China-Pakistan Economic Corridor (CPEC)

China-Pakistan Economic Corridor (CPEC)

1. INTRODUCTION:

 

CPEC is an acronym that stands for “China-Pakistan Economic Corridor” is a major emerging project that depicts the leadership attributes of China government on the frontline. The uniqueness of Pak-China corridor lies within the fact that the CPEC west route prefers:

• To enclose the vital source of the link between the Eurasian land routes and the maritime silk routes that have been previously investigated under the OBOR.
• It is an initiative of One Belt and One Road that envisions to connect the Kashgar City with Gwadar Deep Sea Port, mainly joining through highways, railways, and pipelines.

 

Hence, Pakistan proves to serve as an International Interchange that could enable to be an advantage of an enormous kind to be a central role of a hub for the international trade and moreover the integration of diverse economies including Asia, Africa and Europe. Therefore, this geostrategic advantage needs to be further amplified on the basis of the unity of interests in terms of both upcoming economic and social gains.

 

Background of CPEC-Infrastructure Inter-connectivity:

 

China-Pakistan Corridor that formally refers to as China-Pak. Economic Corridor (CPEC) is 3,218-kilometer long route, aimed to be built and completed over several next years. The actual estimated cost of the CPEC project is found to be US$75billion. It is to be ensured at the cost of $45 billion to be a plus in order to make the project operational i.e the completion date of CPEC is expected by 2020. It is expected that the remaining amount of money would mainly be spent on energy generation and the core development of infrastructure of the project.

 

CPEC Project Details:

 

The CPEC project details have been found to be formally divided into several phases on the basis of the overall CPEC completion time.

• The first phase of CPEC includes the plan for the completion of Gwadar International Airport including all the other major developments of Gwadar Port. This phase is expected to be fully completed by the end of 2017.
• The second phase of the CPEC project includes the expansion of Karakoram Highway-It is basically the road that connects China with Pakistan.
• Placement of fiber-optic line in order to ensure smooth communication between the two countries i.e China and Pakistan is considered to be the third phase of CPEC project.

 

 

Geographical Location of CPEC Western Route:

The ultimate decision of final CPEC western route has been made by considering a throughout evaluation on the all possible routes. Thus, The All Party Conference held on May 28, 2015, made a combined decision to adopt an extensive and yet modified pathway that is considered to be finalized CPEC map is stated as follows:

• Gwadar-Turbat-Hoshab-Panjgur-Besima-Kalat-Quetta-Qila Saifullah-Zhob-Dera Ismail Khan-Mianwali-AttockHasanabdal-and onwards.

 

2. STRATEGIC CONTEXT OF CHINA PAKISTAN CORRIDOR:

 

1. The central point of China-Pakistan Corridor that is Gawadar port is considered as a basic central point in the following aspects:

• It leads to several gateways to the South West and Central Asia.
• The strategic significance of the CPEC project seems to be widely extended from the Persian Gulf to South East Asia and the Far East via pathway covering the Indian ocean in between.
• It is estimated that approximately 3 to 40% of seaborne oil shipments have been transmitted through Strait of Hurmuz.
• Gawadar being located on the roads that are crossed around the three sub-regional systems. The gap between the bridges is the vital source for transportation of its vital source and energy.

 

Therefore, the CPEC project holds magnificent significance to perform a crucial role in the future economic prospects of 20 diverse countries included as the part of Central Asia, South Asia and China. The CPEC project owes to provide economically viable, cost-effective in all terms and shortest possible routes for the transit and supply of energy resources.

 

1. The China Pakistan Corridor offers to provide favourable conditions including the reduced sea-land route between Europe and Western China to be approximated as less than half of the previously measured distance. According to a trial conducted for the transportation of containers from Beijing to Gwadar and Karachi through the medium of Sea Route and as well as by the Land Rout through Khunjerab. It was finally concluded that the transportation through the land route took almost half the time with the additional advantage of an approximate saving of energy up to 7 to 14 cents per kg that leads to the savings of billions of dollars annually.

 

Opportunities Afforded by CPEC based on the Initiatives of FWO:

 

FWO is considered to be the leading organization that owes to develop infrastructure in accordance with its major responsibilities in Pakistan. In addition to the CPEC implementation that is being ensured by the government of Pakistan, FWO has been actively involved in the planning of projects of immense national significance. FWO holds the national significance to optimally capitalize on the enormous opportunities that have been provided by either Public Private Partnership and Built or by Operate and Transfer Regime.

