Featured CPEC brings Peace, Prosperity for Pakistan’s Province Balochistan

[PAKISTANFOREVER]

OK, understood. You dont have any data.



Let me rephrase the question, is there any study which can provide insight in to the impact of CPEC in Pakistan's GDP ?

CPEC will take at least 10 years to come in to effect and start showing it's positive impact on the Pakistan economy. At the moment, CPEC is in the building phase of world class infrastructures and services all across Pakistan including industrial and technological infrastructure.

CPEC is long term project, not a short term one.

Does CPEC annoy India and have their media barking every single day?

If the answer is "yes", then CPEC has helped Pakistan.

.............POTM!

 

[Avatar]

You have made a lot of conjectures and sweeping statements above. Do you have ANY credible, genuine, reliable and irrefutable evidence to confirm and support those claims? Or are they just your opinions which you hope and wish to be true?

My dear Pakistanforever,
I appreciate your honest inquiry.
Please be assured that my statements are backed by facts which even Pakistanis are starting to question.

The CPEC was supposed to help Pakistan to deal with the load shedding problem. The power plants are operational and yes, load shedding has reduced - but at what cost? The prices that the Chinese are billing are higher than Pakistan's local power plants production costs. When this came to notice, the Chinese agreed to renegotiate the agreement.

Source: https://thediplomat.com/2020/05/pakistan-discovers-the-high-cost-of-chinese-investment/

For Pakistan’s citizens, who are always told how China is their most reliable friend in the world, it was a shock to discover that China does business mercilessly and unscrupulously.

Successive civilian governments and Pakistan’s military have looked upon China as their principal backer against India.

Enjoying this article? Click here to subscribe for full access. Just $5 a month.

China’s consistent strategic support, including help with Pakistan’s nuclear program, is often held out by Pakistan’s military establishment favorably in contrast with the more conditional Pakistani alliance with the United States.

But it seems now that China is not in Pakistan to help its people but rather as a predatory economic actor.

The 278-page report by the “Committee for Power Sector Audit, Circular Debt Reservation, and Future RoadMap” listed malpractices to the tune of 100 billion Pakistani rupees ($625 million) in the independent power generating sector, with at least a third of it relating to Chinese projects.

CPEC Authority is currently chaired by Lt. General Asim Saleem Bajwa, who is also the Prime Minister’s Special Assistant on Information and Broadcasting — the Committee treaded softly in relation to the Chinese projects.

According to the committee’s report, “excess set-up costs of Rs. 32.46 billion (approximately $204 million) was allowed to the two coal-based [Chinese] plants due to misrepresentation by sponsors regarding [deductions for] the ‘Interest During Construction’ (IDC) as well as non-consideration of earlier completion of plants.”

The interest deduction was apparently allowed for 48 months whereas the plants were actually completed within 27-29 months leading to entitlement of an excess Return on Equity (RoE) of $27.4 million annually over the entire project life of 30 years in the case of the Sahiwal plant.

The estimated excess payment, keeping in mind the 6 percent annual rupee depreciation against the dollar, works out to a whopping Rs. 291.04 billion (approximately $1.8 billion).

SUBSCRIBE NEWSLETTER
The Chinese company HSR claimed IDC based on a long-term loan at the rate of LIBOR +4.5 percent for the length of the entire construction period, even though it borrowed no money during the first year of construction and used only short-term loans at substantially lower interest rates during the second year.

The magnitude of profiteering by the Chinese companies is incomprehensible. The two projects examined by the Pakistani experts’ Committee were worth $3.8 billion at the time of their launch. The Committee found overpayments of Rs. 483.64 billion, which amounts to $3 billion at current rates of exchange.

This includes overpayment of Rs. 376.71 billion (approximately $2.3 billion) to HSR and Rs. 106.93 billion (approximately $672 million) to PQEPCL on account of excess set-up cost, excess return due to excess set-up cost in 30 years, and excess return due to miscalculation in Internal Rate of Return (IRR).

Enjoying this article? Click here to subscribe for full access. Just $5 a month.

In its report, the Committee recommended that Rs. 32.46 billion (approximately $204 million) be deducted from the project cost of PQEPCL and HSR; the return payment formula be corrected to reflect actual construction time; and Tariff of PQEPCL and HSR be adjusted accordingly.

