China seeks additional guarantees before sanctioning USD 6 billion loan for rail project in Pakistan
Islamabad, Dec 23: China has sought additional guarantees before sanctioning a USD 6-billion loan for the Main Line-1 (ML-1) railway line project in Pakistan, due to the country's weakening financial position, according to a media report on Wednesday.
China has also proposed a mix of commercial and concessional loans to fund the rail project, going against Islamabad's wishes of 'cheapest lending'.
The issue of additional guarantees was raised during the third joint ML-1 Financing Committee Meeting held ten days ago (December 13), The Express Tribune newspaper reported, quoting official documents.
A senior Pakistani official involved in the negotiations said China raised the additional guarantees issue during the meeting but did not make it part of the draft of minutes shared with Pakistan.
The draft minutes have not yet been signed by both the countries.
The ML-1 project includes dualisation and upgrading of the 1,872-km railway track from Peshawar to Karachi and is a major milestone for the second phase of the China-Pakistan Economic Corridor (CPEC).
The official said China raised the additional guarantees issue to get clarity over Pakistan's financial condition after it applied for debt relief from the G-20 countries, which is only meant for the world's poorest nations.
The third round of financial negotiations gave further clarity on the Chinese position on USD6 billion lending for the USD6.8 billion strategically important ML-1 project of Pakistan Railways, sources in the Ministry of Economic Affairs said.
As part of debt relief from G-20 countries, Pakistan cannot secure expensive commercial loans, except those allowed under the International Monetary Fund and World Bank framework.
The Chinese authorities have proposed that "keeping in view the financial situation in Pakistan so also the conditions laid down by the G-20 regulations for debt suspension, the government of Pakistan may provide additional guarantee mechanism for the loan other than sovereign loan for the ML-1 project", according to officials privy to the negotiations.
It was surprising for us when China raised the issue of additional guarantees during the meeting, another senior Pakistani official who was part of the meeting said.
In August this year, the Executive Committee of National Economic Council (ECNEC) approved the strategically important ML-1 project worth USD 6.8 billion.
The ECNEC meeting had continued for hardly 20 minutes, leaving many critical issues about financing and technical details unresolved.
Both the sides have reached broad-based consensus on the technical parameters, including bidding documents, according to deliberations that took place in the joint bilateral third financial and seventh technical committee of ML-1 project.
But an early start of construction work on what the official described as strategically important project is unlikely after China linked the civil works with prior finalisation of financing mechanism of the single-largest project of the CPEC.
Unlike Pakistan's expectations of getting the USD 6 billion loan at 1 per cent interest rate, China has proposed a mix of commercial and concessional lending, the sources said.
China maintained that the lending will be both a combination of commercial and concessional loans, according to sources.
The Economic Affairs Ministry had proposed a 1 per cent rate while the Ministry of Railways was inclined to take the mix of commercial and concessional rate, subject to the condition that the average rate may remain lower than 2.38 per cent, sources said.
However, Pakistan was expecting that due to the strategic nature of the project, China would accept its request for 1 per cent interest rate and a grace period of 10 years for repayment of the loan.
China has offered to finance 85 per cent of the project cost with payback period of 15 years to 20 years in biannual tranches. Sources said the Chinese had offered a five years grace period.
Pakistan has asked for up to 90 per cent of financing and was ready to accept a 20 years repayment period, subject to the condition that the grace period should be 10 years.
The Chinese side proposed that negotiations for financing must be only to the extent of package-1 consisting of USD 2.434 billion and the negotiation for remaining two packages will be undertaken during the implementation phase of package-I, according to the official documents.
Pakistani authorities pressed for negotiation for the total project cost of the ML-1. China has also offered financing in Chinese currency Renminbi (RMB).
According to the ML-1 framework agreement, the project will be executed in the engineering, procurement and construction mode by Chinese contractors. Under the CPEC framework, ML-1 is the only strategic project being finalised as part of the initial USD46 billion deal.
Sources said that Pakistan's desire to start work on the package-1 from January 2021 would remain unfulfilled due to delay in finalisation of financing details.
Pakistan had planned to complete the package-I from January 2021 to December 2024 and will cover the construction of a 527-km track between Peshawar, Rawalpindi and Lahore, according to the paper.
