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China–Pakistan Economic Corridor CPEC


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China–Pakistan Economic Corridor CPEC
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China–Pakistan Economic Corridor CPEC
Many people do not know what is China–Pakistan Economic Corridor CPEC, so here you can get details about CPEC.

train travel at up to 160 kilometres per hour by December 2019. Pakistan's railway network will also be extended to eventually connect to China's Southern Xinjiang Railway in Kashgar. A network of pipelines to transport liquefied natural gas and oil will also be laid as part of the project, including a $2.5 billion pipeline between Gwadar and Nawabshah to eventually transport gas from Iran.

Over $33 billion worth of energy infrastructure are to be constructed by private consortia to help alleviate Pakistan's chronic energy shortages, which regularly amount to over 4,500MW, and have shed an estimated 2-2.5% off Pakistan's annual gross domestic product. Over 10,400MW of energy generating capacity is to be developed between 2018 and 2020 as part of the corridor's fast-tracked "Early Harvest" projects in conjunction with four projects under construction prior to the announcement of CPEC. Electricity from these projects will primarily be generated by coal, though wind projects are included under CPEC, as is the construction of one of the world's largest solar energy plants.

Gwadar forms the crux of the CPEC project, as it is envisaged to be the link between China's ambitious One Belt, One Road project, and its Maritime Silk Road project.[38] In total, more than $1 billion worth of projects are to be developed around the port of Gwadar by December 2017.

China will grant Pakistan $230 million to construct a new international airport in Gwadar which is to be operational by December 2017.[49] The provincial government of Balochistan has set aside 4000 acres for the construction of the new $230 million Gwadar International Airport which will require an estimated 30 months for construction,[50] the costs of which are to be fully funded by grants from the Chinese government which Pakistan will not be obliged to repay.[51]

The city of Gwadar is further being developed by the construction of a 300MW coal power plant, a desalinisation plant, and a new 300 bed hospital.[52] Plans for Gwadar city also include construction of the East Bay Expressway – a 19 kilometre controlled-access road that will connect Gwadar Port to the Makran Coastal Highway.[53] These additional projects are estimated to cost $800 million, and are to be financed by 0% interest loans extended by the Exim Bank of China to Pakistan.[52]

In addition to the aforementioned infrastructure works, the Pakistani government announced in September 2015 its intention to establish a training institute named Pak-China Technical and Vocational Institute at Gwadar,[22] which is to be developed by the Gwadar Port Authority.[54] The institute is to be completed by March 2016 at the cost of 943 million rupees,[22] and is designed to impart to local residents the skills required to operate and work at the expanded Gwadar Port.[22]

Roadway infrastructure projects


The CPEC project envisages major upgrades and overhauls to Pakistan's transportation infrastructure. Under the CPEC project, China has announced financing for $10.63 billion worth of transportation infrastructure so far; $6.1 billion have been allocated for construction "Early Harvest" roadway projects at an interest rate of 1.6 percent.[55] The remainder of funds will be allocated when the Pakistani government awards contracts for construction of road segments which are still in the planning phase.

Three corridors have been identified for cargo transport: the Eastern Alignment though the heavily populated provinces of Sindh and Punjab where most industries are located, the Western Alignment through the less developed and more sparsely populated provinces of Khyber Pakhtunkhwa and Balochistan, and the future Central Alignment which will pass through Khyber Pakhtunkhwa, Punjab, and Balochistan.

The CPEC projects call for reconstruction and upgrade works on National Highway 35 (N-35), which forms the Pakistani portion of the Karakoram Highway (KKH). The KKH spans the 887 kilometre long distance between the China-Pakistan border and the town of Burhan, near Hasan Abdal. At Burhan, the existing M1 motorway will intersect the N-35 at the Shah Maqsood Interchange. From there, access onwards to Islamabad and Lahore continues as part of the existing M1 and M2 motorways. Burhan will also be at intersection of the Eastern Alignment, and Western Alignment.

