OBOR News & Developments
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Akshay Fenix
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Someone is jelly for being not mentioned...
Image of: mediacrooks
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Pakistani PM's disqualification increases likelihood of coalition government in 2018 with less emphasis on foreign investment
Asad Ali - IHS Jane's Intelligence Weekly
28 July 2017
Key Points
Asad Ali - IHS Jane's Intelligence Weekly
28 July 2017
Key Points
- Prime Minister Nawaz Sharif's removal will increase the likelihood of a coalition or opposition-led government following general elections next year.
- A coalition government will be unlikely to prioritise foreign investment as the current administration has.
- Contract cancellations will be unlikely, but the management and speed of China-Pakistan Economic Corridor (CEPC) projects, mostly in the infrastructure and energy sectors, will probably suffer.
- The military's influence will increase in a hung parliament scenario, and it will probably seek to increase its commercial role in the CPEC through affiliated companies.
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Does it matter,china will take over any way.
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I'm reading that report as a forthcoming nightmare for China if it is true with a corrupt Pakistani military insisting on kickbacks and slowing things down for them and favoring their own businesses.
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Pakistani Crying on Iron Friend China Refused Pakistan for any Loan other than CPEC..
pak has some time back been realising that all is not at all well with cpec abd it seems like a nawaz corruption project instead
chek my earlier posts and youll find that i have stated that cpcchina will meet its nemesis in packland ..... pack will use them and then not pay the loans at the time of payment
china thought that pack is uyghurstan and in some ways theuy are but when it comes to money they are not .... and with 200 million in pack and hotly religious for many yers unlike uyghur and being inependednt and formed on the basis of religions +ackland is not uyghurstan
cpcchina is gonna learn that the hard way ..... when it comes to collection time , packland simply will not pay up and therer is zilch that cpcchina will be able to do about it !!!
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AmoghaVarsha
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China will realise that money can only go inside pakiland and nothing comes out.
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So Pakistan has literally one all weather friend in the world right now and that is China. Without China, their military is nothing, economy is nothing etc.
If they don't pay back CPEC, who will the perpetual beggers turn towards next for alms? Or are you thinking that CPEC itself is big enough that they will be a standalone power?
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good qn ....my view is that the govts ofpak will default and kkeep delaying meanwhile the talibs will be attacking and so the project will have to be abandoned or rather cpcchina will never get paid ....the gov will use talebs as excuse and i expect various talebs will attack the projet and personnel working on it eg demand money etc
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i do not think china putting money in pakistan to get it back ....
try to figure out this ....
china putting just 35b$ spread over 15-20 years in pakistan , that roughly 2b$ per year....and level of concern they are showing....
on the other side , china getting 70b$ trade with india in a year......is there any good concern regarding india......certainly not !!!
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Having an alternative right of way thru west if SCS gets blocked, is worth 2 bln$ a year.
One thing I don't understand is why antagonise us, are they assuming we will never attempt to get back gilgit in next 20 years. If they are assuming so, that's a stupid assumption.
jadoogar
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Chances are that the PRC chicoms are not spending much money on CPEC and in particular on baki inputs like labor. The PRC plan appears to be to resurface / build some road, relocate some obsolete fossil fuel power plants to baki controlled territory. Give the bakis a bill for 50 billion USD at 17% ROI. Demand large tracts of agricultural land and perhaps baki women to balance the gender ratio in PRC.
And you are right that bakis will not part with agricultural land - so whatever the chicoms do put in will be lost. As others have pointed out above, there is strategic value in that road access to the chicoms and that is worth the few billion that they do put in. It will be up to us and others to deny the PRC that access since the road passes through territory that is ours and does so without our permission.
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kunal1123
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so that image ins on tv now.....................:biggrin2:
no smoking
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They are not attempting to antagonize India, but since that is the territory that the route must go through, they have no choice.
Since both of you have more than 100 nukes in hand, yes, they don't think you will be able to get back.
Worst of worse, even if you take that territory back, what will you do? You will still need to develop the economy of this territory and its neighborhood, that means this road will benefit you potentially. So, you will work with Chinese and keep it open.
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From Chinese point of view, what you say might be true..
From Indian point of view, i think 100 mistakes are being counted.
Counting 100 mistakes is a old concept from lord Krishna.
john70
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Now an editorial from express tribune :Pakistanis believe China’s CPEC is only benefiting Beijing growth story
https://tribune.com.pk/story/1472085/pakistanis-china-friendship-road-runs-one-way/
TASHKURGAN, CHINA: The China-Pakistan Friendship Highway runs over 1,300 kilometres from the far western Chinese city of Kashgar through the world’s highest mountain pass and across the border.