 

The Pursuits and Initiatives of FWO in the context of CPEC can be collectively regarded in the following context:

 

1. Road Infrastructure:

 

• FWO has been committed to maintaining the Karakoram Highway since its construction in 1978. However, the capacity has been enhancing recently with a motive that the CPEC project remains operationally functional even throughout the winters.
• The innovative construction of the road route Kaghan- Jakhad- Chillas now serves as a convenient and vulnerable portion of Karakoram Highway.
• In the development of Western and the Eastern Routes of CPEC, FWO has played a vital role in regards to the down of the northern hills.
• In Balochistan, the most difficult and challenging portions and missing links have been constructed in collaboration with FWO. The completion of almost 9km road that was supposed to be completed within the stipulated time span of 6 years was rather completed within 2 years time period.
• The completion of this project has resulted to form a link of Gwadar and China through Karakoram Highway whereas Afghanistan and Central Asia has been linked through Chaman Torkham.
• The Western Route of CPEC Project has been further connected with Afghanistan at Ghulam Khan and Angoor Adda. This connection has been made possible through the development of Central Trade Corridor in FATA.
• The package of Halka-D I Khan motorway that constitutes part of CPEC Western Route is also been developed by FWO.
• FWO has been actively involved in the rehabilitation and refined maintenance of Lahore-Islamabad Motorway situated along the eastern route of CPEC, Lahore. Furthermore, the major portions of Karachi-Hyderabad Motorway have been completed and inaugurated by FWO.

 

 

2. Pilot Project Trade:

The throughout completion of the construction of the missing portions In the western route in Balochistan catered by FWO enabled the organization of first ever mega trade convoy from Kashgar to Gwadar. This historic event led to the marked foundation of the 21st-century Maritime silk trade route and has proved to set them in stone of the actualization of CPEC. This pilot project was an emerging event that led to the validation of China-Pakistan Economic Corridor that furthermore proved to be of ultimate significance in the operationalization of CPEC. The event has further helped in the identification of certain inadequacies in the legal framework regarding transit trade and logistics infrastructure from the futuristic viewpoint.

 

3. Railway Infrastructure:

• As regarding the railway infrastructure, FWO has been found working with Pakistan Railway and Chinese Firms for the sole reason of the development of Pakistan-China Dedicated Fright Corridor on ML-2 on the basis of BOT in regard of carrying an approximate freight traffic of 80 million tons per annum.
• It has been expected that the corridor will extend from Karachi and Gwadar to Kashgar, which is most likely to form a connective link with GCC Railway Network and New Eurasian Bridge.
• FWO has most likely to get proposed the upgradation of ML-I and ML-3 besides the development of Kashmir Railway that can also be directly linked with China.

 

4. Petroleum/Oil Infrastructure:

Regarding the contribution to the needs of Petroleum sector, FWO has been found in the planning and proposition of following projects:

• The very first project in the development of Oil village along M-2 which acquires an approximate capacity of 50,000 MT. The commencement work on this project has already been started. The advanced stages of approval of this project include the connection of the Oil Village with Bin Qasim Port through While Oil Pipeline. The Pipeline is expected to be extended further to Tarujaba in KPK where the facility of around 35000 MT storage would be entertained. This pipeline is expected to be further extended to Afghanistan and Central Asia in the future.
• The other major mega project includes the Gwadar-Kashgar cross-country oil pipeline. It includes the designing, operating, finance, building and owning basis. The oil pipeline is considered to provide facilitation in the marked reduction of the distance between the Persian Gulf to western China by over 7000 kilometers that ultimately lead to the saving in the time and cost of transportation of oil.
• The establishment of an oil refinery to be found in KPK.

5. Energy and Power Sector Projects:

• FWO has been found to be currently undertaking Kuran Tangi Dam in FATA and Jagran-II HPP in Kashmir while working on the 3 times HPPs in Chitral and Mohmand Dam.
• FWO has also been found in the planning and proposition development of Indus Cascade on BOOT basis, It is planned in collaboration with the various Chinese firms that would facilitate the harnessing of water and power potential. Its various proposals have been found at various stages of approval by the government.

