The International Monetary Fund (IMF) team reached Pakistan on Wednesday to begin a possible bailout package for Pakistan, the first meeting was scheduled for Wednesday between the IMF team and Pakistani officials for the Ministry of Finance.
However, the policy level talks will be started from Monday as reported by Dawn, IMF during the second round of talks on Thursday has expressed concerns over energy deals between China and Pakistan under China-Pakistan Economic Corridor (CPEC).
The officials from the Ministry of Planning and Power Division had a meeting with IMF team where a difference of $9 billion was observed between the data shared by Beijing and Islamabad about the cost of completed and ongoing projects, reported Tribune.
The Chinese consulate in Islamabad has estimated the cost of 22 projects that are underway to $9 billion, however, Pakistan’s planning ministry has estimated the cost of projects which is more than the figures told by the Chinese embassy.
Due to this discrepancy IMF says making outflows projections for future would be inaccurate, sources said in the Finance Ministry. Later the issue of $9 billion cost wasn’t discussed in detail during the meeting.
IMF also asked the ministry of planning and power division about the outcome of CPEC energy deals, the lender asked about the impact of those deals on Pakistan’s financial condition, they questioned the officials in detail about the sovereign guarantees offered to Chinese power producers and the high rate of return offered to Chinese investors. IMF was inferring that these deals would have an adverse effect on Pakistan’s overall financial health.
During the briefing on infrastructure projects by the ministry of planning and development, the total cost of 22 underway projects was estimated at $28.6 billion, the same figures were provided to Federal Cabinet and IMF during the staff level talks which was held in October last month.
But during a press release in October, Chinese embassy unveiled the cost of 22 completed and ongoing energy projects which was recorded at $19 billion. The Chinese embassy omitted the project based in Kohala and Gwadar 300MW project as well as Oracle power plant that are underway, said the official in planning ministry.
The spokesperson of planning commission Hasan Daud said in response that the original cost of 22 projects was estimated $28 billion by Chinese officials, however, he did not provide any documentation to back his claim.
According to the details officials from power division provided a detailed briefing to the IMF including the details of costs, tariff, recovery, losses as well as circular debt. The IMF’s main concern was the Central Power Purchasing Agency Guaranteed (CPPA-G) Limited, according to them, the company defaulted on payments to power producers and that is what picking up the cost.