Pakistan Too Poor To Fund $58 Billion Gwadar-Kashgar Railway Line Given Its GDP Is Just 6 Times Project Cost But Beijing Must Step In: Chinese Study

The China-Pakistan railway link, the biggest transport project envisaged under Belt and Road Initiative (BRI), will cost an estimated ($57.7 billion), but should proceed because it holds huge geostrategic significance, a feasibility study commissioned by Chinese government recommended.

The proposed railway line, the most expensive transport infrastructure under BRI, will connect Pakistan’s port of Gwadar to Kashgar in China’s Xinjiang Uygur autonomous region.

State-owned China Railway First Survey and Design Institute Group Co Ltd conducted the feasibility survey.

"The government and financial institutions [in China] should provide strong support, increase coordination and collaboration among relevant domestic departments, strive for the injection of support funds and provide strong policy support and guarantees for the construction of this project," the study said.

The study observed that Pakistan's GDP last year ($370 billion) was just six times the estimated cost of the project, and hence, the country will be unable to mobilise funding for the project.

"Due to energy shortages, poor investment environment and fiscal deficits, Pakistan's economic growth rate has come under pressure," the study noted.

"In terms of railway investment and construction, Pakistan is unable to provide sufficient financial and material support and mainly relies on Chinese enterprises for investment and construction." it added.

The study recommended that the project should be executed on a 'build and transfer' (BT) model. The model will provide the best investment and financing strategy for the project.

The report also flagged the security challenges within Pakistan for the project as the railway line will pass througH Balochistan province, which has been reeling under separatist violence for decades.

China-Pakistan Economic Corridor, or CPEC, a vital component of the BRI, envisions to execute multiple transport and energy infrastructure projects worth over $60 billion.

BRI is a Chinese-funded initiative to promote economic cooperation and connectivity among the countries along the ancient Silk Road trade routes.