China In view of the weak economic condition of Pakistan, it has asked for additional guarantee before approving $ 6 billion loan for the Main Line-China Railway Project. A media report said that China has proposed to provide both commercial and concessional loans to finance the railway project. According to ‘Express Tribune’ 10 days ago (December 13), the issue of additional guarantee came up in a meeting of the Joint Financial Committee for the main line-a railway project.
A senior Pakistani official involved in the meeting said that China raised the issue of additional guarantees during the talks but it was not included in the draft document of the details shared with Pakistan. Both countries have not yet signed the documents. The Main Line-One project involves doubling of the 1,872-km rail route from Peshawar to Karachi, repairing tracks and is crucial for the second phase of the China-Pakistan Economic Corridor (CPEC).
The official said that Pakistan has applied for debt relief from the G20 countries. For this reason, China raised the issue of additional guarantees for clarity on the country’s economic condition. Sources in the Finance Ministry said that in the third phase of negotiations on financial issues, further situation was clarified regarding the loan of six billion dollars for the project.
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Under debt relief from G-20 countries, Pakistan cannot take commercial loans at high rates, except with prior approval as per the draft International Monetary Fund and World Bank. In August this year, the Executive Committee of the National Economic Council (ECNEC) approved the strategically important Main Line-1 project to be built at a cost of $ 6.8 billion. The ECNEC meeting lasted for just 20 minutes and financial and technical issues were not resolved.
Sources have said that Pakistan wants to get the amount of six billion dollars at one percent interest rate while China has offered loans under both commercial and concessional categories.
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(This news has not been edited by the NDTV team. It is published directly from the Syndicate feed.)