Historical Background of CPEC

The China-Pakistan Economic Corridor (CPEC) is a 3,000-kilometer network of roads, railways

and pipelines to transport oil and gas from southern Pakistan's Gwadar Port to Kashgar city,
northwestern China's Xinjiang Uygur autonomous region. Proposed by Premier Li Keqiang
during his visit to Pakistan in May 2013, the CPEC will act as a bridge for the new Maritime Silk
Route that envisages linking 3 billion people in Asia, Africa and Europe.
A flagship project of the Belt and Road initiative as well, the CPEC intends to revive the ancient
Silk Road with a focus on infrastructure and constitutes the strategic framework of bilateral
cooperation.
The project links China's strategy to develop its western region with Pakistan's focus on boosting
its economy, including the infrastructure construction of Gwadar Port, together with some energy
cooperation and investment programs. It also involves road and railway construction including
an upgrade of the 1,300-km Karakoram Highway, the highest paved international road in the
world which connects China and Pakistan across the Karakoram Mountains.
The CPEC will reduce China's routes of oil and gas imports from Africa and the Middle East by
thousands of kilometers, making Gwadar a potentially vital link in China's supply chain. Gwadar
Port, which is about 400 km from the Strait of Hormuz, will be upgraded and a 14 km
expressway and an airport will be built in the area.
Pakistani Prime Minister Nawaz Sharif said the corridor would transform Pakistan into a
regional hub and give China a shorter and cheaper route for trade with much of Asia, the Middle
East and Africa.
During President Xi Jinping's visit to Pakistan, China and the host country agreed to form a '1+4'
cooperation structure with the CPEC at the center and Gwadar Port, energy, transport
infrastructure and industrial cooperation being the four key areas to achieve common
development. More than 30 agreements among the 51 agreements and memorandums of
understanding worth $46 billion are designed to boost the CPEC project. Early results of the
planned corridor have seen 25 projects scheduled to be completed in the next three to five years.
Under 21 agreements on energy, the countries will cooperate on gas, coal and solar energy
projects to provide 16,400 megawatts of electricity - roughly equivalent to Pakistan's current
capacity. The layout of the economic corridor has taken various regions' interests into
consideration and will benefit a wide-ranging public, said Xi.
The first wind-power generation project established by Chinese companies in Karachi, Pakistan,
is among the 21 agreements on energy that China and Pakistan cooperated. Photo taken on Nov
28, 2013.
Introduction to CPEC
China-Pakistan Economic Corridor is a framework of regional connectivity. CPEC will not only
benefit China and Pakistan but will have positive impact on Iran, Afghanistan, India, Central
Asian Republic, and the region. The enhancement of geographical linkages having improved
road, rail and air transportation system with frequent and free exchanges of growth and people to
people contact, enhancing understanding through academic, cultural and regional knowledge and
culture, activity of higher volume of flow of trade and businesses, producing and moving energy
to have more optimal businesses and enhancement of co-operation by win-win model will result
in well connected, integrated region of shared destiny, harmony and development.
China Pakistan Economic Corridor is journey towards economic regionalization in the globalized
world. It founded peace, development, and win-win model for all of them. China Pakistan
Economic Corridor is hope of better region of the future with peace, development and growth of
economy.
The corridor, which involves a series of infrastructure projects linking the two countries, runs for
3,000 kilometres from Kashgar in western China to the port of Gwadar in Pakistan. Along the
corridor huge infrastructure projects, including roads, railways and power plants and an optical
cable fibre network are either being built or planned to be built which are largely funded by
Chinese capital and loans. The value of the corridor is currently estimated to be US$62 billion.
Details of the 231-page document developed by the China Development Bank and the National
Development Reform Commission of the PRC in 2015 on the Long Term Plan for the CPEC
were leaked by Pakistan newspaper the Dawn in May 2017. Significantly, one important point
highlighted by the Dawn report on the plan is how despite infrastructure project such as roads
and power plants being some of the most common associations with the CPEC, the plan contains
greater detail concerning agriculture projects suggesting that it is an additional key priority. This
includes many different aspects of agriculture from provision of seeds, fertilizer and pesticides,
operation of farms and processing facilities by Chinese enterprises, to logistics companies
operating storage and transportation for agricultural produce. It also seeks to make use of work
of the Xinjiang Production and Construction Corps, a state-owned enterprise and paramilitary
organization, to introduce mechanization, scientific techniques for livestock breeding,
development of hybrid varieties and precision irrigation to Pakistan. In addition to profitable
opportunities for Chinese enterprises, the plan also places emphasis on opportunities for the
Kashgar Prefecture within the Xinjiang Autonomous Zone. As an underdeveloped region in
China, the plan therefore seems to suggest that China intends the CPEC to aid in its development
strategy there.
Another important component of the CPEC is the Gwadar port, a deep-water sea port, which lies
at the end of the corridor and which although owned by the Pakistan government is being
operated by Chinese state-owned China Overseas Port Holding Company (COPHC). The port
was originally jointly developed by the Pakistan and Chinese government and inaugurated in
March 2007, however control was then handed to the Port of Singapore Authority (PSA) under a
40-year concession agreement. In 2013, reportedly following the failure of the PSA to expand
business, lack of agreed investment by the PSA due to security concerns in the region and the
Pakistan Navy’s failure to transfer land for the development of a free trade zone, the
concessional rights were transferred back to COPHC. A second phase of the port’s construction
is now underway as part of the CPEC. This second phase of expansion involves an expected
$1.02 billion dollars of contracts and involves the construction of nine new multipurpose berths
and other expansions to port infrastructure. This expansion is being financed by loans from
China’s state-owned banks.
Why is the port important?
The location of the port is strategically significant. Gwadar is located near to the Persian/Arabian
gulf and the Strait of Hormuz, through which significant percentages of the world’s petroleum
passes, and it has been suggested that the port will allow China to benefit from the shorter
transportation route for the transportation of oil and gas from gulf countries. This is something
which some Chinese media has attempted to downplay, claiming that benefit to China may be
