ISLAMABAD: The Joint Cooperation Committee (JCC) of the China-Pakistan Economic Corridor (CPEC) approved on Tuesday the Long-Term Plan (LTP 2017-30) envisaging broad parameters for future cooperation, but could not conclude agreements on development projects and special economic/industrial zones.

Informed sources said the Chinese delegation complained about the political instability in Pakistan that would negatively impact on the pace of CPEC progress.

The two sides took almost four hours longer than the scheduled time to conclude the 7th JCC meeting as they struggled over acceptable phrases and language to sign off minutes of the meeting. They also could not finalise taxation issues and stood short of final agreement on inclusion for financing of special economic zones.

Chinese team complains about political instability in Pakistan that may affect pace of project’s progress

A lot of time was also consumed over Chinese insistence on prioritising the Hattar Industrial Estate in Khyber Pakhtunkhwa in view of its ready infrastructure instead of Rashakai near Peshawar, but it was finally agreed that the province’s priorities would be honoured in this respect.

See: Exclusive: CPEC master plan revealed

After the conclusion of the meeting, Minister for Interior and Planning and Development Ahsan Iqbal lamented that a political party’s sit-in ahead of the Chinese president’s visit to Pakistan in September 2014 had delayed the CPEC launching and that tradition was carried forward today ahead of the 7th JCC meeting.

He said Pakistan had to move beyond these sit-ins and become an economic power, but the protesters were earning a bad name for the country. He alleged that various methods and attempts were being made to “crash” Pakistan’s economic takeoff.

Mr Iqbal, who is Pakistan’s focal person for the CPEC, said the LTP had been under preparation for several months involving consultations among all stakeholders in Pakistan and China. “Today we have reached the agreement and approved the LTP that will encompass bilateral economic cooperation until 2030.”

He said the CPEC’s first phase involved removing energy and infrastructure bottlenecks in Pakistan to make them enablers of economic growth and hence $35 billion out of $46bn portfolio went to the energy sector, resulting in $27bn worth of projects now in implementation stage.

The minister said the LTP had now finalised a comprehensive framework for bilateral cooperation, particularly towards industrialisation, value-addition and job creation. Under the framework, he added, investments would now flow to the special economic zones, while a joint working group (JWG) on agriculture had been created because China had made great progress from moving out of low value commodities to technological advancements in agriculture output.

He said that in view of the growing water scarcity, the JWG would work on drip irrigation techniques and transfer of technology from China. He said the two sides had approved feasibility studies of some projects cleared by the 6th JCC meeting held in December last year and those pending would be taken up when their studies were finalised.

The meeting agreed to expedite work on the Gwadar Port and Prime Minister Shahid Khaqan Abbasi would inaugurate the Gwadar Eastbay Expressway project on Wednesday. Mr Iqbal said the 19km expressway also included a 4.5km bridge over the sea that would link the Gwadar Port with the Eastern side.

He said the two sides also agreed that work on the Gwadar airport should start by the middle of next year. Its design is now being examined by the Chinese side would provide a grant for its construction.

He said the two sides “exchanged views on issues of taxation and security and formulated a working group to settle issues of taxes in a comprehensive manner”.

Mr Iqbal said the presence of all chief ministers and their representatives also gave a strong message that the nation was united on progress and development of the country.

He said the feasibility studies on all nine industrial zones cleared at the 6th JCC meeting had been shared with China which would review them and respond.

Pakistan also asked the Chinese to appoint a full-time expert of its industrial sector who should be available for liaison with the Board of Investment.

Responding to a question, the minister said there was no harm in making public the LTP so that people could know what opportunities were coming up like the government had been publishing all its development plans, but declined despite repeated questions when it would be announced.

In reply to a question, he did not agree that the Karachi Circular Railway project had been dropped, saying that its original feasibility was prepared by the Japanese who claimed its intellectual property rights and hence its fresh feasibility study would be vetted by the China Railway Institute for subsequent inclusion in the CPEC framework.

Likewise, he said, the feasibility study of the Mainline Railway project was reviewed and decided that its cost estimates would be completed in two to three months and operationalised at the earliest after completing formalities.

Responding to a question about currency exchange, Mr Iqbal said the State Bank of Pakistan would examine an arrangement for treatment of Chinese equipment related to the CPEC against the Chinese currency. He said two hydropower projects of a joint capacity of 180MW in Gilgit-Baltistan had been made part of the CPEC framework.

KP Chief Minister Pervez Khattak said he was surprised how the Hattar Industrial Estate came up on the agenda when the provincial government had acquired 2,000 kanals of land at Rashakai for an industrial zone. He said the provincial government could not compromise on its priority given the fact that China was providing loan, and not grant, for the industrial zone.

He said that the because of exclusion of Diamer-Bhasha dam from the CPEC about 3,500MW of hydropower capacity was now surplus. Of this, 1900Mw would now be taken up on the recommendation of the KP government and 1600MW in Punjab and Azad Kashmir. He said GB-Chitral road, Greater Peshawar Rail and Peshawar-Torkham road would be made part of the next phase of the CPEC.

Published in Dawn, November 22nd, 2017