Islamabad is prepared to approve the increased price of the stalled project Mainline-1 up-grading of rail connection and supply of its security with a huge escalated cost of 45% just ahead of Prime Minister Shehbaz Sharif’s planned visit to China.
The updated price tag for upgrading ML-1 and building the dry port at Havelian is currently put at Rs1,970.2 billion. The government also suggested that security be provided for the Mainline-1 project, which is expected to cost Rs35.99 billion.
As opposed to the earlier approved cost of $6.8 billion, the updated cost of ML-1 with security has been projected at Rs2 trillion, or almost $10 billion. The declining currency rate has resulted in a 45% increase in the revised price of ML-1.
The China-Pakistan Economic Corridor’s Joint Coordination Committee (JCC) is scheduled to meet in the final week of the current month, possibly on October 27. Pakistan wants all of the preliminary work to be finished before authorizing the eagerly anticipated ML-1 project.
Pakistan and China had signed a framework agreement in 2017 for ML-1 but in the last five years the CPEC was slowed down and the financing agreement could not be struck between the two sides.
The ML-1 project, which was approved by the previous PTI-led government and was expected to cost $6.8 billion, was never carried out, and thus was a non-starter. In accordance with the new working paper, the Ministry of Railways changed its costs. The government allocated Rs5 billion to the Public Sector Development Programme (PSDP) for the current fiscal year.
It would be difficult for Pakistan to carry out a multibillion-dollar project while the nation is being closely watched by the International Monetary Fund, according to independent analysts. The PSDP’s inclusion of Rs 2 trillion will make it challenging to carry out ML-1 and will increase the development’s forward momentum, which is of worry to the IMF and the World Bank.
The two sides’ disagreement over the ML-1 funding deal has continued. With Islamabad wanting to go forward with the bid process following an agreement with the Chinese side, Pakistan is now expecting that significant progress will be made at the upcoming JCC meeting.