limited due to the size of the port when compared to China’s demand for petroleum imports, and
instead emphasizing the development opportunities for Pakistan. Nevertheless given concerns
over energy security and the fact that its key existing route for the transportation of oil imports ,
the Straits of Malacca through which 80% of its oil are imported, are frequently patrolled by the
US and have the potential to be affected by territorial disputes in the South China Sea and there
is also increased surveillance by the Malacca Straits by India as it becomes more concerned
about China’s String of Pearls, the Gwadar port is therefore very strategic as it has the potential
to circumvent this problem if China’s energy imports are threatened thereby also potentially
reducing the likelihood of conflict between the US and China. Indeed there are further
geopolitical implications associated with closer China-Pakistan relations and OBOR, as the
CPEC itself has also been an additional source of tension with India due to territorial disputes in
the region which the corridor passes through.
A lot of the initial cargo handled by the newly expanded port is expected to consist of
construction materials for other CPEC projects. However, current projected traffic for the port is
far below original expectations in part because the roads that the CPEC is expected to build to
link it to industrial zones in China are not yet constructed. A free trade zone is also being
established in conjunction with the expanded port. In late 2015 COPHC leased 650 acres of land
to build and operate the free trade zone (as part of a total of 2,2,81 acres that Pakistan will
eventually provide to the company as part of this zone. The Gwadar Free Trade Zone will
provide an entry point for Chinese companies and products to enter Pakistan and in April 2016,
COPHC chairperson, Zhang Bozhong, said that the company would commit US$4.5 billion to
roads, power, hotel and infrastructure for the zone.
Overall, if it goes ahead as planned and is not too adversely affected by security issues and local
government delaying or restricting implementation, the CPEC therefore presents opportunities to
benefit China in the sense that it advances the interests and opportunities of Chinese capital as
well as China’s geopolitical influence more broadly. As far as Pakistan is concerned the picture
is less clear. Despite the emphasis on the potential benefits to Pakistan, promoted by both the
Chinese and Pakistan governments of the CPEC, the project has first of all been criticized for the
economic risks that it carries to Pakistan, and that it may risks leaving Pakistan trapped in debt
and dependency on China, as has become the case in some other countries such as Tajikistan.
According to the IMF, the CPEC project carries with it potentially serious repayment obligations
for Pakistan on loans from Chinese banks. Such repayments are expected to rise after 2021 and,
along with profit repatriation by Chinese investors, have the potential to be a burden if growth
generated by the CPEC is not enough to cover them, something which is far from guaranteed.
The CPEC has received a lot of criticism inside of Pakistan, both from those with nationalist
perspectives and from across the political spectrum from those raising genuine concerns about
the adverse impacts on ordinary people. Protests have occurred in some regions against the way
that the CPEC is being implemented by both the Pakistan government and China, with some
reportedly opposed to “Chinese imperialism”. Although some have suggested that CPEC may
potentially improve Pakistan’s economic growth and have positive outcomes, for instance
through allowing producers (such as fruit growers) from Pakistan to sell produce more easily in
China, concerns have also been raised that in reality impacts may bring few benefits to locals and
act as a drain on their resources. Fears both of displacement and destruction of farmlands from
which people make their livings represent key concerns. Around the Gwadar port there are also
concerns about the impact on the livelihoods of local fishermen and their potential displacement
to locations with inadequate amenities and facilities to accommodate all of them so that they can
maintain their current incomes. Meanwhile Gwadar city has also been suffering from a growing
water crisis which has left thousands without access to clean drinking water, as increasing
investment has put additional strain on the water resources that do exist. Some critics have also
observed that where the project has been presented as providing benefits in terms of local job
creation may not amount to so much if existing examples of Chinese investment in Pakistan are
considered since many of these largely rely on skilled labour imported from China.
As far as the environment is concerned, the construction of new coal power stations as a part of
the CPEC has been another reason for criticism of the CPEC. Although CPEC is often promoted
as a way to help aid Pakistan’s power problems, the way that this is done and the type of power
invested in might be seen as problematic. In another sign that the Chinese and Pakistan
governments are prioritizing CPEC investment projects over environmental sustainability, in
2016 when the Pakistan government imposed a ban on new power plants which would make use
of imported coal, projects mutually agreed by China and Pakistan or finalized under the CPEC
were reported to be exempt. Another issue involves the destruction of farmland and fragile
ecosystems to make way for the CPEC. Although new trees are being planted, tens of thousands
of mature trees have already reportedly been cut down from forests across Pakistan in
preparation for the construction of the Raikot-Islamabad highway, with the Pakistan
Environmental Protection Agency rejecting the initial Environmental Impact Assessment on the
grounds that it was unprofessional and lacked information about environmental costs.
Concerning all of these issues, a key complaint that has only heightened local fears relates to the
lack of transparency in the way that the project is being carried out. In this respect both Pakistan
and the Chinese governments have been criticized for failing to be transparent enough, and
makes full analysis of some of the likely costs and debts incurred to very difficult. According to
the Dawn newspaper, the only provincial level Pakistan government to receive a copy of the full
version of China’s long-term plan for the CPEC was the Punjab government, with other
provincial governments only receiving a 30 page shortened summary version which only
highlighted “areas of cooperation” and did not provide details. Again, in addition to the details
for the plan and the economic impacts, further concern has also been raised over government
measures to adequately monitor and report the impact on the environment. The fact that such an
extensive project which potentially has significant (adverse) impacts on Pakistan and the lives of
people living there is being implemented without proper disclosure and consultation involving
the peoples whose lives it effects is another reason to call China’s OBOR strategy into question.

