Allegations against China have been made for indulging in malpractices and making exorbitant profits at the cost of Pakistani locals from the China Pakistan Economic Corridor by violating Standard Operating Procedures (SOPs). The $62 billion CPEC is a flagship project under the Belt and Road Initiative (BRI) of the Chinese government.
A 278 page report titled “Committee for Power Sector Audit, Debt Reservation, and future Road Map has been written to Prime Minister Imran Khan which lists malpractices amounting to $625 million in the independent power generating sector. 1/3rd of these are related to Chinese projects. The report also mentioned inflating the cost of certain projects and using the payments to bribe top military officers in Pakistan.
CPEC aims at upgrading Pakistan’s infrastructure and strengthening its economy. A vast network of highways and railways are to be built under it across Pakistan. Meanwhile, China is reaping benefits strategically from the CPEC while crushing Pakistan under debt. Most of the projects under CPEC are funded by loans at high rates of interest by Chinese banks.
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In addition, Chinese companies are also enjoying benefits, as some projects have contract guarantee from the government that they will buy their products and priority treatment is also given by the Pakistani government. According to reports, where the projects are fast paced and rate of return is guaranteed, the Chinese companies move fast towards their completion but where the ROI is slow without a fixed guarantee, they move slowly and costs of the project keep increasing. Moreover repayment of loans of some projects have started while the projects have not even begun yet and to repay these loans Pakistan has to take more loans from Chinese banks since international agencies would not be interested to give loans to a debt ridden state.
