THE new government appears ready to renegotiate with China the price of a railway megaproject that will upgrade the main railway line in Pakistan linking Peshawar with Karachi.

The indication came from Railways Minister Sheikh Rashid. He says the cost estimates of the scheme ML-1 had been scaled down by almost a quarter from $8.2bn to $6.2bn.

The mega venture will be executed with commercial Chinese loans as part of the CPEC initiative around which Beijing has agreed to invest $62bn in infrastructure in Pakistan.

The minister, however, stopped short of explaining the dramatic decrease in the cost of the venture.

It still remains unclear if the government is restructuring the terms of the deal or making a compromise on its range and size. The government is said to have convinced Beijing to tweak the original CPEC framework to attract third-country investments in schemes, and it is reviewing the costs of ventures like ML-1 that have yet to be undertaken.

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But it has done little to address the allegations that the way CPEC has been executed gives unfair benefits to Chinese contractors, who obtained almost every project with no competition, and at the expense of Pakistani companies.

The Chinese firms are also accused of charging higher prices for lower-quality equipment brought for power projects.

Loans were given by Chinese banks to their companies in China that bought equipment from the latter country to bring to Pakistan, and not a single dollar of the $26bn-$30bn (borrowed so far by Islamabad for power and transport schemes) has crossed into Pakistan.

Read more: 'CPEC is not a gift': Professor Jia Yu at the CPEC 2018 Summit

On top of that, expensive projects completed so far as part of the CPEC scheme are accused of exponentially increasing the country’s import bill, widening the current account gap, draining foreign currency stocks, and spiking the external debt.

The Nawaz Sharif government which signed the CPEC agreements with Beijing kept the deals a well-guarded secret, and anyone questioning the fairness of the terms was immediately accused of working against the ‘national interest’.

In spite of its promises, the present government is also following in the footsteps of its predecessor as far as the lack of transparency around Chinese loans and investments is concerned.

It would be doing a huge service to the people by making good on its pledges with the voters and putting before them the financial and other details of all CPEC projects, so that we can calculate their impact.

Published in Dawn, October 3rd , 2018