China has sought additional guarantees before sanctioning a USD 6-billion loan for the Main Line-1 (ML-1) railway line project in Pakistan, due to the country's weakening financial position, according to a media report on Wednesday.

China has also proposed a mix of commercial and concessional loans to fund the rail project, going against Islamabad's wishes of 'cheapest lending'.

The issue of additional guarantees was raised during the third joint ML-1 Financing Committee Meeting held ten days ago (December 13), The Express Tribune newspaper reported, quoting official documents.

A senior Pakistani official involved in the negotiations said China raised the additional guarantees issue during the meeting but did not make it part of the draft of minutes shared with Pakistan.

The draft minutes have not yet been signed by both the countries.

The ML-1 project includes dualisation and upgrading of the 1,872-km railway track from Peshawar to Karachi and is a major milestone for the second phase of the China-Pakistan Economic Corridor (CPEC).

The official said China raised the additional guarantees issue to get clarity over Pakistan's financial condition after it applied for debt relief from the G-20 countries, which is only meant for the world's poorest nations.

The third round of financial negotiations gave further clarity on the Chinese position on USD6 billion lending for the USD6.8 billion strategically important ML-1 project of Pakistan Railways, sources in the Ministry of Economic Affairs said.

As part of debt relief from G-20 countries, Pakistan cannot secure expensive commercial loans, except those allowed under the International Monetary Fund and World Bank framework.

The Chinese authorities have proposed that "keeping in view the financial situation in Pakistan so also the conditions laid down by the G-20 regulations for debt suspension, the government of Pakistan may provide additional guarantee mechanism for the loan other than sovereign loan for the ML-1 project", according to officials privy to the negotiations.

It was surprising for us when China raised the issue of additional guarantees during the meeting, another senior Pakistani official who was part of the meeting said.

In August this year, the Executive Committee of National Economic Council (ECNEC) approved the strategically important ML-1 project worth USD 6.8 billion.

The ECNEC meeting had continued for hardly 20 minutes, leaving many critical issues about financing and technical details unresolved.

Both the sides have reached broad-based consensus on the technical parameters, including bidding documents, according to deliberations that took place in the joint bilateral third financial and seventh technical committee of ML-1 project.

But an early start of construction work on what the official described as "strategically important project"&nbsp;is unlikely after China linked the civil works with prior finalisation of financing mechanism of the single-largest project of the CPEC.

Unlike Pakistan's expectations of getting the USD 6 billion loan at 1 per cent interest rate, China has proposed a mix of commercial and concessional lending, the sources said.

China maintained that the lending will be both a combination of commercial and concessional loans, according to sources.

The Economic Affairs Ministry had proposed a 1 per cent rate while the Ministry of Railways was inclined to take the mix of commercial and concessional rate, subject to the condition that the average rate may remain lower than 2.38 per cent, sources said.

However, Pakistan was expecting that due to the strategic nature of the project, China would accept its request for 1 per cent interest rate and a grace period of 10 years for repayment of the loan.

China has offered to finance 85 per cent of the project cost with payback period of 15 years to 20 years in biannual tranches. Sources said the Chinese had offered a five years grace period.

Pakistan has asked for up to 90 per cent of financing and was ready to accept a 20 years repayment period, subject to the condition that the grace period should be 10 years.

"The Chinese side proposed that negotiations for financing must be only to the extent of package-1 consisting of USD 2.434 billion and the negotiation for remaining two packages will be undertaken during the implementation phase of package-I,"&nbsp;according to the official documents.

Pakistani authorities pressed for negotiation for the total project cost of the ML-1. China has also offered financing in Chinese currency Renminbi (RMB).

According to the ML-1 framework agreement, the project will be executed in the engineering, procurement and construction mode by Chinese contractors. Under the CPEC framework, ML-1 is the only strategic project being finalised as part of the initial USD46 billion deal.

Sources said that Pakistan's desire to start work on the package-1 from January 2021 would remain unfulfilled due to delay in finalisation of financing details.

Pakistan had planned to complete the package-I from January 2021 to December 2024 and will cover the construction of a 527-km track between Peshawar, Rawalpindi and Lahore, according to the paper.