For China, the two-lane thoroughfare symbolises a blossoming partnership, nourished with tens of billions of dollars of infrastructure investment. But for many businessmen living and working on the Chinese side of the border, the road is a one way street.
“China says our friendship is as high as the Himalayas and as deep as the sea, but it has no heart,” said Pakistani businessman Murad Shah, as he tended his shop in Tashkurgan, 120 kilometres from the mountain pass where trucks line up to cross between China’s vast Xinjiang region and Pakistan. “There is no benefit for Pakistan. It’s all about expanding China’s growth,” Shah said, as he straightened a display of precious stones.
The remote town of around 9,000 is at the geographic heart of Beijing’s plans to build a major trade artery – the China-Pakistan Economic Corridor (CPEC) – connecting Kashgar to the Arabian Sea port of Gwadar.
A truck drives along the China-Pakistan Friendship Highway before the Karakorum mountain range near Tashkurgan in China’s western Xinjiang province. PHOTO: AFP
The project is a crown jewel of China’s One Belt, One Road [OBOR] initiative, a massive global infrastructure programme to revive the ancient Silk Road and connect Chinese companies to new markets around the world.
In 2013, Beijing and Islamabad signed agreements worth $46 billion to build transport and energy infrastructure along the corridor, and China has upgraded the treacherous mountain road better known as the Karakoram Highway.
‘CPEC to bring prosperity to region’
A woman collects water from the Karakul Lake before the Karakorum mountain range next to the China-Pakistan Friendship Highway, near Tashkurgan in China’s western Xinjiang province. PHOTO: AFP
Pakistan’s exports to China fell by almost eight per cent in the second half of 2016, while imports jumped by almost 29 per cent. In May, Pakistan accused China of flooding its market with cut rate steel and threatened to respond with high tariffs.
“There are all of these hopes and dreams about Pakistan exports,” said Jonathan Hillman, a fellow at the Center for Strategic and International Studies in Washington. “But if you’re connecting with China, what are you going to be exporting?”
One answer is Nigerian “male enhancement” supplements: expired medications which Pakistani merchants in the oasis city of Hotan recently peddled. The products were typical of the kinds of small consumer goods brought by Pakistani traders into Xinjiang: medicine, toiletries, semi-precious stones, rugs and handicrafts.
Pakistani businessmen in Xinjiang see few benefits from CPEC, complaining of intrusive security and capricious customs arrangements.
A man looking at his lottery ticket in Tashkurgan, China’s western Xinjiang province. PHOTO: AFP
“If you bring anything from China, no problem,” said Muhammad, a trader in the ancient Silk Road city of Kashgar, who declined to give his full name. But he said tariffs on imported Pakistani goods are “not declared. Today it’s five per cent, tomorrow maybe 20. Sometimes, they just say this is not allowed”.
Three years ago, Shah was charged between eight and 15 yuan per kilo to bring lapis lazuli, a blue stone. The duty has since soared to 50 yuan per kilo, he said.
Customs officials told AFP the “elements influencing prices were too many” for them to offer a “definite and detailed list” of costs.
While large-scale importers can absorb the tariffs, independent traders have benefited little from CPEC, said Hasan Karrar, political economy professor at the Lahore University of Management Sciences.
Alessandro Ripa, an expert on Chinese infrastructure projects at Ludwig Maximilian University Munich, said the highway “is not very relevant to overall trade” because “the sea route is just cheaper and faster”.
A man uses a mobile phone before the Karakorum mountain range next to the China-Pakistan Friendship Highway near Tashkurgan in China’s western Xinjiang province. PHOTO: AFP
The project is better understood as a tool for China to promote its geopolitical interests and help struggling state-owned companies export excess production, he said.
Traders also face overbearing security in China. Over the last year, Beijing has flooded Xinjiang, which has a large Muslim population, with tens of thousands of security personnel and imposed draconian rules to eliminate ‘extremism’.
Businessmen complain they are not allowed to worship at local mosques, while shops can be closed for up to a year for importing merchandise with Arabic script.
In June, on the 300 kilometre trip between Kashgar and Tashkurgan, drivers were stopped at six police checkpoints, while their passengers had to walk through metal detectors and show identification cards.
Signs warn that officials can check mobile phones for ‘illegal’ religious content. Police officers interrupted an interview in Tashkurgan to demand a shopkeeper hand over his smartphone and computer for inspection, an event he said occurs several times a week.
Shah said that when he first arrived in the town, the intrusive security made him nervous: “But now I’m used to it. I almost feel like I’m one of the police.”