 

6. Miscellaneous Infrastructure including Transit Facilities:

• A comprehensive formulation of an extensive plan for the development of Industrial Zones, Smart cities and the logistic infrastructure along M-2, M-9 and Pakistan- China dedicated freight corridor.
• The number of Smart cities including industrial zones, container terminals, grain and fuel storage facilities and warehouses etcetera has been planned along the motorway.

 

7. Development of Mineral Production:

An aim to exploit enomorous mineral potential, FWO has created a special ‘Mine Exploration and Development’ during 2015. Besides, the pilot project in FATA is considered to be completed successfully. In order to undertake the requisite technical expertize the undertaking strategic mining have been developed.

8. Human Resource Development:

FWO has been found in the management of the following Human resource development projects:

• FWO is keen on presenting and managing the country’s best Technical Training Institute (CTTI).
• General and Technical Education System (GATES) institutes have been developed by FWO along the CPEC routes. These institutes are expected to fulfil the requirement of huge technical and skilled workforce that could ensure to encompass an entire spectrum of skill industry at implementation tier.
• FWO is found to be in the process to hold over the non-technical institutes of KP on the request of KP Govt. These institutes would mainly aim to organise the inline training with the modern day requirement as the sole part of the Corporate social responsibility.
• Furthermore, National University of Technology and Skills Development (NuTech) has been established along with its constituent institutes along the corridor. The institutes are being developed with the conceptualization of promoting technical training to the youth, especially in the remotest areas. For the first time in Pakistan, the university has taken an initiative to mainly focus on the promotion of basic to higher education in the field of technology and skills development.

 

3. CPEC-A GAME CHANGER

 

The Chinese province of Xinjiang, that is most likely to be linked by Gwadar Port as part of China Pakistan Corridor is expected to prove to be a game changer not only for Balochistan and Pakistan but also for the rest of the world trade. In Balochistan specifically, this tremendous development activity has opened the opportunity gateways that would lead pathways towards peace after years of instability and violence. Besides the provincial government of Pakistan has ensured to do its part in terms of providing full-proof security to the workers during the construction period of CPEC. Furthermore, with the combined efforts of federal and provincial government, major youth among Balochistan have been recruited in the army in order to frustrate the designs of the enemies of Pakistan. In the combined efforts to develop and ensure peace and development in Balochistan have been provided by people of Balochistan and Jirga.

 

A quick overview of the past of talented youth of Balochistan depicts that their enomorous energy and vitality was previously surprised by Sardars. These talented youth of Balochistan has always proved to be in successful professions including as doctors, engineers and lawyers etc. Over the previous years, billions of rupees fund have been spent with an aim to promote development plans but no worthwhile project has been seen functional along with first-class educational facilities in diverse fields and disciplines specifically for the commoner Baloch youth.

 

In the light of Benefits of China Pakistan Economic Corridor (CPEC), not only the people of Balochistan but rather the whole population of Pakistan, in general, will get the benefits. The CPEC project being part of Beijing’s “Belt and Road” has been specifically planned in order to expand its trade and transport channel across Central and South Asia. The route owes to provide the links from the Caspian Sea to the Strait of Hormuz and enable Gwadar to compete with the Persian Gulf ports. The Chinese strategic access to the Arabian Sea and its presence in the region has made a wary impact on the US.

The role of Pakistan is found firm in the commitment to the CPEC project. It seems optimist to the imperative establishment to the creation of a climate that would be conducive to investment and development. According to various reports, the US has made several trials in order to persuade Pakistan against involving China in the mega project. Besides, India has been found making heavy investments in the road linking project from Afghanistan to Iran’s Chabahar port with an aim to lessen the importance of Gwadar Port. But it seems that along with the keen determination of Pakistan and China, the project would hopefully be completed on time.

 

China-Pakistan Economic Corridor:

 

The significant Importance of China-Pakistan Economic Corridor (CPEC) project is expected to have tremendous economic significance to Pakistan. With the completion of the CPEC, Balochistan would become an economic hub and the people of Pakistan have likely to gain benefits from this mega project. In addition, the project would help Pakistan to achieve self-reliance that could lead to help the Pakistani nation to get rid of dependency syndrome.