The CPEC is part of China's One Belt, One Road initiative, a global infrastructure development strategy to invest in nearly 70 countries and international organizations. India has expressed concern over the projects as a portion of the CPEC runs through Pakistan-occupied Kashmir, violating Indian sovereignty.&nbsp;

China has sought additional guarantees before sanctioning a USD 6-billion loan for the Main Line-1 (ML-1) railway line project in Pakistan, due to the country's weakening financial position, according to a media report on Wednesday.

China has sought additional guarantees before sanctioning a USD 6-billion loan for the Main Line-1 (ML-1) railway line project in Pakistan, due to the country's weakening financial position, according to a media report on Wednesday. China has also proposed a mix of commercial and concessional loans to fund the rail project, going against Islamabad's wishes of 'cheapest lending'. The issue of additional guarantees was raised during the third joint ML-1 Financing Committee Meeting held ten days ago (December 13), The Express Tribune newspaper reported, quoting official documents. A senior Pakistani official involved in the negotiations said China raised the additional guarantees issue during the meeting but did not make it part of the draft of minutes shared with Pakistan. The draft minutes have not yet been signed by both the countries. The ML-1 project includes dualisation and upgrading of the 1,872-km railway track from Peshawar to Karachi and is a major milestone for the second phase of the China-Pakistan Economic Corridor (CPEC). The official said China raised the additional guarantees issue to get clarity over Pakistan's financial condition after it applied for debt relief from the G-20 countries, which is only meant for the world's poorest nations. The third round of financial negotiations gave further clarity on the Chinese position on USD6 billion lending for the USD6.8 billion strategically important ML-1 project of Pakistan Railways, sources in the Ministry of Economic Affairs said. As part of debt relief from G-20 countries, Pakistan cannot secure expensive commercial loans, except those allowed under the International Monetary Fund and World Bank framework. The Chinese authorities have proposed that "keeping in view the financial situation in Pakistan so also the conditions laid down by the G-20 regulations for debt suspension, the government of Pakistan may provide additional guarantee mechanism for the loan other than sovereign loan for the ML-1 project", according to officials privy to the negotiations. It was surprising for us when China raised the issue of additional guarantees during the meeting, another senior Pakistani official who was part of the meeting said. In August this year, the Executive Committee of National Economic Council (ECNEC) approved the strategically important ML-1 project worth USD 6.8 billion. The ECNEC meeting had continued for hardly 20 minutes, leaving many critical issues about financing and technical details unresolved. Both the sides have reached broad-based consensus on the technical parameters, including bidding documents, according to deliberations that took place in the joint bilateral third financial and seventh technical committee of ML-1 project. But an early start of construction work on what the official described as "strategically important project" is unlikely after China linked the civil works with prior finalisation of financing mechanism of the single-largest project of the CPEC. Unlike Pakistan's expectations of getting the USD 6 billion loan at 1 per cent interest rate, China has proposed a mix of commercial and concessional lending, the sources said. China maintained that the lending will be both a combination of commercial and concessional loans, according to sources. The Economic Affairs Ministry had proposed a 1 per cent rate while the Ministry of Railways was inclined to take the mix of commercial and concessional rate, subject to the condition that the average rate may remain lower than 2.38 per cent, sources said. However, Pakistan was expecting that due to the strategic nature of the project, China would accept its request for 1 per cent interest rate and a grace period of 10 years for repayment of the loan. China has offered to finance 85 per cent of the project cost with payback period of 15 years to 20 years in biannual tranches. Sources said the Chinese had offered a five years grace period. Pakistan has asked for up to 90 per cent of financing and was ready to accept a 20 years repayment period, subject to the condition that the grace period should be 10 years. "The Chinese side proposed that negotiations for financing must be only to the extent of package-1 consisting of USD 2.434 billion and the negotiation for remaining two packages will be undertaken during the implementation phase of package-I," according to the official documents. Pakistani authorities pressed for negotiation for the total project cost of the ML-1. China has also offered financing in Chinese currency Renminbi (RMB). According to the ML-1 framework agreement, the project will be executed in the engineering, procurement and construction mode by Chinese contractors. Under the CPEC framework, ML-1 is the only strategic project being finalised as part of the initial USD46 billion deal. Sources said that Pakistan's desire to start work on the package-1 from January 2021 would remain unfulfilled due to delay in finalisation of financing details. Pakistan had planned to complete the package-I from January 2021 to December 2024 and will cover the construction of a 527-km track between Peshawar, Rawalpindi and Lahore, according to the paper. The CPEC is part of China's One Belt, One Road initiative, a global infrastructure development strategy to invest in nearly 70 countries and international organizations. India has expressed concern over the projects as a portion of the CPEC runs through Pakistan-occupied Kashmir, violating Indian sovereignty.

