No debt burden on Pakistan due to CPEC power projects: China

[Muhammad Omar]

No debt burden on Pakistan due to CPEC power projects: China

China has said that power projects under the China-Pakistan Economic Corridor (CPEC) did not incur debt burden on Pakistan as they were investment projects.

“I can say this with good authority that these energy projects are commercial investments where Chinese companies invested in Pakistan,” Chinese Foreign Ministry Spokesperson Zhao Lijian said during a regular briefing in response to a question that Pakistan had requested China to reschedule its debt of around $22 billion in power projects funded by Beijing.

“We have responded to similar questions on many occasions. I don’t know how you got your specific figure,” he said, adding that there were many power and energy cooperation projects in CPEC. “Perhaps you are referring to loans on the energy projects. Right?”

Lijian informed that he had worked in Pakistan for many years and was very familiar with the energy projects and the CPEC. “So, these loans are from Chinese companies. The Pakistani government doesn’t need to pay back anything,” he added.

The spokesperson remarked that the construction and operation of energy projects under the CPEC framework were “going on very well”, providing steady and affordable power source, adding tax revenues and producing very tangible, economic and social benefits. “We are confident that energy cooperation between the two countries will continue to make greater contributions to Pakistan’s national development and livelihood improvement,” he added.

According to official data, a total of 22 energy and power projects will be constructed under CPEC, a flagship project of the Belt and Road Initiative (BRI) launched by Chinese President Xi Jinping. So far, nine energy and power projects have been completed, boosting the energy needs of Pakistan. These projects have contributed 5,340 megawatts of electricity to the main grid, helping meet the country’s vital needs of industry, agriculture and domestic consumers. Another eight energy projects are near completion and will pump in an additional 4,470MW of electricity to the national grid. Another five projects are in the planning and implementation phase.



@Norwegian ab tasali hogai hai??

 

[PakistaniAtBahrain]

“Perhaps you are referring to loans on the energy projects. Right? So, these loans are from Chinese companies. The Pakistani government doesn’t need to pay back anything,” he added.

so Chinese companies loaned this money to Pakistani companies?

 

[Norwegian]

@Norwegian ab tasali hogai hai??

He is lying. Pakistan's external debt exploded post CPEC:

Pakistan’s debt and liabilities increase by Rs11.6 trillion in 15 months

ISLAMABAD (News Desk): The finance ministry in its debt policy statement FY2019-20 has conceded that Pakistan’s public debt and liabilities have increased by Rs11,610 billion or about 39 percent in 15 months. In a report,

dailybw.com

@beijingwalker @TaiShang @Patriot forever @ziaulislam @PakistaniAtBahrain @Indus Pakistan

 

[Patriot forever]

No debt burden on Pakistan due to CPEC power projects: China

View attachment 720451

China has said that power projects under the China-Pakistan Economic Corridor (CPEC) did not incur debt burden on Pakistan as they were investment projects.

“I can say this with good authority that these energy projects are commercial investments where Chinese companies invested in Pakistan,” Chinese Foreign Ministry Spokesperson Zhao Lijian said during a regular briefing in response to a question that Pakistan had requested China to reschedule its debt of around $22 billion in power projects funded by Beijing.

“We have responded to similar questions on many occasions. I don’t know how you got your specific figure,” he said, adding that there were many power and energy cooperation projects in CPEC. “Perhaps you are referring to loans on the energy projects. Right?”

Lijian informed that he had worked in Pakistan for many years and was very familiar with the energy projects and the CPEC. “So, these loans are from Chinese companies. The Pakistani government doesn’t need to pay back anything,” he added.

The spokesperson remarked that the construction and operation of energy projects under the CPEC framework were “going on very well”, providing steady and affordable power source, adding tax revenues and producing very tangible, economic and social benefits. “We are confident that energy cooperation between the two countries will continue to make greater contributions to Pakistan’s national development and livelihood improvement,” he added.