Upgrades to the 487 kilometer long section between Burhan and Raikot of the Karakoram Highway are officially referred to in Pakistan as the Karakoram Highway Phase 2 project. At the southern end of the N-35, works are already underway to construct a 59-kilometer-long, 4-lane controlled-access highway between Burhan and Havelian which upon completion will be officially referred to as the E-35 expressway.[57] North of Havelian, the next 66 kilometres of road will be upgraded to a 4-lane dual carriageway between Havelian and Shinkiari,[58] Groundbreaking on this portion commenced in April 2016.[59]

The entire 354 kilometres of roadway north of Shinkiari and ending in Raikot, near Chilas will be constructed as a 2-lane highway.[60] Construction on the first section between Shinkiari and Thakot commenced in April 2016 jointly with construction of the Havelian to Shinkiari 4-lane dual carriageway further south.[61] Construction on both these sections is expected to be completed with 42 months at a cost of approximately $1.26 billion with 90% of funding to come from China's EXIM bank in the form of low interest rate concessional loans.[61][62][63]

Railway infrastructure projects
Phase 1 of the ML-1 overhaul and reconstruction is highlighted black between Peshawar and Multan. Overhauling and reconstruction of the line will allow trains to travel at up to 160 kilometres per hour.
Phase 2 of the ML-1 overhaul between Multan and Hyderabad is marked in orange. Phase 3 of the project is indicated by the green line between Hyderabad and Karachi.

The CPEC project emphasises major upgrades to Pakistan's ageing railway system, including rebuilding of the entire Main Line 1 railway between Karachi and Peshawar by 2020;[113] this single railway currently handles 70% of Pakistan Railways traffic.[114] In addition to the Main Line 1 railway, upgrades and expansions are slated for the Main Line 2 railway, Main Line 3 railway. The CPEC plan also calls for completion of a rail link over the 4,693-meter high Khunjerab Pass. The railway will provide direct access for Chinese and East Asian goods to Pakistani seaports at Karachi and Gwadar by 2030.[114]

Procurement of an initial 250 new passenger coaches, and reconstruction of 21 train stations are also planned as part of the first phase of the project – bringing the total investment in Pakistan's railway system to approximately $5 billion by the end of 2019.[115] 180 of the coaches are to be built at the Pakistan Railways Carriage Factory near Islamabad,[116] while the Government of Pakistan intends to procure an additional 800 coaches at a later date, with the intention of building 595 of those coaches in Pakistan.[116]
Overhaul of Main Line 1 Railway
Main article: Karachi–Peshawar main railway line

The CPEC "Early Harvest" plan includes a complete overhaul of the 1,687 kilometre long Main Line 1 railway (ML-1) between Karachi and Peshawar at an estimated cost of $3.65 billion.[55] with expected completion by December 2019.

Upgrading of the railway line will permit train travel at speeds of 160 kilometres per hour, versus the average 60 to 105 km per hour speed currently possible on existing track,[117] and is expected to increase Pakistan Railways' annual revenues by approximately $480 million.[114][118] The upgrades are also expected to cut transit times from Karachi to Peshawar by half.[119]

The first phase of the expedited project will focus on upgrading the Multan to Peshawar section, which will then be followed by the Hyderabad to Multan section, and finally by the Hyderabad to Karachi section.[120]

At the time of CPEC's announcement, the ML-1 consisted of dual track railway between Karachi, and the Lahore suburb of Shahdara, interrupted by an approximately 90 kilometre long stretch of single track railway between Sahiwal and the city of Raiwind, south of Lahore. From Shahdara, the track mainly consisted of a single track until the ML-1 terminus in Peshawar. Construction works to upgrade the stretch of ML-1 between Sahiwal and Raiwind to a dual track railway were completed and inaugurated in January 2016, resulting in a fully dual track railway between Karachi and Shahdara.[121]

In addition to a complete overhaul of the Karachi to Shahdara railway, the remaining stretch of track between Shahdara and Peshawar is to upgraded to a dual track railway under CPEC.[122] A spur from Taxila to Havelian will also be constructed, with a dry port to be established near the city of Havelian.[123] Further, the entire length of track will have computerised signal systems, with stretches of track in urban areas to also be fenced off to prevent pedestrians and vehicles from crossing tracks in unauthorised areas.[124]
Overhaul of Main Line 2 Railway
ML-2 of Pakistan Railways is marked in purple, while ML-3 is marked in orange. Other lines are in blue.