Projects in CPEC
SR# Project Investment Status
1 Projects in Gwadar Port and City $1 billion Complete 2017
2 Gwadar Port Complex $4.5 billion 2030
3 Projects in Gwadar city $230 million 2021
Projects in Gwadar Port and City
Gwadar forms the crux of the CPEC project, as it is envisaged to be the link between China's
ambitious One Belt, One Road project, and its 21st Century Maritime Silk Road project. In total,
more than $1 billion worth of projects are to be developed around the port of Gwadar by
December 2017.
Gwadar Port Complex
Initial infrastructure works at Gwadar Port commenced in 2002 and were completed in 2007
however plans to upgrade and expand Gwadar's port stalled. Under CPEC agreement, Gwadar
Port will initially be expanded and upgraded to allow for docking of larger ships with
deadweight tonnage of up to 70,000. Improvement plans also include construction of a $130
million breakwater around the port, as well as the construction of a floating liquefied natural gas
facility that will have a capacity of 500 million cubic feet of liquefied natural gas per day and
will be connected to the Gwadar-Nawabshah segment of the Iran–Pakistan gas pipeline.
The expanded port is located near a 2,282-acre free trade area in Gwadar which is being
modelled on the lines of the Special Economic Zones of China. The swathe of land was handed
to the China Overseas Port Holding Company in November 2015 as part of a 43-year lease. The
site will include manufacturing zones, logistics hubs, warehouses, and display centres.
Businesses located in the zone would be exempt from customs authorities as well as many
provincial and federal taxes Business established in the special economic zone will be exempt
from Pakistani income, sales, and federal excise taxes for 23 years. Contractors and
subcontractors associated with China Overseas Port Holding Company will be exempted from
such taxes for 20 years, while a 40-year tax holiday will be granted for imports of equipment,
materials, plant/machinery, appliances and accessories that are to be for construction of Gwadar
Port and special economic zone.
The special economic zone will be completed in three phases. By 2025, it is envisaged that
manufacturing and processing industries will be developed, while further expansion of the zone
is intended to be complete by 2030. On 10 April 2016, Zhang Baozhong, chairman of China
Overseas Port Holding Company said in a conversation with The Washington Post that his
company planned to spend $4.5 billion on roads, power, hotels and other infrastructure for the
industrial zone as well as other projects in Gwadar city.
Projects in Gwadar city
China will grant Pakistan $230 million to construct a new international airport in Gwadar. The
provincial government of Balochistan has set aside 4000 acres for the construction of the new
$230 million Gwadar International Airport which will require an estimated 30 months for
construction, the costs of which are to be fully funded by grants from the Chinese government
which Pakistan will not be obliged to repay.
The city of Gwadar is further being developed by the construction of a 300MW coal power plant,
a desalinization plant, and a new 300 bed hospital. Plans for Gwadar city also include
construction of the East Bay Expressway – a 19 kilometer controlled-access road that will
connect Gwadar Port to the Makran Coastal Highway. These additional projects are estimated to
cost $800 million and are to be financed by 0% interest loans extended by the Exim Bank of
China to Pakistan.
In addition to the aforementioned infrastructure works, the Pakistani government announced in
September 2015 its intention to establish a training institute named Pak-China Technical and
Vocational Institute at Gwadar, which is to be developed by the Gwadar Port Authority at the
cost of 943 million rupees, and is designed to impart to local residents the skills required to
operate and work at the expanded Gwadar Port.

