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ISLAMABAD: A Chinese firm will be awarded the contract to build $2.5 billion Gwadar liquefied natural gas (LNG) and the Iran-Pakistan gas pipeline in November, Interstate Gas Systems (ISGS), who opened the technical bid for the construction of projects told media personnel on Wednesday.
Mubeen Saulat, ISGS managing director, said that the Chinese state firm China Petroleum Pipelines Bureau (CPP) has submitted technical and commercial bids in accordance with the Public Procurement Regulatory Authority (PPRA) rules. While ISGS, after scrutinising the documents opened the technical bid adding that the commercial bid will be opened in November.
Related: Iran Pakistan gas pipeline to be completed by 2017
CPP will construct the terminal with a capacity to handle 500 mmcfd (million cubic feet per day) of LNG and a floating storage gasification unit. It will also build the 700 kilometre long Gwadar to Nawabshah pipeline.
"The dual projects will be completed at the cost of about $2.5 billion, 85 per cent of the investment will be done by the Chinese company while government of Pakistan will provide 15pc of equity," said Saulat.
The ISGS official also added that the CPP will acquire a loan from Exim Bank which Pakistan will repay in the coming years through the revenue earned from the project.
The pipeline and terminal will be secured by Pakistani security agencies while the Chinese camp will be safeguarded by a Chinese security company.
The CPEC, with a planned portfolio of projects totalling around $46 billion, will link Gwadar, Khuzdar and other areas on way to Dera Ghazi Khan, Dera Ismail Khan and Peshawar along its central route.
The eastern route will connect Gwadar to Ratodero, Sukkur, and Karachi and upward to cities in Punjab, and from there to Khyber Pakhtunkhwa and the Khunjerab Pass.
Linking Gwadar to the rest of Pakistan and the western Chinese city of Kashgar, 3,000 kilometres away, will involve major infrastructure work in Balochistan.
*Related Details of agreements signed during Xi's visit to Pakistan*
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Comments (71) Closed
Sep 30, 2015 07:32pm
Pakistan Zindabad...keep moving forward we r heading in the the right direction
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Sep 30, 2015 07:34pm
Who else is bidding? Without local expertise, the only country will ever bid is China.
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Sep 30, 2015 07:38pm
Pakistani tax payers pay for the project. Chinese make the money. AND
"Chinese camp will be safeguarded by a Chinese security company."
Things could never be better in the favour of Chinese. Some leadership shown by Islamabad.
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Sep 30, 2015 07:49pm
Why Pakistani government allots all work to China only.?why pakistan dependent on only one nation ?when there is no competiton how can you trust quality and the rates ? ln contrast India is entrusting the major contracts to foreign companies on competitve and transparent bidding and therefore no country is dominating India.
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Sep 30, 2015 07:56pm
Weren't we hearing that Russia has signed an MOU to build the pipeline? CPEC is vital but it seems if whole the Pakistan brain has stuck on only one thing. Move on, let CPEC be in process but also find new ideas, partners and Projects.
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Sep 30, 2015 07:57pm
This is good news and progress for the nation.
Please continue the good work.
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Sep 30, 2015 08:02pm
Why the word 'Investment' is used for Chinese company when the loan has to be repaid by Pakistan to exim bank?? Does china also entitled to the profit generates from this project??
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Sep 30, 2015 08:12pm
Nations awaits good news. How long before shortage of electricity & shortage of gas problem be solved? Hope honest, responsible and trustworthy managers are assigned to see completion of these mage projects for uplift of living conditions for average pakistani citizens. (Rich politicians and their friends are already doing well well).
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Sep 30, 2015 08:14pm
Can anybody confirm the terms of these contracts.
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Sep 30, 2015 08:16pm
Chinese company to have their own security !!!!
are we going to have another East India company in making? Donot forget that this is how all that started
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Sep 30, 2015 08:21pm
good to see some action. This needs to be put into action fast.
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Sep 30, 2015 08:23pm
Everybody is stuck on profits. Has there been any study which shows the economic value and impact? Show me the numbers? Pakistan taxpayer is going to repay the loan - they should know what is the earning potential of the project and what will be the operational costs to maintain the pipeline.
What if most profits are consumed in pipeline maintenance, there has been no competitive bid so I assume the maintenance will be done by the Chinese company at our cost.
We really need to differentiate between a feel-good long term liability project and a financially viable project.
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Sep 30, 2015 08:24pm
@dwarakanath
if you read the article it was an international bidding process guided by Public Procurement rules. It just so happens the Chinese bids are lower.
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Sep 30, 2015 08:27pm
Very bad deal if you ask to any expert. But just would like to wish - Best of Luck.
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Sep 30, 2015 08:28pm
@Iqbal Khan this is likely to be the section between Gwadar and Nawabshah. The section between Gwadar and the Iranian border will be solely completed by Pakistan.
