In what is being called a major development, China has converted a $230m loan to build a new international airport at Pakistan’s strategic port of Gwadar (pictured) into an interest-free grant in order to speed up the implementation of the China-Pakistan Economic Corridor (CPEC).
As a result, authorities in Pakistan have stopped the tendering process and Beijing will select a contractor.
China’s Ministry of Commerce will direct control of building New Gwadar International Airport, reports Pakistan’s Geo.tv news.
Beijing has also converted a $140m loan for the construction of Gwadar city’s Eastbay Expressway Project to an interest-free grant.
Meanwhile, of a total $3.8bn worth of infrastructure projects around Gwadar that support the CPEC plans, China has cut interest on its loans from more than 3% to 1.6%, official sources told Geo.tv.
Pakistan’s Minister for Planning and Development, Ahsan Iqbal, said that China had brought down its loan costs to accelerate the progress of CPEC.
The federal government’s tendering process for the airport and highway projects were moving too slowly for the Chinese, a source told Pakistan Today in August.
With China assuming direct responsibility things are expected to move at a faster pace, the source said.
Gwadar is expected to expand dramatically as a transhipment hub when it becomes the terminus of the CPEC, which is a proposed rail, road and pipeline corridor stretching from China’s western Xinjiang autonomous region through Pakistan to the Gwadar on the Arabian Sea.
Photograph: Pakistan’s Gwadar Port is expected to expand dramatically when it becomes the terminus of the China-Pakistan Economic Corridor (Wikimedia Commons)