CHINA

PAKISTAN
ECONOMIC
CORRIDOR?
 ECONOMIC PROSPECTS
OF CPEC AND AN UPDATE
ON ROAD
INFRASTRUCTURE
DEVELOPMENT TO
SUPPORT THIS INITIATIVE
SEQUENCE OF PRESENTATION
Background
Economic Prospects
Geostrategic Dynamics
Chinas Go-West Policy
CAREC
Introduction CPEC
CPEC-Projects
CPEC Roads
Threats and Constraints
_ Geostrategic Environment
Economic & Financial Constraints
Political & Social Constraints
Security Related Threats
Indigenous Capacity Constraints
Conclusion
BACKGROUND
 ECONOMIC PROSPECTS
Current level of Chinese economic standing in the world is evident

GDP of USD 10.4 Trillion, Exports exceeding USD 2.3 Trillion, Imports more than
USD 1.8 Trillion, F.E. reserves exceeding USD 4 Trillion, highest in the world.
Against this backdrop, Trade between our two countries is about USD 12 Billion with
Pakistans share around USD 2 Billion out of total Exports of USD 25 Billion. Total
GDP of Pakistan about USD 250 Billion.
This highlights unlimited potential and future scope for broadening and strengthening
of our strategic economic cooperation, including quantum growth in balanced trade.
For this to happen, there is an urgent need for jointly designing and implementing
appropriate supporting policies and initiatives.
ECONOMIC PROSPECTS
If Pakistan were to get even 10 percent of the Chinese world trade
passing through the Corridor, it would mean a trade and transport volume
of approximately USD 500 Billion to USD 1 Trillion.

Plans for Pakistan-China Economic Cooperation in strategic spheres are

based on the proposal to create an Economic Corridor from Gwadar in
Balochistan to Kashgar in the Western Chinese Province of Sinkiang.

Two necessary conditions of the Corridor are development of the Port

at Gwadar and creating surface transport connectivity between Gwadar
and Kashgar.
BENEFITS TO CHINA
Substantially reduced travel distance and travel cost from China to Gulf
states.

Independent path from Indian and USAs interference

Decrease in their labor cost

New business market in another country

BENEFITS TO PAKISTAN
Encouragement for other Regional Countries to benefit from this initiative

More foreign investment likely to come to Pakistan

GDP growth of Pakistan likely to increase enormously (Presently being 4.7)

Tax Income from the Porting and Deporting of Chinese ships through
Gwadar and Transit Charges from Land Routes

Development of Roads network will lead to development of nearby cities

Investment by Chinese Banks to support this initiative

GEOSTRATEGIC DYNAMICS
The CPEC is part of Chinas efforts meant to strengthen its trade and
commerce connectivity with different regions of world.

Chinas emphasis on reviving ancient trade routes connecting China,

Central Asia and Europe through developing three main corridors.
Northern, Central and Southern Xinjiang, to connect China with Russia,
Europe and Pakistan.

Pakistan could emerge as a hub of commerce and trade in the region.

CPEC would entail establishing several economic and industrial zones
and physical Road and Railway links connecting Pakistan and China.
GEOSTRATEGIC DYNAMICS
As the corridor also anticipates regional connectivity with India and
Afghanistan It is early to comment whether regional element of the
CPEC will become operational or not This will enhance regional
economic and trade cooperation, leading to regional peace and stability.

It is a common perception that the construction of the CPEC will place

Gwadar on the matrix of intense geo-strategic competition
CHINAS GO WEST STRATEGY
China's "Go West" strategy, launched in 2001, a milestone in the nation's
economic development.
The aim was to boost poorer Western parts of Country that remained
away from economic benefits of China's opening up to the outside world.
Some $325 billion have been invested in major infrastructure projects in
the Western Region.
Includes Qinghai-Tibet Railway, completed in 2006, runs for almost
2,000 km. Another major project extension of Xianyang Airport in Xi'an.
Many acknowledge that the "Go-West" strategy still has some way to go.
The West's share of GDP was only 17.8 percent of China's total in 2008,
with the East still accounting for 41.1 percent, according to a report last
year by Center for Studies of China's Western Economic Development at
Northwest University in Xi'an.
CHINAS GO WEST STRATEGY
As an extension of Chinas Go West policy, and proximity of Xianjang
Province with Pakistan, a transport corridor through Pakistan was a
logical course to adopt, being an economical and shortest route to Middle
East, Africa and also rest of the world.