Roadway Projects
SR# Project Investment Status Distance
1 Karakoram Highway $1.2 Billion Complete 887 Km
2 Eastern Alignment $4 Billion Process 1152 Km
3 Western Alignment $1.05 Billion Process 620 Km

The CPEC project envisages major upgrades and overhauls to Pakistan's transportation
infrastructure. Under the CPEC project, China has announced financing for $10.63 billion worth
of transportation infrastructure so far; $6.1 billion have been allocated for constructing "Early
Harvest" roadway projects at an interest rate of 1.6 percent. The remainder of funds will be
allocated when the Pakistani government awards contracts for construction of road segments
which are still in the planning phase.
Three corridors have been identified for cargo transport: the Eastern Alignment through the
heavily populated provinces of Sindh and Punjab where most industries are located, the Western
Alignment through the less developed and more sparsely populated provinces of Khyber
Pakhtunkhwa and Balochistan, and the future Central Alignment which will pass through Khyber
Pakhtunkhwa, Punjab, and Balochistan
Karakoram Highway
The CPEC projects call for reconstruction and upgrade works on National Highway 35 (N-35),
which forms the Pakistani portion of the Karakoram Highway (KKH). The KKH spans the 887
kilometre long distance between the China-Pakistan border and the town of Burhan, near Hasan
Abdal. At Burhan, the existing M1 motorway will intersect the N-35 at the Shah Maqsood
Interchange. From there, access onwards to Islamabad and Lahore continues as part of the
existing M1 and M2 motorways. Burhan will also be at intersection of the Eastern Alignment,
and Western Alignment.
Upgrades to the 487 kilometer long section between Burhan and Raikot of the Karakoram
Highway are officially referred to in Pakistan as the Karakoram Highway Phase 2 project. At the
southern end of the N-35, works are already underway to construct a 59-kilometer-long, 4-lane
controlled-access highway between Burhan and Havelian which upon completion will be
officially referred to as the E-35 expressway. North of Havelian, the next 66 kilometres of road
will be upgraded to a 4-lane dual carriageway between Havelian and Shinkiari, Groundbreaking
on this portion commenced in April 2016.
The entire 354 kilometres of roadway north of Shinkiari and ending in Raikot, near Chilas will
be constructed as a 2-lane highway. Construction on the first section between Shinkiari and
Thakot commenced in April 2016 jointly with construction of the Havelian to Shinkiari 4-lane
dual carriageway further south. Construction on both these sections is expected to be completed
with 42 months at a cost of approximately $1.26 billion with 90% of funding to come from
China's EXIM bank in the form of low interest rate concessional loans.
Between Thakot and Raikot spans an area in which the government of Pakistan is currently
either planning or actively constructing several hydropower projects, most notably the Diamer-
Bhasha Dam and Dasu Dam. Sections of the N-35 around these projects will be completely
rebuilt in tandem with dam construction. In the interim, this section of the N-35 is currently
being upgraded from its current state until dam construction commences in full force at a later
date. Improvement projects on this section are expected to be completed by January 2017 at a
cost of approximately $72 million. The next 335 kilometres of roadway connect Raikot to the
China-Pakistan border. Reconstruction works on this section of roadway preceded the CPEC,
and were initiated after severe damage to roadways in the area following the 2010 Pakistan
floods. Most of this section of roadway was completed in September 2012 at a cost of $510
million.
A large earthquake rocked the region nearest to the China-Pakistan border in 2010, triggering
massive landslides which dammed the Indus River, resulting in the formation of the Attabad
Lake. Portions of the Karakoram Highway were submerged in the lake, forcing all vehicular
traffic onto barges to traverse the new reservoir. Construction on a 24 kilometre series of bridges
and tunnels to Attabad Lake began in 2012 and required 36 months for completion. The bypass
consists of 2 large bridges and 5 kilometres worth of tunnels that were inaugurated for public use
on 14 September 2015 at a cost of $275 million. The 175 kilometre road between Gilgit and
Skardu will be upgraded to a 4-lane road at a cost of $475 million to provide direct access to
Skardu from the N-35.
Eastern Alignment
The term Eastern Alignment of CPEC refers to roadway projects located in Sindh and Punjab
provinces – some of which were first envisioned in 1991. As part of the Eastern Alignment, a
1,152 km long motorway will connect Pakistan's two largest cities, Karachi and Lahore with 4 to
6-lane controlled access highway designed for travel speeds up to 120 kilometres per hour. The
entire project will cost approximately $6.6 billion, with the bulk of financing to be distributed by
various Chinese state-owned banks.
The entire Eastern Alignment motorway project is divided into four sections: a 136 kilometre
long section between Karachi and Hyderabad also known as the M9 motorway, a 345 kilometre
long section between Hyderabad and Sukkur, a 392 kilometre long section between Sukkur and
Multan, and a 333 kilometre section between Multan and Lahore via the town of Abdul Hakeem.
The first section of the project will provide high speed road access from the Port of Karachi to
the city of Hyderabad and interior Sindh. Upgrade and construction works on this section
currently known as Super Highway between Karachi and Hyderabad began in March 2015, and
will convert the road into the 4-lane controlled access M9 Motorway which will be completed in
an estimated 30 months. In February 2017, a completed 75 kilometre stretch of the motorway
was opened for public use by Prime Minister Nawaz Sharif.
At the terminus of the M9 motorway in Hyderabad, the Karachi-Lahore Motorway will continue
onwards to Sukkur as a six lane controlled-access motorway known also as M6 motorway that
will be 345 kilometers long, The planned cost for this project is $1.7 billion, and will provide
high speed road access to interior Sindh – especially near the towns of Matiari, Nawabshah, and
Khairpur. The project will require the construction of seven interchanges, and 25 bridges on the
Indus river and irrigation canals. The planned route of the motorway runs roughly parallel to the
existing National Highway and Indus Highway at various portions. In July 2016, the Pakistani
government announced that the project would be open to international bidders on a build-
operate-transfer basis, with Chinese and South Korean companies expressing interest in the
project.
The 392 kilometre Sukkur to Multan section of the motorway is estimated to cost $2.89 billion,
with construction works inaugurated on this section of roadway on 6 May 2016. The road will be
a six lane wide controlled access highway, with 11 planned interchanges, 10 rest facilities, 492
underpasses, and 54 bridges along its route. The Pakistani government in January 2016 awarded
the contract to build this section to China State Construction Engineering, but final approvals
required for disbursement of funds were not granted by the Government of the People's Republic
of China until May 2016. 90% of the project's cost is to be financed by concessionary loans from
China, with the remaining 10% to be financed by the government of Pakistan. Construction on
this segment is expected to last 36 months.
Construction of the portion between Multan and Lahore costing approximately $1.5 billion was
launched in November 2015 as a joint venture between the China Railway Construction
Corporation Limited and Pakistan's Zahir Khan and Brothers Engineers. The total length of this
motorway section is 333 kilometres; however, the first 102 kilometres of the road between
Khanewal and Abdul Hakeem is designed as part of the M4 Motorway, and is being funded by
the Asian Development Bank. The portion of motorway between Abdul Hakeem and Lahore that
is under construction as part of CPEC will consist of the remaining 231 kilometers.
Western Alignment
The CPEC project envisages an expanded and upgraded road network in the Pakistani provinces
of Balochistan, Khyber Pakhtunkhwa, and western Punjab Province as part of the Western
Alignment. The Western Alignment project will result in the upgrading of several hundred
kilometres worth of road into 2 and 4-lane divided highways by mid-2018, with land acquisition
sufficient for upgrading parts of the road to a 6-lane motorway in the future. In total, the CPEC
project envisages re-construction of 870 kilometres of road in Balochistan province alone as part
of the Western Alignment. Of those 870 kilometres of road, 620 kilometres have already been
rebuilt as of January 2016.
The Western Alignment roadway network will begin at the Barahma Bahtar Interchange on the
M1 Motorway near the towns of Burhan and Hasan Abdal in northern Punjab province. The
newly reconstructed Karakoram Highway will connect to the Western Alignment at Burhan, near
where the new 285-kilometre-long controlled-access Brahma Bahtar-Yarik Motorway will
commence. The motorway will terminate near the town of Yarik, just north of Dera Ismail Khan.
Groundbreaking for the project took place on 17 May 2016. The motorway will traverse the
Sindh Sagar Doab region, and cross the Indus River at Mianwali before entering into Khyber
Pakhtunkhwa province. It will consist of 11 interchanges, 74 culverts, and 3 major bridges
spanning the Indus, Soan, and Kurram Rivers. Total costs for the project are expected to be $1.05
billion.
At the southern terminus of the new Brahma Bahtar-Yarik motorway, the N50 National Highway
will also be upgraded between Dera Ismail Khan in Khyber Pakhtunkhwa and Zhob in
neighbouring Balochistan province, with eventual reconstruction between Zhob and Quetta. The
upgraded roadway will consist of a 4 lane dual-carriageway spanning the 205 kilometre distance
between the two cities. The first portion of the N50 to be upgraded will be the 81 kilometre
portion of the N50 between Zhob and Mughal Kot, with construction works having begun in
January 2016. Construction on this portion is expected to be completed by 2018 at a cost of $86
million. While the project is considered a vital link in the CPEC's Western Alignment, the
project's cost will not be financed by Chinese state-owned banks, but instead by Asian
Development Bank under a 2014 agreement which preceded CPEC, as well as by a grant
provided by the United Kingdom's Department for International Development
Railway Projects
SR# Project Investment Status Distance
1 Main Line 1 8.2 Billion 2021 1687 Km
2 Main Line 2 2 Billion 2021 1254 Km
3 Main Line 3 1.02 Billion 2025 560 Km
4 Lahore Metro 1.6 Billion Complete 2017 27.1 Km
5 Khunjerab Railway 12 Billion 2030 682 Km

