China has decided not to finance the Karachi-Rohri railway segment being built under its Belt and Road Initiative (BRI), its “all-weather friendship" with Pakistan notwithstanding. The development has forced Pakistan to seek urgent funding from the Asian Development Bank (ADB) to salvage the second phase of the China-Pakistan Economic Corridor (CPEC), according to people familiar with the matter.
The Karachi-Rohri section of Main Line 1 Railway, previously expected to receive $2 billion from China, has been left unfunded, with the latter citing financial and security concerns as reasons for withdrawing support, they said.
It comes as China is frustrated over Pakistan’s unpaid debts, particularly $1.5 billion owed to Chinese power companies. Moreover, Pakistan has been unable to ensure security of Chinese nationals working on different projects in the country. Since 2021, several Chinese citizens working on BRI projects in Pakistan have been killed by separatist groups. China has raised the issue with Pakistan’s Field Marshal Asim Munir and sought permission to deploy its military for the protection of its nationals in Pakistan.
Pakistan’s loan request to the Asian Development Bank involves upgrading 480 kilometres of the Karachi-Rohri railway segment. The total cost of the project is estimated at $6.7 billion, covering the entire 1,726-kilometre stretch from Karachi to Peshawar. The railway segment is central to the CPEC and will be used for transporting goods as well as minerals extracted in the mineral-rich Balochistan province.
China’s decision to withdraw financial support to the project comes close on the heels of Pakistan improving its ties with the United States. Pakistan has indicated that it will offer the US opportunities in Balochistan’s mining sector. However, the US’ commercial or security presence in Balochistan may impact China’s wide-ranging interests in the province, said people in the know.
Under the BRI, of which the CPEC is the jewel crown, China has announced that it will invest more than $50 billion in Pakistan. Gwadar Port has been constructed, and plans for a naval base are underway. The first phase of the CPEC brought infrastructure investment from China. The second phase, which would expand the corridor further, now faces a critical funding gap due to China’s retreat, according to experts on Sino-Pak ties.
Pakistan’s energy minister announced on Thursday that the ADB had approved a $130 million loan for the country’s energy sector. Pakistan has sought assistance from international partners, including the ADB, to improve its energy infrastructure by modernising its transmission system and promoting renewables.
The Karachi-Rohri section of Main Line 1 Railway, previously expected to receive $2 billion from China, has been left unfunded, with the latter citing financial and security concerns as reasons for withdrawing support, they said.
It comes as China is frustrated over Pakistan’s unpaid debts, particularly $1.5 billion owed to Chinese power companies. Moreover, Pakistan has been unable to ensure security of Chinese nationals working on different projects in the country. Since 2021, several Chinese citizens working on BRI projects in Pakistan have been killed by separatist groups. China has raised the issue with Pakistan’s Field Marshal Asim Munir and sought permission to deploy its military for the protection of its nationals in Pakistan.
Pakistan’s loan request to the Asian Development Bank involves upgrading 480 kilometres of the Karachi-Rohri railway segment. The total cost of the project is estimated at $6.7 billion, covering the entire 1,726-kilometre stretch from Karachi to Peshawar. The railway segment is central to the CPEC and will be used for transporting goods as well as minerals extracted in the mineral-rich Balochistan province.
China’s decision to withdraw financial support to the project comes close on the heels of Pakistan improving its ties with the United States. Pakistan has indicated that it will offer the US opportunities in Balochistan’s mining sector. However, the US’ commercial or security presence in Balochistan may impact China’s wide-ranging interests in the province, said people in the know.
Under the BRI, of which the CPEC is the jewel crown, China has announced that it will invest more than $50 billion in Pakistan. Gwadar Port has been constructed, and plans for a naval base are underway. The first phase of the CPEC brought infrastructure investment from China. The second phase, which would expand the corridor further, now faces a critical funding gap due to China’s retreat, according to experts on Sino-Pak ties.
Pakistan’s energy minister announced on Thursday that the ADB had approved a $130 million loan for the country’s energy sector. Pakistan has sought assistance from international partners, including the ADB, to improve its energy infrastructure by modernising its transmission system and promoting renewables.
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