The CPEC is part of China's One Belt, One Road initiative, a global infrastructure development strategy to invest in nearly 70 countries and international organizations. India has expressed concern over the projects as a portion of the CPEC runs through Pakistan-occupied Kashmir, violating Indian sovereignty.
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BJP worker’s 16-year-old son allegedly casts eight votes in Uttar Pradesh’s Farrukhabad; Video viral
Lucknow (Farrukhabad): A viral video has surfaced showing a 16-year-old son of a BJP worker allegedly casting eight votes to the saffron party during the ongoing general elections in Uttar Pradesh. The video has sparked controversy, and the opposition has urged for prompt action from the Election Commission of India, reports scroll.in.
The video shared by the Samajwadi Party President Akhilesh Yadav on micro-blogging site ‘X’, showed the youngster recording himself while casting multiple times in a series of instances. The incident reportedly took place in Khiri Pamaran village, which falls under the Aliganj Assembly constituency within the Farrukhabad parliamentary seat. Mukesh Rajput, the sitting MP, is the BJP candidate in this constituency. Polling in Farrukhabad occurred on May 13 during the fourth phase of the general election.
In the viral video, the youngster is seen casting eight votes in total, all for the BJP, one by one with different clippings.
The youngster in the video has been identified as Rajan Singh Thakur, confirmed his father, Anil Singh Thakur to the Scroll.in. Anil Singh Thakur is the gram pradhan (village head) of Khiri Pamaran and a member of the BJP.
Anil defending his son told the Scroll that the ‘Video misrepresented his son,’ and claimed that the voting was done when the machine was being tested in some instances and other clipping of him voting on behalf of mentally and physically disabled voters was merged and made into a video.
Despite the Anil's caims, the video has drawn significant criticism. Subhash Chandra Prajapati, the additional district magistrate of Farrukhabad, confirmed to the Scroll that the administration will file a case soon. He mentioned that the returning officer is investigating the matter following a directive from the chief electoral officer in Lucknow.
The opposition has been vocal in its criticism, with Akhilesh Yadav demanding action from the Election Commission. In his social media post, Yadav accused the BJP of undermining the electoral process and described the party's booth committee as a "loot committee." The Congress party also called on the Election Commission to take action, in a ‘X’ post the party wrote, “Dear Election Commission…are you watching..a boy is voting 8-8 times ... .at least wake up now.”
Congress leader Rahul Gandhi, took to ‘X’ to express, “Fearing and seeing their defeat, the BJP is attempting to undermine democracy by pressuring government machinery to deny the mandate. The Congress expects all officers performing election duties to remember their constitutional responsibilities despite any pressure from those in power. Otherwise, once the Indian National Developmental Inclusive Alliance (INDIA) bloc government is formed, actions will be taken to ensure that anyone will think ten times before violating their 'Oath to the Constitution'."
Following the video's circulation, Naval Kishor Shakya, the Samajwadi Party candidate in Farrukhabad, filed a complaint with the district election officer. Shakya's complaint alleges that Rajan Singh Thakur cast votes after snatching voter information slips from other voters and that he was assisted by Dinesh Thakur, the local police station's station house officer. Shakya has called for re-polling at the affected polling center.
In a related incident earlier in May, Gujarat Police arrested two BJP workers for allegedly casting bogus votes and live-streaming the act on social media in the Dahod constituency. The Election Commission conducted re-polling at the affected booth following the incident.
The opposition INDIA bloc, including the Congress and the Samajwadi Party, has repeatedly accused the Election Commission of failing to take prompt action against election model code of conduct violations.
अपनी हार सामने देख कर भाजपा जनादेश को झुठलाने के लिए सरकारी तंत्र पर दबाव बना कर लोकतंत्र को लूटना चाहती है।
— Rahul Gandhi (@RahulGandhi) May 19, 2024
कांग्रेस चुनावी ड्यूटी कर रहे सभी अधिकारियों से यह अपेक्षा करती है कि वो सत्ता के दबाव के सामने अपनी संवैधानिक ज़िम्मेदारी न भूलें।
वरना INDIA की सरकार बनते ही ऐसी… https://t.co/fk4wXL8QZy
