Signifying Mainline-1 Project under China-Pakistan Economic Corridor


Pakistan China Economic Corridor (CPEC) is heralded as corridor of prosperity as this project is likely to connect China with West Asia and Europe through Pakistan. China has formulated this flagship project of BRI as a substitute of Strait of Malacca but Pakistan is also going to be a great beneficiary of this project. Under CPEC already several projects of power generation and road up gradation have been completed but Mainline 1(ML-1) is one of the main components of CPEC. Under the ML-1upgradation and dualisation of 1872-kilometer long track from Peshawar to Karachi is the milestone for second phase of CPEC. Pakistan Railways is a state enterprise and it has not been a profit making entity since private transport provided better services beginning of the year 2000.Government has been salvaging this by providing subsidy to Pakistan railways. Reparation and slow overhauling of decades old tracks has caused dozens of accidents of trains. Transportation of goods has also been at snail’s pace. This project of ML-1 is promising to uplift railways in Pakistan. Despite economic challenges, Pakistan’s current government has approved this project through The Executive Committee of the National Economic Council (ECNEC) which is worth $ 6.8 billion on cost sharing basis as Beijing is the main financer of this project. Beijing is providing 90% of the cost to complete this project in the form of loans.

This whole project of ML-1 is comprised of three packages, the package -1 is comprised of construction of 527-km long rail-track connecting Peshawar, Rawalpindi and Lahore and it will be completed by 2024.

Package -2 and 3 are most significant because that will be upgrading 251-km long track between Lahore and Hyderabad and 740-km between Rawalpindi-Peshawar and Hyderabad-Multan respectively. Pakistan’s railways have not been performing well as a national enterprise and remained a burden for decades. Even the number of freight trains reduced to some because of low indigenous production on one hand and number of accidents increased on the other hand. Because of the poor services, passengers opted for private transportation that propped up after the year 2000.It can easily be established that a country with better railways and transportation has better chances of rising as an economic state. Pakistan’s railways fell prey to incompetent bureaucracy, corrupt politicians and lack of will to upgrade it. Pakistan Tehreek-i-Insaf (PTI) government got elected because it promised to introduce revolutionary reforms in all major sectors including Pakistan Railways, Pakistan steel mills and Pakistan International Airlines. The PTI government halted some of the projects under CPEC doubting corruption by the previous regime but later on resumed the work on almost all the projects. Now phase-II of CPEC is underway but once the covid-19 is over,it will get back to fast track of completion. There are certain people in Pakistan who feel that the Chinese government has lent money for projects which will be hard for Pakistan to repay as debt, this perspective is false. It’s on cost share basis, some are loans, grants and investments which are confused with debts. This also reflects who negative propaganda against CEPC is active in certain quarters nationally and internationally.

The project of ML-1 will have far reaching impact on Pakistan’s economy in the years to come. Chinese loan of $6.2billion will be spent to complete the project and there will be no pressure on Pakistan for return but with convenience whereas the total estimated cost of the project is about $8.5 billion. Pakistan’s government has taken this decision because at the moment railways financial conditions are weak and it is facing challenges in the payment of salaries and pensions of the railways employees. Other international financial institutions including IMF have serious concerns about the Chinese loans as Pakistan has already taken loan from IMF under an agreement that Pakistan’s government will introduce economic reforms to widen tax-net which at this moment doesn’t seem to be optimistic. It is likely that Pakistan will undertake only $2.4 billion of construction because of the commitments with the IMF.

Under the project Pakistan railways track will be upgraded which will increase the speed of trains from 70 to 120 km/hour and the capacity of the line will also increase from 34 trains per day to 170 trains per day. Completion of the project will also generate economic opportunities for daily wagers in the main train stations of major cities. Even after the completion when Chinese goods will be transported from the same track-it will attract foreign investors on invest in Pakistan. Several technologically developed countries are eyeing on potential for digital market in Pakistan. Being a big population it is a major untapped market for digital multinational companies. The completion of the project will also enhance Pakistan’s global ranking in cross-border trade related indicators. Pakistan’s current government of PTI aims to rejuvenate Pakistan’s tourism industry and that industry is also likely to experience boost because of the ML-1 project. Pakistan will be connecting China with west Asia and Africa through its port Gwadar. All shipped goods to and from China will be transported along with Pakistan’s own goods. Timely completion of ML-1 is in the best economic interest of Pakistan as well as China.

Bushra Amin
Bushra Amin
Bushra Amin is a PhD candidate at School of International and Public Affairs at Jilin University China. She is doing her doctorate on China-Pakistan Economic Corridor


Why Does TTP still Survive in Pakistan?

On September 6, Tehreek-i-Taliban Pakistan (TTP) attacked military check...

Disasters at sea trigger ship-safety advances

Research projects in Europe developed water-surface scanners and better...

Shock and terror in Gaza as bombardment of shattered enclave resumes

As Secretary-General António Guterres spoke of his deep regret...