CPEC power projects

This article is right now a “stub” i.e., being developed. But we are posting it online as it is being written so any comments can be incorporated.

This article is part of our CPEC watch series.

As you may be aware, bulk of the CPEC dollars go into energy sector projects. Of the $50b or so earmarked for CPEC, $30b is for such projects. Bulk of this money goes into coal based thermal power projects.

Ignoring the small ones, here is a quick summary of the major projects.

NameCost ($b)MWTariff (c/Kwh)Remarks
Port Qasim2.0813208.12LIBOR + 4.5% rate for this & most other projects listed here! Plus 7% insurance on interest!
Thar 12.013208-8.5Some reports say PKR 8 which is slightly less.
34% ROI guaranteed!
Thar 21.16608-8.5Plus mine $800m
Sahiwal1.813208.3627% ROI Guarantee!
Suki Kinari Hydro
Karot Hydro

Update Jan 2017: As per this article, some of the projects (actually amounting to 50% of generation capacity) would be delayed by at least a year. A new list of projects as of date will be made presumably in February.

How does Pakistan benefit?

Reading the mainstream Pakistani press or listening to its politicians and Generals, you can conclude CPEC is the magic bullet that will transform Pakistan into another Switzerland or Singapore or may be both. The Pakistani intellectual class has been raising some hard questions, although quietly. The religious right is so far sold on the benefits though that could change fairly quickly.

We can look at 3 possibilities:

  1. Energy projects are simply a way for China to dump its excess capacity and grab juicy contracts for its manufacturing sector floundering on reduced domestic demand and worsening international market. It is using the carrot of CPEC to extract this benefit from the Pakistani Generals.
  2. Pakistan is throwing this as a sweetener willingly to be eligible for the strategic (and military) benefits that accrue from the CPEC’s non-energy part. This essentially means tying up China and its powerful military-economic complex to secure Pakistan’s interests particularly vis-a-vis India. That is why they are not de-linked from CPEC nor are subject to any competitive bidding or transparent procurement norms.
  3. It is China that is throwing money at Pakistan by funding all these energy projects, so that Pakistan can be persuaded to literally hand over the CPEC route to China. After all, why should the Abdul on the streets of Pakistan care if China benefits from a shorter route to the Gulf?

Of the 3, we can straightaway rule out (3). While it is hard to compare projects across time and geography, that too with numerous variables such as coal linkages, ports and rail handling infrastructure etc., simple back of envelope calculations show these projects are nearly twice as expensive as comparable NTPC (India) ones. (Note: We would be happy to stand corrected if this is wrong).

The tariffs too are much higher (8-11 US cents) whereas NTPC has been having trouble selling power even at 7c (INR 4.3) and falling, since prices are even lower in the open market in India (INR 3.5)!  Recent solar bids are also lower than this price!.

Therefore one can venture to say Pakistanis are royally screwed, even without counting the extra security and other invisible costs. Remember, these costs are in dollars and will keep fluctuating (mostly increasing) with time. Even if these worst case theories are wrong, it would indeed be quite safe to conclude that China is not at least throwing its hard earned money at Pakistan.

(1) and (2) hardly make any difference in terms of actual cost to Pakistan, only its acceptability, although Pakistani aam Abduls have been sold on theory (3) and the fact that China has been so kind and benevolent. The question then boils down to the benefit that come with such costs.

It is interesting to note that while the rest of CPEC will take a long time to come to fruition, the energy aspects are being fast tracked with supposedly quick win benefits for Pakistan. The general elections due in 2018 in Pakistan obviously has a significance too.

Note also that some of these projects pre-date the CPEC or even the OBOR and have been grand-fathered in to make the CPEC sound bigger and ride on the publicity bandwagon.






Executive summary on CPEC and OBOR

We have started a new page – CPEC Watch. As part of this initiative, you will see articles on related topics in our regular posts.

