Saudi Arabia Announces New Economic Corridor ......

[Crimson Blue]

https://twitter.com/x/status/1700527368694083917

 

[Black.Mamba]

but what about the 25 Billion that Hafiz Gee was promising? main phir nah he sumjhon?

 

[Crimson Blue]

May be that was the whole reason to topple the government in April 2022 ........... to make space for other economic players in region by castrating CPEC.

 

[LeGenD]

May be that was the whole reason to topple the government in April 2022 ........... to make space for other economic players in region by castrating CPEC.

CPEC continues FYI. It would be sensible to talk about its projects, terms and conditions, and impact.

 

[Azadkashmir]

mbs just shat on pakistan establishment. munir go wipe his beduin ***.

 

[PakAlp]

Do we Pakistanis have a spine or not? This same Saudi Arabia spend billions to promote their sect in Pakistan, brainwashed young children and made them extremists, the same saudia whom Pakistan and Pakistanis have been bowing down to for decades, same saudia which wouldn't allow Pakistan to improve their relations with Iran and other states. Pakistanis kept on closing their eyes and ears and continued to worship.

The same Saudia now spending billions to promote their relations with India, trying to rival Cpec. Where are those Pakistanis who have been saying for 20 years on PDF that Saudia hamara bhai hei.

I am not blaming saudia but Pakistanis. Hum ek chamcha mulk hei, otherwise would you dare to show saudia their true face. Saudi lovers will certainly make it out that Pakistan will benefit mostly lol

mbs just shat on pakistan establishment. munir go wipe his beduin ***.

100%. Pakistan for decades have been on purpose not improving relations with Iran because Saudia would pull their pants down. But now saudia is hugging Iran and India, shitting on Pakistan leadership face. Pakistan betrayed Turkey during Malaysian summit, betraying China with taking the mick with Cpec and Gwadar.

 

[Crimson Blue]

CPEC continues FYI. It would be sensible to talk about its projects, terms and conditions, and impact.

Government has not announced any big company setting up manufacturing under CPEC in past 16 months. After the PM's China visit in Feb 2022, China was to fast track the opening of new manufacturing units in Pakistan.

What happened to that revenue generating phase of CPEC?

Even ministry of planning & development does not talk about CPEC projects anymore.

All the talk is about SIFC / GCC countries now.

 

[Ali_Baba]

mbs just shat on pakistan establishment. munir go wipe his beduin ***.

Munir just shat on Pakistan - MBS just declined to provide the wet wipes to clean the mess up again ... better analogy of the current situation

 

[SaadH]

This sounds like a pie in the sky project to be honest, hydrogen adaption as a fuel source is a long ways off. Secondly there's a little tiny matter of Arabian sea, persian gulf, red sea and Mediterranean sea in the way of this corridors. Not sure what this corridor will offer that cannot be achieved with existing shipping lanes, unless they plan to build a physical bridge from India to Arabian peninsula.

 

[nahtanbob]

Government has not announced any big company setting up manufacturing under CPEC in past 16 months. After the PM's China visit in Feb 2022, China was to fast track the opening of new manufacturing units in Pakistan.

What happened to that money generating phase of CPEC?

Even ministry of planning & development does not talk about CPEC projects anymore.

All the talk is about SIFC / GCC countries now.

Why would China open manufacturing units in Pakistan when they have record youth unemployment ?

This sounds like a pie in the sky project to be honest, hydrogen adaption as a fuel source is a long ways off. Secondly there's a little tiny matter of Arabian sea, persian gulf, red sea and Mediterranean sea in the way of this corridors. Not sure what this corridor will offer that cannot be achieved with existing shipping lanes, unless they plan to build a physical bridge from India to Arabian peninsula.

you are right. Just like CPEC

 

[Crimson Blue]

Why would China open manufacturing units in Pakistan when they have record youth unemployment ?

I was responding to @LeGenD when he said that all CPEC projects continue as usual. As far as I know, no Chinese manufacturing has been transferred to Pakistan in past 18 months.



And this:

Biden hails India-Middle East-Europe Economic Corridor as ‘game-changing’ investment

The IMEC is expected to stimulate economic development through enhanced connectivity and economic integration between Asia, the Arabian Gulf, and Europe.

www.hindustantimes.com

 

[Crimson Blue]

This is also being promoted in US.

