Pakistan and China to Begin CPEC Phase 2 This Year

Pakistan and China are all set to begin the second phase of China Pakistan Economic Corridor (CPEC) with 27 projects focused on social sectors, poverty alleviation, training, research and improving agriculture productivity at an estimated cost of over one billion dollars.

A senior official of the Ministry of Planning and Development revealed that 27 projects would be implemented in 2-3 years with an initial estimated cost of $1 billion dollars. However, according to another official privy to developments, the amount may exceed one billion dollars.

The Joint Cooperation Committee (JCC) in its 9th meeting held in Islamabad on November 5, 2019, agreed to follow the memorandum of understanding (MOU) on social and economic development and proceed with the 27 agreed-upon priority projects in six sectors identified for cooperation including (i) agriculture, (ii) education, (iii) medicine, (iv) poverty alleviation, (v) water supply, and (vi) vocational training.

Both sides would proceed with the 27 projects in a steady and orderly manner, of which the 17 fast-track projects would begin implementation in the current year.

Pakistan confirmed the goods list of projects, provision of agricultural equipment and tools as well as the goods list of projects under China-Pakistan joint agricultural technology laboratory as agreed in the JCC end November 2019, and the Letter of Expression (LOE) procedures has also been completed.

However, Pakistan has yet to provide project proposals for the remaining 10 priority projects due by the end of 2019 for the Chinese side to start feasibility studies at an early date.

The official said that Chinese experts have completed their visits to all the provinces of Pakistan to finalize the projects’ requirements and equipment under the social sector development program. List of equipment/items have been finalized and with concurrence from both sides, they are ready for implementation.

JCC had agreed to convene the second meeting of the Joint Working Group (JWG) on social and economic development in Pakistan after the LOE procedures of all the 17 fast-track projects are completed. Both sides agreed to accelerate the procedures for the projects including Balochistan solar power lighting equipment, drinking water equipment supply (solar-powered pumps in KP and water filtration plants in AJK), smart classroom project for higher education, provision of medical equipment and material and Pakistan vocational schools equipment upgrading, and renovation project.

Further horticulture projects in Khyber Pakhtunkhwa and biotechnology projects for Balochistan are finalized and would be completed under the social sector development program. An oil laboratory would be set up in Islamabad for agriculture sector development.

Sources said that it was also agreed to take agriculture as a key cooperation area on the basis of equality and mutual benefits, enhancing cooperation in capacity building, generating resources, agricultural product processing, technology extension, fisheries, disease-free zone construction, and market information. Pakistan’s side highlighted that it has huge water resources for the agriculture sector and recommended the inclusion of the Chashma Right Bank Canal in the list of CPEC projects.

Sources said that China has not given a commitment to the inclusion of Chashma Right Bank Canal however Pakistan will again highlight the matter in upcoming JCC to be held in Beijing in April. The project would cost over one billion dollars and is being considered a critical project for meeting the agriculture requirements of the country.

The second phase of CPEC offers a good opportunity to help the agriculture sector to recover via a business-oriented model through value addition i.e. converting raw materials into standard commercial products and brands, the official added.