 

Previously, it has been found that many anti-Pakistani entities have been at work with an aim to sabotage the China-Pakistan Economic Corridor (CPEC), As they had a pretty good idea about the prosperity and usher that the completion of the project could possibly bring to Pakistan. Besides, there are others who have been involved in spreading the marked false misconceptions about the CPEC. Anyhow, CPEC is more likely to bring new vistas of development that could ultimately lead to the faster economic progress of the country. Furthermore, the Advantages of China-Pakistan Economic Corridor (CPEC) include a comprehensive package of cooperative initiatives that are likely to provide a platform for the following projects:

 

• Better employment opportunities
• Development of Transportation sector
• Enhancing Key areas of connectivity
• Boost industrial growth
• Information Network Infrastructure
• Energy Cooperation
• Industries and Industrial Parks
• Agricultural development
• Poverty alleviation
• Promotion of Tourism
• Financial Cooperation as well as livelihood improvement
• Municipal infrastructure
• Quality of Education
• Public health and better medical facilities
• People-to-people communication

 

The energy sector has been assigned as a top priority of the CPEC project that would help Pakistan to overcome energy shortages. Moreover, Gwadar Port Project is considered to be the central piece of Pak-China Strategic Partnership with its strategic location and potential to be best suited for becoming the future economic and energy hub. These above-mentioned projects under China-Pakistan Economic Corridor will transform it to be among one the world’s top ranking port cities having top class tourist and commercial facilities as well as integrated infrastructure and investment opportunities. Gwader is considered to serve as a catalyst for the development of Makran Coast and Balochistan in particular whereas Pakistan in general. However, the first phase of Gwadar Port with three multipurpose berths with a total quay length of about 602 is found to be fully operational.

 

4. CPEC BENEFITS FOR CHINA

 

The CPEC is most likely to open doors of diverse economic opportunities not specifically to Pakistan but will ensure to provide the physical connection China to its markets in Asia, Europe and Beyond. It has been reported that about 80% of China’s oil is currently been transported from the Strait of Malacca to Shanghai. This distance is regarded as a total of 16000 km and takes a time period of 2-3 months of transport. While the Gwadar would become operational, this distance is most likely to be reduced by 5,000 km. The following schedules have been well-planned for the timely completion:

 

• 21 Agreements on energy-including gas, coal and solar energy.
• 14 agreements are expected to provide up to 10,400 Megawatts of energy.
• The project altogether would enable to provide 16,400 MW of energy.

 

The China-Pakistan Economic Corridor (CPEC) is regarded as a manifestation of classical nature that would lead to the convergence of the various aspects including:

• The geostrategic and geo-economic interests of the two countries.
• The socio-economic and diplomatic relation among the two participating nations.
• The mutual economic interests of the two states would more likely to serve the development of beneficial infrastructure.
• To harmonise the collective efforts of two counter common adversaries that ultimately lead to the advantages and gains for the two sides.

 

The completion of the CPEC project would provide following diverse advantages to China:

1. CPEC would lead to the major economic development of the backward western regions specifically included in Xinjiang. CPEC project is likely to be the source of bringing harmony and peace while providing the facilitation to the trade with Central Asia to fulfil its up growing energy needs and demands.
2. The CPEC project would furthermore afford China’s access to its market situated in Asia, Europe and beyond. The use of Gwadar Port would help in the facilitation of trade from the Persian Gulf and Africa leading to Western and northern China. This would reduce the distance by several thousand kilometres and the savings of the cost of billions of dollars.
3. It has been estimated that almost 80% of total China’s oil is currently being transported from the Strait of Malacca to Shanghai. Besides, the reduction in the transportation time of the oil imports from the Middle East and Africa has been reported until just 2 days over the previous 30 days duration. The completion of pipeline projects would facilitate the independent shipping to China through the Straits of Malacca and the vulnerable Maritime routes.
4. Furthermore, regarding the economic factor, the presence of Gwadar is of great strategic value for China. The Gwadar port holds the strategic significant value for China and is expected to be of great valuable advantage if in the case of war in Asia and in the state of any hindrance or blockage of the Strait of Malacca in the future.
5. There are a diverse and multiple opportunities for China investors because of the fact that Pakistan has a lot to offer in the multiple sectors with minimal wages ratio in the labour sector.

