BEIJING: Beijing’s proposal to build a $58 billion railway system linking Pakistan to western China should go ahead because of its strategic importance, JEE News reported on Thursday.
The study, prepared by scientists at the state-run China Railway First Survey and Design Institute Group Co., Ltd., said the proposed railway project would connect the port city of Gwadar in Balochistan with Kashgar in China.
The feasibility study, led by Zhang Ling, the institute’s deputy director of capital operations, said the proposal – China’s largest Belt and Road Initiative transport project – has the potential to reshape trade and geopolitics on the Eurasian continent. is and should be supported.
The report states that “[in China] the government and financial institutions should provide strong support, enhance coordination and cooperation between relevant national departments, make efforts to inject support funds, and build the project.” Strong policy support and guarantees should be provided for this.” said JEE News.
According to the report, the 3,000-km long Pakistan-China Railway will bypass the Strait of Malacca and connect China’s western regions with the Arabian Sea and reduce its dependence on the South China Sea.
Additionally, “linkages with other transport networks, namely Iran and Turkey, will also provide a more direct route for Chinese goods to Europe, while Pakistan is predicted to get a much-needed boost from better infrastructure and easier trade with China.” has gone,” said. Reports.
The scientists pointed out that the majority of BRI transport infrastructure construction projects received a large share of funds from host countries, and the scale of Chinese investment was very small.
However, this is not the case with Pakistan, which is unable to provide the same support due to the poor economic situation of the country.
The team said that Pakistan’s economic growth rate has come under pressure due to energy shortages, poor investment climate and fiscal deficit.
“Regarding railway investment and construction, Pakistan is unable to provide sufficient financial and material support and relies mainly on Chinese institutions for investment and construction.”
Additionally, the project also requires supporting infrastructure, namely ports and logistics facilities, “which may not be readily available in Pakistan,” the study said.
It added that Pakistan’s unpredictable labor policies could potentially affect railway construction and operating costs.
Moreover, the researchers also expressed concern over the current security situation in Balochistan.
The report recommends the build and transfer (BT) model as the best investment and financing strategy for the project.
“In the BT model, a contractor would be responsible for designing, building and financing the railway, paying on completion and ownership would be transferred to the government or other commissioning body.
“BT will allow the risks associated with the construction and operation of the railway to be more effectively allocated between China and Pakistan, potentially reducing financial risks for both parties,” the report said.
Long-time ally China has been among Pakistan’s major financial institutions, as the South Asian country’s foreign exchange reserves are extremely low.
