Pakistan will seek a $2.7 billion loan (approximately Rs 20,100 crore) from China to fund construction of package-I of the Mainline-1 project of China Pakistan Economic Corridor (CPEC).
The decision was made on November 13 at the sixth meeting of the financing committee on the ML-1 project, Pakistan daily The Express Tribune reported.
The committee concluded that it would first ask China to sanction only $2.73 billion out of the total estimated Chinese funding of around $6.1 billion (Rs 45,400 crore), officials told the publication.
Moneycontrol could not independently verify the story.
Package-I of the ML-1 project involves upgrading a portion of the tracks on the Karachi-Peshawar Railway Line.
Pakistan's Ministry of Railways had preferred requesting the full financing $6.1 billion, but it was decided to seek the loan in tranches due to debt sustainability concerns, The Express Tribune reported.
A Ministry of Finance representative had at the meeting pointed out the issue of the project's bankability, sources told the paper.
"It is the responsibility of the Ministry of Finance to ensure continued and improved debt sustainability and advice of the Ministry of Finance on bankability (of the project) has been given in this context," Kamran Afzal, spokesman for the Ministry of Finance told The Express Tribune.
"The advice given by the Ministry of Finance will improve project feasibility," he added.
According to the report, Pakistan's Ministry of Economic Affairs has been directed to formally send the Letter of Intent to China next week since Beijing is expected to freeze its financing plans for next year by November-end.
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