Members of the Federal Cabinet are at odds over the $8.2 billion Main Railway Line (ML-1) project – a part of the China Pakistan Economic Corridor (CPEC) – and this reflects a problem that we have seen festering under the surface. There have been numerous reports of the government’s waning interest in many of the projects linked to the corridor deal with China, and with the Cabinet now at odds, it would be helpful if the ruling party clarifies their stance once and for all.

The Pakistan Tehreek-i-Insaf’s (PTI) economic policy has focused on austerity since their victory in the general elections. The International Monetary Fund (IMF) bailout programme was a central keystone in the efforts of the party to rejuvenate the economy. With work on various projects under the CPEC banner already well underway, the government now has to juggle both austerity and large-scale spending for CPEC somehow, and this is already proving to be complicated.

The ML-1 project in particular, is backed by Railways Minister Sheikh Rasheed, a key ally of PTI and a failure to show any progress on this programme will lead to divisions between the ruling coalition. Placating the Railways Minister has been an important part of PTI’s domestic political strategy and agreeing to this project implies that the ruling party is not ready to deepen any divisions that may come about from not approving this project.

The problem however, lies in the fact that the agreements for CPEC have already been penned by the Pakistani side, and the country cannot afford to renege in commitments made to our closest economic partner. The IMF has an inherent bias against Chinese investment, and just because a bailout programme has been agreed to, does not mean that the Fund should have a say in who Pakistan conducts its business dealings with. Foreign policy remains under the purview of the Pakistan state and should not be ceded at any cost.

Having said that, there are legitimate concerns about securing financing from China that must be mitigated before signing a new loan deal for this project. The long-term objective here, must to be to secure the maximum amount of benefit possible for Pakistan, and that goes beyond merely opening up a new rail route for use by the public or for increased trade. The loan should imply that Pakistani businesses should take up more work in the completion and running of the project in order to ensure that growth continues unfettered.