By: Sarmad Shahbaz
Established on 22nd May 2013, CPEC is an economic corridor between Pakistan and its neighboring country China. The CPEC (China Pakistan Economic Corridor) is a linking between Gwadar Port (Pakistan) and Xinjiang (Chinese Province). The project is going to be a game changer in the world of trade as it is not advantageous only to Pakistan and China but it will also contribute its services with other countries like Russia etc. In the Pakistani Province (Baluchistan), the development activity has picked up with the restoration of peace after decades of insurgency and violence.
Not only Baluchistan and its people but people of Pakistan will benefit from China-Pakistan Economic Corridor (CPEC). The CPEC project is part of Beijing’s “Belt and Road” plan to expand its trade and transport footprint across Central and South Asia. Baluchistan will turn out to be a pecuniary pivot and people of Baluchistan and other shires of Pakistan will benefit from the mega project. It will also help Pakistan to accomplish self-reliance, get rid of the dependency syndrome. Of course, Pakistan would become militarily strong and India would think twice before hurling threats or resorting to aggressive posturing.
The total trade ratio between Pak-China has increased to $16 billion. China’s exports to Pakistan were increased by 10% from 2009-10 to 2014-15. The most topical landmark achieved in this two-sided relationship is the signing of Memorandum of Understanding (MoU) on the construction of China-Pakistan Economic Corridor (CPEC).
China Pakistan Economic Corridor is 3,218 Kilometer long route, consisting of highways, railways, and pipelines. The approximate cost of this project is estimated to be the US $75 billion. In this amount, more than the US $45 billion is used for the construction purposes which will help the corridor to become operational by 2020. Rest of the speculation will be spent on energy generation and groundwork development.
The CPEC project has been separated into chapters, the first chapter is the completion of Gwadar International Airport and major expansions of Gwadar Port. This chapter is expected to be completed by the year 2017. The project also includes the expansion of Karakoram Highway- the road that bonds China with Pakistan and placement of fiber-optic line certifying better communication between the two republics.
It is believed that if all the intentional projects are completed, the value of these projects will surpass all foreign direct investment in Pakistan since 1970 and would be correspondent to 17% of Pakistan’s 2015 gross. It is complementarily predictable the CPEC project will produce about 700,000 direct jobs during the period 2015–2030 and add up to 2.5 fraction points to the country’s growth rate.
In 2016, Pakistan and China signed an agreement to originate work on CPEC development projects worth over $46 billion, which comes to roughly 20 percent of Pakistan’s annual GDP.
When talking about the benefits of this affluent venture, everything you count is less. This un-ending project is a real game changer, not only in South Asia but also will affect the whole world. The CPEC will open doors to gigantic monetary projections not only to Pakistan but will physical connect China to its marketplaces in Asia, Europe and further than.
Practically 80% of China’s oil is presently conveyed from a distance of almost 16,000 km and takes 2-3 months, but with Gwadar becoming operative, the distance would lessen to less than 5,000 km. There are 21 agreements on energy– together with gas, coal and solar energy– 14 will be able to provide up to 10,400 megawatts (MW) of energy by March 2018. According to China Daily, these projects would provide up to 16,400 MW of energy altogether.
As part of substructure projects worth in the region of $11 billion, and 1,100-kilometer long motorway will be assembled between the cities of Karachi and Lahore, 2 while the Karakoram Highway between Rawalpindi and the Chinese border will be entirely renovated and repaired. The Karachi–Peshawar main railway line will also be elevated to permit for train travel at up to 160 kilometers per hour by December 2019.
Pakistan’s railway system will also be connected ultimately to China’s Southern Xinjiang Railway. A network of pipelines for the conveyance of LNG and oil will also be rested as part of the project, together with a $2.5 billion pipeline between Gwadar and Nawanshahr for the carriage of gas from Iran.
Oil from the Middle East could come to Gwadar and conveyed to China through the passage, cutting the current 12,000 km journey to 2,395 km. It will act as a bond for the new Maritime Silk Route that foresees linking 3 billion people in Asia, Africa, and Europe, part of a trans-Eurasian project. When completely functioning, Gwadar will endorse the economic development of Pakistan and will convert a gateway to Central Asian countries, including Afghanistan, Uzbekistan, linking Sri Lanka, Iran, and Xinjiang to undertake marine transport.
Over $33 billion worth of energy structure will be created by private associations to help alleviate Pakistan’s chronic energy shortages, which regularly amount to over 4,500MW, and have shed an assessed 2-2.5% off Pakistan’s annual GDP.
With almost $33 billion likely to be invested in energy sector projects, power generation assumes an important role in the CPEC project. Over 10,400MW of energy generating capacity is to be developed between 2018 and 2020 as part of the corridor’s fast-tracked “Early Harvest” projects.
The CPEC appears to be a very critical project for both the countries. For China, it delivers an alternate secure direction to import Energy and find new markets for its belongings and services. For Pakistan it helps counters Indian impact in the region, position itself as a major transit point connecting the Eurasian region with South Asia and South East Asia and provide a much-needed base to kick-start its economic growth.
This article is published in March 2018 edition of Monthly Engineering Cap Magazine. This article can also be read online in the animated version of magazine at http://engineeringcap.com/engineering-cap-magazine/