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Pakistan Cuts Chinese Rail Project because of Debt Concerns

According to the Pakistan’s Railways Ministry, Islamabad has cut the budget of the biggest Chinese “Silk Road” project by US$2 billion, citing government concerns about the country’s debt levels.

The project planned to revamp the existing and outdated railway stretching 1,872 km (1,163 miles) from Karachi to the city of Peshawar. The initial price was US$8.2 billion, but concerns over the tremendous costs have led to delays.

The new Prime Minister Imran Khan appears to be more cautious about the Chinese “Belt and Road” investment. His government pressured the Chinese government to revise the project so that it will rely less on debt or allow third countries to join in the investment and operations.

On Monday, in the city of Lahore, Railway Minister Sheikh Rasheed told a news conference, “Pakistan is a poor country that cannot afford the huge burden of these loans.”

Other Asian countries including Thailand, Laos, Sri Lanka, and Maldives also complained about the debt terms of Chinese investment projects, which many people have also called a “debt trap.” In August this year, Malaysia’s new Prime Minister Mahathir bin Mohamad cancelled a US$20 billion Chinese railway project.

Source: Voice of America Chinese, October 1, 2018