China seeks additional guarantees before sanctioning USD 6 billion loan for rail project in Pakistan

India has expressed its commitment to jointly develop Chabahar - Zahedan rail project and refuted reports of it being removed from the project.

Indian govt sources said, “Both sides remain committed to Chabahar-Zahedan railway project."

Adding, "We are very much in the game but progress is slow due to current political environment".&nbsp;

New Delhi sees the various connectivity projects in the West Asian country as the "paradigm driving India-Iran relations". The Chabahar - Zahedan port &amp; rail project and the International North-South Corridor (INSTC) from Mumbai to Moscow that passes via Iran are key connectivity projects both countries are working on. Chabahar port project is the better known of these connectivity projects.

Indian government sources said, "Both vectors enjoy a great deal of convergence among decision-makers in the two countries and beyond. This is therefore not merely an India-Iran initiative but one which generates considerable interest from Central Asian Republics and the Republic of Azerbaijan."

According to Iran media reports, Iran Railway on July 7 started laying track for the 628 km railway project with 150 km section to be completed by March 2021. The full length of the track is expected to be completed by March 2022.

There are two components of the massive connectivity project that will connect India to Afghanistan via Iran. First being the substructure --concrete bed on which rail tracks are mounted, bridges laid or tunnels dugout, etc. This is standard work in any railroad project and superstructure viz. signalling systems, rolling stocks/wagons, locomotive engines, etc.

Under the bilateral agreement, Iran is to lay the substructure which has seen delays due to lack of funds. Upon completion of substructure, India will supply the stock and operationalisation is to be done jointly.

Another hiccup has been that Iran was procuring steel from Indian suppliers. This has been suspended due to US sanctions as steel is a sanctioned commodity. Presidential elections next summer and domestic politics are also in play in the country and that sources believe does impact the project.

During PM Modi's 2016 visit to the West Asian country, India and Iran signed MoU on the construction of Chabahar-Zahedan railway line which forms part of transit and transportation corridor in a trilateral agreement between India, Iran and Afghanistan. MoU was between India's IRCON and Construction, Development of Transport and Infrastructure Company (CDTIC) of Iran.

As regards financing, broad terms have been agreed upon and these are approximately in the range of $800 million.

India has expressed its commitment to jointly develop Chabahar - Zahedan rail project and refuted reports of it being removed from the project. Indian govt sources said, “Both sides remain committed to Chabahar-Zahedan railway project.

India has expressed its commitment to jointly develop Chabahar - Zahedan rail project and refuted reports of it being removed from the project. Indian govt sources said, “Both sides remain committed to Chabahar-Zahedan railway project." Adding, "We are very much in the game but progress is slow due to current political environment". New Delhi sees the various connectivity projects in the West Asian country as the "paradigm driving India-Iran relations". The Chabahar - Zahedan port & rail project and the International North-South Corridor (INSTC) from Mumbai to Moscow that passes via Iran are key connectivity projects both countries are working on. Chabahar port project is the better known of these connectivity projects. Indian government sources said, "Both vectors enjoy a great deal of convergence among decision-makers in the two countries and beyond. This is therefore not merely an India-Iran initiative but one which generates considerable interest from Central Asian Republics and the Republic of Azerbaijan." According to Iran media reports, Iran Railway on July 7 started laying track for the 628 km railway project with 150 km section to be completed by March 2021. The full length of the track is expected to be completed by March 2022. There are two components of the massive connectivity project that will connect India to Afghanistan via Iran. First being the substructure --concrete bed on which rail tracks are mounted, bridges laid or tunnels dugout, etc. This is standard work in any railroad project and superstructure viz. signalling systems, rolling stocks/wagons, locomotive engines, etc. Under the bilateral agreement, Iran is to lay the substructure which has seen delays due to lack of funds. Upon completion of substructure, India will supply the stock and operationalisation is to be done jointly. Another hiccup has been that Iran was procuring steel from Indian suppliers. This has been suspended due to US sanctions as steel is a sanctioned commodity. Presidential elections next summer and domestic politics are also in play in the country and that sources believe does impact the project. During PM Modi's 2016 visit to the West Asian country, India and Iran signed MoU on the construction of Chabahar-Zahedan railway line which forms part of transit and transportation corridor in a trilateral agreement between India, Iran and Afghanistan. MoU was between India's IRCON and Construction, Development of Transport and Infrastructure Company (CDTIC) of Iran. As regards financing, broad terms have been agreed upon and these are approximately in the range of $800 million.