The CPEC project emphasises major upgrades to Pakistan's ageing railway system, including
rebuilding of the entire Main Line 1 railway between Karachi and Peshawar by 2020; this single
railway currently handles 70% of Pakistan Railways traffic. In addition to the Main Line 1
railway, upgrades and expansions are slated for the Main Line 2 railway, Main Line 3 railway.
The CPEC plan also calls for completion of a rail link over the 4,693-meter high Khunjerab Pass.
The railway will provide direct access for Chinese and East Asian goods to Pakistani seaports at
Karachi and Gwadar by 2030.
Procurement of an initial 250 new passenger coaches, and reconstruction of 21 train stations are
also planned as part of the first phase of the project bringing the total investment in Pakistan's
railway system to approximately $5 billion by the end of 2019. 180 of the coaches are to be built
at the Pakistan Railways Carriage Factory near Islamabad, while the Government of Pakistan
intends to procure an additional 800 coaches at a later date, with the intention of building 595 of
those coaches in Pakistan.
In September 2018, the new government led by Prime Minister Imran Khan reduced the Chinese
investment in railways by $2 billion to $6.2 billion because of financing burdens
Main Line 1
The CPEC "Early Harvest" plan includes a complete overhaul of the 1,687 kilometre long Main
Line 1 railway (ML-1) between Karachi and Peshawar at a cost of $3.65 billion for the first
phase of the project, with the first phase expected to be completed by December 2017. In June
2016, China and Pakistan unveiled plans for the second phase of the project, with a total cost of
$8.2 billion for both phases of the project. The second phase of the ML-1 overhaul project is
expected to be completed in 2021.
Upgrading of the railway line will permit train travel at speeds of 160 kilometres per hour, versus
the average 60 to 105 km per hour speed currently possible on existing track, and is expected to
increase Pakistan Railways' annual revenues by approximately $480 million. The upgrades are
also expected to cut transit times from Karachi to Peshawar by half. Pakistani railways currently
account for 4% of freight traffic in the country, and upon completion of CPEC, Pakistani
railways are expected to transport 20% of the country's freight traffic by 2025.
The first part of the expedited first phase of the project will focus on upgrading the Multan to
Peshawar section, which will then be followed by the Hyderabad to Multan section, and finally
by the Hyderabad to Karachi section.
At the time of CPEC's announcement, the ML-1 consisted of mostly dual track railway between
Karachi, and the Lahore suburb of Shahdara, with long stretches of single track. From Shahdara,
the track mainly consisted of a single track until the city Peshawar. Construction works to
dualize the entire track between Karachi to Shahdara were completed and inaugurated in January
2016. As part of the first phase of the CPEC railway project, the remaining stretch of track
between Shahdara and Peshawar is to upgraded to a dual track railway.
The 676 kilometer portion between Lalamusa, north of Lahore, and Peshawar will require
complete reconstruction with the addition of tunnels, culverts, and bridges, while over 900
kilometers south of Lalamusa towards Karachi will be upgraded to handle cars with a 25-ton axle
load capacity. A spur from Taxila to Havelian will also be constructed, with a dry port to be
established near the city of Havelian. Further, the entire length of track will have computerised
signal systems, with stretches of track in urban areas to also be fenced off to prevent pedestrians
and vehicles from crossing tracks in unauthorised areas.
Main Line 2
In addition to upgrading the ML-1, the CPEC project also calls for similar major upgrade on the
1,254 kilometre long Main Line 2 (ML-2) railway between Kotri in Sindh province, and Attock
in northern Punjab province via the cities of Larkana and Dera Ghazi Khan. The route towards
northern Pakistan roughly parallels the Indus River, as opposed to the ML-1 which takes a more
eastward course towards Lahore. The project also includes a plan to connect Gwadar, to the town
of Jacobabad, Sindh which lies at the intersection of the ML-2 and ML-3 railways.
Main Line 3
Medium term plans for the Main Line 3 (ML-3) railway line will also include construction of a
560 kilometer long railway line between Bostan near Quetta, to Kotla Jam in Bhakkar District
near the city of Dera Ismail Khan, which will provide access to southern Afghanistan. The
railway route will pass through the city of Quetta and Zhob before terminating in Kotla Jam, and
is expected to be constructed by 2025.
Lahore Metro
The $1.6 billion Orange Line of the Lahore Metro is under construction and is regarded as a
commercial project under CPEC. Construction on the line has already begun, with initial planned
completion by Winter 2017 however this has now been delayed to end of 2018. The line will be
27.1-kilometre (16.8 mi) long, of which 25.4 kilometres (15.8 mi) will be elevated, with the
remaining portion to be underground between Jain Mandir and Lakshmi Chowk. When
complete, the project will have the capacity to transport 250,000 commuters per day, with plans
to increase capacity to 500,000 commuters per day by 2025.
Khunjerab Railway
Longer term projects under CPEC also call for construction of the 682 kilometre long Khunjerab
Railway line between the city of Havelian, to the Khunjerab Pass on the Chinese border, with
extension to China's Lanxin Railway in Kashgar, Xinjiang. The railway will roughly parallel the
Karakoram Highway, and is expected to be complete in 2030.
The cost of the entire project is estimated to be approximately $12 billion, and will require 5
years for completion. A 300 million rupee study to establish final feasibility of constructing the
rail line between Havelian and the Chinese border is already underway. A preliminary feasibility
study was completed in 2008 by the Austrian engineering firm TBAC.
However the construction of the Khunjerab Railway line was not mentioned in the CPEC Long
Term Plan from 2017-2030 released jointly by China and Pakistan in 2017.