This article will be updated as we go along so that it remains current and relevant. Date of last update will be shown at the bottom of the article. Links that form sources for this and other articles are given on the CPEC Watch page

  1. CPEC is actually a part of the larger OBOR initiative of President Xi.
  2. OBOR consists of a belt which is actually a series of land routes (road or rail) that connect China to Europe. The “road” is actually a sea lane aka Maritime Silk Route (MSR) which connects various ports, mainly in the Indian Ocean.
  3. CPEC will provide rail connectivity from Kashgar in China’s Xinjiang to Gwadar, a port it is building (or partly built) in Pakistan’s Balochistan province. That’s a distance of over 2000km as crow flies, much longer in reality.
  4. On top of this, CPEC will also feature roads and energy project which primarily address Pakistan’s energy shortfall.
  5. There are other pie in the sky projects linked to OBOR’s MSR part such as BCIM (Bangladesh, India, China, Myanmar) which are in various stages of consideration.
  6. China’s financing initiatives such as AIB are linked to this overall plan.
  7. Substantial share of CPEC dollars ($30b+) go into energy sector projects, primarily coal. These are fast track projects which obviously use a lot of Chinese machinery and labor, not to speak of capital. We are planning a separate article on these projects.

What makes it unique?

  1. The CPEC engagement is unique since thus far China has been reaping the strategic benefits of its illicit affair with Pakistan without paying a cent for it. In fact bills were forwarded to Uncle Sam who was cuckolded by the jihadi Generals. But that is not a workable option any longer.
  2. Now China is literally putting money where its mouth is. That too not Corporate or private sector like Alibaba or Huawei that invest in India, but state funds and that too in a high visibility prestigious project aka OBOR/CPEC on which President Xi has staked his personal reputation.
  3. This means China will not take kindly to any roadblocks, real or perceived. Whether it succeeds or not is another matter altogether.  Its track record overseas, particularly in countries that differ culturally has been mixed. Africa is a good example.
  4. If things don’t go too well for the regime, it may quickly find convenient scapegoats to blame and wash its hands off. Communism has its advantages, it doesn’t have to explain anything to anyone.


30th October 2016


Boycott of Chinese goods – makes sense?

After the recent Uri attack and China’s blatant siding with Pakistan on terrorism as well as the NSG matter, opinions are slowly hardening on the Indian side too. Now many Indians are copying a long used Chinese trick – boycotting Chinese made goods.

As everyone knows, China has been using this weapon for years now, mostly targeting Japan, occasionally smaller European states like Denmark that dare to raise inconvenient issues like human rights. State run media whip up a frenzy which is promptly followed up by social media “patriots”.

Now China is getting a taste of it’s own medicine although in much smaller, almost statistically insignificant doses.

Question then is, is it right? How does one go about it?

  1. First, it should be made clear the target is not Chinese people. In fact the message that should go from any such boycott is one of pain and not anger. Pain that Chinese government, unaccountable to its own populace, in supporting jihadi terrorist Pakistani generals and the deep state, is acting against the best interests of all three countries involved – China, India and Pakistan itself.
  2. Second, any such boycott should firstly involve change in lifestyle and behaviour. For example, richer parents buy plastic toys (almost 100% made in China) by the dozen for their kids only thrown away in the attic after a few minutes of play. Isn’t it better to avoid such gifts in the first place? After all most parents do it not so much for their kids but to massage their own egos.
  3. Most middle and upper class kids have way too much in clothing, much of it imported, though they hardly wear them once or twice before they outgrow them. Loving parents and relatives shower them with stuff they have no use for. Can we change that? That doesn’t take a boycott.
  4. We should be selective and choose items for which reasonable alternatives exist within India. And which helps our artisans and poorer citizens. Locks are a good example. Diyas (earthen lamps) instead of strip lighting is another. Thankfully clothing is mostly made locally but even here Chinese goods have swamped, particularly in specific sub-sectors like kids clothing, baby wear etc.
  5. Where there are no choices, such as mobiles and laptops that are 100% made in China and nowhere else, we have ask ourselves do we need yearly upgrades?
  6. It should be a reminder to ourselves and our babudom that the reason why we import practically everything from China at prices far cheaper despite considerable distance traveled is because of our own inefficiency and incompetence that treats business as evil, profit as immoral and businessmen worse than armed terrorists. It is odd that we have to learn the benefits of a fair but capitalist, investment oriented society from a supposedly socialist state. If alongside such boycotts, we can dismantle the numerous controls and paperwork and corruption that kill our SMEs we will need no boycotts in future.
  7. Government can also consider sensible regulations that avoid plastic and electronic wastage without directly targeting China. Europe forced most phone makers into using common interface for charging so they dont have to bundle a charger with each handset. Why can’t we ban such bundling? After all chargers can be made here for common use?
  8. Many “Indian” brands have actually given up on manufacturing and simply import stuff from China and sell it in their name. Obviously that brings bigger profits. Bajaj table fans are a good example. Same goes for most iron boxes, rice cookers, even bulbs and other such items sold in Indian shops. Our trade unions and government should sit together and ponder over why this has happened and what can be done about it. While this is slightly better than the situation in other countries such as Indonesia or Thailand where even brands are Chinese, it is small consolation.
  9. Whenever we buy something, it should become a habit to check where it is made. Most of us don’t even check expiry dates of foodstuff. Ask ourselves a simple question – why can’t it be made here? Is it super-duper high tech? Most likely not! Solutions will follow. Reforms pushed from ground up can never fail. If a million citizens change their thinking and push for change, that can exceed the impact a dozen think tanks and intellectuals shouting themselves hoarse.
  10. Government should publish and keep updated, a list of top 1,000 things that we import (not just from China) along with the quantity, value and other statistics. This list should mainly target things that end users buy in large quantities (such as mobile covers, chargers etc). It should be a wake up call to our entrepreneur class to see if they can make them, better, cheaper. In most cases, the answer is yes.