According to official data, a total of 22 energy and power projects will be constructed under CPEC, a flagship project of the Belt and Road Initiative (BRI) launched by Chinese President Xi Jinping. So far, nine energy and power projects have been completed, boosting the energy needs of Pakistan. These projects have contributed 5,340 megawatts of electricity to the main grid, helping meet the country’s vital needs of industry, agriculture and domestic consumers. Another eight energy projects are near completion and will pump in an additional 4,470MW of electricity to the national grid. Another five projects are in the planning and implementation phase.



@Norwegian ab tasali hogai hai??

Bro the problem with the CPEC power projects was never chinese loans. They are not built on chinese state concessionary financing. The problem with them being on commercial loans is that the interest payment gets adjusted in tariff, combine that with high ROI add capacity payments along with dollar indexation it's a recipe for disaster.

Had these plants being built on chinese concessionary state lending with lower interest rates and owned by government of Pakistan (not IPP's) , we would be in a much much better position right now.

These power projects are just cash cows right now. Not only people of Pakistan are paying the high interest but also the profit whether we use the electricity or not.

Do you understand the dilemma we are in?

 

[FuturePAF]

CPEC as the flagship project of the the BRI/OBOR needs to show it is sustainable. Debt is fine if it is productive debt, and the profits out way the costs. Phase 2 of CPEC, where Chinese companies invest into setting up production facilities in Pakistan across various sectors needs to be sped up.

The US is currently probably formulating a counter program to OBOR; especially in Africa (considering all the Africa specialists in key positions in the the Biden Administration)

One option, that may not cost Chinese companies much, but will cost the Chinese government, is to allow Pakistan to re-export foreign goods through Pakistan; such as American or European goods, but at little or no tariff, or at a much lower rate then from those countries directly. With some value added work in Pakistan, it would net Pakistan income, and would provide “volume” for all the cargo trucks going back empty from Pakistan, that come full from China. It would be a way to make Gwadar sustainable in the Intial phase.

Once the ports are working, other Chinese and non-Chinese companies could be attracted to the business activity, such as gulf Arab companies.

We have to look at ways to utilize the fixed costs on transport and roads usage already spent, and find ways to make use of them, to recoup some of the costs.

 

[PAKISTANFOREVER]

He is lying. Pakistan's external debt exploded post CPEC:
View attachment 720456
View attachment 720455
View attachment 720457
View attachment 720458

Pakistan’s debt and liabilities increase by Rs11.6 trillion in 15 months

ISLAMABAD (News Desk): The finance ministry in its debt policy statement FY2019-20 has conceded that Pakistan’s public debt and liabilities have increased by Rs11,610 billion or about 39 percent in 15 months. In a report,

dailybw.com

@beijingwalker @TaiShang @Patriot forever @ziaulislam @PakistaniAtBahrain @Indus Pakistan

Is it because of CPEC or because of 33 years of nawaz-not-so-sharif and bhutto/zardari robbing Pakistan of untold billions?

 

[Hakikat ve Hikmet]

I am pretty sure the money being spent on CPEC in fact belongs to the Pak Deep State, which has myriad sources of Deep Finances, thanks to the Deep Economy run by her Deep Nation!! Both Deep Economy and the consequent Finances are hidden from the wary eyes of the financial institutions (IMF/WB/ADB, international banks/media etc.) run by the Ehl-i Sheyatin....

No Deep Finances, no Deep State.....

No Deep Economy, no Deep Nation....

No Deep Nation, no Deep State......


*BD, Arabs etc. have no Deep Nation or State; hence, they deserve to be the slaves under the Ehl-i Kufr

 

[Norwegian]

Bro the problem with the CPEC power projects was never chinese loans. They are not built on chinese state concessionary financing. The problem with them being on commercial loans is that the interest payment gets adjusted in tariff, combine that with high ROI add capacity payments along with dollar indexation it's a recipe for disaster.