The CPEC program being mutually beneficial was envisioned by

leadership of the two brotherly Countries for implementation.
CENTRAL ASIA REGIONAL ECONOMIC
COOPERATION, CAREC
The Central Asia Regional Economic Cooperation, or CAREC, Program
is Partnership of 10 countries (Afghanistan, Azerbaijan, People's
Republic of China, Kazakhstan, Kyrgyz Republic, Mongolia, Pakistan,
Tajikistan, Turkmenistan, and Uzbekistan), supported by 6 Multilateral
Institutions, working together to promote development through
cooperation, leading to accelerated growth and poverty reduction.

The CAREC's long-term vision is Good Neighbors, Good Partners, and

Good Prospects.
CENTRAL ASIA REGIONAL ECONOMIC
COOPERATION, CAREC
CAREC helps Central Asia and its neighbors realize their significant potential
by promoting regional cooperation in four priority areas: Transport; Trade
Facilitation; Energy, and Trade Policy.
To achieve these objectives through regional connectivity, six transport corridors
have been planned and are in various stages of implementation including two
corridors (No. 5 and No. 6) passing through Pakistan.
With the rapid economic expansion of People's Republic of China and Japan to
the East, the Russian Federation to the north, and India and Pakistan to the
south, there is unprecedented opportunity for CAREC countries to emerge as a
center of trade and commerce, achieve higher levels of economic growth, and
reduce poverty.
CAREC TRANSPORT CORRIDORS
INTRODUCTION
CPEC - INTRODUCTION
CPEC is a comprehensive development program that entails the linking
of Gwadar Port to Chinas northwestern region of Xinjiang through
highways, railways, oil and gas pipelines, and an optical fiber link.

Major physical infrastructure to be built includes 2,700-kilometre

highway stretching from Kashgar to Gwadar through Khunjrab, railways
links for freight trains between Gwadar and Khunjrab linking to China
and having possible regional connectivity with Afghanistan, Iran and
India.
The project will also undertake the revival and extension of the
Karakorum Highway that links Xinjiang with Pakistan's northern region
GilgitBaltistan and Khyber Pakhtunkhwa.
CPEC - INTRODUCTION
Besides physical links connecting Pakistan and China, the project also
envisages establishing several economic zones along the corridor.

The China- Pakistan Economic Corridor (CPEC) though not part of the
CAREC initiative, will also compliment the objectives of CAREC such
as enhancing trade and economic cooperation between the regional
countries.
CPEC 15 - YEAR PLAN
Industrial parks and special economic zones are part of the China-
Pakistan Economic Corridor (CPEC) memoranda of understanding
recently agreed between the leaders of the two countries.
The key pre-requisite for the establishment of these zones are resolution
of the energy crisis and building of a competitive infrastructure in
Pakistan.
China-Pakistan Economic Corridor is a 15-year plan and will be
completed in four phases:
2018 Early Harvest
2020 Short Term
2025 Medium Term
2030 Long Term
 CPEC PROJECTS
The projects proposed under the CPEC fall into two main categories
Energy
Motorways & Highways, Railways, Oil Pipelines, Optic fiber backbone etc.
Energy projects would add almost 10,000 MW of power easing the lingering
problem of electricity outages and load shedding.
Thar coal fired project would use the locally mined coal while other projects
at Port Qasim, Sahiwal, Qadirabad, Muzaffargarh, Rahim Yar Khan and
Gwadar would be based on imported coal.
Hydropower projects would be developed at Sukki Karnai and Karot. Solar
and Wind power projects are also included in this portfolio.
 CPEC PROJECTS
The Highways and Motorways would follow two routes

Eastern route that would start from Gwadar and connect to KKH through:
Khuzdar, Ratodero, Sukkur, Multan, Lahore, Islamabad and Havelian.