Under the current formula, in two years of operation, HSR has already recovered 71.18 percent of its original equity invested whereas PQEPCL has recovered 32.46 percent of its original equity in the first year of operation.

This is over and above the profits that the companies would have made without subterfuge. Imagine the return the Chinese will generate on the $62 billion CPEC projects. These numbers are way too large to have been missed as oversight or malfeasance of individuals within the companies and their Pakistani counterparts.

Sri Lankan and Maldives governments suggests that these overpayments are generated with the complicity of leaders in the Pakistan government and the loot shared by all parties.

Pakistan’s economy has been teetering on the verge of bankruptcy for some time and the COVID-19 pandemic has made the situation even worse.

Instead of reforming their country’s policies, Pakistan’s leaders, once again, sought debt restructuring and waivers on account of the pandemic, just as they previously sought international assistance as a reward for fighting terrorism.

But expecting the international community to repeatedly bail Pakistan out from one economic crisis after the other is unrealistic. Massive military expenditure, deep rooted corruption, and lack of accountability are at the heart of Pakistan’s perennial and ever widening gulf between revenue and expenditure.

Now, it seems, Chinese investments have become a new liability. The International Monetary Fund (IMF) has been pushing Pakistan’s officials to raise taxes and power tariffs, effectively asking the Pakistani public to foot the bill for China’s rapacious practices.

The United States and Western financial institutions should not help Pakistan’s ruling elites in their own and China’s predatory behavior. The people of Pakistan deserve better.

Husain Haqqani, director for South and Central Asia at the Hudson Institute, was Pakistan’s ambassador to the United States from 2008 to 2011.

This is just one such example. I can bring many more. You need to understand that China as an entity is nobody's friends because China does not share the same values as the rest of the civilized world. Chinese ambitions are at odds with everyone, including Pakistan. You are being debt trapped in every imaginable way.
CPEC helps China much more than it helps anyone else. Originally touted as an economic exchange corridor, it is just a transportation route for Chinese factories and all trucks that travel from China fully loaded go back empty without bringing any goods back into China.

A lot of the CPEC dealing is mired in secret govt to govt dealing which is nothing but a guise for covering up the massive corruption that has increased the bill almost 2 fold since the conception of the CPEC. All this finance is not coming for free - It is the hard earned money of Pakistani tax payers that will have to pay for all of this, and nobody can argue that much of this money could be put to better use than just serving Chinese interests and becoming so subservient to China in the process that there is no way out in this relationship.

Why dont Pakistani leaders press to utilize Pakistani labor and materials instead of importing everything including labor from China? In the face of it - this deal is suitable only for highly developed nations where the labor and construction materials have to be imported for economic benefits but this is not at all the case in Pakistan.

 

[PAKISTANFOREVER]

My dear Pakistanforever,
I appreciate your honest inquiry.
Please be assured that my statements are backed by facts which even Pakistanis are starting to question.

The CPEC was supposed to help Pakistan to deal with the load shedding problem. The power plants are operational and yes, load shedding has reduced - but at what cost? The prices that the Chinese are billing are higher than Pakistan's local power plants production costs. When this came to notice, the Chinese agreed to renegotiate the agreement.

Source: https://thediplomat.com/2020/05/pakistan-discovers-the-high-cost-of-chinese-investment/


This is just one such example. I can bring many more. You need to understand that China as an entity is nobody's friends because China does not share the same values as the rest of the civilized world. Chinese ambitions are at odds with everyone, including Pakistan. You are being debt trapped in every imaginable way.
CPEC helps China much more than it helps anyone else. Originally touted as an economic exchange corridor, it is just a transportation route for Chinese factories and all trucks that travel from China fully loaded go back empty without bringing any goods back into China.

A lot of the CPEC dealing is mired in secret govt to govt dealing which is nothing but a guise for covering up the massive corruption that has increased the bill almost 2 fold since the conception of the CPEC. All this finance is not coming for free - It is the hard earned money of Pakistani tax payers that will have to pay for all of this, and nobody can argue that much of this money could be put to better use than just serving Chinese interests and becoming so subservient to China in the process that there is no way out in this relationship.