 

The China-Pakistan Economic Corridor (CPEC) is the multi-billion dollar project that is considered to provide more benefits to China as compared to Pakistan due to the lack of financial input in the project by Pakistan’s side.

 

• Due to the reduced input by Pakistan in the CPEC project, including the fact that the government’s expectation for the targeted economic growth enhancement to 6% in the future fiscal year. This economic benefit adds the concern to the other side that these benefits might not be justifiably distributed as initially expected due to the major concern that it has added value to the risk of Islamabad in regards to paying loans to Chinese banks for a prolonged time period in the future.
• It has been reported that the Chinese banks have been keenly waiting for their shares worthy of more than $20 Million approximately for the aim of potential finance. It has furthermore found that much of the financing needs have been fulfilled by China with the Pakistan lenders left to be bound to look into it.
• The CPEC is among the most expensive of the energy projects, the worth $3.5 Billion has been invested in the Thar Coal Mine which is in turn expected to the generation of 1.3 gigawatts of electricity.

 

5. CPEC BENEFITS FOR PAKISTAN:

 

The successful completion of China-Pakistan Economic Corridor (CPEC) and with the help of its smooth implementation, the people of Pakistan would definitely be able to get several tangible and potential benefits which can be summarized as follows:

 

• The people of Pakistan living as the residents in the southwestern port city of Gwadar would more likely to enjoy medical treatment and better emergency health facilities that have been made possible by a hospital donated by China.
• The hospital that has been donated by the Red-Cross society of China is considered to be innovative one of its kind along the CPEC. The hospital situated in this locality is considered to be a sole source of connection between Gwadar and the city of Kashgar in the western China Xinjiang Autonomous Region.
• Moreover, the construction of the more similar hospitals is expected to be planned in order to provide basic diagnosis including small surgeries and emergency rescues.
• In addition to the hospital building plans, adjacent Faqeer Primary Schools has also been facilitated with the capacity of over 300 pupils to be occupied in the classrooms with freshly painted desks. The school was initially set up in September 2016 by the funds provided by China with the aim to provide an improvement in the livelihood of the people of Gwadar.
• Moreover, another similar training school has been developed afterwards which aimed at providing skills development courses to the Pakistani youth. These skills were expected to help the individuals to cater better earning opportunities in their future.
• In the centre of Pakistan’s city, Multan that has a historical basis in several development projects of significant importance have also been established. These projects have been initially funded by China State Construction Engineering Corporation (CSCEC) with an aim to impact the life of locals in Pakistan.
• The China State Construction Engineering Corporation (CSCEC) is found in the building of the Sukker-Multan section of the motorway originating from Peshawar-Karachi Expressway. The road is a sum total of 392-km with the expected total investment 2.89 Billion US dollars. The project is likely to be completed under the supervision of around 10,000 Pakistani as well as 15,00 Chinese engineers and labourers working around the tireless hours on the site. On the completion of this project, the eight-hour travel distance between Multan and Sukker will be reduced by half the original time.
• The sales of several items of general vendors have also been increased along the expressway. Their goods including cigarettes, bottled water and fresh juice etc have expected to have increased sale ratio in the near future too.

Energy-A Major Pillar of CPEC:

Energy is considered to be the major pillar of CPEC project. In order to address the chronic power shortages of Pakistan, among all the major projects 11 out of 19 initiated projects fall under the energy category. These energy projects mainly include coal-fired plants, hydropower facilities, as well wind, and power farms.

• The first phase of the solar power plant was constructed in Bahawalpur in the province of Punjab. The power plant was energy supplied by China’s conglomerate Zoenergy with the basic aim to meet 30 percent of region’s power demands in 2016.
• The mega energy project aims at the development of the 300-megawatt plant with a capacity to generate 495 million kilowatts of electricity annually. Moreover, the construction of three coal-fired plants has been planned in Punjab, Sindh and Balochistan provinces. These plants would have the capacity to generate 1,320 megawatts of electricity which could facilitate the electricity to 4 million households.
• Moreover, China had a friendly gesture in regard of its decision of not dumping the outdated industrial capacity of Pakistan as well as to ensure the avoidance of any burden to the local Pakistan population because of CPEC project.
• According to the preliminary statistics, the CPEC projects are more likely to cover all the regions and provinces of Pakistan and will lead to the hiring of over 60,000 Pakistani workers.

