New Delhi: International monetary funds have reportedly asked Pakistan to re -negotiate energy agreements with China where the former should pay more than Pakistani Rupee Rugee to several Chinese companies operating in the country.
Pakistan who was full of debt and IMF was involved in difficult talks in Doha for giving $ 3 billion from the existing loan program.
This request arose after the rejection of Beijing to re-negotiate the provisions of the agreement for projects under the China-Pakistan Economic Corridor (CPEC), reported The Express Tribune. According to the report, the IMF suspected that the Chinese IPP might have burdened Pakistan excessively, thus encouraging the need to reopen this agreement.
There are more than 30 Chinese companies operating under CPEC in several infrastructure projects in various fields such as energy, communication, trains, roads and highways to facilitate trade connectivity.
In a virtual conversation held on Wednesday, the IMF had expressed concern over Pakistan’s extraordinary payments to the Chinese IPP, the news reported. This happened after Pakistan Prime Minister Shehbaz Sharif on Monday approved the 50 billion PKR IMPLEMENTATION for the Chinese IPP as the first installment for the total contributions circulating PKR RS 340 billion to ensure fuel supply.
IMF, Pakistan and CPEC
That is because the IMF objection that the Pakistani government did not directly pay the Chinese IPP last week and vice versa released PKR 50 billion for the electricity division based on public subsidy claims for July. The electricity division then made payments to the Chinese IPP and several others to discuss their “crunch liquidity”, which made the IMF ask Pakistan to provide a list of power plants that receive that number.
The action of a global lender puts Pakistan in a strict place in dealing with China’s concern over the slowdown of the CPEC project in the last four years. China has tried to restore the initiative worth billions of dollars to its track.
In Pakistan, 11 Chinese IPPs have invested $ 10.2 billion to produce 5,320 megawatts, but almost 2,000 MW of power plants closed last month due to lack of coal. In addition, power plants threatened to stop the operation if PKR contributions 340 billion were not immediately cleaned. This caused PM Sharif to hold a meeting with the CEO of Chinese company working on the CPEC project.
Chinese representatives complained at the meeting that the work remained almost stopped at the CPEC project. The PM then issued various orders in places to solve problems that say that Pakistan sought support for China on every way of life in an effort to ensure sustainable development, reported the news.
The IMF has lent money to Pakistan 22 times over the past 60 years and they have all come with several conditions – the most stringent is to take into account the details of Chinese financial expenditure in the CPEC and provide a strong guarantee that Pakistan will not transfer the IMF loan to serve the Chinese debt.
Meanwhile, Head of IMF Resident Esther Perez Ruiz has mentioned the ongoing discussion about the seventh review that is delayed by the “constructive” Pakistani authority even when Islamabad made his final attempt to make peace with a global lender.
Javed Hassan’s columnist criticized the IMF. “People feel it is impossible to accept that @imfnews / @imf_pakistan will sue from Pakistan that it re -negotiates the CPEC contract. While people may believe that the funds want to know the secrets of all the obligations related to CPEC, people imagine it is not in the mandate to determine such demands, “Hassan tweet.
Professor of Political Science Adnan Rasool called this a non-Starter, said that the CPEC agreement as part of the Belt and Road initiative was included under the Chinese court system with a special court.