There is talk of the pipeline or possibly other pipelines being extended to China. So this is very much still under discussion.
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Sep 30, 2015 08:29pm
Sometimes i really wonder why our govt dont give these contracts to our own companies ?i mean if u see history , earlier it was all us companies which took everything and now it looks like chinese companies
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Sep 30, 2015 08:30pm
Another mega project with kickbacks!!!!
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Sep 30, 2015 08:41pm
You should have gone for international bidding which would have ensure price discovery and competitiveness. Avoid putting all eggs in the same basket. You could have issues of sovereignty down the line.
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Sep 30, 2015 08:50pm
@shahid
No, Russia is building the karachi to lahore pipeline. You're getting these two pipelines confused.
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Sep 30, 2015 08:52pm
@dwarakanath
China is giving the loan at 1.6% interest rates with generous paybac terms. They are subsidizing the cost of the loan because the interest rate should be much higher. Since its concessionary, it's common practice that the country which subsidizes the loan gets the project contract. Even usa EXIM bank is willing to fund 3600mw LNG project as long as GE is the chosen contractor.
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Sep 30, 2015 08:53pm
Is it a very task to lay a gas pipe line for our construction companies? we are building aircrafts, ships, rockets etc. etc so why not this project?
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Sep 30, 2015 08:59pm
Another Nandipur in making. I don't trust this Govt. Ask , why not
transparent international bidding for the project. Terms & conditions must be debated in the Parliament.
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Sep 30, 2015 09:01pm
@Imtiaz. Let's be reasonable. 85% of the cost will be invested by the Chinese money.
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Sep 30, 2015 09:04pm
@dwarakanath. Indian anger is understandable. Indonesia today awarded railway project to a Chinese company over a Japanese bid.
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Sep 30, 2015 09:04pm
OMG!!!
The only bidder China.
Security company of China.
Gwadar port by China.
CPEC by China.
Helicopters from China.
Missiles from China.
Loan by Pakistan.
Interest paid by Pakistani citizens.
Is this project built for the benefit of people of Pakistan or few corrupt politicians and Chinese companies???
In short Pakistan is trapped by China. Gradually China is implementing East India company policies and if not stopped now, we will soon see Pakistan under China's grip. People should understand the gravity of grievances that will occur if they don't act now. Why should command people pay with their hard earned money to make the fortunes for Chinese companies and few politicians.
For how long a nation could stand like this?
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Sep 30, 2015 09:12pm
Great! get the job done, get the "economy going" does it really matter if the Chinese are building or not?
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Sep 30, 2015 09:16pm
@Waseem, wise observation. But is anyone listening in your country? Just refer to what China did in Sri Lanka.
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Sep 30, 2015 09:18pm
Compliments & Best Wishes to China and hope for timely completion of the pipeline project.It will be a success .As far as Nandipur is concerned,wait,it will revive.
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Sep 30, 2015 09:19pm
@Akram no, it does not say that. It says that Chinese company has submitted Technical bids !! so most likely, it was the only company
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Sep 30, 2015 09:27pm
@dwarakanath , Indian company can bid, the situation in kashmir should be settled ASAP
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Sep 30, 2015 09:30pm
Great News
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Sep 30, 2015 09:48pm
@Khan
Where did you see the loan was 1.6% ? Is Sinosure insurance on top and how much is that ?
Chinese solar in Punjab is double the cost of Indias And UAEs, electricity from Thar coal is double the price India or Malaysia pay for imported coal electricity.
No clear bidding, no clear financials, CPEC is amazing but unless transparent, will be no real help.
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Sep 30, 2015 09:49pm
since i saw firsthand what happened at a 1000 mw power plant built by chine in india ,i recommend that pakistan has a strong competent and honest person to monitor this project
the coal based plant worked as long as the chinese company was under contractual obligation to operate it -build and operate project,once the chine contract was over its production declined to 40%
of course one could say it was not the Chinese company fault may be the new management was incompetent
however that our local politician grew richer by few crores ....
good luck from india anyway
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Sep 30, 2015 09:52pm
They even brings the workforce from China.
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Sep 30, 2015 09:54pm
Today international FDI data is release and for first half year of 2015 and India is leading over china and America. India received 31 Billion dolars. Trend is still in India's favor.
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Sep 30, 2015 10:15pm
Time to have our own indigenous companies to do such works. Our Heavy Mechanical Complex should be entrusted such jobs.
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Sep 30, 2015 10:26pm
Setting up infrastructure is just beginning in the development process. If China can build these critical projects for Pakistan it will be a blessing for this country. Of course they have business objectives but it will be good for Pakistan as well. I am looking forward to the day when foreign workers will be coming to Pakistan for work.