You are aware that the above source you used is an OPINION piece by Hussain Huqqani? He has used NO facts or evidence let alone reference them. He is giving his opinions. Nothing more.

Now, WHERE is the CREDIBLE, GENUINE, IRREFUTABLE & RELIABLE evidence that supports and confirms your initial claims?

 

[Rakesh]

CPEC will take at least 10 years to come in to effect and start showing it's positive impact on the Pakistan economy. At the moment, CPEC is in the building phase of world class infrastructures and services all across Pakistan including industrial and technological infrastructure.

CPEC is long term project, not a short term one.






.............POTM!

Industrial and technological infrastructure good. How is this transforming Pakistan from agrarian society to industrialist one ? I simply asked for any available statistics or study. But I got recommendation for imported ButtHurt cream.

 

[Avatar]

You are aware that the above source you used is an OPINION piece by Hussain Huqqani? He has used NO facts or evidence let alone reference them. He is giving his opinions. Nothing more.

Now, WHERE is the CREDIBLE, GENUINE, IRREFUTABLE & RELIABLE evidence that supports and confirms your initial claims?

The evidence will come to surface when nothing can be done about it and those who made the money are already living their lavish retired lives in Europe.

Why dont you start with proving the benefits of CPEC? What is the additional contribution to Pakistans GDP?
How much interest must Pakistan pay annually? What is the rate of interest? Why are Chinese labor and materials used when the same can be produced inside Pakistan - which will truly help support Pakistani industries? What is the cost of power that is being produced at these CPEC power plants?

Instead of importing everything from China - why doesn't Pakistan ask China to setup some factories inside Pakistan so that Pakistani people can live a better life with cheaper access to everyday electronics? It will be a mutually beneficial move because Pakistani labor is cheaper than Chinese labor, but it seems like the deal benefits China a lot more than Pakistan.

Today, Pakistan needs: Employment, Pakistan made consumer products, industrialization, better roads, and power and CPEC can potentially provide all of this - so why not insist and get all the benefit that Pakistan deserves?

 

[Unite & Defend]

Can someone provide some statistics. How CPEC has helped Pakistani economy ?

The benefits to Pakistani businesses are huge, some include;

1) Enables competitive landed cost (s) negotiations with foreign buyers
2) Speed to Market
3) Firm sale/ return rights to the buyer (infrastructure development allowing material/finish product returns to be cheaper); which equals to buying in Pakistan more attractive.
4) Ease the un-even openings of disruptions in global supply chains
5) Network configuration benefits- I.e. Capital goods companies in China/Pakistan benefiting from final assembly/production near Gawadar - improving operational drivers & QC
6) Expedites the evolution of Pakistani high-tech industries


This means opportunity for people to be employed and up-skilled, which equals to huge-boosts in employment, Particularly for young adults.

Pakistan’s companies will start to take away business that would normally go to its neighbours.

 

[PAKISTANFOREVER]

Industrial and technological infrastructure good. How is this transforming Pakistan from agrarian society to industrialist one ? I simply asked for any available statistics or study. But I got recommendation for imported ButtHurt cream.

Again, you failed to understand the current implications of CPEC. We are CURRENTLY in the process of laying the foundation of CPEC, of the technological and scientific industrialisation of Pakistan and the building of world class infrastructures all over Pakistan. The long term benefits of which will not be seen for AT LEAST 10 years. We are currently in phases 1 and 2 of CPEC. There are however over 10 phases of CPEC. CPEC is an all pervasive and encompassing project that will last many decades if not longer.

The evidence will come to surface when nothing can be done about it and those who made the money are already living their lavish retired lives in Europe.

Why dont you start with proving the benefits of CPEC? What is the additional contribution to Pakistans GDP?
How much interest must Pakistan pay annually? What is the rate of interest? Why are Chinese labor and materials used when the same can be produced inside Pakistan - which will truly help support Pakistani industries? What is the cost of power that is being produced at these CPEC power plants?

Instead of importing everything from China - why doesn't Pakistan ask China to setup some factories inside Pakistan so that Pakistani people can live a better life with cheaper access to everyday electronics? It will be a mutually beneficial move because Pakistani labor is cheaper than Chinese labor, but it seems like the deal benefits China a lot more than Pakistan.

