On CPEC

Despite recent security incidents targeting Chinese personnel, the Sino-Pak relationship endures. Both countries have promptly engaged at high level in recent months to move past misunderstandings. Pakistan has reportedly assured China of foolproof security. Beijing also seems cognizant of the fluid regional situation post-US withdrawal having an impact on Pakistan. Pakistan’s Parliamentary Committee on CPEC has recently singled out “security” as a key challenge that needs to be addressed.

Against this backdrop, it remains to be seen as to how soon the CPEC-related activities can become mainstream again. Hanging in the balance are mega projects like the overhaul of 1,800km ML-1 Railway track, operationalization of special economic zones, and agreement on a framework for industrial cooperation between the two countries.

For activity to return, both countries would need to move things fast under the CPEC’s high-level Joint Coordination Committee (JCC) platform. The tenth JCC meeting was scheduled to take place in July after a gap of over one and a half years, with expectations of significant progress. But unfortunately, it was postponed after the tragic Dasu incident. A new date has not been officially announced yet.

Having said that, things are still moving in Pakistan. A major change took place last month when a renowned energy sector professional, who has experience working with the Chinese and on CPEC energy projects, was appointed as Prime Minister’s Special Assistant on CPEC Affairs. This development coincided with resignation of the Chairman of the recently-established CPEC Authority.

The said authority was supposed to fast-track bureaucratic processes underpinning the mega projects, but now security-related issues have become paramount. It remains to be seen what kind of operational and tactical acumen the SAPM brings to the table, especially in removing hurdles facing CPEC energy sector projects as well as the slow-moving infrastructure development projects in the Gwadar area.

A low-profile, but significant, development took place earlier this month when it was announced that the 660kV (HVDC) Matiari-Lahore long-distance power transmission line project had been operationalized. This project, which falls under the CPEC Cooperation Agreement, is expected to help the NTDC’s transmission system in minimizing system-wide breakdowns.

Going forward, Pakistan will need to show progress on the ground to excite Beijing’s interest in revitalizing CPEC portfolio. Prior to recent security challenges, the element of “financing” was said to be the main issue hampering progress on projects like ML-1. In some ways, the recent security situation has weakened Pakistan’s hand in negotiations. Let’s see if the two countries can find agreeable terms.