WATCH: Biden, Modi announce economic corridor linking India to Middle East, Europe at G20

President Joe Biden and his allies on Saturday announced plans to build a rail and shipping corridor linking India with the Middle East and Europe, an ambitious project aimed at fostering economic growth and political cooperation.

www.pbs.org

 

[LeGenD]

Government has not announced any big company setting up manufacturing under CPEC in past 16 months. After the PM's China visit in Feb 2022, China was to fast track the opening of new manufacturing units in Pakistan.

What happened to that revenue generating phase of CPEC?

Even ministry of planning & development does not talk about CPEC projects anymore.

All the talk is about SIFC / GCC countries now.

Phase 1 was too focused on developing costly infrastructure including IPPs.

IPPs = one of the worst decisions

-----

Pakistan has surplus power generation capacity but the tariffs are skyrocketing in the country, reaching an unbearable level with all consumers – domestic, commercial, agri and industrial – registering their protest over inflated bills.

The rising tariffs have resulted in reduced demand as many industrial units closed or suspending their operations thanks to the high cost of doing business while domestic consumers too are now forced to consume less electricity – an obvious consequence of shrinking purchasing power amid record-high inflation.

Meanwhile, the government has failed to deliver on its promise to provide some relief as the International Monetary Fund (IMF) rejected the proposal for any tariff adjustment or provision of additional subsidy, citing fiscal deficit.

The IMF has been stressing reforms in energy sector and increase in power tariff to deal with circular debt through slashing subsidies.

Whatever the reasons or justifications are, the crust of the matter is that the electricity tariffs have reached unsustainable levels both for domestic users and businesses. There can’t be any economic activity in this scenario as the interest rate hikes and rupee depreciation have already crippled the economy.

CAPACITY CHARGES AND SURPLUS POWER

The government wants to recover Rs146 billion from consumers in terms of quarterly tariff adjustment (QTA) for the April-June 2023 period through the bills payable in October, November and December, as they are already paying the amount under the same head for previous quarter [January-March]. And a huge chunk of Rs146bn comes from capacity charges – Rs124bn.

So no matter what the demand and consumption is, the independent power producers (IPPs) are supposed to get a certain amount for the electricity they generate or can generate. That’s why power generation became a lucrative business thanks to the conditions listed in the agreement signed with the government.

CPEC POWER PLANTS

These units certainly helped Pakistan getting rid of power outages but sustainability remains the issue thanks to the capacity charges.

Reports suggest that the financial crunch has forced Islamabad to think about asking Beijing to either renegotiate the agreements in a fashion similar to what has been achieved with other IPPs (Independent Power Producers) or purchase 1200 MW of electricity for supplying the same to Afghanistan – an energy deficient country.

In 2020, the government and over 30 IPPs had inked revised agreements which paved the way for discounted tariff for the projects of 20 to 30 years of life.

According to reports, similar deals with the Chinese IPPs will enable Pakistan save $14.29bn over the life of these projects. It translates into an average of $0.48bn per year for an average project life of 30 years.

However, China isn’t likely to accept the solution for the reason that it is being floated by the IMF, World Bank and the United States of America and western countries have time and again urged Islamabad to give similar treatment to Chinese IPPs on the pattern of other IPPs.

But the option of selling electricity to China for supplying the same to Afghanistan may work out, resulting in an earning of Rs100b ($0.57bn) per year for Pakistan.

WE DON’T KNOW HOW TO DEAL WITH ANYTHING SURPLUS

This surplus power and the related capacity charges resulting in circular debt and rising tariffs is reminder that we are not good at planning.

In 1980s, we were told that establishment of sugar mills in Pakistan would lower the commodity prices – a promise that never materialise.

Later, the same thing was heard with the focus shifted to the cement industry as new plants mushroomed around the country. However, cheaper cement remained elusive.

How to deal with surplus power generation through CPEC projects?

Currently, it means consumers are pay hefty capacity charges

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[Crimson Blue]

Phase 1 was too focused on developing costly infrastructure including IPPs.

IPPs = one of the worst decisions

That's all known and understood about Phase I.

But now when 'CPEC Authority' is disbanded;

What happened to 2nd Phase (revenue generating phase) of CPEC ? Why ministry of planning & development does not talk about CPEC Phase II anymore ?

Why is Government promoting SIFC instead of CPEC?


The most obvious explanation for an outsider like me would be: CPEC is castrated.

 

[TriptiD]

IPPs = one of the worst decisions

IPP = One of the worst decisions for Pakistani consumers and one of the best decisions for investors.