Today, Pakistan needs: Employment, Pakistan made consumer products, industrialization, better roads, and power and CPEC can potentially provide all of this - so why not insist and get all the benefit that Pakistan deserves?

You are deflecting from providing credible evidence for your initial claims. You are again engaging in opinions and conjectures without ANY factual basis whatsoever. What is your point?

 

[Longhorn]

CPEC is not only an economic project, but a strategic one also.
Some of the strategic benefits can already be seen and felt with the building of Diamer Bhasha dam, Iran's strategic realignment and the standoff between China and India in Ladakh.
The economic benefits will take a little longer but they will be just as dramatic when they finally kick in.

 

[PAKISTANFOREVER]

My initial claims are exactly this:

CPEC is just a ploy by China to drain Pak economy into subterfuge submission when Pak can no longer keep up with the annual interest payments on these massive projects that have very little tangible benefits for Pakistan (other than the upgrade of transport which would have been cheaper to do without Chinese help)

The CREDIBLE EVIDENCE is information in public domain.

China has already debt trapped several nations. You will not be the first or the last.



The onus is on you to prove that the benefits for Pakistan are indeed viable and at least on par with the benefits that China got in this deal. To start with - China has already pocketed infrastructure projects that used Chinese construction companies, labor and material. Pakistan's contribution to CPEC is merely providing the land over which it is built as well as agreeing to undertake the financial obligations of all this work, which provides PRC with a steady stream of revenue both in terms of interest payments as well as revenue from selling power at inflated prices.

There is no reason why Pakistan could not have negotiated to use its own skilled and unskilled workforce as well as Pakistan construction industry to execute these projects with Chinese supervision. This way, the money would have stayed inside Pakistan and contributed to the GDP.

Today there is no tangible benefit from all the billions of $ spent other than having better transport network which can be built locally in a fraction of the cost. The attitude of Chinese nationals who come to Pakistan shows that they see Pakistan as an inferior, domesticated nation and they are free to do as they like.

https://www.cbsnews.com/news/human-...-married-men-in-china-sold-into-prostitution/

https://www.dawn.com/news/1399531

They are trashing up your police like they are sanitary workers. I wonder if they could replicate this behavior in mainland China? What makes them think that they can do this in Pakistan and get away with it so easily? Have Chinese ever behaved like this inside India?

Again, you are not addressing ANY of the main points or accusations you made nor are you using any RELEVANT, GENUINE, CREDIBLE, IRREFUTABLE & RELIABLE evidence to support those claims and accusations. Simply stating your opinions over and over again and claiming them to be true means nothing and ACTUALLY conveys that not only are they untrue but you have NO idea what you are talking about. It appears as though you don't have the analytical skills or insight to be able to contribute to this thread.

 

[maverick1977]

My dear Pakistanforever,
I appreciate your honest inquiry.
Please be assured that my statements are backed by facts which even Pakistanis are starting to question.

The CPEC was supposed to help Pakistan to deal with the load shedding problem. The power plants are operational and yes, load shedding has reduced - but at what cost? The prices that the Chinese are billing are higher than Pakistan's local power plants production costs. When this came to notice, the Chinese agreed to renegotiate the agreement.

Source: https://thediplomat.com/2020/05/pakistan-discovers-the-high-cost-of-chinese-investment/


This is just one such example. I can bring many more. You need to understand that China as an entity is nobody's friends because China does not share the same values as the rest of the civilized world. Chinese ambitions are at odds with everyone, including Pakistan. You are being debt trapped in every imaginable way.
CPEC helps China much more than it helps anyone else. Originally touted as an economic exchange corridor, it is just a transportation route for Chinese factories and all trucks that travel from China fully loaded go back empty without bringing any goods back into China.

A lot of the CPEC dealing is mired in secret govt to govt dealing which is nothing but a guise for covering up the massive corruption that has increased the bill almost 2 fold since the conception of the CPEC. All this finance is not coming for free - It is the hard earned money of Pakistani tax payers that will have to pay for all of this, and nobody can argue that much of this money could be put to better use than just serving Chinese interests and becoming so subservient to China in the process that there is no way out in this relationship.