Understanding Quetta Police cadet camp attack

Whenever blood gets spilled in the subcontinent we find that even more ink gets spilled. Most of it is stale propaganda for one vested interest or the other. Rarely is truth spoken with courage.

The love affair of Pakistani state with religious fanatics who are either directly involved in terror or merely one fake facade or two away from the “boys with guns” has not ended and is not going to end soon.

In this context let us try and understand the most recent attack in Quetta that killed 69 including the three “terrorists”.

  1. Numerous fake claims pop up after such attack to take “credit”. But most government reports seem to blame a faction of the Lashkar-e-Janghvi group.
  2. This LeJ is considered an off-shoot of yet another Sunni terror group known as “Sipah-e-Sahaba”. Terror groups in Pakistan float subsidiaries and associates and joint ventures with speed that will put any Hong Kong business tycoon to shame. The state too facilitates such cosmetic makeovers since it allows them to “prove” to the Americans that they have acted against a group, milking more dollars to use to create more such groups. After a while the drama repeats.
  3. Now this SSP itself has again renamed itself to “Ahle-Sunnat-Wal-Jamaat” or ASWJ (don’t confuse with Asian Wall St Journal!)
  4. These groups have been banned, un-banned and re-banned as often as they grouped, re-grouped, renamed themselves.  Usually it follows a major terror attack, PM/Army chief visit to US or a visit by US Secretary of State etc so that more dollars can be milked. Once dust settles they carry on, often with state aid.
  5. Their involvement in various terror acts, going by their own admissions, is beyond doubt.
  6. Just two days prior to the Quetta attack, Pakistan’s interior minister met with the boss of ASWJ – Maulana Ludhianvi. Remember, this is a banned terror organisation even by Pakistan’s loose standards of what constitutes terror. Bit like Carter or Kerry having dinner with the ISIS Caliph.
  7. To add some “masala” to the mix, various other terrorists were also in the meeting with the minister.
  8. It is exactly this group or its off-shoot which carried out the Quetta attack. Remember, such off-shoots are created for providing plausible deniability, a trick Pakistan has mastered over the years.
  9. It is also well known that state funds are provided to the Madrasas run by extremist groups that were part of the meeting. If you wonder why Pakistan funds terrorists that kill Pakistanis, look closely again at the ethnicity, religion or sect of the victims. Most are Ahmedis, Shias, Christians, Hindus, Baloch or Pashtun, rarely the Punjabi elite. The Peshawar school attack that targeted senior officials’ kids was a rare exception.
  10. Pakistani state benefits from such attacks since they can be used to play the victim card and gather more sympathy and dollars to go after the real enemies – Afghanistan and India.
  11. So it can be safely concluded that the Quetta terror attack is basically staged by “friends” of the regime. Or some boys who absorbed their training too well and didn’t care to listen to their tutors once they graduated.
  12. The most interesting aspect of this whole affair is that these groups are not even anti-India or Afghanistan, a traditional excuse offered by Pakistani deep state to justify support. These groups have almost exclusively operated within Pakistan.
  13. Far from “not allowing terror groups to operate”, Pakistani ruling party and its Army allows such groups to openly meet, greet, discuss, get state funds and hold massive rallies.
  14. If this is the sort of ambivalence shown by the state against groups that kill within Pakistan, one can only imagine the situation re groups like LeT that only kill kuffar Hindus in India.
  15. The left liberal cabal in India controlled by hardcore Marxists deliberately ignores, obfuscates, buries such facts to suit its own narrative that stays close to Beijing’s strategic objectives.