Western route from Gawadar to KKH via Turbat, Panjgur, Kalat, Mastung,
Quetta, Qilla Saifullah, Zhob, Dera Ismail Khan, Mianwali, Hasan Abdal,
Abbotabad and Gilgit.

The total distance from Gwadar to Khunjerab would be 2653km. The existing
800 km Karakoram Highway would also be upgraded.
ENERGY & INFRASTRUCTURE
The first phase of the economic corridor is focused on $45.6 billion worth
of energy and infrastructure projects. Chinas state-owned banks will
finance Chinese companies to fund, build and operate $45.6 billion worth
of energy and infrastructure projects in Pakistan over the next six years.
Major Chinese companies investing in Pakistans energy sector will
include Chinas Three Gorges Corp which built the worlds biggest hydro
power project, and China Power International Development Ltd.
Under the agreement signed by Chinese and Pakistani leaders at a Beijing
summit recently, $15.5 billion worth of coal, wind, solar and hydro
energy projects will come online by 2018 and add 10,400 megawatts of
energy to the national grid.
ENERGY & INFRASTRUCTURE
An additional 6,120 megawatts will be added to the national grid at a cost
of $18.2 billion by 2021.
The transport and communication infrastructure roads, railways, cable,
and oil and gas pipelines will stretch 2,700 kilometers from Gwadar on
the Arabian Sea to the Khunjerab Pass at the China-Pakistan border in the
Karakorams.
The implementation of the energy and infrastructure projects identified
under the China-Pakistan Economic Corridor is being done on a fast-track
basis on both sides to translate the plans into reality.
The fund management company set up as a consortium of leading
Chinese banks, including the China Exim Bank and the China
Development Bank had initial funds of $10bn, which have now been
raised to $40bn.
ENERGY & INFRASTRUCTURE
The ambitious CPEC programme has two main components. It plans to
develop a new trade and transport route from Kashgar in China to the
Gwadar Port. The other component envisages developing special
economic zones along the route, including power projects. The first-phase
projects will receive $45.69bn in concessionary and commercial loans,
for which financial facilitation to the Chinese companies is being
arranged by the Silk Road Fund.

These include $33.79bn for energy projects, $5.9bn for roads, $3.69bn for
railway network, $66m for Gwadar Port and a fiber optic project worth
$4m.
DETAIL OF ONGOING PROJECTS OF CPEC
Sr Name Cost of Project Start Date Completion
# Date