CPEC Benefits-Other than Economic:

The countries along the CPEC project, will only primarily have economic gains from the corridor but rather diverse advantages including:

• Cross-cultural and people-to-people contact which could have involved the population of countries including Iran, Afghanistan and other Central Asia countries.
• The CPEC project is regarded as an alternative for the war conflicting countries like Afghanistan, Iraq, Syria and Lybia with the help of its exclusive vision of ultimate development.
• CPEC in regards to its strategic context is keen to provide Pakistan’s security including “Look East” policy that leads to serving towards the further strategic partnership.
• The vital role of the economic revival of Pakistan could be played by the fully functional Gwadar port linked with China and Central Asia. This could be the source of enomorous supply of communicating market.
• The socioeconomic development Gilgit-Baltistan and Balochistan have been solely dependent upon the completion CPEC project.
• Pakistan would most likely to get benefit from the investment of China with an aim to the development of infrastructure in order to tackle the energy shortfall. This could primarily help Pakistan to expand its original potential in order to be best suited for becoming a regional trade hub and energy corridor. Thus, this would enable to bring huge transit facilities and employment opportunities.
• Regarding the creation of employment opportunities in hundreds of thousands spectrum, Pakistan would most likely to take benefits on the basis of marked investment of China on all possible project of over 100 Billion US dollar annually.
• Gwadar port and it’s connectively is likely to hold marked significant importance in the connection of Karachi and Bin Qasim Port that would ultimately lead to the reduction of current energy overload.

 

CPEC-Key Imperatives for Pakistan:

 

In the light of the immense and diverse potential background of CPEC project, the major decision on what to focus or not in seeking the sustained opportunities of economic development and the context of securing the socio-economic future of Pakistan, following requisite imperatives would be absolutely essential:

• The throughout the development of trade routes including highways, railways and oil pipelines providing regional connectivity by the linkage of major ports of the country.
• The impressive development of Logistic Chain including Infrastructure and the facilitation of trade.
• The development of Industrial zones of especially economic nature and the transit facilities to be provided along the corridor.
• The marked tendency in the oil storages connections through pipelines.
• The development of Water and Hydro Power Plants including the construction of mega dams on Indus Cascade along with the additional medium-sized HPPs.
• The fund of the economic program by exploring and developing of mineral resources.
• The throughout plan for the development of the marked Human Resources.

 

6. CONCLUSION:

 

CPEC is considered to be a game changer in terms of opening vast career and business opportunities for the Youth of Pakistan in the near future. The major advantage of opening the corridor is expected to the marked enhancement of tourism opportunities in Pakistan which could lead to the substantial part of the country’s earnings. Moreover, the region of Baltistan has been popular due to its regional fresh fruits export including cherries, apricots and apples. The corridor seems to provide a platform to get maximum advantages to the regional traders with the tremendous double savings on their sales and transportation costs.

 

The CPEC project is overall to be surrounded by all the optimistic approach in general besides there are certain controversial pessimist viewpoints regarding the project too. One of these perceived misconceptions about the project includes the reclamation on the revival of Diamer-Bhasha dam on Indus river surrounding the region of Gilgit-Baltistan mainly approved by the Government of Pakistan (GOP). This project to be included in the second phase of CPEC project would be enabled to result in the production 4500 MW electricity supply. In addition, this project has potential to serve the additional reservoir to the country with the authentication of Asian Developmental Bank (ADB). The Gilgit-Baltistan has found to have a marked potential for the production of nearly 50,000 MW of energy. Whereas the highest potential for the generation of energy as high up to 71,000 MW electricity is to be kept by the investment of ADB project in the Bungi-Dam. This fact is of controversial discussion among the commoners that the construction of the huge and giant hydro project hold the definite potential to fulfil energy needs than why the funds have been invested on the 750km transmission line.

 

CPEC seems to be a win-win strategy for both the nations and the regions. It is among one of the rarest opportunity to be availed by Pakistan in terms of its marked strategic and economic significance. Besides, FWO is working side by side along with its all possible potential capacity to pursue vigorous success in multi-factorial initiatives as well as of socio-economic significance. This mega project, of course, holds within itself a colossal undertaking of commitment and persistent efforts by both the private sectors as well as the government institutions to work in collaboration for the single motive of expeditious implementation.