ISLAMABAD: Islamabad on Thursday committed with Beijing that it would not reopen $15 billion deals of energy projects under the China-Pakistan Economic Corridor (CPEC), as both the nations also agreed on new areas of cooperation to deepen strategic economic relations.
The Chapter opened by Premier Imran Khan’s administration on power cuts and the withdrawal of tax advantages granted to China’s energy projects now appears to be closed in Pakistan, with the written guarantee to India.
The agreement was achieved at the 10th meeting, which eventually came over two years from the Joint Cooperation Committee — the CPEC’s top decision-making body.
This meeting was conducted by a video conference co-chaired by Asad Umar, Planning Minister, and Ning Jizhe, Vice-President of the NDRC.
According to a resolution of the JCC, the Pakistani side is committed to stable policy on taxes and tariffs and develop a more standardised and easy electricity market in Pakistan.
In his speech at a media briefing following the JCC, Umar stated that tariff reduction discussions with China must be considered in the framework of the extremely warm ties of both nations.
In the past, PTI administration stated plans to renegotiate electricity rates and to restore equity from energy projects to Chinese investors. They were also looking for a rollover of Chinese mature repayments of $ 3 billion.
To date, ten $10 billion energy projects have been completed and four $4.7 billion projects have been implemented. These programmes were to be renegotiated by the government.
Pakistan has also guaranteed China, on account of energy generating costs that have been locked in a vicious cyclical debt cycle, to pay the Chinese power plants’ $1.4 billion or Rs230 billion.
Pakistan committed itself to creating a revolving fund with deposits equal to 21% of electrical costs. But the engagement has never been respected.
China on Thursday hoped that the Pakistani side would get the article related to the revolving account on the ground soon.
Umar said the ministries of finance and energy were working on a path to resolve the issues of overdue payments of the CPEC energy projects and the revolving fund.
The minister said about $1.4 billion or Rs230 billion were payable to the Chinese power plants and a solution would soon be found to it.
The JCC also approved the decision of inclusion of 700.7 MW Azad Pattan HPP and exclusion of RY Khan 1320 MW project from the CPEC framework.
Both sides agreed that the remaining 600MW Zonergy Projects at Quaid-i-Azam Solar Park will be implemented, in accordance with Pakistan’s generation planning, by means acceptable to both sides.
Pakistan and China also agreed to include new areas for cooperation under the CPEC framework.
Both the countries agreed to carry out a joint study for future development of Thar Coal blocks with a view to meeting Pakistan’s energy needs, conversion of coal into other products for domestic demand as well as exports.
China offered support for a plan for oil and gas sector development. For Thar Coal Gasification to Fertiliser Project, it was decided that the Pakistani side would prepare a policy framework to bring this technology to the country.
The Chinese side noted the progress on the North-South Gas Pipeline Project and offered support to carry out related actions under the framework of the development plan for the oil and gas sector of Pakistan.
For Strategic Underground Gas Storages, the government is planning to develop underground gas storages to ensure uninterrupted supply of natural gas.
The Pakistani side invited technically capable and financially sound Chinese companies in the exploration, development and production of metallic minerals.
Both sides agreed to continue cooperation in areas including Emerging Technologies Maritime sector, Mines and Minerals (Oil & Gas), Tourism.