Highways and Motorways

1 Thakot Havelian (118 km) Rs. 141.88 Billion May 2016 May 2018

2 E-35 Hassanabdal Havelian (59 km) Rs. 34.165 Billion March 2015 August 2017

3 D.I. Khan (Yarik) Halka (on M1) (285 Rs. 145.5 Billion March 2016 2 years from
km) (Package I) start of each
package

4 PKM Lahore Multan Rs. 150.665 Billion February August 2018

2016
5 PKM Multan Sukkar Rs. 314.977 Billion August 2016 August 2018

6 Faisalabad to Multan Motorway (M4) Rs. 28.564 Billion April 2016 March 2018
 DETAIL OF ONGOING PROJECTS OF CPEC
Sr Name Cost of Project Start Date Completion
# Date
Railways
3 Rehabilitation and upgradation of Karachi- US $ 3,650 million 2015 2017-18
Lahore-Peshawar (ML-1) Railway Track (1736
km)
4 Construction of Havelian Dry Port including US $ 40 million 2015 2017-18
cargo handling facilities
Gwadar Port
5 Construction of Easy Bay Expressway (18.9 Rs. 11-12 billion 2015 2017
km)
6 Construction of Breakwaters Rs. 13 billion 2015 2016-17
7 Dredging of Birth Areas & Channels Rs. 2.8 billion 2015 2016-17
8 Infrastructure Development for EPZA and Rs. 3.45 billion 2015 2017
GIEDA
Optical Fiber Cable
9 China-Pakistan Optical Fiber Cable (OFC) US $ 4.0 million 2014 2017
Project
CPEC Energy Projects
Early Harvest Energy Project Capacity Location
Pakistan Port Qasim Power Plant 1,320 MW (2 x 660 MW plants) Sindh
Thar I Project 1,320 MW (4 x 330 MW plants) Sindh
Thar II Project and Coal mine 1,320 MW (2 x 660 MW plants) Sindh
Sahiwal Coal Power Project 1,320 MW (2 x 660 MW plants) Punjab
Rahimyar Khan Coal Power Project 1,320 MW (2 x 660 MW plants) Punjab
Quaid e Azam Solar Park 1,000 MW Punjab
Suki Kinari Hydropower Project 870 MW (expected completion in 2020) Khyber Pakhtunkhwa
Karot Hydropower Project 720 MW (expected completion in 2020) Punjab
HUBCO Coal Power Project 660 MW Balochistan
Thar Engro Coal Power Project 660 MW (2 x 330 MW plants) Sindh
Gwadar Coal Power Project 300 MW Balochistan
UEP Windfarm 100 MW Sindh
Dawood Wind Power Project 50 MW Sindh
Sachal Windfarm 50 MW Sindh
Sunnec Windfarm 50 MW Sindh
Matiari to Faisalabad Transmission Line 660 kilovolt Sindh to Punjab
Matiari to Lahore Transmission Line 660 kilovolt Sindh to Punjab
 China
Existing Network
New Links
Railway Connectivity Khunjrab
Quetta Taftan Jalalabad Gilgit

Operative Link Besham Occupied

Non Operative Link Afghanistan Peshawar Havelian Kashmir
Kandhar
Rawalpindi
Iran
Wagha
Chaman Amritsar
Lahore
Spinbuldak Kasur
Quetta
Taftan Amruka Ganda Singh

Zahidan Bhatinda
Jaccobad

Rohri Length
Section Remarks
(Km) India
Gawadar - Basima 623 New Track
Monabao
Basima - Jacobabad 425 New Track
Gwadar Khokhrapar Existing
Jacobabad -
959 Track to be
Karachi Havalian
upgraded
Havalian - Khunjrab 682 New Track
Total 2689
Source: Pakistan Railways
CPEC-ROAD PROJECTS
CPEC ROAD
PROJECTS
 SALIENT FEATURES
Contractor China Communications Construction Company Ltd (CCCC/CRBC)
Source of Financing The Export-Import Bank of China
Total Project Cost Rs. 133.980 Billion
Construction Period 42 Months
Project Length 118.057 Km (as per updated PC-I)
Type of Road Expressway / Highway (Class-II)
PC-I cost of Project Rs. 136 Billion
PC-I cost of Land Acq. Rs. 6.5 Billion
Start Point Havelian (Km 61+898)
End Point Thakot (Km 180+580)
 E-35 - Burhan to Havelian (Hazara Motorway) 6 Lanes
Package-1 (20.400 km) Package-2 (20.400 km) Package-3 (20.000 km)

Havelia
n

S. Maqsood
Hattar Interchange
Jarikas Interchange Sarai 42+496
Interchange
24+160 Saleh
17+860
Chachain
Burhan Interchange
Interchange 29+200
0+00 Jarikas
Length / Cost 59 Km / 34.165 Billion
Commencement March, 2015
Completion August 2017
Burhan Progress
Interchang Package-I 45.47 %
e Hassan Abdal Package-II 30.95%
Package-III 26.43%
Overall Progress Approx 37%
WESTERN ROUTE
Hakla - Yarik (DI Khan) 285 km Burhan