No dilution in India-Iran commitment to jointly develop Chabahar - Zahedan rail project

Malaysia has agreed with neighbouring Singapore to suspend until December 31 a project for a high-speed rail link between the capital, Kuala Lumpur, and the city-state, to allow discussion of changes.

The project was first announced by both nations in 2013, and the cost was estimated at about $17 billion. The recent announcement came on Sunday in the wake of the coronavirus-induced crisis.

"The government of Malaysia and the government of Singapore have agreed to resume discussions on the Kuala Lumpur-Singapore high speed rail infrastructure project in the near future," said Mohamed Azmin Ali, Malaysi's minister of international trade and industry.

"The discussions will encompass some of the proposed changes in the commercial and technical aspects of the project," he said in a statement.

Malaysia reported 57 new coronavirus infections on Sunday, taking its tally to 7,819, but with no additional deaths its toll stands at 115.

As far as Singapore is concerned, the city-state is gearing up to lift its circuit breaker measures imposed to curb the coronavirus pandemic after two months, even as the city-state reported 518 new COVID-19 cases on Sunday, taking the total number of infections to 34,884.

Singapore's circuit breaker period will end on Monday, with measures to be progressively lifted in three phase starting the next day.

Of the 518 new cases reported on Sunday, only three cases are among Singaporeans or permanent residents, the Ministry of Health said in its daily update.

(with inputs from agencies)

Malaysia has agreed with neighbouring Singapore to suspend until December 31 a project for a high-speed rail link between the capital, Kuala Lumpur, and the city-state, to allow discussion of changes.

Malaysia has agreed with neighbouring Singapore to suspend until December 31 a project for a high-speed rail link between the capital, Kuala Lumpur, and the city-state, to allow discussion of changes. The project was first announced by both nations in 2013, and the cost was estimated at about $17 billion. The recent announcement came on Sunday in the wake of the coronavirus-induced crisis. "The government of Malaysia and the government of Singapore have agreed to resume discussions on the Kuala Lumpur-Singapore high speed rail infrastructure project in the near future," said Mohamed Azmin Ali, Malaysi's minister of international trade and industry. "The discussions will encompass some of the proposed changes in the commercial and technical aspects of the project," he said in a statement. Malaysia reported 57 new coronavirus infections on Sunday, taking its tally to 7,819, but with no additional deaths its toll stands at 115. As far as Singapore is concerned, the city-state is gearing up to lift its circuit breaker measures imposed to curb the coronavirus pandemic after two months, even as the city-state reported 518 new COVID-19 cases on Sunday, taking the total number of infections to 34,884. Singapore's circuit breaker period will end on Monday, with measures to be progressively lifted in three phase starting the next day. Of the 518 new cases reported on Sunday, only three cases are among Singaporeans or permanent residents, the Ministry of Health said in its daily update. (with inputs from agencies)

Malaysia, Singapore defer high-speed rail project until year-end

<a href="https://www.google.com/url?q=http://www.wionews.com/world/malaysia-probes-claim-china-offered-to-bail-out-1mdb-188963&amp;sa=U&amp;ved=0ahUKEwjkxIPB44rgAhUJrY8KHcHsAc8QFggRMAQ&amp;client=internal-uds-cse&amp;cx=006054055338965708568:09spwrlibei&amp;usg=AOvVaw2sdLJepHoHyZYr2oCNmOxW">Malaysia's economics minister</a> said on Saturday the country will cancel its $20 billion <a href="https://www.google.com/url?q=http://www.wionews.com/world/malaysian-pm-heading-to-china-with-mega-projects-in-focus-159601&amp;sa=U&amp;ved=0ahUKEwjkxIPB44rgAhUJrY8KHcHsAc8QFggUMAU&amp;client=internal-uds-cse&amp;cx=006054055338965708568:09spwrlibei&amp;usg=AOvVaw3MotepaChwQNDGonqXnCf_">East Coast Rail Link (ECRL) project</a> with contractor China Communications Construction Co Ltd (CCCC).

