According to a meeting transcript and senior Pakistani officials, China has expressed reservations about approving a $6 billion loan for the Mainline-I (ML-I) railway track, the single largest project under the China-Pakistan Economic Corridor.
The Executive Committee of the National Economic Council (Ecnec) approved the three-phase construction of the ML-1 project in August of last year. The project’s initial cost was $9 billion, including the Pakistani government’s equity contribution. Later, it was eventually reduced to $6.8 billion.
Beijing expressed its concerns during a meeting on March 30 to discuss the project’s funding modalities, according to the officials.
Furthermore, the officials said that China considered the overall project cost of $6.8 billion to be on the low end, and that Islamabad is now willing to raise it by 15%, or $1 billion.
According to the sources, Chinese officials were concerned about Pakistan’s ability to service its debt at the last meeting. The issues have now been documented in the meeting minutes as well.
