China’s railway to the Arabian Sea would be worth the $58bn, study finds

Carried out by scientists from the China Railway First Survey and Design Institute Group, the study found that the railway would reduce China’s dependence on the choke-point of the Strait of Malacca.

The Chinese government and financial institutions should provide “strong policy support and guarantees for the construction of this project”, the study said. It was published in the Chinese-language journal Railway Transport and Economy.

It would be an element of the China–Pakistan Economic Corridor, and one of the largest and most challenging Belt and Road transport projects.

Building it would entail risks, as it would cross mountainous terrain and politically volatile regions.

Chinese workers in Pakistan have been the targets of several terrorist attacks in recent years (see further reading).

The study noted that the line would connect with Iranian and Turkish networks to provide shortcuts to Europe for Chinese goods, and that Pakistan’s economy would benefit from state-of-the-art infrastructure and easier trade with China.

But it noted that China would have to bear the lion’s share of the cost, since it represented around 16% of Pakistan’s GDP.

The study suggested that a build and transfer (BT) model would be a better procurement option than build-operate-transfer, public-private partnerships, or the engineering, procurement, construction form.

In the BT model, a contractor would design, build and finance the railway, receiving payment on completion, rather than taking it from fares over a franchise period.

The researchers said build and transfer would allow risks more effectively between China and Pakistan, and could also build trust between the two sides by showing China’s commitment to supporting Pakistan’s long-term economic development.

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