In a setback to the China Pakistan Economic Corridor (CPEC), the Pakistan government has decided to put on hold a major power project, Rahim Yar Khan power project, and has reportedly informed the Chinese government about the same. According to a report in Pakistan-based Dawn News, the Pakistan government will shut down several other schemes under the Public Sector Development Programme (PSDP).
The report further said that Pakistan Prime Minister Imran Khan-led government has asked Beijing to “formally delete the project from the CPEC list”. The same was communicated to China in a meeting of the CPEC Joint Coordination Committee by Pakistan on December 20, 2018. According to the report, the project was pushed by the Pakistan Muslim League – Nawaz government in the past.
The development comes months after China refuted charges that Pakistan’s current economic crisis crumbled because of projects under CPEC. China had said that blaming CPEC was uncalled for and that the corridor in fact was something that would bolster Pakistan economy in the years to come.
The defence of CPEC was necessiated after rising voices in Pakistan against it. Several people questioned the loans taken from China and asked the terms for their repayment. Even the United States has said that the current state of Pakistani economy is a result of loans it has taken from Beijing and has made it clear that it won’t allow any bailout package from the International Monetary Fund (IMF) which would be used by Islamabad to repay Chinese debt.
The IMF also later observed that increasing Chinese involvement in Pakistan’s economy could be disastrous on the latter’s future.
Islamabad has already cut the size of the biggest Chinese “Silk Road” project in Pakistan, a reconstruction of the main rail line between the port city of Karachi and Peshawar in the northwest by $2 billion, citing government concerns about the country’s debt levels. The changes are part of Islamabad’s efforts to rethink key Belt and Road Initiative projects in Pakistan, to which China has pledged about $60bn in financing.
