situation report

Pakistan, China: Uncertainty Over Chinese Loans Clouds Future of Signature Railway Project

1 MIN READAug 8, 2019 | 21:16 GMT

What Happened: The Pakistani Planning and Development Ministry has said it lacks clarity as to whether it can acquire a Chinese loan to proceed with the $8.5 billion Mainland-I railway, one of the most important projects in the China-Pakistan Economic Corridor (CPEC), The Express Tribune reported Aug. 6.

Why It Matters: The $62 billion CPEC is a flagship in China's Belt and Road Initiative, but the uncertainty over the loan — both due to the International Monetary Fund's concerns that Pakistan is taking on too much debt and concerns in the Planning Ministry over potential graft in the railway project — shows how domestic and foreign factors can hinder much-need infrastructure projects.

Background: The 1,680-kilometer (1,050-mile) railway, which will run between Karachi and Peshawar, is expected to be built in three phases over six years under a build-operate-transfer model. 

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