Had these plants being built on chinese concessionary state lending with lower interest rates and owned by government of Pakistan (not IPP's) , we would be in a much much better position right now.

These power projects are just cash cows right now. Not only people of Pakistan are paying the high interest but also the profit whether we use the electricity or not.

Do you understand the dilemma we are in?

Exactly:

 

[Norwegian]

Is it because of CPEC or because of 33 years of nawaz-not-so-sharif and bhutto/zardari robbing Pakistan of untold billions?

Both. CPEC contracts were signed without thinking its long term consequences on country's finances:

Before CPEC, external debt was manageable and actually declining. Not anymore. Pakistan is in external debt trap because of it.

 

[PAKISTANFOREVER]

Both. CPEC contracts were signed without thinking its long term consequences on country's finances:
View attachment 720464
Before CPEC, external debt was manageable and actually declining. Not anymore. Pakistan is in external debt trap because of it.
View attachment 720465

Could you provide a link to some GENUINE, CREDIBLE & IRREFUTABLE evidence that is not from indian FAKE NEWS &PROPAGANDA sources like the one above.

 

[Norwegian]

I am pretty sure the money being spent on CPEC in fact belongs to the Pak Deep State, which has myriad sources of Deep Finances, thanks to the Deep Economy run by her Deep Nation!! Both Deep Economy and the consequent Finances are hidden from the wary eyes of the financial institutions (IMF/WB/ADB, international banks/media etc.) run by the Ehl-i Sheyatin....

No Deep Finances, no Deep State.....

No Deep Economy, no Deep Nation....

No Deep Nation, no Deep State......


*BD, Arabs etc. have no Deep Nation or State; hence, they deserve to be the slaves under the Ehl-i Kufr

Enough of these conspiracy theories. All the money Pakistan borrows and pays in external debt is public information.

Pakistan signed up for $10.5bn foreign loan in FY20

Country received $10.7bn in foreign assistance during same period.

www.dawn.com

Could you provide a link to some GENUINE, CREDIBLE & IRREFUTABLE evidence that is not from indian FAKE NEWS &PROPAGANDA sources like the one above.

Is the PTI budget sustainable for an economy like Pakistan's?

We could be looking at another bailout a few years down the road.

www.dawn.com

Highest single expenditure is debt servicing. Nearly three times as defense budget.

 

[Indus Pakistan]

He is lying.

What did you expect out of a pork eater? He is not a Muslim.

Pakistan's external debt exploded post CPEC

DEbt itself is not the issue. If I borrow a million pounds and I use that to establish a business that earns me ten million pounds would be a great. But if I borrow that money but fail to earn any real money than I am screwed.

It is very difficult tomake power generation sync with increasing demand. If you fail then you will get crippling loadshedding as happened before. When this happens you can't do a abracradbra magic and new generations come up. These take couple of years so while they are being built you get screwed with loadshedding. Not good.

On the other hand ideally you want to be ahead of the demand. However this is not easy. Get it wrong and you will get surplus which is okay because you want to have some buffer. However get it badly wrong and you end up with huge surplus which is not good either. It appears that is what has happened.

However could this be that Pakistani industry has failed to uptake like it was hoped it would. I am inclined to believe this. CPEC if it has failed - then it has because of failure of Pakistan in pulling in Chinese industrialists. We had reports of one Karen Chen who is the CEO of Challange Textiles and has invested $150 milion in export sector. Had Pakistan as it should have attracted dozen more Karen Chens then all that power would have been used and you would see massive exports.

But that has failed to happen largely as I feared that Chinese culturally do not fit into Pakistan's environment. We all know about Pakistan's negative image in the West. What is of even more shocking to me is that Pakistan has equally terrible image in China. For instance Chinese private investors or tourists will much prefer their nemesis India than Pakistan.

This cultural and image issue really has to be fixed.

 

[Norwegian]

What did you expect out of a pork eater? He is not a Muslim.