Watch the Duterte space

A colorful character that can make our Lalloo Prasad look stale and sober, Rodrigo Duterte has taken over Philippines as its President. The web is full of his hilarious and often offensive remarks so let us not waste any time discussing them. Many of them are about as sensible as a drunk garrulous taxi driver’s.

But then he is President of a nation and what he says and does impacts not only his country but others too. So his recent “break” with the United States, announced in China during a state visit, if carried out even partially will have profound impact.

Basically what he is saying is that US is a has-been, too arrogant and lecturing and unable or unwilling to help his country in its development. So he wants to turn to China the new Don in town. Interestingly similar comments were also made by a prominent Pakistani diplomat recently in the US, where he blatantly threatened Americans that Pakistan may “turn” to China or Russia. As if that is something new!

In fact many leftists in India have been arguing that instead of challenging China’s hegemony in Asia or even South Asia, India should learn to live with it, accept its overwhelming superiority and find ways to benefit from its rise. Be obedient and reap rewards.

There are many domestic and personal compulsions that propel Duterte’s open hostility to US and warm embrace of China. It appears he too suffered visa denials (1) and bad treatment at LAX airport in the past. Ethnic Chinese tycoons control practically all of Philippines economy and are a powerful. It is said that the indigenous populace, deeply suspicious of China and more wannabe American than Ronald McDonald will not support this switch.

Be that as it may, India should watch the space carefully. Two things may happen:

1. Duterte’s overture to China will result in good bargains for Philippines in its various disputes with China as well as economically. China will be generous to its “subjects” and give away more than it otherwise would. Projects and investments will flow not merely to fill order books of factories in China but benefit locals.

2. China will simply use this surrender as an example to arm twist other recalcitrant and fence sitters and drive hard bargains or worse, humiliate even more. Real gains to the Philippines at least in the short and medium term will be marginal.

As China goes about writing big cheques that may or may not bounce (well over $100b at last count (2) ), India should keep a watch on these developments. Given the experience of East Africans and others like Cambodia, this manna from heaven may come with side effects.

May be the lefties are right. May be they aren’t.


  1. http://news.abs-cbn.com/blogs/opinions/10/23/16/opinion-duterte-and-the-us-so-it-boils-down-to-a-visa-issue
  2. $24b to BD, $15 to Egypt, $48b to Pakistan, $15b to Philippines counting only the recent ones.


Bollywood’s hypocrisy on terror

There are many things about Bollywood that Indians can proud of. The sweet melodies of Lata Mangeshkar, golden voice of Md. Rafi, the poetry of Sahir Ludhianvi, the all round magic of Raj Kapoor and so on. No doubt Bollywood has enriched India’s culture and the lives of its ordinary citizens in numerous ways even if you completely ignore it’s contributions towards a more progressive and caring society.

But then there are many things about Bollywood that makes any Indian cringe and be ashamed of, especially when overseas. The outlandish plots, weak story lines, repetitive themes, running around bushes singing songs, blatant plagiarism that rips off not just songs and tunes but entire movies frame by frame from Hollywood, questionable ethics, morals and values in getting funded by mafia and its starlets playing side role as concubines for Indian mafia dons in Dubai and so on.

Add hypocrisy to that list.

This hypocrisy has always been around only it comes to the fore with more visibility whenever there is a terror attack from Pakistan. Remember Mumbai 26/11? Bollywood ‘liberal’ Mahesh Bhatt, whose son Rahul was under a cloud for hosting a Pakistani-American jihadi terrorist (supposedly unknowingly) selfishly participated, along with an equally shameless and obnoxious sycophant of the Sonia dynasty,  Digvijay Singh, to launch a book that blamed the attack on RSS! Question them, pronto you will be labelled ‘fascist’.

