CPEC facing teething problems

[Rasengan]

Pakistan has been struggling to convince Chinese authorities to accept around a 10pc cost overrun for the $1.5bn Lahore Orange Line Metro Train even though the project has yet to take off

The Lahore Orange Line Metro Train project has already commenced in Pakistan and the thread on infrastructure development is a testament to this conclusion. The investment agreement's which were signed in April took two years of preparation, therefore the decision was never made in haste where bureaucracy would become a challenge at a later date. The design, construction and operation of the Orange Line project was entrusted to the Chinese Government. Henceforth, there is simply no logic behind the assumption that Pakistani official would be concerned with the overrun of cost, since the feasibility study was never conducted by them in the first place. Hogwash news reporting has become a fashion now in Pakistan.

 

[saurav]

From the comments:

"There should be no delay. Pakistan is already paying interest for this money at 16% returns."

Is this true? I have never heard of such high rates before. Japan is offering $15 billion loan at 1% to India for a bullet train between Mumbai and Ahmedabad in comparison.

May very well be true. Apparently sovereign guarantee ROI of at least 17% has been given. We will know more about this as this project progresses.

 

[Rasengan]

Following the 6,600MW Gadani Power Park debacle arising out of a half-baked plan, the two sides seem to have learnt the lesson to take up ‘early harvest’ projects that are ready to take off immediately and could be expected to deliver results before the PML-N goes into the next polls with a success story on having reduced the power shortfall.

The amount of cesspit in this article is truly astounding. The Gadani Power Park initiative was never included in the China-Pakistan Economic Corridor and the feasibility report was never completed by Chinese firms. This was a political ruse to hype up the expectation of the public and bring positive feelings towards the civilian government. The 'early harvest projects' was commenced by both sides because infrastructure and the generation of electricity must occur for the eventual set of economic zones across Pakistan. Karot Hydropower project has already started. Sahiwal Coal project has many pictures from the infrastructure thread and its looking very good as work is ongoing. 100 MW has already been added in the Solar Park project in Bahawalpur and another 300 MW will be added in December, while the remaining 500 MW would be completed in 2016.

May very well be true. Apparently sovereign guarantee ROI of at least 17% has been given. We will know more about this as time progresses.

Sovereign Guarantee on the Return of Investment with 17% given to Chinese Companies was on one specific project and that was the Solar Park initiative in Bahawalpur. This was opened to all investors from the Government of Punjab for the last 2 years.

 

[marbella]

Stock markets heavens from an ROI's standpoint is the U.S.
high growth, small cap securities, then Pakistan(KSE) and then Africa. Both KSE and Africa will have similar results in the future.

You must've hit the wrong stocks as KSE has been one of the top 5 best performers during the past three years. Good luck



Nope, wrong comments. Every investment deal that Pakistan has with China, it's financed by China, to the Chinese companies doing the project. There is a very small percentage that Pakistan gets as a loan. That's why they call these projects "investments" and not loans.

so how does it work? is it something like, they make metro , they get revenues?

 

[I S I]

Dawn strikes again....


What they expected, A walk in the park?

 

[somebozo]

From the comments:

"There should be no delay. Pakistan is already paying interest for this money at 16% returns."

Is this true? I have never heard of such high rates before. Japan is offering $15 billion loan at 1% to India for a bullet train between Mumbai and Ahmedabad in comparison.

I have worked with these so called 1% loans with SUMITOMO and they only exist on paper. There are soo much strings and over heads involved you end up with the same market rate. Low interest loans by Japanese banks are only applicable in Japan.

CPEC: China expresses reservations before entering power purchase agreements - The Express Tribune


So here we are talking openly about giving a free hand to corruption....so Chinese contractors can pay lucrative bribes and do substandard works and get away with it..

The officials said in order to allay concerns of Chinese investors, the government was also formulating special rules and regulations aimed at finding a way to avoid application of Public Procurement Regulatory Authority (PPRA) rules on these contracts. The PPRA rules are aimed at ensuring transparency in public contracts but often become hurdle in speedy implementation of agreements.