‘CPEC to integrate regional economies’
As he spoke, an alarm sounded. He grabbed a crude spear, body armour and a black helmet off his counter and rushed into the street, where police had assembled over a dozen people for impromptu counter-terrorism drills. The exercises are held up to four times a day. Stores are closed for several days if they do not participate.
The China-Pakistan Friendship Highway before the Karakorum mountain range near Tashkurgan in China’s western Xinjiang province. PHOTO: AFP
Back in Kashgar, Muhammad hopes that CPEC will make life better, but he believes the oppressive security will remain an obstacle.
He plans to give it another three years. But, he said, he cannot wait forever: “Many people have already gone back.”
https://tribune.com.pk/story/1472085/pakistanis-china-friendship-road-runs-one-way/
TASHKURGAN, CHINA: The China-Pakistan Friendship Highway runs over 1,300 kilometres from the far western Chinese city of Kashgar through the world’s highest mountain pass and across the border.
For China, the two-lane thoroughfare symbolises a blossoming partnership, nourished with tens of billions of dollars of infrastructure investment. But for many businessmen living and working on the Chinese side of the border, the road is a one way street.
“China says our friendship is as high as the Himalayas and as deep as the sea, but it has no heart,” said Pakistani businessman Murad Shah, as he tended his shop in Tashkurgan, 120 kilometres from the mountain pass where trucks line up to cross between China’s vast Xinjiang region and Pakistan. “There is no benefit for Pakistan. It’s all about expanding China’s growth,” Shah said, as he straightened a display of precious stones.
The remote town of around 9,000 is at the geographic heart of Beijing’s plans to build a major trade artery – the China-Pakistan Economic Corridor (CPEC) – connecting Kashgar to the Arabian Sea port of Gwadar.
A truck drives along the China-Pakistan Friendship Highway before the Karakorum mountain range near Tashkurgan in China’s western Xinjiang province. PHOTO: AFP
The project is a crown jewel of China’s One Belt, One Road [OBOR] initiative, a massive global infrastructure programme to revive the ancient Silk Road and connect Chinese companies to new markets around the world.
In 2013, Beijing and Islamabad signed agreements worth $46 billion to build transport and energy infrastructure along the corridor, and China has upgraded the treacherous mountain road better known as the Karakoram Highway.
‘CPEC to bring prosperity to region’
A woman collects water from the Karakul Lake before the Karakorum mountain range next to the China-Pakistan Friendship Highway, near Tashkurgan in China’s western Xinjiang province. PHOTO: AFP
Pakistan’s exports to China fell by almost eight per cent in the second half of 2016, while imports jumped by almost 29 per cent. In May, Pakistan accused China of flooding its market with cut rate steel and threatened to respond with high tariffs.
“There are all of these hopes and dreams about Pakistan exports,” said Jonathan Hillman, a fellow at the Center for Strategic and International Studies in Washington. “But if you’re connecting with China, what are you going to be exporting?”
One answer is Nigerian “male enhancement” supplements: expired medications which Pakistani merchants in the oasis city of Hotan recently peddled. The products were typical of the kinds of small consumer goods brought by Pakistani traders into Xinjiang: medicine, toiletries, semi-precious stones, rugs and handicrafts.
Pakistani businessmen in Xinjiang see few benefits from CPEC, complaining of intrusive security and capricious customs arrangements.
“If you bring anything from China, no problem,” said Muhammad, a trader in the ancient Silk Road city of Kashgar, who declined to give his full name. But he said tariffs on imported Pakistani goods are “not declared. Today it’s five per cent, tomorrow maybe 20. Sometimes, they just say this is not allowed”.
Three years ago, Shah was charged between eight and 15 yuan per kilo to bring lapis lazuli, a blue stone. The duty has since soared to 50 yuan per kilo, he said.
Customs officials told AFP the “elements influencing prices were too many” for them to offer a “definite and detailed list” of costs.
While large-scale importers can absorb the tariffs, independent traders have benefited little from CPEC, said Hasan Karrar, political economy professor at the Lahore University of Management Sciences.
Alessandro Ripa, an expert on Chinese infrastructure projects at Ludwig Maximilian University Munich, said the highway “is not very relevant to overall trade” because “the sea route is just cheaper and faster”.
A man uses a mobile phone before the Karakorum mountain range next to the China-Pakistan Friendship Highway near Tashkurgan in China’s western Xinjiang province. PHOTO: AFP
The project is better understood as a tool for China to promote its geopolitical interests and help struggling state-owned companies export excess production, he said.
Traders also face overbearing security in China. Over the last year, Beijing has flooded Xinjiang, which has a large Muslim population, with tens of thousands of security personnel and imposed draconian rules to eliminate ‘extremism’.