Energy Sector Projects

Pakistan's current energy generating capacity is 24,830 MW, Energy generation will be a major
focus of the CPEC project, with approximately $33 billion expected to be invested in this sector.
An estimated 10,400 MW of electricity are slated for generation by March 2018 as part of
CPEC's "Early Harvest" projects.
The energy projects under CPEC will be constructed by private Independent Power Producers,
rather than by the governments of either China or Pakistan. The Exim Bank of China will finance
these private investments at 5–6% interest rates, while the government of Pakistan will be
contractually obliged to purchase electricity from those firms at pre-negotiated rates
Renewable-Energy
In March 2018, Pakistan announced that hydropower projects would be prioritized following the
completion of under-construction power plants. Pakistan aims to produce 25% of its electricity
requirements by renewable energy resources by 2030. China's Zonergy company will complete
construction on the world's largest solar power plant the 6,500 acre Quaid-e-Azam Solar Park
near the city of Bahawalpur with an estimated capacity of 1000MW is expected to be completed
in December 2016. The first phase of the project has been completed by Xinjiang SunOasis, and
has a generating capacity of 100 MW. The remaining 900 MW capacity will be installed by
Zonergy under CPEC.
The Jhimpir Wind Power Plant, built by the Turkish company Zorlu Enerji has already begun to
sell 56.4 MW of electricity to the government of Pakistan, though under CPEC, another 250MW
of electricity are to be produced by the Chinese-Pakistan consortium United Energy Pakistan and
others at a cost of $659 million. Another wind farm, the Dawood wind power project is under
development by HydroChina at a cost of $115 million, and will generate 50 MW of electricity by
August 2016.
SK Hydro Consortium is constructing the 870 MW Suki Kinari Hydropower Project in the
Kaghan Valley of Pakistan's Khyber Pakhtunkhwa province at a cost of $1.8 billion, SK Hydro
will construct the project with financing by China's EXIM bank.
The $1.6 billion 720 MW Karot Dam which is under construction is part of the CPEC plan, but is
to be financed separately by China's Silk Road Fund.
Pakistan and China have also discussed the inclusion of the 4,500MW $14 billion Diamer-
Bhasha Dam as part of the CPEC project,[175] though as of December 2015, no firm decision
has been made – though Pakistani officials remain optimistic at its eventual inclusion.[176] On
14 November 2017, Pakistan dropped its bid to have Diamer-Bhasha Dam financed under the
CPEC framework.
The $2.4 billion, 1,100 MW Kohala Hydropower Project being constructed by China's Three
Gorges Corporation predates the announcement of CPEC, though funding for the project will
now come from CPEC fund
Coal
Despite several renewable energy projects, the bulk of new energy generation capacity under
CPEC will be coal-based plants, with $5.8 billion worth of coal power projects expected to be
completed by early 2019 as part of the CPEC's "Early Harvest" projects.
Balochistan
In Balochistan province, a $970 million coal power plant at Hub, near Karachi, with a capacity
of 660MW to be built by a joint consortium of China's China Power Investment Corporation and
the Pakistani firm Hub Power Company as part of a larger $2 billion project to produce
1,320MW from coal.
A 300MW coal power plant is also being developed in the city of Gwadar, and is being financed
by a 0% interest loan.
Punjab
The $1.8 billion Sahiwal Coal Power Project, in full operation since 3 July 2017, is a project in
central Punjab that has a capacity of 1,320MW. It was built by a joint venture of two Chinese
firms: the Huaneng Shandong company and Shandong Ruyi, who will jointly own and operate
the plant. Pakistan will purchase electricity from the consortium at a tariff of 8.36 US cents/kWh.
The $589 million project to establish a coal mine and a relatively small 300MW coal power plant
to be built in the town of Pind Dadan Khan by China Machinery Engineering Corporation in
Punjab's Salt Range. Pakistan's NEPRA has been criticized for considering a relatively high tariff
of 11.57 US cents/kWH proposed by the Chinese firm, which had been initially agreed at 8.25
US cents/kWH in 2014. The Chinese firm argued that coal transportation costs had greatly
increased due to the nonavailability of coal from nearby mines which had initially been regarded
as the primary coal source for the project. The company argued that coal would instead have to
be transported from distant Sindh province, which along with inefficiencies in mining
procedures, increased the cost of fuel by 30.5%.
Sindh
The Shanghai Electric company of China will construct two 660MW power plants as part of the
"Thar-I" project in the Thar coalfield of Sindh province, while "Thar-ll" will be developed by a
separate consortium. The facility will be powered by locally sourced coal, and is expected to be
put into commercial use in 2018. Pakistan's National Electric Power Regulatory Authority
(NEPRA) has agreed to purchase electricity from both Thar-l and Thar-ll at a tariff of 8.50 US
cents/kWh for the first 330 MW of electricity, 8.33 US cents/kWh for the next 660 MW, and
7.99 US cents/kWh for the next 1,099 MW as further phases are developed.
Near the Thar-I Project, the China Machinery Engineering Corporation in conjunction with
Pakistan's Engro Corporation will construct two 330MW power plants as part of the "Thar-ll
Project" (having initially proposed the simultaneous construction of two 660MW power plants)
as well as developing a coal mine capable of producing up to 3.8 million tons of coal per year as
part of the first phase of the project." The first phase is expected to be complete by early 2019, at
a cost of $1.95 billion. Subsequent phases will eventually generate an additional 3,960MW of
electricity over the course of ten years. As part of infrastructure required for electricity
distribution from the Thar l and ll Projects, the $2.1 billion Matiari to Lahore Transmission Line,
and $1.5 billion in Matiari to Faisalabad transmission line are also to be built as part of the CPEC
project.
The 1,320MW $2.08 billion Pakistan Port Qasim Power Project near Port Qasim will be a joint
venture of Al-Mirqab Capital from Qatar, and China's Power Construction Corporation – a
subsidiary of Sinohydro Resources Limited. Pakistan's NEPRA and SinoHydro agreed to set the
levelized tariff for electricity purchased from the consortium at 8.12 US cents/kWh. The first 660
MW reactor was commissioned in November 2017.
Liquified Natural Gas
Liquefied natural gas power LNG projects are also considered vital to CPEC. The Chinese
government has announced its intention to build a $2.5 billion 711 kilometre gas pipeline from
Gwadar to Nawabshah in province as part of CPEC. The pipeline is designed to be a part of the
2,775 kilometre long Iran–Pakistan gas pipeline, with the 80 kilometre portion between Gwadar
and the Iranian border to be connected when sanctions against Tehran are eased; Iran has already
completed a 900 kilometre long portion of the pipeline on its side of the border.
The Pakistani portion of the pipeline is to be constructed by the state-owned China Petroleum
Pipeline Bureau. It will be 42 inches in diameter, and have the capacity to transport 1 billion
cubic feet of liquified natural gas every day, with an additional 500 million cubic feet of
additional capacity when the planned off-shore LNG terminal is also completed The project will
not only provide gas exporters with access to the Pakistani market, but will also allow China to
secure a route for its own imports.
The project should not be confused with the $2 billion 1,100 kilometre North-South Pipeline
liquified natural gas pipeline which is to be constructed with Russian assistance between Karachi
and Lahore with anticipated completion by 2018. Nor should it be confused with the planned
$7.5 billion TAPI Pipeline which is a planned project involving Turkmenistan, Afghanistan,
Pakistan, and India.
Other LNG projects are currently under construction with Chinese assistance and financing that
will augment the scope of CPEC, but are neither funded by nor officially considered a part of
CPEC. The 1,223MW Balloki Power Plant is currently under construction near Kasur, and is
being constructed by China's Harbin Electric Company with financing from the China's EXIM
bank, is one such example. In October 2015, Prime Minister Nawaz Sharif also inaugurated
construction of the 1,180MW Bhikhi Power Plant near Sheikhupura,[205] which is to be jointly
constructed by China's Harbin Electric Company and General Electric from the United States.It
is expected to be Pakistan's most efficient power plant, and will provide enough power for an
estimated 6 million homes.
"Early Harvest" Projects
As part of the "Early Harvest" scheme of the CPEC, over 10,000 megawatts of electricity-
generating capacity is to be developed between 2018 and 2020. While some "Early Harvest"
projects will not be complete until 2020, the government of Pakistan plans to add approximately
10,000 MW of energy-generating capacity to Pakistan's electric grid by 2018 through the
completion of projects which complement CPEC.
Although not officially under the scope of CPEC, the 1,223 MW Balloki Power Plant, and the
1,180 MW Bhakki powerplants are also under construction, which along with the under-
construction 969 MW Neelum–Jhelum Hydropower Plant and 1,410 MW Tarbela IV Extension
Project, competed in February 2018, will result in an additional 10,000 MW being added to
Pakistan's electricity grid by the end of 2018 with a combination of CPEC and non-CPEC
projects. A further 1,000 MW of electricity will be imported to Pakistan from Tajikistan and
Kyrgyzstan as part of the CASA-1000 project, which is expected to be launched in 2018.
Some Other Details of Projects
Early Harvest Energy Capacity Location
Projects

Pakistan Port Qasim Power 1,320 MW (2 x 660 MW plants) Sindh

Project

Thar-l Project 1,320 MW (4 x 330 MW plants) Sindh

Thar-II Project and coal mine 1,320 MW (2 x 660 MW plants) Sindh

Sahiwal Coal Power Project 1,320 MW (2 x 660 MW plants) Punjab

Rahimyar Khan coal power 1,320 MW (2 x 660 MW plants) Punjab

project

Quiad-e-Azam Solar Park 1,000 MW Punjab

 Suki Kinari Hydropower project 870 MW (expected completion in Khyber
2020)[212] Pakhtunkhwa

Karot Hydropower Project 720 MW (expected completion in Punjab

2020)[213]