 

[black-hawk_101]

The investment is quite low. China should increase it to $100 Billion. Also, Pakistan should do more privatization.

 

[xyxmt]

From the comments:

"There should be no delay. Pakistan is already paying interest for this money at 16% returns."

Is this true? I have never heard of such high rates before. Japan is offering $15 billion loan at 1% to India for a bullet train between Mumbai and Ahmedabad in comparison.

What money are you talking about? there is no money coming to Pakistan, Chinese banks financing the projects by chinese companies...Pakistan not involved in it. stop reading gupshup news

 

[Muhammad Omar]

WTF
Gaddani Power project was not Included in CPEC.... It was another project by Gov....

Lahore metro is already under construction.. On Package I by Habib Construction and Package II by Malcolmson and package III by ZKB and Reliable

Sahiwal coal project is also under construction... as i already posted many pics about the Project going on

Thar Coal project and Hub Coal power Project is totally different project there are even 2 coal power plants at Port Qasim Karachi that are under Construction...

 

[Viper0011.]

May very well be true. Apparently sovereign guarantee ROI of at least 17% has been given. We will know more about this as this project progresses.

ROI guarantee is over 30% and it's still easily manageable due to the feasibility study and economic forecasts / outlook .

By the way, you can't see the difference in ROI and interest rate??? But yet you decided to jump in and write expert analysis ??

 

[raj76]

16% that can't be true, that's too much

its not interest its return on investment guaranteed by pak govt that too in $$$$

 

[karakoram]

ROI guarantee is over 30% and it's still easily manageable due to the feasibility study and economic forecasts / outlook .

By the way, you can't see the difference in ROI and interest rate??? But yet you decided to jump in and write expert analysis ??

don't you know the habit of Indian trolls

 

[NHUDA]

A super hyped up article with half baked twisted information ....
Such projects will not be a walk in the Park, More and Bigger problems would arise & would need to be sorted out ...
A lot indeed depends on homework .... & Plans change, re-designed & diverted ...
A lot of Amount is an Investment Instead of Loan ....

To me here is the deal ;

A loan is a loan ... Chinese, Japanese, French, no one will loan u money unless they would have guarantees (but more so knowledge of getting it back) ...

An investment is an INVESTMENT .. and no one would invest thr resources in dwindling projects ...

(i m not saying Pakistan is Now a Heaven .. Corruption is still rampant .. so is mismanagement ... )
But countries (Investors, Lenders & Donors) have learned thr lessons ... Now with New System it is a two way treat from them... thr money ... they will give to thr fellow nation company DIRECTLY in most cases (which will keep them running, instead of saturating back home) , while the country will get its job done, and they will get thr loan or investment back , ....... China is Doing it .. US does it with USAID, Russia is building the new gas Pipeline same way ... (to me this is a better option)

but contrary to other projects, CPEC has one unique characteristic ... it is Beneficial for china too .. MULTI FOLD .... commercially as well as strategically ...
Faster Import Export Line ...
Continuous Jobs & work for thr own Companies (steel, cement,construction, energy generation etc)
Good Investment & lending Oppurtunities with good rate of return
Foothold in indian Ocean (Arabian Sea)
More leverage on Pakistan .. & Stronger Pakistan .. hence u know Stronger TAG TEAM ally against U know Who !

Even if they made 60% of what is promised it would be a big boost .... hence more thn Pakistan, i m banking on chinese to get it done ...

 

[saurav]

ROI guarantee is over 30% and it's still easily manageable due to the feasibility study and economic forecasts / outlook .

By the way, you can't see the difference in ROI and interest rate??? But yet you decided to jump in and write expert analysis ??

Not expert analysis. Just an observation.

BTW how did you assume that I "can't see the difference in ROI and interest rate " ? I would not have quoted ROI if i "can't see the difference in ROI and interest rate ", would I ?

If sovereign guarantee of ROI indeed is 30%, then its bonanza for investors. Interesting times ahead.