On 27th April, the China-watchers were surprised when South China Morning Post (SCMP) reported that the China-Pakistan railway project with a cost of $58 billion has been declared ‘worth it’ by a study. This report was reproduced by media in Pakistan, India, and across the globe, without digging further into the facts of this matter.
Political analysts and Vloggers in Pakistan used this news story to make a case that the China-Pakistan Economic Corridor (CPEC) has been revived after years of stagnation.
Now the $58 billion question, is China Really Planning to Build a $58 billion worth Railway Line Connecting Kashghar With Gwadar?
The short answer is No.
What was the study about?
The SCMP story was based on an article Research on the Investment and Financing Operation Mode of Railway’s “Go Global” Projects published in the Chinese Journal of Railway Transport and Economy. This article was produced by two staff membersofChina Railway First Survey and Design Institute Group, which was established in 1953 and ranked among the top 100 national survey and design companies in China.
The article stated that the proposed China-Pakistan Railway is currently in the pre-feasibility study stage, which will connect Kashgar in China to Gwadar in Pakistan. It further stated that the total length of this railway line will be about 3,000 km and it will require a total investment of 400 billion RMB ($58 billion).
The study further stated that China-Pakistan Railway is a strategic project, and the significance of the railway to the Chinese side makes it worth investing in. The article suggested that this Railway project should be financed through Build Transfer (BT) model.
This was a journal article that focused primarily on the mode of financing of this proposed project. This was by no means a feasibility study commissioned by the Chinese government, which provided a nod of approval to the Pak-China Railway project.
Is the Pak-China railway project a new idea?
According to another article published in the Chinese journal South Asian Studies Quarterly 2012, the idea of the Pak-China Railway Project was first floated by former President Pervez Musharraf in 2008 to the Chinese leadership. As per the proposal, a Railway line had to be constructed from Kashghar to Rawalpindi, where it would join Pakistan’s existing Railway network.
In 2014, the Kashgar Regional Development and Reform Commission launched the pre-feasibility study report of the China-Pakistan Railway. However, this idea never went beyond the pre-feasibility stage due to the huge costs involved and the difficult terrain of the Pak-China border region.
Since then this idea has been in cold storage and there is no still no indication by the Chinese government that they have any plans to even consider it for a feasibility study.
Why the Pak-China railway project is not feasible?
1) The terrain of the Karakoram region
The China-Pakistan Railway needs to pass through plateaus, snow-capped mountains, and rivers of the Karakoram region. Some sections of the proposed railway line have an altitude of 4,700 meters, and most of them are uninhabited areas. In these areas, mudslides, mountain collapses, avalanches, and gravel drops are extremely common. The Karakoram Highway remains closed for four months in winter due to snowfall. In fact, the most difficult section of the proposed China-Pakistan Railway is the Khunjerab-Sust-Gilgit section, which is 270 kilometers long. The only feasible way to bypass the snow-capped mountains is to build a tunnel under the mountains, which will be very costly, and technically might not be possible.
2) The cost of $58 billion is too high to be practical:
The total estimated value of the entire CPEC is $50 billion, out of which only $25.4 billion have been spent so far. The CPEC enterprise is not without financial problems and Chinese companies are having trouble getting payments, especially for power projects.
In such a situation why would China invest or lend $58 billion just for one railway project? It does not make sense.
3) ML-1 railway project under CPEC has not materialized so far:
The Main Line 1 (ML-1) project, which is about upgrading railway infrastructure in Pakistan from Karachi to Peshawar has a price tag of $10 billion. This is the single largest project of CPEC and it has not materialized even after 8 years of inception of CPEC. As of now, China is reluctant to make a firm commitment to finance ML-1 due to disagreement on financing terms and also the political instability in Pakistan.
So, if China is not ready to give the go-ahead for ML-1, How it can even think about starting a $58 billion Pak-China railway project?
Bottom Line
China is not planning to spend $58 billion on the construction of the Pak-China Railway project. No feasibility study for this proposed project has been completed or approved. Only a journal article was published last month, which focused on financing aspects of this proposed project, if and when it materialized. This article was inaccurately reported and reproduced by several media platforms without double-checking the story.
As of now, the $58 billion Pak-China Railway project is just a pie in the sky.
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