RMB account, rescheduling of loans likely


ISLAMABAD: The government is reportedly finalising drafts of over a dozen pacts including rescheduling of Chinese loans, opening of accounting in RMB and cyber security, to be signed during the maiden visit of Prime Minister Shahbaz Sharif to China next month, well informed sources told Business Recorder.

Some of the Agreements/ Memorandum of Understandings (MoUs) to be signed are: (i) (10,000MWp solar projects; (ii) procurement of Liquefied Natural Gas (LNG); (iii) debt restructuring; (iv) ML-1; (v) Karachi Circular Railway; (vi) Agriculture; (vii) opening of RMB Account;( viii) cyber security; (ix ) flood relief and rehabilitation; and (x) relocation of Chinese industries in the SEZs. On October 11, SAPM Syed Tariq Fatemi, on the instructions of the Prime Minister, invited Advisor to Prime Minister on Establishment Ahad Cheema, Special Assistant to the Prime Minister Dr Jehanzeb Khan and Zafaruddin Mahmood to meet the Chinese ambassador to firm up preparations for the Prime Minister’s upcoming visit to Beijing next month.

During the course of the meeting, the Pakistani side explored the possibility of signing Agreements/ MoUs, after fulfilling codal formalities with the Chinese side on a number of important projects of mutual interest. The Chinese ambassador was requested to inform the relevant departments of his government that he would favour the signing of such pacts.

Recently, Prime Minister discussed the proposal to construct railway track from Thar Coal Block-II to Chor Station and upgradation of existing track from Hyderabad to Mirpurkhas, for transportation of Thar coal to various power plants in the country currently operating on imported coal.

Secretary Railways informed that the proposed project is estimated to cost around Rs 55.509 billion and can be completed in 18 months with an Internal Rate of Return (IRR) of 15% and payback period of 9 years. It was also shared by Secretary Power that the Lucky Power Plant is 100% convertible to Thar coal whereas imported coal-based power projects could blend 20 to 25 % of Thar coal with imported coal for their operations.

Prime Minister emphasized the importance of the project being one of the most important projects for Pakistan’s economy due to its long-term benefit of shifting reliance from external to local sources of energy generation and significant savings in Foreign Exchange.

After discussion, following decisions were taken: (i) project cost shall be rationalized by the Ministry of Railways; (ii) completion date of the project shall be confirmed by Minister Railways; (iii) Pakistan Railways shall consider executing the project through a special purpose vehicle on terms and conditions to be agreed between the Government of Pakistan and the Government of Sindh; (iv) the cost of project will be shared by the Federal Government and Government of Sindh on 50:50 basis; (v) M/o Railways would consider doing the project on EPC mode for most feasible engineering design, value for money procurement and speedy implementation; and (vi) the P3A would work on monetization of the project on Commercial Operation Date (COD).