In addition to upgrading the ML-1, the CPEC project also calls for similar major upgrade on the 1,254 kilometre long Main Line 2 (ML-2) railway between Kotri in Sindh province, and Attock in northern Punjab province via the cities of Larkana and Dera Ghazi Khan.[125] The route towards northern Pakistan roughly parallels the Indus River, as opposed to the ML-1 which takes a more eastward course towards Lahore. The project also includes a plan to connect Gwadar, to the town of Jacobabad, Sindh[126] which lies at the intersection of the ML-2 and ML-3 railways.
Overhaul of Main Line 3 Railway

Medium term plans for the Main Line 3 (ML-3) railway line will also include construction of a 560 kilometre long railway line between Bostan near the Afghanistan border, to Kotla Jam near the city of Dera Ismail Khan,[127] which will provide access to southern Afghanistan. The railway route will pass through the city of Quetta and Zhob before terminating in Kotla Jam, and is expected to be constructed by 2025.[114]
Orange Line Metro

The $1.6 billion Orange Line of the Lahore Metro is under construction and is regarded as a commercial project under CPEC.[128] Construction on the line has already begun, with planned completion by Winter 2017.[129][130] The line will be 27.1-kilometre (16.8 mi) long, of which 25.4 kilometres (15.8 mi) will be elevated, with the remaining portion to be underground between Jain Mandir and Lakshmi Chowk.[131] When complete, the project will have the capacity to transport 250,000 commuters per day, with plans to increase capacity to 500,000 commuters per day by 2025.[132]
Khunjerab Railway
The proposed route of the Khunjerab Railway is indicated by the brown line.
Main article: Khunjerab Railway

Longer term projects under CPEC also call for construction of the 682 kilometre long Khunjerab Railway line between the city of Havelian, to the Khunjerab Pass on the Chinese border,[133] with extension to China's Lanxin Railway in Kashgar, Xinjiang. The railway will roughly parallel the Karakoram Highway, and is expected to be complete in 2030.[114]

The cost of the entire project is estimated to be approximately $12 billion, and will require 5 years for completion. A 300 million rupee study to establish final feasibility of constructing the rail line between Havelian and the Chinese border is already underway.[134] A preliminary feasibility study was completed in 2008 by the Austrian engineering firm TBAC.[135]
Energy sector projects

Pakistan's current energy generating capacity is 24,830 MW,[136] though the country currently faces energy shortfalls of over 4,500MW on a regular basis[17] with routine power cuts of up to 5 hours per day,[18] which has shed an estimated 2–2.5% off its annual GDP.[18] Energy generation will be a major focus of the CPEC project, with approximately $33 billion expected to be invested in this sector.[16] As part of the "Early Harvest" scheme of the CPEC, an estimated 10,400 MW of electricity are slated for generation by March 2018 as part of CPEC's "Early Harvest" projects.[19]

The energy projects under CPEC will be constructed by private Independent Power Producers, rather than by the governments of either China or Pakistan.[137] The Exim Bank of China will finance these private investments at 5–6% interest rates, while the government of Pakistan will be contractually obliged to purchase electricity from those firms at pre-negotiated rates.[138]
Renewable-energy projects

China's Zonergy company will complete construction on the world's largest solar power plant – the 6,500 acre Quaid-e-Azam Solar Park near the city of Bahawalpur with an estimated capacity of 1000MW is expected to be completed in December 2016.[139][140] The first phase of the project has been completed by Xinjiang SunOasis, and has a generating capacity of 100 MW.[141] The remaining 900 MW capacity will be installed by Zonergy under CPEC.[141]

The Jhimpir Wind Power Plant, built by the Turkish company Zorlu Enerji has already begun to sell 56.4 MW of electricity to the government of Pakistan,[142] though under CPEC, another 250MW of electricity are to be produced by the Chinese-Pakistan consortium United Energy Pakistan and others at a cost of $659 million.[143][144] Another wind farm, the Dawood wind power project is under development by HydroChina at a cost of $115 million, and will generate 50 MW of electricity by August 2016.[145]