Businessmen complain they are not allowed to worship at local mosques, while shops can be closed for up to a year for importing merchandise with Arabic script.
In June, on the 300 kilometre trip between Kashgar and Tashkurgan, drivers were stopped at six police checkpoints, while their passengers had to walk through metal detectors and show identification cards.
Signs warn that officials can check mobile phones for ‘illegal’ religious content. Police officers interrupted an interview in Tashkurgan to demand a shopkeeper hand over his smartphone and computer for inspection, an event he said occurs several times a week.
Shah said that when he first arrived in the town, the intrusive security made him nervous: “But now I’m used to it. I almost feel like I’m one of the police.”
‘CPEC to integrate regional economies’
As he spoke, an alarm sounded. He grabbed a crude spear, body armour and a black helmet off his counter and rushed into the street, where police had assembled over a dozen people for impromptu counter-terrorism drills. The exercises are held up to four times a day. Stores are closed for several days if they do not participate.
The China-Pakistan Friendship Highway before the Karakorum mountain range near Tashkurgan in China’s western Xinjiang province. PHOTO: AFP
Back in Kashgar, Muhammad hopes that CPEC will make life better, but he believes the oppressive security will remain an obstacle.
He plans to give it another three years. But, he said, he cannot wait forever: “Many people have already gone back.”
Last edited:
sorcerer
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Power consumers to pay security cost of CPEC projects
ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Thursday allowed power producers to charge consumers through tariff one per cent cost of 19 power projects worth $15.56 billion under the China-Pakistan Economic Corridor (CPEC) for 20-30 years on account of security cost.
In an order, the power sector regulator said it allowed building in tariff the additional security cost on the orders of the federal government and estimated it at $155.6 million (about Rs17 billion) for all 19 power projects under the CPEC. Nepra worked out the annual cost at about $2.92m (Rs315m).
Editorial: CPEC security cost
The order said the federal government had, through a decision of the Economic Coordination Committee of the cabinet on Sept 22, instructed that CPEC projects having achieved financial close or early harvest projects where financial close was still pending as well as new addition to the CPEC projects under an implementation agreement be allowed one per cent of capital cost net of $150,000 on account of security to be distributed annually starting from the construction period till the term of the project.
“The authority (Nepra) has decided to allow 1pc capital cost of the project reduced by $150,000/annum (subject to 3pc indexation for each year after the first year from COD) as security cost in respect of each CPEC power project in accordance with the approved payment mechanism and the same shall be treated as pass-through item,” the regulator said in its order.
Nepra did not accept objections from a number of stakeholders, including the sponsors of the power projects and consumer groups, that provision of security was the responsibility of the state and electricity consumers should not be charged for it given the fact that they were already paying huge taxes to the state to meet its expenses, including security cost.
Nepra said Article 10 of the CPEC Agreement provided that “the Pakistani party shall take the necessary measures to ensure the safety of Chinese personnel and projects” and it had established a special security force/division of the armed forces to ensure security of CPEC projects.
Even if the government bears the cost of extra security arrangements, it has to be allocated from the budget which is public money and the development budget has to be cut short to the equivalent amount.
“Since this cost is specific to the CPEC projects, it is more appropriate to charge this cost to the respective project. These preventive security measures shall enable the smooth operation of the CPEC energy projects and shall better protect the interest of the electricity consumers,” Nepra ruled.
The regulator claimed that 10 out of 19 projects would have zero financial impact while three would have a financial impact of less than one paisa per unit and six projects 1-2 paisa per unit.
Nepra also approved a payment mechanism under which IPPs (independent power producers) of CPEC projects would pay $150,000 per annum, subject to 3pc indexation for each year after the first year from COD (commercial operation date) to the relevant government-designated agency or the ministry during the construction and operation period.
During the operation period, CPEC-IPPs will include in the monthly capacity invoice a separate charge on account of security cost. The capacity charge for security cost will be calculated on the basis of determined annual security cost of the respective project reduced by $150,000/annum for the first year from COD and then with 3pc indexation for each succeeding year, divided by net annual output in kilowatt hours assuming reference exchange rate of Rs105 per dollar.
The subject security cost component of capacity charge will be indexed on the basis of exchange rate of the last available day of the preceding quarter. IPPs will seek its approval from Napra quarterly in accordance with other tariff components of the capacity charge.
The Central Power Purchase Agency (CPPA) will pay the invoiced amount in accordance with other components of capacity charge. In case the annual security cost of a project is less than $150,000 subject to applicable indexation, IPPs will not include security cost in the capacity charge invoice and the CPPA will not pay any amount on account of security cost for the respective project.
