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Politics & Policy
Pak-China unbreakable friendship

The friendship between Pakistan and China will remain strong and unbreakable

From Shamim Ahmed Rizvi, Islamabad
May 21 - Jun 03, 2001

China has once again provided irrevocable and formidable security and economic guarantees to Pakistan with agreeing to continue undiluted cooperation in all fields including defence and nuclear technology. The Chinese Premier Zhu Rongji and Chief Executive Pakistan Gen. Pervez Musharraf, after their 240 minutes official talks in Islamabad reported the waiting newsmen complete unanimity of views on all international and regional issues including Kashmir.

The 4 days official visit of Premier Zhu Rongji during last week coincided with the golden jubilee of the all weather friendship between the two neighbouring countries. "I am here to inject new vigour and vitality into it", the Chinese premier declared.

Pakistan attach equal importance to its relations with China and is always proud of having a dependable friend like China. Pakistanis differ on several domestic and international issues within themselves, but on the issue of the relations with China they speak with one voice. Every government, every political party, every segment of society in Pakistan, including those demanding the imposition of Shariah in Pakistan wants the Sino-Pakistan relationship to remain firm.

On the very first day of his arrival on Friday May 11, six Memorandums of Understanding (MoUs) were signed between Pakistan and China covering the fields of economic and technical cooperation, tourism, finalization of lease of Saindak copper project to a Chinese firm, supply of locomotives and coaches to Pakistan Railways, construction of white oil pipeline from Karachi to Mahmood Kot near Multan and investment in the field of telecommunication. Additionally, the Chinese prime minister announced that his country would be willing to make investment in the construction of Gwadar port and Makran coastal highway. He made this offer at a luncheon hosted in honour of the Chinese delegation by the Federation of Pakistan Chambers of Commerce and Industry on May 12. This announcement by the Chinese Prime Minister was loudly applauded by Chief Executive General Pervez Musharraf.

Investment in IT

The specific fields in which Chinese participation was assured through signing of the MoUs were the focus of immediate interest for the government. For instance, a Chinese firm's announcement of investment of $ 300 million in the development of information technology in Pakistan may be seen as an important support to Pakistan's ongoing programme in this field. This programme is expected to result in all-round progress in technological development, including higher efficiency and modernization in the country's industrial sector. Faster progress may also be achieved in software development for exports through a sustained pace of expansion in information technology. Further, Chinese support to the current process of improvement in the operations of Pakistan Railways could also be seen as a development of economic significance. A Chinese firm would initially supply built-up locomotives and coaches in limited numbers but subsequently would extend financial and technical assistance for the manufacture of locomotives in the workshop of Pakistan Railways.

Contract for running the Rs.16 billion project Saindak copper gold project was awarded to a Chinese firm which had earlier participated in the bid. Cabinet took this decision only a day before the arrival of Chinese premier. Hectic consultations took place among the minister and officials of the petroleum ministry, Saindak Metals Limited (SML), Geological Survey of Pakistan (GSP), finance ministry and Foreign Office before and after the cabinet meeting to finalize a memorandum of understanding (MoU) and its technical details so that it could be signed in the presence of the visiting leader.

Official sources said the Metallurgical Corporation of China (MCC) will pay $ 500,000 per year to Pakistan as lease rental for 10 years in addition to 50 per cent of the total production from the project. The sources said in the final round, three companies, MCC of China, and two companies from Australia—M/S Molly Mining and Tethyane Mining—took part in the bidding. The bid of Tethyane was rejected on technical grounds.

The technical evaluation committee awarded 72.5 points to Molly Mining of Australia compared with 71 points to MCC of China. The two bids were almost identical in financial terms. They, however claimed that negotiations with the two contenders resulted in improvement in the Chinese offer and finally its offer proved better than the Australian.

The sources said that China was so keen in the project in view of future copper prices in the international market that it also agreed to withdraw sovereign guarantee for $ 500 million white oil pipeline project. A Chinese company has already undertaken exploration activities in Daddar area with an investment of around $80 million, the sources said.

The company will take over the Saindak project free of work force and other encumbrances as the project staff is being offered golden handshake and voluntary service separation. The project has been lying closed since 1995 due to shortage of working capital.

The trial production at the project yielded 1,700 tons of copper, 5,000 ounce of gold and 12,000 once of silver in four months period. The project is capable of producing 15,810 tons of blister copper, 1.46 tons of gold, three tons of silver besides pyrites concentrate for a period of 20 years.