Imran govt needs help again: Pakistan seeks $2.7 billion loan from China for CPEC project

At a time when financial institutions and banks of China are showing reluctance in investing in the China-Pakistan economic corridor (CPEC), Imran Khan has decided to seek $2.7 billion loan from China for the construction of package-I of the Mainline-1 project.

Also read | Chinese banks looking to curtail investments in CPEC due to instability in Pakistan

The Main Line 1 railway track connects Karachi in the South to Peshawar in the North of Pakistan. 

At the sixth meeting of the financing committee on ML-1 project, which includes dualisation and upgrading of the 1,872 km railway track from Peshawar to Karachi, decided that Pakistan would initially request China to sanction the only USD 2.73 billion in loan out of the total estimated Chinese financing of about USD 6.1 billion.

This development comes even as Pakistan's economy has been teetering on the verge of bankruptcy for some time and the COVID-19 pandemic has made the situation even worse.

The Ministry of Economic Affairs has been directed to formally send the Letter of Intent to China next week as Beijing is expected to finalise its next year's financing plans by the end of the current month, The Express Tribune reported.

CPEC was sold as the ultimate solution to Pakistan's economic troubles. But, it was China that has squeezed all the benefits.

This move will further impact Pakistan’s already battered economy, even as the spread of the coronavirus pandemic was contained. 

However, PM Imran Khan has repeatedly highlighted the need to complete the $60-billion CPEC saying that it would push socio-economic development.

For China, CPEC is a geopolitical game-changer - the biggest success of Chinese expansionism, and for Pakistan it is a life-time opportunity and its last chance for economic modernisation.

(With inputs from agencies)