PACKAGE-V
(Pindigheb-Hakla (M-1) ) Hakla
(60km)
(under Award)

PACKAGE-IV
(Tarap-Pindi Gheb ) (50km)
( Contractor:M/s Limak-ZKB JV)
Rs 21,386 Million)
Tarap
PACKAGE-III
(Mainwali-Tarap) (60km)
(Contractor: M/s FWO
Rs 20,629 Million )

PACKAGE-II
(Rehmani Khel-Mianwali)
(60 km)
(Design under preparation)
Abdul Khail
PACKAGE-I
N-55 (Yarik (DIK)-Rehmani Khel)
(55 km)
(Contractor:M/s NLC
s 13,257 Million) Yarik
DI Khan
(27km)
 HAKLA YARIK (D.I.KHAN) TOTAL LENGTH
285 KM 285 km
Length
125.5 Billion for Construction
Cost
20 Billion for Land Acquisition and shifting of utilities
Consultant M/s NESPAK
Date of Start Mar, 2016 (Package-I)
Date of
Two Years (For each Package)
Completion

Description Package-I Package-II Package-III Package-IV Package-V

Yarik Rehmani
Rehmani Khel- Mainwali Mianwali - Tarap Tarap - Pindi Gheb Pindi Gheb - Hakla
Length Khel
(55 km) (60 km) (60 km) (50 km) (60 km)

This section involves a

(Lowest Bidder Bride on river Indus for (Lowest Bidder (Lowest Bidder M/s
M/s NLC which Riverine survey is M/s FWO Limak-ZKB JV (Design Under
Present Status Bid Amount
Bid Amount under process. Bid Amount Preparation)
Rs 13,257 Million) Hydraulic model study Rs 20,629 Million ) Rs 21,386 Million)
will require 4-5 months
Zhob Quetta (N-50)
Zhob

Quetta
Zhob Quetta
Total Length 331 km
CPEC Status Transport Joint Working Gp
agreed to include up gradation
of section as short term Project
Present Two lane carriageway in good
Status condition
Khuzdar Quetta Chaman
Chaman Chaman

Section (N-25)
Jungle- PirAlizai - Chaman
existing 2 lane carriageway
Quetta
56 km

N25

Kalat
Existing Carriageway
Balance work of Kalat Quetta - Chaman (N-25) 226 km
Length / Cost 116 (Pckg. II & IV)
Contractor M/s FWO(EPC)
Commencement June, 2014
Surab Completion June, 2016
Progress 96% Completed
Additional Carriageway (Khuzdar Chaman)
Length 431 km
Procurement of consultant for Detail Design
Khuzdar underway.
Detail Design completion by Dec, 2016.
 Surab Hoshab (N-85)
Length 449 km
Surab
Rs. 22.412 Billion (ECNEC on 22-10-
PC-I Cost
07)
PSDP Allocations (2015-16) Rs. 2.5 Billion
Consultant M/s NESPAK
Basima
Contractor M/s FWO
Contract Cost Rs 17.452 Billion
Date of Start 10 Sep 07
Date of
December, 2016 Nag
Completion
Overall Progress 75%
N85
Panjgur
Divided in (IV) Sub Length Progress
Sections
Sorab-Basima, Section-I 90 Km 39%
Basima-Nag, Section-II Wadh65%
91 Km
Naag-Panjgur, Section-III 130 Km 95%

Panjgur-Hoshab, Section- 138 Km 78%

Hoshab IV
 Khuzdar To Basima (N-30)

Besima
Khuzdar
N-30

Length 110 km
Est. Cost 14.0 Billion
The project is proposed in the CPEC as short term project.
M/s NESPAK emerged as successful bidder to carry out
detail design of the project.
Detail design underway.
Balance Work of Gwadar Turbat- Hoshab (M-8)