Why dont Pakistani leaders press to utilize Pakistani labor and materials instead of importing everything including labor from China? In the face of it - this deal is suitable only for highly developed nations where the labor and construction materials have to be imported for economic benefits but this is not at all the case in Pakistan.

funniest post i have seen from a person who wishes a good future for pakistan.. vile snake ..

 

[Longhorn]

The thinking of Indian posters is predicated on fear, and then wishful thinking to make that fear go away.
It is a very one eyed and narrow way of thinking.
They only have to look at the reaction of governments around the world to get a better idea of the impact of CPEC. Not least their own government and the Americans.
You know you're on the right track when your enemies begin to be worried.
CPEC is not only a Pakistan project funded by China, as in other Chinese projects around the world, it is a project where China has an equal geostrategic and economic interest in making it work. It is strategic lifeline for both countries.
The Indian posters who are pointing out that Pakistan could have built the infrastructure on it's own disregard the fact of what that infrastructure is going to be used for and who is going to be using it. Of what is coming and going through Header, up and and down ML1, up and down the Karakoram Highway, the Iran Pakistan China pipelines that will surely be built in the near future, the potential interconnection to the CAS and Russia itself.
CPEC is not merely an infrastructure project.
It is nothing short of a revolution. It will transform the geopolitical, military, economic map of the whole region and potentially the world.
The region is gearing up for a more prosperous future through cooperation.
The Indians are content to gripe and play spoilsport from the sidelines at the behest of outsiders who have no interest in seeing this region progress.

 

[Avatar]

The thinking of Indian posters is predicated on fear, and then wishful thinking to make that fear go away.
It is a very one eyed and narrow way of thinking.
They only have to look at the reaction of governments around the world to get a better idea of the impact of CPEC. Not least their own government and the Americans.
You know you're on the right track when your enemies begin to be worried.
CPEC is not only a Pakistan project funded by China, as in other Chinese projects around the world, it is a project where China has an equal geostrategic and economic interest in making it work. It is strategic lifeline for both countries.
The Indian posters who are pointing out that Pakistan could have built the infrastructure on it's own disregard the fact of what that infrastructure is going to be used for and who is going to be using it. Of what is coming and going through Header, up and and down ML1, up and down the Karakoram Highway, the Iran Pakistan China pipelines that will surely be built in the near future, the potential interconnection to the CAS and Russia itself.
CPEC is not merely an infrastructure project.
It is nothing short of a revolution. It will transform the geopolitical, military, economic map of the whole region and potentially the world.
The region is gearing up for a more prosperous future through cooperation.
The Indians are content to gripe and play spoilsport from the sidelines at the behest of outsiders who have no interest in seeing this region progress.

So what is the benefit for Pakistan today in dollar terms? If China has equal interests in this then why must small brother Pakistan pay the bills?

 

[Longhorn]

So what is the benefit for Pakistan today in dollar terms? If China has equal interests in this then why must small brother Pakistan pay the bills?

It's an absurd question.
What are you trying to prove?

 

[Avatar]

It's an absurd question.
What are you trying to prove?

My question is not absurd at all. It is intuitively logical and inherently inquisitive about the only fact that matters: What is the benefit for Pakistan in dollar terms today and why must Pakistan pay these bills?

Quoting you:

CPEC is not only a Pakistan project funded by China, as in other Chinese projects around the world, it is a project where China has an equal geostrategic and economic interest in making it work. It is strategic lifeline for both countries.

A project that has equal geostrategic value for China and China is betting on so much for, then why doesn't China - which is a 40x larger economy than Pakistan (Perhaps even Shanghai's GDP is almost double of Pakistan's nominal GDP terms) - and when we can clearly see the economic difficulties that small brother Pakistan has been facing: Then why does Iron Brother China not absorb the financial burden of these projects which is a very small burden for the great Chinese economy but a massive heavy weight for the ailing and nominal Pakistani economy which is barely surviving on IMF handouts? Clearly - something is amiss and I sense malevolent intentions from planners in Beijing.

@Mods: I hope you dont delete this post under guise of propaganda - everything I have stated is completely factual and logical.

 

[Hakikat ve Hikmet]

Thanks to CPEC and India's opposition to it, the LAC is now activated!! It has tremendously reduced pressure on Pak....