated grey areas of CPEC must be addressed and scrutinized now, before its too late as usual. The Chinese investment is the need of the hour for Pakistan and its economy and Chinese friendship and strategic partnership has been always most welcomed by every segment of the Pakistani society. However, to keep this special relationship flourishing and to further strengthen the Pak-China deep rooted strategic partnership, these grey areas must be addressed at priority.