Socio-Political and Financial Risk Analysis of Infrastructure Projects Linked with China-Pakistan Economic Corridor

Abstract

China-Pakistan Economic Corridor (CPEC) is more than just a project between Pakistan and China because it will have financial, economic, and social changes at a massive level around the globe especially in the Asian region. Multiple projects have been planned under the umbrella of CPEC including construction and extension of highways, railways, special economic zones to connect China from Kashgar to Gawadar in Pakistan. This project will have a massive infrastructural development in Pakistan. Rehabilitation and Expansion of Karachi-Peshawar Railway Line known as ML-1 to be completed in 6 years approximately is one of the vital infrastructure projects in this mass transit corridor. This is the oldest and busiest rail line in Pakistan for passengers as well as cargo transfer with almost 75% share of the country’s transfer. The approximate cost allocation on that project is $8 billion which is shared by the Government of China and the Asian Development Bank (ADB). This route is covering KPK, Punjab and Sindh Provinces. These provinces have different political ruling parties. We have concluded that to deal with any kind of possible delay or termination of the project, the sponsoring agency and guarantor involved must make sure the transparency in this whole process.