China has agreed to provide $5.5 billion in a concessionary loan for the expansion and renovation of Pakistan’s primary railway connection that connects north to south as part of its investment under the China-Pakistan Economic Hallway (CPEC), it was declared on Thursday.
Of the overall cost of about $8 billion for the ML I (Peshawar-Karachi) railway undertaking, China has agreed to provide $5.5 billion at an interest rate of less than 2%, said Minister for Planning, Development and Reform Ahsan Iqbal at a press conference after his return from Beijing.
After Beijing’s decision to expand the $5.5-billion loan, the entire cost of CPEC jobs being funded by China either partly or totally will grow to $50 billion.
Earlier, China had agreed to provide $3.7 billion out of the $46-billion CPEC programme for the ML I endeavor and “now it has determined to increase its contribution to $5.5 billion”, the minister said.
The Peshawar-Lahore section of the ML I will be built with the ADB loan.
The minister said the railroad project would be completed in five to six years and after that, the train speed would double to 180 kilometres per hour. About 75% of passenger traffic and the state’s freight passes through the Peshawar-Karachi rail track.
At present, the job would be to renovate and extend the ML-1. The new railway project from Jacobabad to Gwadar will begin in the medium term.