China Power Hub Generation 2X660 MW Balochistan

Company

Thar Engro coal Power Projects 660 MW (2 x 330 MW plants) Sindh

Gwadar coal power project 300 MW Balochistan

UEP Windfarm 100 MW Sindh

Dawood Wind Power Project 50 MW Sindh

Sachal Windfarm 50 MW Sindh

Sunnec Windfarm 50 MW Sindh

Matiari to Faisalabad 660 kilovolt Sindh and Punjab

transmission line

Matiari To Lahore Transmission 660 kilovolt Sindh and Punjab

Line

Investment in CPEC of China

The CPEC is an ongoing development mega project which aims to connect Gwadar Port of
Pakistan to China’s northwestern region of Xinjiang, via a network of highways, railways and
pipelines. The economic corridor is considered central to China–Pakistan relations and will run
about 2700 km from Gwadar to Kashghar.
China-Pakistan Economic Corridor and its connectivity with Central Asia, Middle East and
Africa will help to shape entire region. Overall construction costs are estimated around $46
billion, with the entire project expected to be completed in several years.
The Corridor is an extension of China’s proposed 21st century Silk Road initiative. This is the
biggest overseas investment by China announced so far and the corridor is expected to be
operational within three years. The corridor will be a strategic game changer in the region and
would go a long way in making Pakistan a richer and stronger entity.
The investment on the corridor will transform Pakistan into a regional economic hub. The
corridor will be a confidence booster for investors and attract investment not only from China
but other parts of the world as well. Other than transportation infrastructure, the economic
corridor will provide Pakistan with telecommunications and energy infrastructure.
MAIN COMPONENTS OF CORRIDOR
A. Gwadar (including port and city and Gwadar region socio-economic development)
B. Energy (Coal, Hydel, Wind, Solar, LNG, Transmission)
C. Transport Infrastructure (Road, Rail, Aviation)
D. Investment & Industrial Cooperation (Gwadar Free Zone and other industrial parks to be
finalized)
E. Any other area of interest mutually agreed
Table given below summarizes the number of projects identified so far along with estimated cost
under CPEC:
Sr. No. Sector No. of Projects Estimated Cost (Million
$)

01 Energy 21 33,793

02 Transport Infrastructure 4 9,784

03 Gwadar 8 792.62

DIVERSE INVESTMENT OPPORTUNITIES

i. Industrial Cooperation
ii. Financial Cooperation
iii. Agricultural Cooperation
iv. Tourism
v. Educational linkage
vi. Human resource development
vii. Health Care
viii. People to people contact
ix. Increase in livelihood opportunities
x. Enhance Security and stability of the region
INDUSTRIAL COOPERATION UNDER CPEC
BOI is an active member of working group on Industrial parks/ special economic zones of the
CPEC which is mandated to identify potential feasible sites for consideration by Joint Working
Group. BOI, in consultation with all stakeholders, has identified potential sites in all provinces
from Khunjrab to Gwadar to establish Special Economic Zones alongside the corridor. Each
economic zone will target specific products and services based on the availability of local raw
material, work force and other such factors. Establishment of these zones will attract local &
foreign investments and generate huge employment.

Benefits for Pakistan and China

CPEC is a flagship project of Chinese leadership’s overarching initiative of One Belt One Road
and envisions connecting Kashgar City with Gwadar Deep Sea Port through highways, railways
and pipelines.
What makes this corridor unique is the fact that it affords the vital link between Eurasian land
routes and maritime silk routes envisaged under OBOR. Therefore, Pakistan serves as an
International Interchange enabling us a great strategic advantage to be the hub for international
trade and integration of economies of Asia, Africa and Europe. This geo strategic advantage
needs to be harnessed on the basis of mutuality of interests to translate into geo economic gains.
Strategic and Economic Context
Gwadar Port is the cornerstone of the whole gambit and Gateway to South West and Central
Asia with its strategic significance extending from Persian Gulf through the Indian Ocean to
South East Asia and the Far East. Almost 35 to 40% of sea borne oil shipment transits through
Strait of Harmuz. Gwadar located at cross roads of three sub regional systems, bridges the gap
for transportation of this vital source of energy. Therefore, it retains fundamental role in the
future economic prospects of about 20 countries of Central Asia, South Asia and China by
providing economically viable, cost effective and shortest route for transit and supply.
The corridor will reduce sea land route distance between Europe and Western China to less than
half. A trial was conducted last year for transportation of containers from Beijing to Gwadar and
Karachi through Sea Route as well as Land Route through Khunjrab. Transportation through
land route took almost half the time with approximate saving of 7 to 14 Cents per Kg that
translates into savings of Billions of Dollars per annum.