DEbt itself is not the issue. If I borrow a million pounds and I use that to establish a business that earns me ten million pounds would be a great. But if I borrow that money but fail to earn any real money than I am screwed.

It is very difficult tomake power generation sync with increasing demand. If you fail then you will get crippling loadshedding as happened before. When this happens you can't do a abracradbra magic and new generations come up. These take couple of years so while they are being built you get screwed with loadshedding. Not good.

On the other hand ideally you want to be ahead of the demand. However this is not easy. Get it wrong and you will get surplus which is okay because you want to have some buffer. However get it badly wrong and you end up with huge surplus which is not good either. It appears that is what has happened.

However could this be that Pakistani industry has failed to uptake like it was hoped it would. I am inclined to believe this. CPEC if it has failed - then it has because of failure of Pakistan in pulling in Chinese industrialists. We had reports of one Karen Chen who is the CEO of Challange Textiles and has invested $150 milion in export sector. Had Pakistan as it should have attracted dozen more Karen Chens then all that power would have been used and you would see massive exports.

But that has failed to happen largely as I feared that Chinese culturally do not fit into Pakistan's environment. We all know about Pakistan's negative image in the West. What is of even more shocking to me is that Pakistan has equally terrible image in China. For instance Chinese private investors or tourists will much prefer their nemesis India than Pakistan.

This cultural and image issue really has to be fixed.

So CPEC contracts were signed in a hurry without proper feasibility reports on how Pakistan will ever payback all these mega projects. To the public these projects were sold as "gift and investment" from China. In reality each new CPEC project was a debt bomb waiting to explode for decades to come. Name one CPEC project that is self sustaining?

 

[PakistaniAtBahrain]

Both. CPEC contracts were signed without thinking its long term consequences on country's finances:
View attachment 720464
Before CPEC, external debt was manageable and actually declining. Not anymore. Pakistan is in external debt trap because of it.
View attachment 720465

whether we end up being in a debt trap in the long term depends on how much we grow in exports and tax collection.

 

[Indus Pakistan]

So CPEC contracts were signed in a hurry without proper feasibility reports on how Pakistan will ever payback all these mega projects. To the public these projects were sold as "gift and investment" from China. In reality each new CPEC project was a debt bomb waiting to explode for decades to come. Name one CPEC project that is self sustaining?

Well they were 'gift' in the sense that nobody would even loan a penny to Pakistan few years back when USA was preparing to cope with Pak nukes falling into AQ hands after the state which was declared failed fell apart. Don't forget the context.

Roll back few years and I am sure you probably was one among others screaming about the loadshedding why did any one of those that are crying "debt trap" step forward and invest in Pakistan power sector on halal rates? No fcukn country did until the pork eaters came along. So harsh as it is don't forget this reality when your constructing your narative.

The failure is in Pakistan. Our industry and our people have failed in attracting Chinese export industries which instead choose to go to South East Asia or India but avoid Pakistan like a curse. I gave example of Karen Chen earlier. If dozen of them had been attracted today Pakistan would be facing another energy shortage as new industry would gobble up the extra power.

Pakistan's as a nation need to introspect why even the Chinese avoid Pakistan even with all the "iron brother songs". The Turks also despite all the talk of "Kardesh" avoid Pakistan. Pakistan can't even pull Chinese tourists. India got 240,000 Chinese tourists last year. Pakistan probably got 20 times less.


India becomes trendy destination for Chinese travelers

India aims to draw 14m Chinese tourists

India aims to draw 14m Chinese tourists

India is holding roadshows in China this week in a bid to draw more tourists.

www.chinadaily.com.cn

India becomes trendy destination for Chinese travelers

The number of visits made by Chinese to India registered robust growth during the first three quarters of this year, making India a trendy destination for Chinese tourists, according to a report published by China's online travel agency Ctrip.

www.chinadaily.com.cn