SK Hydro Consortium is constructing the 870 MW Suki Kinari Hydropower Project in the Kaghan Valley of Pakistan's Khyber Pakhtunkhwa province at a cost of $1.8 billion,[146] SK Hydro will construct the project with financing by China's EXIM bank.[147]

The $1.6 billion 720 MW Karot Dam which is under construction is part of the CPEC plan, but is to be financed separately by China's Silk Road Fund.[148]

Pakistan and China have also discussed the inclusion of the 4,500MW $14 billion Diamer-Bhasha Dam as part of the CPEC project,[149] though as of December 2015, no firm decision has been made – though Pakistani officials remain optimistic at its eventual inclusion.[150]

The $2.4 billion, 1,100 MW Kohala Hydropower Project being constructed by China's Three Gorges Corporation predates the announcement of CPEC, though funding for the project will now come from CPEC fund.[151]
Coal

Despite several renewable energy projects, the bulk of new energy generation capacity under CPEC will be coal-based plants, with $5.8 billion worth of coal power projects expected to be completed by early 2019 as part of the CPEC's "Early Harvest" projects.

The Shanghai Electric company of China will construct two 660MW power plants as part of the "Thar-I" project in the Thar coalfield of Sindh province.[152][153] The facility will be powered by locally sourced coal,[154] and is expected to be put into commercial use in 2018.[155]

Near the Thar-I project, the China Machinery Engineering Corporation in conjunction with Pakistan's Engro Corporation will construct two 330MW power plants (having initially proposed the simultaneous construction of two 660MW power plants) as well as developing a coal mine capable of producing up to 3.8 million tons of coal per year as part of the first phase of the "Thar-ll Project."[156] The first phase is expected to be complete by early 2019,[157] at a cost of $1.95 billion.[158] Subsequent phases that will eventually generate an additional 3,960MW of electricity over the course of ten years.[153]

As part of infrastructure required for electricity distribution from Thar power plants, the $2.1 billion in Matiari to Lahore Transmission Line, and $1.5 billion in Matiari to Faisalabad transmission line are also to be constructed as part of the CPEC project.[19] The Matiari to Lahore transmission line is to be built on an "urgent basis" by the China Electric Power Equipment and Technology Company.[159]

Also in Sindh province, the 1,320MW $2.08 billion Pakistan Port Qasim Power Project near Port Qasim will be a joint venture of Al-Mirqab Capital from Qatar, and China's Power Construction Corporation – a subsidiary of Sinohydro Resources Limited.[160][161]

In Punjab province, the $1.8 billion Sahiwal Coal Power Project is an under construction project in central Punjab that will have a capacity of 1,320MW. It is being constructed by a joint venture of two Chinese firms: the Huaneng Shandong company and Shandong Ruyi Science & Technology Group, who will jointly own and operate the plant.[162]

Other coal-based projects in Punjab province include a $589 million project to establish a coal mine and a 300MW coal power plant to be built in the town of Pind Dadan Khan by China Machinery Engineering Corporation in Punjab's Salt Range.[163]

In Balochistan province, a $970 million coal power plant at Hub, near Karachi, with a capacity of 660MW to be built by a joint consortium of China's China Power Investment Corporation and the Pakistani firm Hub Power Company as part of a larger $2 billion project to produce 1,320MW from coal.[164]

A 300MW coal power plant is also being developed in the city of Gwadar, and is being financed by a 0% interest loan.[52]
Liquified natural gas

Liquefied natural gas power LNG projects are also considered vital to CPEC. The Chinese government has announced its intention to build a $2.5 billion 711 kilometre long liquid natural gas pipeline from Gwadar to Nawabshah in province as part of CPEC.[165] The pipeline is designed to be a part of the 2,775 kilometre long Iran–Pakistan gas pipeline, with the 80 kilometre portion between Gwadar and the Iranian border to be connected when sanctions against Tehran are eased; Iran has already completed a 900 kilometre long portion of the pipeline on its side of the border.[15]

The Pakistani portion of the pipeline is to be constructed by the state-owned China Petroleum Pipelines Bureau.[166] It will be 42 inches in diameter, and have the capacity to transport 1 billion cubic feet of liquified natural gas every day, with an additional 500 million cubic feet of additional capacity when the planned off-shore LNG terminal is also completed[167] The project will not only provide gas exporters with access to the Pakistani market, but will also allow China to secure a route for its own imports.[168]

The project should not be confused with the $2 billion 1,100 kilometre North-South Pipeline liquified natural gas pipeline which is to be constructed with Russian assistance between Karachi and Lahore with anticipated completion by 2018.[169] Nor should it be confused with the planned $7.5 billion TAPI Pipeline which is a planned project involving Turkmenistan, Afghanistan, Pakistan, and India.