Strategic and Economic Gains for Pakistan & China

CPEC is a classic manifestation of convergence of geo strategic and geo economic interests of
the two countries with socio-economic and diplomatic relations fostered through vicissitudes of
time. While complementarity of the economies would serve the economic interests of the two
states, development of mutually beneficial infrastructure will further harmonize the efforts to
counter common adversaries. Envisaged advantages and gains for the two sides are as under
China
i. Economic development of relatively backward Western Regions especially Xinjiang will
bring peace and stability facilitating trade with Central Asia to meet the growing energy
needs.
ii. CPEC would afford China shortest access to its markets in Asia, Europe and beyond. Use
of Gwadar Port will facilitate trade from Persian Gulf and Africa to Western and
Northern China reducing the distance by several thousand kilometres (almost 12500 Km)
and slashing the cost by Billions of Dollars.
iii. Almost 80% of China’s oil is currently transported from Strait of Malacca to Shinghai.
Transportation time of oil imports from the Middle East and Africa will be reduced from
over 30 days to just 2 days after completion of pipeline projects and will not be
dependent on shipping through Straits of Malacca and the vulnerable maritime routes.
Besides economic factor, presence in Gwadar is of great strategic value for China and
would be a great strategic advantage in case of war in Asia and blockade of Strait of
Malacca.
iv. For the Chinese investors, Pakistan has lot to offer in multiple sectors because of low
labor cost.
Pakistan
i. In the strategic context, CPEC conforms to Pakistan’s security paradigm and “Look East”
policy and will serve towards furtherance of strategic partnership.
ii. Located at the crossroads of huge supplying and communicating markets, fully functional
Gwadar Port linked with China and Central Asia can play a vital role in economic revival
of Pakistan.
iii. It also affords us great opportunity for socio-economic development of GB and
Balochistan Province.
iv. Pakistan would benefit through investment from China for development of requisite
infrastructure and to bridge energy shortfall. This will help Pakistan in realizing the
potential to become a regional trade hub and energy corridor thereby bringing huge
transit revenues and employment opportunities.
v. Even the conservative estimates show projected possible revenues of over 100 Billion US
Dollars on account of transit revenue per annum in long term besides creating
employment opportunities in hundreds of thousands.
vi. With 95% of Pakistan’s trade through sea and economy heavily dependent on sea trade,
development of Gwadar Port and its connectivity is of extreme significance to reduce
load on Karachi and Bin Qasim ports for furtherance of Pakistan’s Sea borne trade.
Key Imperatives for Pakistan
Having seen the immense potential; what should be our focus to make the most of this
opportunity for seeking sustained economic development and securing our socio-economic
future; Improvement and development of requisite infrastructure is absolutely essential. Key
imperatives in this context are: -
 a. Regional connectivity by linking major ports of the country with trade routes through
highways, railways and oil pipelines.
b. Development of world class efficient Logistic Chain and Infrastructure and Trade
Facilitation.
c. Development of Special Economic Industrial Zones and Transit Facilities along the
Corridor.
d. Increasing oil storages connected through pipelines.
e. Water and Hydro Power Development including mega dams on Indus Cascade coupled
with medium sized HPPs.
f. Exploration and development of mineral resources to fund the economic program.
g. Last, but not the least is development of skilled Human Resource.
Pursuits and Initiatives by FWO to Exploit Opportunities Afforded by CPEC
FWO, being the leading infrastructure development organization of Pakistan, is cognizant of its
responsibilities. Besides implementation of CPEC projects entrusted by the Govt, FWO has
conceived and planned projects of immense national significance to optimally capitalize on the
enormous opportunities through Public Private Partnership and Built, Operate and Transfer
Regime. Pursuits and initiatives of FWO in the context of CPEC are covered in ensuing
paragraphs.
Road Infrastructure
a. FWO is maintaining Karakoram Highway since its construction in 1978. However,
capacity has been enhanced to keep the Khunjrab Pass opened during winters for
ensuring round the year functionality of CPEC
b. Road Jalkhad - Chilas was completed last year and now Road Kaghan - Jakhad - Chilas
serves as an alternate route for vulnerable portion of KKH
c. Down from Northern Areas, FWO is playing a central role in development of Western
and Eastern Routes of CPEC.
d. Along the Western Route, the most arduous and challenging portions and missing links in
Baluchistan have been constructed by FWO where almost 900 Kms of roads have been
completed in record time of 2 years against envisaged time frame of 6 years.
e. Completion of these projects have linked Gwadar with China through KKH and
Afghanistan and Central Asia through Chaman and Torkham.
f. Western Route has been further connected with Afghanistan at Ghulam Khan and Angoor
Adda through development of Central Trade Corridor in FATA last year.
g. FWO is also developing one package of Hakla - D I Khan Motorway that constitutes part
of CPEC Western Route.
h. Along Eastern Route of CPEC, Lahore - Islamabad Motorway has been rehabilitated and
modernized by FWO on BOT Basis while 75 Kms portion of Karachi - Hyderabad
Motorway has also been completed and inaugurated and remaining portion shall be
completed by August this year.
Pilot Project Trade Convoy
Completion of missing portions of Western Route in Balochistan by FWO last year enabled
organization of first ever mega trade convoy from Kashgar to Gwadar. The historic event marked
the founding of 21th Century Maritime Silk Trade Route and has set in stone the actualization of
CPEC. This pilot project was a water shed event that validated the viability of Economic
Corridor and shall prove to be a catalyst for operationalization of CPEC. The event has further
helped in identification of certain inadequacies in legal framework for transit trade and logistic
infrastructure from futuristic perspective which are being addressed.
Railway Infrastructure
a. As for Railway Infrastructure, FWO is working in close harmony with Pakistan Railways
and Chinese Firms for development of Pakistan - China Dedicated Freight Corridor along
ML-2 on BOT Basis to carry anticipated freight traffic of 80 Million Tons per annum.
b. In a phased undertaking, the corridor will extend from Karachi and Gwadar to Kashagar,
which would eventually link GCC Railway Network and New Eurasion Bridge.
c. FWO has also proposed upgradation of ML-I and ML-3 besides development of Kashmir
Railway that can also be subsequently linked with China.

Petroleum / Oil Sector Infrastructure / Projects

In order to contribute to the needs of Petrolueum Sector, FWO has planned and proposed various
projects.
a. First project is development of Oil Village along M-2 with a capacity of 50,000 MT.
Work on this project has already commenced. Project to connect the Oil Village with Bin
Qasim Port through White Oil Pipeline is in advanced stages of approval. The Pipeline
shall also be further extended to Tarujaba in KPK where 35000 MT storage facility shall
be developed. In future, this pipeline would be extended to Afghanistan and Central Asia.
b. Other mega project is Gwadar - Kashgar Cross Country Oil Pipeline on Design, Build,
Finance, Own and Operate Basis. This oil pipeline shall reduce the distance between
Persian Gulf to Western China by over 7000 Kilometers ensuing huge saving in time and
cost of transportation of Oil.
c. An Oil Refinery is also being established in KPK.
Energy and Water Sector Projects
a. FWO is currently undertaking Kurram Tangi Dam in FATA and Jagran-II HPP in
Kashmir while 3 x HPPs in Chitral and Mohmand Dam have been awarded to FWO
which shall be developed on BOOT Basis.
b. FWO has planned and proposed development of Indus Cascade on BOOT Basis in Joint
Venture with various Chinese Firms to harness water and power potential. Proposals are
at various stages of approval with the Government.
Miscellaneous Infrastructure Including Transit Facilities
a. A comprehensive plan has been formulated for development of Industrial Zones, Smart
Cities and direly needed logistic infrastructure along M-2, M-9 and Pakistan - China
Dedicated Freight Corridor.
b. Accordingly, number of Smart Cities, Industrial Zones, Container Terminals, Grain and
Fuel Storage Facilities and Ware Houses etcetera are planned along the Motorways.
Similarly, 8 x Smart Cities, 10 x Oil Storage Facilities, 10 x Industrial Zones and 15 x
Dry Ports are planned along Freight Corridor.

Exploration / Development of Mineral Potential

In order to exploit enormous mineral potential, a special ‘Mine Exploration and Development
Organization’ was created in FWO during 2015 and pilot project in FATA has been successfully
completed. Requisite technical expertize has been developed to undertake strategic mining.
Human Resource Development
FWO is presently managing the country’s best Technical Training Institute (CTTI). Realizing the
requirement of huge technical and skilled workforce encompassing an entire spectrum of skill
industry at implementation tier, General and Technical Education System (GATES) institutes are
being developed along CPEC routes. On the request of KP Govt, FWO is in the process of taking
over non functional technical institutes of KP to manage them and organize training in line with
modern day requirement as part of Corporate Social Responsibility. Moreover, National
University of Technology and Skills Development (NUTECH) has been conceptualized and
being established with its constituent institutes all along the corridor especially in remotest parts
to train and prepare our youth. The university will introduce the concept of basic to higher
education in the field of technology and skills development for the first time in Pakistan.

Conclusion
CPEC is a win win synergy for both the nations and the region. It is a rare opportunity for
Pakistan to realize its true strategic and economic potential. FWO in its capacity is vigorously
pursuing multi sectoral initiatives in sync with our socio-economic imperatives. This of course, if
not gigantic, is at least a colossal undertaking requiring the private sector and financial
institutions to come forward and join hands for expeditious implementation.