Now we have the likes of Karan Johar, Anurag Kashyap and other Bollywood worthies, joined by equally ‘intellectual’ leftist elites and media divas have donned the convenient liberal mask to question why Pakistani stars should not be allowed to continue working in Indian movies. They pretend to cast themselves in the role of ambassadors of love, affection, brotherhood and what not, conveniently forgetting their choices often boils down to business considerations.

Let’s face it – the decision to cast Pakistani or German or Rwandan actor or a porn star from the USA for that matter, is purely a commercial one, with enormous gains accruing to the Producer, Director and others, should it ‘click’. When that is questioned for genuine reasons, instead of facing up to the reality, our Bollywood tries to fool others into believing they are liberal heroes trying to build bridges of “friendship” and the rest of us are uncouth fascists out to spoil the bonhomie.

Useless questions are asked and given prominence by allies in the media like Barkha Dutt – Is Fawad Khan a terrorist? How can banning them help Kashmir? Did anyone ask Is Barry Richards or Graeme Pollock a racist bigot? How is banning South African cricket going to help its poor black people?

Interestingly, the very same leftist “intellectuals” in liberal mask that now scold us ordinary Indians as illiberal fascists and fanatics for calling for a ban on Pakistanis actors, proudly participate in “Boycott Israel” campaigns, even protesting against harmless orchestras and musicians. No too-clever-by-half questions such as “Will boycotting Israeli Philharmonic orchestra solve Palestinian problem?” etc.  Then the roles are reversed. Anyone questioning the ban become a fascist.

Obviously killing Jews is kosher and killing kuffar Hindus is halal presumably because it suits China’s strategic interests. As mandated by the “taller than mountain” friendship of Rawalpindi and Beijing, our leftist elites see absolutely no issues with jihadi terrorism and boycotts are only justified if it punishes its victims.

Of course none of these leftist comrades question their fellow travelers who impose bans on anything that doesn’t please their whims and fancies and of course, Marx/Mao ideologies. Acharya Ramdev cannot speak at JNU, non-left professors cannot survive in Bengal, historians that don’t take instructions from Alimuddin get purged out in PolPotist purges. All the while the noisy ‘freedom’ brigade will collect their rewards and frequent flyer miles and stay silent.

And since it suits their own commercial interests, our Bollywood moghuls, experts in the art of make-up, farce and hypocrisy, quickly wear the liberal mask and join our leftist elites in questioning the patriotism of the rest of us, as if only their brand is the original one!


Is Modi fixated on terror?

No one can have a quarrel with India trying to isolate Pakistan globally using its considerable diplomatic and increasingly lethal financial muscle. But then there comes a point when we have to ask – Is the government wasting too much time on this ? Worse, can it be counter productive?

At the outset, it has to be said that using diplomatic means is a lot better (for now) than using military means. Having said that, let us think through some of the recent events.

Excessive obsession with Pakistan is actually bad for India as we are seen as vulnerable, weak and end up getting bracketed with a failing jihadi terrorist state that survives on handouts from its benefactors.

A strong person, hurt in a relationship, shrugs his shoulders and moves on. A strong Mafia don goes for the kill and makes sure the lesson is taught well. A strong nation extracts its revenge too, but doesn’t wail and holler every time someone passes by and lends a shoulder.

What can netting Masood Azhar or Hafiz Saeed accomplish? Simply replacing them with another beard? Is Pakistan running out of fanatic barbarians? Pakistan should be clearly told it has made its choice and will have to pay the appropriate price. Nothing more.

Are we saying don’t go and take them out like Uncle Sam did? By all means, do that! But don’t obsess over it and try score small semantic victories in joint statements.

India should simply issue one statement – that it will not talk to Pakistan until there is clear and present evidence of action, change of course and reserves right to use ANY and ALL options to deal with the issue. Don’t talk about it unless asked about it, even then simply refer to the earlier statement.

As far as China goes, there is so much we can learn from Chinese diplomats and their clear statements. Why can’t we simply say “We would like to China to see long term value in the relationship with India” or some such thing that simply puts the ball in PRC’s court and sets a price for recalcitrance?

Lobbying with super powers should be quiet not noisily conducted through the press.

We should also selectively loosen curbs on actors, musicians etc., who are not jihadist fanatics. That again conveys strength not weakness. This is not a call for large scale pappi-jappi or Wagah candle kissing. It also prevents Pakistan from raising the “Islam is in danger” bogey.