Other LNG projects are currently under construction with Chinese assistance and financing that will augment the scope of CPEC, but are neither funded by nor officially considered a part of CPEC. The 1,223MW Balloki Power Plant is currently under construction near Kasur, and is being constructed by China's Harbin Electric Company with financing from the China's EXIM bank, is one such example. In October 2015, Prime Minister Nawaz Sharif also inaugurated construction of the 1,180MW Bhikki Power Plant near Sheikhupura,[170] which is to be jointly constructed by China's Harbin Electric Company and General Electric from the United States.[171] It is expected to be Pakistan's most efficient power plant, and will provide enough power for an estimated 6 million homes.[171]
"Early Harvest" energy projects

As part of the "Early Harvest" scheme of the CPEC, over 10,000 megawatts of electricity-generating capacity is to be developed between 2018 and 2020.[19] While some "Early Harvest" projects will not be complete until 2020, the government of Pakistan plans to add approximately 10,000 MW of energy-generating capacity to Pakistan's electric grid by 2018 through the completion of projects which complement CPEC. Although not officially under the scope of CPEC, the 1,223 MW Balloki power plant, and the 1,180 MW Bhakki powerplants are also under construction,[170][172] which along with the under-construction 969 MW Neelum–Jhelum Hydropower Plant and 1,410 MW Tarbela IV Extension Project will result in an additional 10,000 MW being added to Pakistan's electricity grid by 2018 by a combination of CPEC and non-CPEC projects.[173] A further 1,000 MW of electricity will be imported to Pakistan from Tajikistan and Kyrgyzstan as part of the CASA-1000 project, which is expected to be completed in late 2018.[174]
"Early Harvest" Energy Project[175] Capacity Location
Pakistan Port Qasim Power Project. 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
Thar SSRL coal power project and mine 1,320 MW (2 x 660 MW plants) Sindh
Quaid-e-Azam Solar Park 1,000 MW Punjab
Suki Kinari Hydropower Project 870 MW (expected completion in 2020)[176] Khyber Pakhtunkhwa
Karot Hydropower Project 720 MW (expected completion in 2020)[177] 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 and Punjab
Matiari to Lahore Transmission Line 660 kilovolt Sindh and Punjab
Other areas of cooperation

The CPEC announcement encompassed not only infrastructure works, but also addressed areas of co-operation between China and Pakistan.
Science and technology cooperation

As part of CPEC, the two countries signed an Economic and Technical Cooperation Agreement,[178] as well as pledged to "China-Pakistan Joint Cotton Bio-Tech Laboratory"[178] The two countries also pledged to establish the "China-Pakistan Joint Marine Research Center" with State Oceanic Administration and Pakistan's Ministry of Science and Technology[178] Also as part of the CPEC agreement, Pakistan and China have agreed to co-operate in the field of space research.[179]

In February 2016, the two countries agreed to establish the "Pak-China Science, Technology, Commerce and Logistic Park" near Islamabad at an estimated cost of $1.5 billion.[180] The park will be situated on 500 hectares, which will be provided by Pakistan to China's Xinjiang Production and Construction Corps, with all investments expected to come from the Chinese side over the course of ten years.[181]

In May 2016, construction began on the $44 million 820 kilometer long Pakistan-China Fiber Optic Project, an optical fiber cable that will enhance telecommunication in the Gilgit-Baltistan region, while offering Pakistan a fifth route by which to transmit telecommunication traffic.[182]

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Last edited by pakistani on Mon Jan 30, 2017 4:25 pm; edited 1 time in total
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The CPEC is an ongoing development mega project which taking the bilateral relationship between Pakistan and China to new heights. InshAllah.
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