Mohamed Azmin Ali said at a media event that the project's cost was too great, while also giving an assurance that Malaysia would welcome investment from China on a case by case basis.

"The cabinet has made this decision because the cost to develop the ECRL is too big and we don't have (the) financial capacity," said Azmin.

The government was still determining how much to pay CCCC for the project cancellation fee, he said.

The interest on the project alone amounted to half a billion ringgit ($120 million) a year.

"We cannot afford to bear this, so this project needs to be terminated without affecting our good relationship with China."

Malaysian Prime Minister Mahathir Mohamad said last August that the rail project would be cancelled "for now", but the government has since said it was in negotiations with CCCC on the rail line's future.

He also announced in August the cancellation of another China-backed project, a natural gas pipeline in the East Malaysia state of Sabah.

CCCC did not immediately respond to a request for comment from Reuters by phone and text message.

Since coming into power last May, Mahathir has repeatedly vowed to renegotiate or cancel what he calls "unfair" Chinese infrastructure deals authorised by his predecessor Najib Razak, whose near-decade long rule ended in electoral defeat amid a massive financial scandal.

The ECRL project was the centrepiece of China's infrastructure push in Malaysia but work had been suspended pending discussions over pricing and graft accusations.

Malaysia's finance minister said last year that the cost of the ECRL project had been inflated, according to local financial newspaper The Edge.

The ECRL project is one of the biggest China has signed under its signature Belt and Road initiative, as well as one of state-owned contractor CCCC's largest railway projects.

In November, the US-China Economic and Security Review Commission issued a report ranking the ECRL as the second-largest Belt and Road project by estimated cost, behind the $21.4 billion Moscow-Kazan high-speed railway project in Russia.

Malaysia's economics minister said on Saturday the country will cancel its $20 billion East Coast Rail Link (ECRL) project with contractor China Communications Construction Co Ltd (CCCC).

Malaysia's economics minister said on Saturday the country will cancel its $20 billion East Coast Rail Link (ECRL) project with contractor China Communications Construction Co Ltd (CCCC). Mohamed Azmin Ali said at a media event that the project's cost was too great, while also giving an assurance that Malaysia would welcome investment from China on a case by case basis. "The cabinet has made this decision because the cost to develop the ECRL is too big and we don't have (the) financial capacity," said Azmin. The government was still determining how much to pay CCCC for the project cancellation fee, he said. The interest on the project alone amounted to half a billion ringgit ($120 million) a year. "We cannot afford to bear this, so this project needs to be terminated without affecting our good relationship with China." Malaysian Prime Minister Mahathir Mohamad said last August that the rail project would be cancelled "for now", but the government has since said it was in negotiations with CCCC on the rail line's future. He also announced in August the cancellation of another China-backed project, a natural gas pipeline in the East Malaysia state of Sabah. CCCC did not immediately respond to a request for comment from Reuters by phone and text message. Since coming into power last May, Mahathir has repeatedly vowed to renegotiate or cancel what he calls "unfair" Chinese infrastructure deals authorised by his predecessor Najib Razak, whose near-decade long rule ended in electoral defeat amid a massive financial scandal. The ECRL project was the centrepiece of China's infrastructure push in Malaysia but work had been suspended pending discussions over pricing and graft accusations. Malaysia's finance minister said last year that the cost of the ECRL project had been inflated, according to local financial newspaper The Edge. The ECRL project is one of the biggest China has signed under its signature Belt and Road initiative, as well as one of state-owned contractor CCCC's largest railway projects. In November, the US-China Economic and Security Review Commission issued a report ranking the ECRL as the second-largest Belt and Road project by estimated cost, behind the $21.4 billion Moscow-Kazan high-speed railway project in Russia.

Malaysia to cancel $20 billion China-backed rail project: Minister

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