M-8
Hoshab
Turbat

N-10

Gawdar
GWADAR TURBAT HOSHAB (M-8) BALANCE
WORK
Gwadar-Turbat Gwadar-Turbat
Description Sec-I, Pakage-IIA Sec-I, Pakage-IIB Turbat-Hoshab Section-IIA
(Nalient-Dasht) (Dasht-Turbat)
Length 53.60 km 63.45km 76.25 Km

Contractor M/s FWO

Consultant M/s LRA Group

Expenditure Already incurred 1.43 Billion 2.35 Billion 2.1 Billion

Current Cost (FWO) 4 Billion 4.221 Billion 4.810 Billion
Total 5.43 Billion 6.571 Billion 6.910 Billion

Date of Commencement June, 2014

Completed 3rd February, 2016

 Khuzdar Shahdadkot (M-8)
Length / Cost 151 Km / Rs 8.1 Billion
PSDP 2015-16 Rs.2.8 Billion (Global)
Commencement April 2004
Completion June,2016
P-III: 71%
Overall
Progress P-IV: 93%
86%
P-V: 95%

Quba Saeed Khan

Khuzdar
M-8
Shahdadkot
EASTERN ROUTE
M-2 (Lahore Islamabad Motorway) 357 Km
M1 Islamabad
Length 357 km (DCW 357x2 = 714 km)
Project Scope Overlay and Modernization

Concession period 20 Years

Commencement / Jan 15
Completion Oct 16
Progress 96%, 675 out of 714 Km completed

Indian Occupied Kashmir

India

Lahore
M4
 Lahore Multan (M-3) 230 km

230 km / Rs.148 Billion

Length / PC-I Cost

February, 2016
Commencement

May, 2018
Completion

Mobilization Stage.

M3
Faisalabad Multan (M-4) 240 Kms
 Sukkur Multan Motorway (M-5)
Salient Features List of Structures
Contractor M/s China State Interchanges 11
Construction Engr.
Corp.
Toll Plaza 22
PC-I Cost 315 Billion
Admin Centers 02
Construction Cost 294 Billion
Length of Road 392 km Weigh Station 22

Lanes 06 Bridges (Major) 60 Nos

(Length=8.8 km)
Lane Width 3.65 m
Bridges (Small) 30 Nos
Paved Shoulder (Outer) 3.0 m (Length=1.13 km)

Paved Shoulder (Inner) 1.0 m Underpasses 250

Design Speed 120 /km Culverts 800

Karachi Hyderabad Motorway (M-9)

Length / Cost 136 km / Rs.36 Billion

Concession Period 25 Years
Scope Conversion of existing
4-lane Highway to 6-lane motorway
BOT Basis
NHAs Share Rs.143 Billion
Commencement July,15

Karachi Completion March, 17

Status Overall progress 20%.
Construction of 104 km commenced
GWADAR PORT-CORNER STONE OF CPEC

The CPEC deal grants the Chinese 40-year operation rights to the port. This is
significantly important for Beijing because it will allow China to ship some of its
oil coming from the Persian Gulf to that port and pump it through the pipelines to
Western China.

A transport route some 6,000 miles shorter, China will be able to save billions in
transport costs and saved time. Indeed, Pakistan in general and Gwadar in particular
will be playing a critical role in Chinas joint plans for a Silk Road Economic Belt
and a Maritime Silk Road linking China to Europe and beyond.
GWADAR PORT
COMPARISON OF GAWADAR PORT WITH OTHER
REGIONAL PORTS
Serial no. Port Depth of Sea Port Number of Berths Capacity in Tons