And for God’s sake can we avoid those “felicitation ceremonies” over the cross border “surgical strike”? It reeks of cheap Bollywood drama.

May be Narendra Modi, Parikkar and Amit Shah should sit together and watch the first two seasons of Godfather. There’s a lot to learn from Michael Corleone.

Or they can try and listen to Teddy Roosevelt’s ancient wisdom – speak softly, carry a big stick. Not the other way around.



The “surgical” strikes

First let us clear some basic doubts. The term “surgical strike” is not yet another archaic, 18th century English word that Indians and only Indians use (“Eve teasing”, “Textbook launch” etc).  A quick search of UK Ministry of Defense web page turns up a few instances. But the super duper trigger happy macho US armed forces, for all their prowess, have unfortunately not carried out even one such strike. Their website returns blank if you search for “surgical strikes”. This should tell our Govt PR men something. Better use terms Americans (and English media dominated by them and their lingo) understand.

Having discussed the most important aspect of the strike, let us turn our attention to less important ones. A few salient facts stand out.

  1. This tight slap comes with free massage service too. Modi government is not really calling this an attack on Pakistan or even Pakistani Army. The specific reference to telecon with Paki DGMO in the presser (plus the confirmation that nothing else was planned) was designed to reassure international community as well as perhaps Pakistan itself – it is up to you to treat an attack on jihadi terrorists as an attack on your state.
  2. This gives Pakistan too a chance to deny everything and pretend nothing happened. But then like alibis (“I was never there”) in murder cases, that also preculdes them from using other defenses (“He hit me first, it was self defense, etc etc”)
  3. It may even offer Modi a nice chance to get back into the talks mode and de-escalate. The jingos have been taken care of. This is why repeated noises by likes of Praveen Swami that more or less imply strikes never took place look not only silly and foolish but also counterproductive.
  4. It sets a new bar no doubt. But alarmist opinions (like that of S Varadarajan at The Wire) that this will only force Modi to take even more violent action in future are silly. Because India was clever enough to wait for time and place as well as choose the strength and direction of the blow. Not only that PM Modi even addressed Pakistani citizens directly from Kerala, telling them clearly they are not his enemies. All this means, should another terror attack happen, public opinion will give Modi the time and space as well as let him choose the weapon to retaliate and not demand instant mob justice. In that sense, this “surgical strike” may have done more good than harm.
  5. No one think this will put a stop to Pakistani terror tactics as R. Jagannathan points out succintly in his brilliant article. But what was earlier a free ticket to kill kufr Indians is now a priced product with the usual “prices are subject to change without notice” condition in fine print. This may not stop a jihadi fanatic ready to die for “Islam” but it will give their backers and handlers (who are not that keen on dying, rather look forward to retiring in peace with their fine Scotch, kebabs and Chinese LED TV screens) in the Pakistani deep state something to chew on.
  6. Combine that with the muscular stand on Balochistan and the strident opposition to CPEC, it will also send a signal to China. Happy hours are over, peak period pricing applies. Given their commercial acumen, it is a matter of time before they pull out their calculators and do the maths. Given the size of the reward booming Indian economy offers to demand starved Chinese manufacturers with excess capacity, we have much better chances of seeing a gradual change in behaviour than aggressive counter measures. China will even lean on Pakistan to keep a lid on their boys at least until its own economy steps back from the precipice.
  7. There has always been a lot of “Oh God! They have nukes” arguments are slowly loosing their shine. Interestingly all our leftist geniuses that argue that Pakistan is perfectly entitled to blackmail and we should simply roll over and play dead do not seem to suggest a similar course against China! After all the dynamics are almost exactly the same. Although a few of their kids have been sent overseas to safety, as we mentioned earlier, the Pakistani elite loves life, and does not want to be vaporised in their homes. This is obviously not to recommend a reckless course, but to be ready to raise costs and not yield to blackmail without worrying all the time about a nuclear wipeout.
  8. The world will understand India means business and will now work to restrain Pakistan. This completely reverses the earlier game where Pakistan was free to kill and maim and it was the Indians that were told to be “restrained”

Let us see how the situation develops and hope enough planning is being done to exploit the new momentum as well as take precautions.