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China suspends funding of three CPEC projects in Pakistan amid graft rumours

Even as the official statement suggests that China suspended funding pending 'new guidelines', a Pakistani official told local media that the step was possibly taken in light of increasing news reports being published in Pakistan regarding corruption

Edited by: IANS, Islamabad [ Updated: December 12, 2017 16:05 IST ]
Image Source : PTI CPEC projects included building 210-km highway at an estimated cost of 81 billion Pakistani rupees

China has temporarily stopped funding of three projects related to the road network under the China-Pakistan Economic Corridor (CPEC) till a decision regarding "new guidelines" is issued from Beijing, according to a senior government official.

Even as the official statement suggests that China suspended funding pending 'new guidelines', a Pakistani official told local media that the step was possibly taken in light of increasing news reports being published in Pakistan regarding corruption in the CPEC projects

Chinese side was disturbed with reports of graft and that was the reason behind Beijing temporarily halting release of funds for the corridor, a senior official told media. 

The decision could affect over 1 trillion Pakistani rupees ($9 billion) road projects of the National Highway Authority (NHA). The projects to be affected include the 210-km Dera Ismail Khan-Zhob Road at an estimated cost of 81 billion Pakistani rupees, Dawn online reported. 

Of this, 66 billion Pakistani rupees was supposed to be spent on construction of road and 15 billion Pakistani rupees on land acquisition. The second project was 110-km Khuzdar-Basima Road and 19.76 billion Pakistani rupees was estimated to be spent on it. 

The 8.5 billion Pakistani rupees 136-km remaining portion of Karakarom Highway from Raikot to Thakot was also impacted.

All three projects were originally part of the government's own development programme but in December 2016, the spokesman of the NHA announced that they are to be included under the CPEC umbrella to become eligible for concessionary finance from China.

The Pakistan government official told Dawn that funds for the three road projects were approved in the 6th Joint Coordination Committee (JCC) meeting for the CPEC held last year, pending necessary procedural formalities. 

It was expected that the funding of the three projects would be finalised during the Joint Working Group (JWG) meeting held on November 20, but Pakistan was informed in the meeting that "new guidelines" will be issued from Beijing under which a new modus operandi for release of the funds will be described.

The decision of the Chinese government was conveyed to Pakistan in the JWG meeting and the existing procedure for release of funds had been abolished.

The official said the Pakistani side was left "stunned" when told of the development.

With inputs from agencies

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