1. Gwadar (Pakistan) 17.1M-18.2M 120 (13) 400 Million Tons

2. Karachi (Pakistan) 9.4M-10M 33 (30) 25 Million Tons

3. Jebel Ali (UAE) 15.5M-16M 67 13.6 Million Tons

4. Bandar Abbas (Iran) 9.4M-10M 24 -

5. Chabahar (Iran) 11M 10 2.5 Million Tons

6. Salalah (Oman) 10M 19 (6) 30 Million Tons

7. Dammam (Saudi Arabia) 9M 39 -

8. Doha (Qatar) 11.2M-12M 29 6 Million Tons

NEW GWADAR INTERNATIONAL AIRPORT
Source: Civil Aviation Authority
THREATS AND
CONSTRAINTS
GEOSTRATEGIC ENVIRONMENT
India also needs energy and looks forward to developing Irans Chabahar
Port. Which many believe is central for India to open up a route to
landlocked Afghanistan.
If peace and stability is not achieved in Afghanistan after drawdown of
international assistance forces, some security implications mainly for
Pakistan that could impact development projects.
Pakistan has struggled to achieve a reasonable level of security in
Balochistan but it will have to be maintained for successful execution of
CPEC program.
The vested conflicting interests of the regional/international players for
containment of China may have fallout for Pakistan. An issue to be
guarded against through diplomatic means and strong national
commitment and consensus
ECONOMIC & FINANCIAL CONSTRAINTS
GOP funded projects of CPEC (Lahore-Multan and Hakla- D.I. Khan
Motorways) requiring about Rs. 280 billion over next two-three financial
years is a huge undertaking and commensurate resource allocation as per
the financial phasing of these projects is to be ensured.
Natural calamities, unforeseeable disasters and financial crisis in the near
future may offset the financial capacity of the government to meet its
obligation towards this program.
The Chinese governments continued financial commitment to the CPEC
program is vital for its successful execution.
Achieving a balance between financing of CPEC and other essential
development projects will remain a challenge for the government.
POLITICAL & SOCIAL CONSTRAINTS
It is important to evaluate the variables that can affect Pakistans political
and social capacity and response to implement the various elements of
CPEC program. Important among these variables are:

A positive aspect is that there is almost consensus among Pakistans

political parties on maintaining friendly relations with China which
suggests that in principle there should be no major political
impediment in the way of the construction of the China-Pakistan
Economic Corridor.
However, the continuous political stability will remain an essential
requirement for the successful completion of the program. This will
also necessitate continuity and consistency of the policy relating to
CPEC by the Governments across the future election cycles.
POLITICAL & SOCIAL CONSTRAINTS
The consensus achieved by the present government through
engagement with all political parties on the contentious issue of the
Western route is a positive development. Similarly, other social issues
relating to various provinces and segments of society will have to be
suitably addressed. Which entails equitable placing/locating of
various components of the CPEC program and in creating equal
economic opportunities for the people.