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Sep 30, 2015 10:28pm
someone said that the friendship with china is more dangerous than enmity with america.this report mention that 85% investment made by chines, what lol this 85% is a loan which Pakistan government have to pay with interest in a define time.
our people are jobless and government hiring chines people for all project and these project are also not durable.chines providing cheapest machinery for highest rate to Pakistan and we becoming fool since long. locomotive of railway and scanner project in Islamabad is only two example. why our government awarding all project to chines ignoring all rules, this is a million dollar question because they get easily kickback from than.
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Sep 30, 2015 10:37pm
All pollution and side effects will be faced by Pakistan. China will keep the rewards. Time for us to wake up
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Sep 30, 2015 10:40pm
@Farhan who released the figures? Indian Finance minister is fooling Indians. You can check an Indian website www.first post.com. FDI in first half of 2015 is USD.19.4 billions and not USD.31 billion. Check www.Reuters.com. during first half of 2015 China received USD.68.4 billions...up by 8.3% than last year. China got USD.119.6 billions in FDI during 2014.
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Sep 30, 2015 10:48pm
@dwarakanath, We love China a lot.
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Sep 30, 2015 11:25pm
Companies invest to get reap returns. Western companies invested in China and India to reduce the cost of labor in both low-tech and hi-tech sectors. What's the incentive for China to invest $ 46 billion in Pakistan ? Think for a while. Please don't say easy access to South Asian Shipping lanes because China can get the much better access through Bangladesh.
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Oct 01, 2015 12:08am
Only Technical bid is opened and everyone talking about finance. PPRA followed and Bro European firm going to evaluate technical build and financial bid will surely be subject to price audits etc. Its a contract between two commercial entities backed by govts so ISGS will repay the loan out of profits then again profit will be determine by OGRA teriff. So a lot of regulators are there we should hope for good results.
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Oct 01, 2015 12:28am
These comments make me shake my head. Across the border, hindustanis celebrate every tiny development in their country - even those that are of no consequence (which is most of them). In Pakistan, though, we read about a massive development opportunity, and almost every comment is a complaint. Even worse, some of us are now starting to show anger at the assistance given to us by our closest ever ally, China. How low can we go?
Let's stop all development projects because they're all open to corruption, and let's break off all ties with China because they have been too helpful to us. Let's remain a country that sits on a goldmine while our poorest can't even find food. Maybe then all the people here who are moaning and complaining will be happy.
Hasan
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Oct 01, 2015 12:50am
This is well planned out. Balochistan will become the hub of energy corridor, a gateway. The revenues flowing in will be massive.
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Oct 01, 2015 01:55am
@Saira Durrani K, Austin,TX A sensible comment from you. But we Pakistanis don't care as long as China does whatever it wants to do with us. Got me? LOL.
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Oct 01, 2015 02:45am
Good.China should start building this LNG pipeline ASAP.
Cost of gas from Iran/Gwadar will be less than $6 but the cost of gas from Qatar is more than $15.
Pakistan/India/Afghan. should import gas from Iran/Turkmenistan which lot cheaper than Qatar gas.
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Oct 01, 2015 02:51am
Biggest problem for LNG is its price i.e spot LNG is $7 but Qatar contract $15.
So china is helping Pakistan (everybody in world) to reduce price of LNG.
China should build as many LNG projects as possible to reduce the price.There is lots of gas available in ground.
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Oct 01, 2015 03:05am
@futurewizard .... It Pakistanis build it, it will be rusted and busted in no time. China puts it's people to work. It's engineers and technicians are more skilled than Pakistan's. Aside from the fact that Pakistan does not have the money for the project.
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Oct 01, 2015 03:17am
CPEC is vital for China and Pakistan and both are heading in the right direction.
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Oct 01, 2015 03:20am
@Waseem ... Your history is wrong. British troops came to protect India only after Nadir Shah robbed you of every penny. India did not even have an army. A viceroy was installed because Indian could not protect itself from the combined forces of Persians and Afghans who looted the country. With people jabbering in 600 different languages India was not a nation.
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Oct 01, 2015 03:24am
@Imtiaz ... The economic fact is this: It is cheaper for China to build it, than Pakistan to build it. Does Pakistan Steel Mills even have a pipe mill that could produce pipe in that diameter? In Pakistani hands it could even end up as another failed infrastructure project.
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Oct 01, 2015 03:29am
@Sartaj ahmed .... Take one Jiao Tong University trained engineer, and show me one Pakistan engineer who can match him. I had a Chinese girl friend in Guang Zhou who was running the public water company for the city with her mother and father. All three of them were graduate civil engineers.
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Oct 01, 2015 03:31am
@kashor ... Doesn't matter. Only China can deliver all that pipe to Iran and Pakistan at the lowest cost.