In future, if the overall security situation improves and the government considers that special security arrangements are no longer needed and the special security force/division is released from this responsibility, no payment will be made by the power purchaser on account of special security arrangement.
The government is already charging at least four special surcharges of about Rs4.7 per unit in consumer tariff to cover low recoveries, high losses, special debt servicing, tariff equalisation across various distribution companies and so on.
The prime minister had originally allowed the Planning Commission to allow one per cent additional cost of all CPEC projects to meet the expenditure of a special security division of the army being raised to protect the corridor. The government had allocated about Rs30bn in the budget to meet initial expenditure and then allow one per cent increase in capital cost of all projects under the Public Sector Development Programme.
Published in Dawn, August 4th, 2017
ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Thursday allowed power producers to charge consumers through tariff one per cent cost of 19 power projects worth $15.56 billion under the China-Pakistan Economic Corridor (CPEC) for 20-30 years on account of security cost.
In an order, the power sector regulator said it allowed building in tariff the additional security cost on the orders of the federal government and estimated it at $155.6 million (about Rs17 billion) for all 19 power projects under the CPEC. Nepra worked out the annual cost at about $2.92m (Rs315m).
Editorial: CPEC security cost
The order said the federal government had, through a decision of the Economic Coordination Committee of the cabinet on Sept 22, instructed that CPEC projects having achieved financial close or early harvest projects where financial close was still pending as well as new addition to the CPEC projects under an implementation agreement be allowed one per cent of capital cost net of $150,000 on account of security to be distributed annually starting from the construction period till the term of the project.
“The authority (Nepra) has decided to allow 1pc capital cost of the project reduced by $150,000/annum (subject to 3pc indexation for each year after the first year from COD) as security cost in respect of each CPEC power project in accordance with the approved payment mechanism and the same shall be treated as pass-through item,” the regulator said in its order.
Nepra did not accept objections from a number of stakeholders, including the sponsors of the power projects and consumer groups, that provision of security was the responsibility of the state and electricity consumers should not be charged for it given the fact that they were already paying huge taxes to the state to meet its expenses, including security cost.
Nepra said Article 10 of the CPEC Agreement provided that “the Pakistani party shall take the necessary measures to ensure the safety of Chinese personnel and projects” and it had established a special security force/division of the armed forces to ensure security of CPEC projects.
Even if the government bears the cost of extra security arrangements, it has to be allocated from the budget which is public money and the development budget has to be cut short to the equivalent amount.
“Since this cost is specific to the CPEC projects, it is more appropriate to charge this cost to the respective project. These preventive security measures shall enable the smooth operation of the CPEC energy projects and shall better protect the interest of the electricity consumers,” Nepra ruled.
The regulator claimed that 10 out of 19 projects would have zero financial impact while three would have a financial impact of less than one paisa per unit and six projects 1-2 paisa per unit.
Nepra also approved a payment mechanism under which IPPs (independent power producers) of CPEC projects would pay $150,000 per annum, subject to 3pc indexation for each year after the first year from COD (commercial operation date) to the relevant government-designated agency or the ministry during the construction and operation period.
During the operation period, CPEC-IPPs will include in the monthly capacity invoice a separate charge on account of security cost. The capacity charge for security cost will be calculated on the basis of determined annual security cost of the respective project reduced by $150,000/annum for the first year from COD and then with 3pc indexation for each succeeding year, divided by net annual output in kilowatt hours assuming reference exchange rate of Rs105 per dollar.
The subject security cost component of capacity charge will be indexed on the basis of exchange rate of the last available day of the preceding quarter. IPPs will seek its approval from Napra quarterly in accordance with other tariff components of the capacity charge.
The Central Power Purchase Agency (CPPA) will pay the invoiced amount in accordance with other components of capacity charge. In case the annual security cost of a project is less than $150,000 subject to applicable indexation, IPPs will not include security cost in the capacity charge invoice and the CPPA will not pay any amount on account of security cost for the respective project.
In future, if the overall security situation improves and the government considers that special security arrangements are no longer needed and the special security force/division is released from this responsibility, no payment will be made by the power purchaser on account of special security arrangement.
The government is already charging at least four special surcharges of about Rs4.7 per unit in consumer tariff to cover low recoveries, high losses, special debt servicing, tariff equalisation across various distribution companies and so on.
The prime minister had originally allowed the Planning Commission to allow one per cent additional cost of all CPEC projects to meet the expenditure of a special security division of the army being raised to protect the corridor. The government had allocated about Rs30bn in the budget to meet initial expenditure and then allow one per cent increase in capital cost of all projects under the Public Sector Development Programme.
Published in Dawn, August 4th, 2017