The important aspects of cultural sensitivities and business interests

of local communities will have to be adequately guarded when
exposed to massive Chinese presence in the country.
SECURITY RELATED THREATS
The environment of insecurity, militancy and terrorist activities prevalent
in the recent past has been neutralized to a large extent through the
concerted effort of the Army and Law Enforcement Agencies (LEAs).
The military Operation Zarb e Azb has successfully countered this
threat to quite an extent. However, any resurgence of these activities can
pose serious threats to the execution of the China-Pakistan Economic
Corridor.
The raising of Special Security Division (SSD) by the Army to
handle/oversee all security related issues of the program is a positive
development. However, the capacity of other LEAs involved in the
security arrangements remains an area of concern for which respective
Ministry/Provincial governments will have to play a critical role.
SECURITY RELATED THREATS
The possibility of sporadic sabotage incidents occurring in the future
sponsored by the rival States can not be ruled out which can retard the
progress of these projects. The Central as well as the Provincial governments
are already alive to this threat, however, continuous coordination and
cooperation will result in addressing this challenge adequately .
There are certain security-related threats which could emanate both from
within Pakistan or from Xinjiang province in western China linked to the
China-Pakistan Economic Corridor. This will need to be monitored/countered
through collective response by the concerned agencies of the two
governments.
The security of the corridor on its completion and operation will become
crucially important for Pakistan as well as China. Suitable measures will have
to be put in place by the brotherly governments to ensure its uninterrupted
operation.
INDIGENOUS CAPACITY CONSTRAINTS
Massive road construction being undertaken under the CPEC program
requires, in addition to Chinese resources; indigenous support in terms of
contractors, consultants, skilled/unskilled man-power and availability of
equipment as well as construction material.
This will require continuous support and encouragement to the local
construction industry by the concerned government departments/agencies to
overcome this imbalance in shortest possible timeframe.
Supply of core construction materials such as cement, steel and bitumen etc.
and their availability within the country needs to be monitored and addressed
by the Ministries concerned in consultation with the relevant industry to
minimize import from outside.
CPEC is an opportunity for indigenous capacity building of the technical man
power as well as construction industry. The government must create a
conducive environment and extend all possible support.
CONCLUSION
The China-Pakistan Economic Corridor is a game changer project for
both Pakistan and China. Because the economic activities will increase
across the region and people will get more economic benefits, thus
Gwadar port and CPEC will change the fate of both China and Pakistan.
However, potential threats and constraints need to be addressed
effectively by all concerned.
THANK YOU
Questions /Answers Session
ADDITIONAL SLIDES
ECONOMIC BENEFITS OF CPEC
Pakistans current Foreign reserves: $ 17.7 billion
CPECs investment agreement: $46 billion

50
CPECs investment
45
40
35
30
25
20 Pakistans reserves

15
10
5
0
MAIN PROJECTS OF CPEC

Joint research in
Energy
cotton Biotech and Sector ($33.8
marine research billion)

Projects to
address Infrastructure
climate ($11.8 billion)
change

Communication
($44 million)
 Sukkur Multan Motorway (M-5) Status Update
Sr. Item
1 Detailed Design
2 Guarantees
3 Mobilization
4 Land Acquisition
5 Construction Camps
6 Procurement of plants
and equipment
7 Security of the Chinese
staff
8 Completion
Status
In progress
Submitted.
445 Chinese experts mobilized along the Project, supported by a substantial
number of local partner
200 km out of 392 km RoW has been handed over
The project is divided in seven sections. 16 Camps under construction, 10 in
Punjab and 6 in Sindh. Each section will have three camps. Land is purchased
for the camps and construction of camp offices has commenced.
214 units of equipment's arranged on site rental basis. 232 units of site arrived
in Karachi port.740 units of equipment on the way from China.
Presently the local police is providing security. Request for Rangers is made till
special units of Pak Army arrives.
July, 2019 (36 Months)
 Electricity total installed
capacity: 22,797 MW
Electricity Sources
fossil fuel 14,635 MW 64.2% of
total(oil-35.2% + gas-29%)
hydro 6,611 MW 29% of total
nuclear 1,322 MW 5.8% of total
average demand-17,000 MW
shortfall-between 4,000 MW and 5,000
MW
GWADAR, A JEWEL!
At the moment, Gwadar is being developed as a commercial port and not as a facility for
the Chinese Navyyet it could potentially be made into one in the future. Such a
development would without any doubt exponentially increase Sino-Indian maritime
competition in the Indian Ocean, in keeping with Chinas first official defense white
paper, published in early 2015, which makes quite clear that the traditional mentality
that land outweighs sea must be abandoned, and great importance has to be attached to
managing the seas and oceans and protecting maritime rights and interests.
In a move that will strengthen the defense of Gwadar, Pakistan is negotiating with China
the purchase of eight diesel-powered, conventionally armed attack submarines. This
acquisition, which is reportedly part of the CPEC package, would be one of Pakistans
biggest weapons purchases ever, at about $6 billion. Pakistans possession of such
submarines, which are very quiet and lethal, would seriously complicate any Indian
attempt in blockading Karachi or Gwadar. This sale would also further entrench China
as Pakistans principal arms provider. In 2010 alone, Pakistan was the destination for 60
percent of Chinas total arms sales