Pakistan-China Concern over Pakistan's growing debt: China reluctant to approve $6b ML-I loan
Beijing: China has shown reluctance to approve a $6 billion loan for the Mainline-I (ML-I) railway track, expressing concern over Pakistan's growing debt, media reports said.
The construction of ML-1 project in three phases had been approved by the Executive Committee of National Economic Council (Ecnec) in its meeting held in August last year. The actual cost of the project was $9bn initially, including the equity amount of the government of Pakistan, The Express Tribune reported.
It was later reduced gradually to $6.8bn.
“Beijing conveyed its concerns during a meeting held on March 30 to discuss financing modalities of the project,” the officials told the newspaper.
The sources told the newspaper that in the last meeting, Chinese authorities were wary of Pakistan’s ability to service its debt. The concerns have now also been reflected in the meeting records.
“The Chinese side has sought clarification regarding the possibility of raising further debt by Pakistan during currency of the IMF programme. The Pakistani side clarified that the debt situation is being monitored and there is no restriction under the programme to raise debt for viable projects,” Deputy Chairman Planning Commission Dr Jehanzeb Khan told The Express Tribune while responding to a question.
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