Pakistan govt to start clearing dues of Chinese power projects next week

Pakistan has announced that it will start making payments to the independent power producers (IPPs) set up under the China-Pakistan Economic Corridor from next week, local media reported on Saturday.

Dawn newspaper reported that the government also set a schedule for regular monthly payments for a full fiscal year to the satisfaction of Chinese investors.

The Central Power Purchasing Agency (CPPA) of Pakistan owes around PKR260 billion to Chinese IPPs on account of power purchases, according to the publication. Chinese companies were given assurance that the issue of revolving accounts, pending for years will be resolved soon.

During a meeting of all stakeholders and chief executives of Chinese IPPs, Finance Minister Ismail assured the investors that CPEC was a flagship project of friendship between Pakistan and China and expressed the resolve of the present government to provide all kinds of facilities to Chinese investors and promised to address their concerns immediately, Dawn reported.

Chinese investment under Belt and Road Initiative (BRI) across the world is causing alarm among the beneficiaries, as China's debt-diplomacy only reaps profits to Beijing while countries are pushed towards an economic crisis.

China's belt and road initiative, which was launched in 2013 with an audacious plan to harness the juggernaut of the Chinese economy to the goal of Asian economic development, is on the verge of crisis as BRI has become a burden for Beijing rather than a benefit.

Nine years ago, China chose Pakistan's Gwadar as the launch pad and presented it as Beijing's commercial window onto the Indian Ocean, a hub for regional integration under the Belt and Road Initiative but still many projects have either failed to get off the ground or produced mixed to poor results, Nikkei Asia reported.

First announced in a speech by Chinese President Xi Jinping in 2013 as the "Silk Road," the BRI was fleshed out in April 2015 with the announcement of the China-Pakistan Economic Corridor (CPEC), stretching from Gwadar to the Chinese city of Kashgar, in Xinjiang.

The CPEC showcased the China-Pakistan "all-weather friendship" with USD 46 billion in pledged funds that have since grown to USD 50 billion. It was to be the backbone of the now renamed Belt and Road Initiative.