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Oct 01, 2015 03:32am
So China offers to invest 85% on this project and offers loan on very low interest rate and friendly terms to payback and people are still moaning about it. I can understand why Indians want us to ditch China but for Pakistanis to start complaining is really strange. Do you have any other country lining up to build stuff in Pakistan and invest in projects? No. Enough said.
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Oct 01, 2015 03:39am
@syed wasim haider ... China is putting up most of the money because China knows Pakistan will be a world power in 2040.
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Oct 01, 2015 03:50am
@Farhan ... They would not be in Pakistan without putting their own people to work. If Pakistan lacks jobs that is not a Chinese problem.
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Oct 01, 2015 04:12am
@Kamal Pasha .... I love China more than America.
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Oct 01, 2015 04:15am
@NORI ..... 46 billion dollars is a very big number.
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Oct 01, 2015 04:55am
@Hasan Well said. You are the only few with the thinking cap on. China is putting down the money and has huge experience in pipeline building and are very competitive in cost. China is an ideal partner for Pakistan.
Some criticize China for using their own security company. You can't blame them for this is because many Chinese engineers got killed during Gwardar port building under the Pakistani security establishment which was a major concern to the Chinese firm.
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Oct 01, 2015 05:10am
@naren1
Very few people know that Pakistan has its own large reserves of Gas and it need not import it. So, why import. Give global tender for exploration and extraction on profit sharing basis.
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Oct 01, 2015 05:11am
@Khan
> China is giving the loan at 1.6% interest rates with generous paybac terms.
You are WRONG. It's 16% interest rate; not 1.6%.
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Oct 01, 2015 05:18am
I feel in 5 years Pakistan will be ahead of its game. Now the terrorists are almost eliminated from Pakistan thanks to army Pakistan is now concentrating on development if things go smoothly in next five years other countries will hugely invest in Pakistan. Chinese know the importance of pakistani location in central asia that's why they are investing billions in Pakistan.
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Oct 01, 2015 05:22am
@Hasan Well said. China is Pakistan's best friend and partner for development because China don't interfere in how you run your country and help Pakistan to the best of their ability and for the same kind of help from the West they will demand more than a pound of flesh.
Simple example, the West was in Africa for centuries, but the continent remained very poor due extreme White exploitation. Since China's engagement with Africa the continent have seen huge improvement in their economy and infrastructure and this give the African a sense of pride they never felt that before. China is not just giving them fish but showing them how to fish. This is the Chinese win win partnership.
Pakistan should take maximum advantage out of this special realtionship with China to advance its development.
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Oct 01, 2015 05:32am
@Farhan With workforce from China ,when Pakistani technical manpower learn the technology? Also if Pakistan is in to building fighter planes ,missiles why not have these projects?It means project is going to benefit only Chinese companies & few corrupt politicians rather than common Pakistani for sure.
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Oct 01, 2015 06:56am
Gas is essential commodity for Nation. Gas is a clean fossil fuel and generating comparatively less environmental pollution compared to oil and Coal. The problem faced by Pakistan is the corruption. The negotiation of price of LNG and Natural gas is very vital element . GOP needs to involve corruption less National experts in all large size projects. For Power generation gas can give us very fruitful results due to the reason that we can increase efficiency of power plant utilizing gas in combined cycle power plant close to 60 % considering Pakistan average site conditions while with Oil and Coal efficiency can not go above 44 % in any case. It is shame for Us the corruption rating of Pakistan has increase. Dealing with China we need to maintain international engineering Codes and standards, it is for sure that it will increase the cost of project but will give us long term benefits. Chines GB standards should be acceptable if they are equivalent to international standards.
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Oct 01, 2015 09:19am
@Mahesh
tech to build pipelines?
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Oct 01, 2015 12:45pm
@NORI
access to Western China is the point of the CPEC. not just an avoidance of Malacca straits. No goods from Western China can easily get to Bangladesh without crossing a huge distance, up and down the massive tibetan plateau, and across Indian or Burmese borders into bangladesh. Gwadar is meant to open up Western China to development, and is the easiest and shortest route. This is listed as a gold of CPEC many times. Please read the facts before questioning the project.
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Oct 01, 2015 03:45pm
@syed wasim haider Bro, we are not building rockets and all. We are ASSEMBLING them. You know, tighten the nut bolts here and there and put the green stamp. Go figure.
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Oct 01, 2015 06:55pm
My previous prediction became true. There is huge Economic crisis right now in China, which is more than just a temporary loss. China will naturally turn towards Pakistan and sell them many such projects. And as I said earlier, I say it again, these projects will come wrapped in polished words, and looking at the awareness level of people, they will be cherished, without asking the right questions.
Expect some more projects pushed down your throat in coming year. Mark my words.
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Oct 01, 2015 07:12pm
@Cytheir rus
that is exactly the point
No one can rely on foreign power to protect themselves, that is how started in India, and that is my fear right now
Giving up your writ on any part of your land makes a hole, that let every insect in
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