🚆 China Exits CPEC’s Main Line-1 Project – Pakistan Turns to ADB Loan

 

🚆 China Exits CPEC’s Main Line-1 Railway Project – What It Means for Pakistan

Introduction

The China–Pakistan Economic Corridor (CPEC) has long been regarded as the backbone of Pakistan’s economic and infrastructure growth. Among its flagship projects, the Main Line-1 (ML-1) Railway Project was considered the most ambitious and transformative.

However, in a surprising move, China has withdrawn from directly funding the ML-1 project, forcing Pakistan to explore alternatives. Now, Pakistan is turning towards the Asian Development Bank (ADB) for financial support, signaling a major shift in its infrastructure and economic strategy.

In this article, we will cover:

• What the CPEC Main Line-1 Railway Project is.
• Why China decided to withdraw.
• Pakistan’s plan to seek a $2 billion loan from ADB.
• The economic and political implications.
• What this means for Pakistan’s future infrastructure development.

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📌 What is the CPEC Main Line-1 (ML-1) Project?

The ML-1 project is part of Pakistan Railways’ modernization plan and was the largest component of CPEC.

Key Facts About ML-1:

• Route: Karachi to Peshawar (1,872 km).
• Cost Estimate: Around $6.8 billion.
• Purpose: Upgrading Pakistan’s railway system to modern standards.
• Features:

• Dual tracks.

• Electric-powered locomotives.
• High-speed capacity up to 160 km/h.

If completed, ML-1 would have reduced travel time between major cities, increased freight capacity, and boosted Pakistan’s economic efficiency.

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❓ Why Did China Withdraw from ML-1?

China’s withdrawal shocked policymakers, but experts cite several reasons:

1. Debt Concerns

• Pakistan’s mounting external debt has made Chinese lenders cautious.
• Beijing is reevaluating risky investments due to Pakistan’s fragile economic situation.

2. Political Instability in Pakistan

• Frequent government changes create uncertainty in project execution.
• Investors worry about inconsistent policies and delays.

3. China’s Global Strategy Shift

• Beijing is focusing more on domestic priorities and reducing exposure to high-risk foreign projects.
• Belt and Road Initiative (BRI) projects are being scaled back worldwide.

4. Economic Crisis in Pakistan

• High inflation, currency devaluation, and limited repayment capacity added to China’s concerns.

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💰 Pakistan Turns to the Asian Development Bank (ADB)

After China’s withdrawal, Pakistan has approached the Asian Development Bank (ADB) for funding.

ADB’s Role in ML-1

• Pakistan has requested $2 billion from ADB to finance the Karachi–Rohri section of the ML-1 project.
• The government hopes to secure co-financing from international lenders.
• Unlike China’s financing, ADB loans often come with reform conditions, including transparency and project accountability.

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🔎 Economic Implications for Pakistan

The shift from China to ADB has far-reaching economic consequences.

📊 Table: Comparison of Chinese vs. ADB Funding

Aspect	China (CPEC)	ADB (Alternative)
Loan Type	Bilateral, government-to-govt	Multilateral, stricter oversight
Conditions	Relatively flexible	Reform-driven, accountability
Interest Rates	Moderate but negotiable	Standardized, sometimes higher
Strategic Impact	Part of BRI, political leverage	Development-focused, less politics

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🚉 Impact on Pakistan Railways

Upgrading ML-1 remains critical for Pakistan’s economic development. Without modernization:

• Freight transport remains slow and inefficient.
• Logistics costs stay high.
• Trade competitiveness suffers.

With ADB stepping in, Pakistan may still achieve modernization but at a slower pace than initially promised under CPEC.

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🌍 Geopolitical Dimensions

The decision also reshapes Pakistan’s foreign policy dynamics.

China–Pakistan Relations

• China remains Pakistan’s “all-weather friend,” but this withdrawal suggests limits to Beijing’s support.
• It signals a cautious approach by China amid Pakistan’s financial instability.

Role of Multilateral Institutions

• Pakistan’s reliance on the ADB and IMF shows a shift towards multilateral financing.
• This could bring more accountability but reduce policy flexibility.
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🔮 What Lies Ahead for CPEC?

Although ML-1 has stalled, other CPEC projects continue:

• Energy projects (coal, hydropower, renewables).
• Gwadar Port expansion.
• Road networks.

However, without ML-1, CPEC may lose its transformational impact on Pakistan’s logistics sector.

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📌 Challenges Pakistan Faces

1. Financing Delays – Securing ADB loans takes longer than bilateral Chinese funding.
2. Implementation Issues – Pakistan Railways’ inefficiencies may slow progress.
3. Debt Pressure – More loans will further increase Pakistan’s external debt burden.
4. Public Expectations – Citizens expected rapid modernization, but delays may frustrate them.

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✅ Possible Solutions & Way Forward

To overcome challenges, Pakistan should:

• Diversify Financing Sources: Seek investment from Gulf countries, EU, and private investors.
• Improve Governance: Ensure project transparency and reduce corruption.
• Strengthen Pakistan Railways: Invest in management reforms and modern technology.
• Focus on Regional Trade: Use ML-1 to boost connectivity with Central Asia.
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📢 Conclusion

China’s withdrawal from the CPEC Main Line-1 project is a major turning point for Pakistan’s infrastructure dreams. While disappointing, it opens a new chapter where multilateral lenders like ADB may ensure greater accountability and transparency.

Pakistan must now balance between economic survival, infrastructure needs, and foreign relations.

👉 What do you think? Will Pakistan succeed in completing ML-1 with ADB’s help, or will this project face further delays? Share your thoughts in the comments below!