Mumbai: India will not prevent funding for the China-Pakistan Economic Corridor (CPEC) through a multilateral institution like the Asian Infrastructure Investment Bank (AIIB), despite being critical of the $50 billion transportation project that it believes infringes on India’s sovereignty.
“Every multilateral bank has many dimensions and one cannot dictate which projects it must invest in, in other countries," said Piyush Goyal, Union minister for finance, railways, coal and corporate affairs. “I think we should look at how we can benefit from such engagements rather than focusing our efforts on trying to see what they should not be doing," he said.
CPEC is part of the Belt and Road Initiative (BRI) being spearheaded by China to build transport infrastructure across Asia and Africa. It passes through Gilgit and Baltistan areas of Pakistan-occupied Kashmir.
India was isolated in its criticism of the project and was the only country at this month’s Shanghai Cooperation Organisation summit in Qingdao city that refused to endorse BRI. Beijing has signed agreements with about 80 countries and international organizations before it started work on BRI.
“The AIIB is an independent organization, it’s not a Chinese-led institution," Goyal reiterated. “India is the largest recipient of AIIB’s funds. We’ve received loans of $1.2 billion of the $ 4.4 billion sanctioned so far by the bank. We’re looking at a bouquet of 9-10 other projects (for AIIB’s financing). We should focus our efforts on this."
China holds a 31% stake in AIIB, while India, the second-largest shareholder, has 8% voting rights. On Sunday, economic affairs secretary S.C. Garg said that no funding proposal linked to the BRI had so far come before the AIIB. He was speaking on the sidelines of the AIIB annual meeting in Mumbai.
On India’s internal infrastructure needs, Goyal said the government is open to the idea of monetizing infrastructure assets, besides roads, through the new toll-operate-transfer (ToT) model. “It’s not a bad idea and it’s good for the economy," he said. “If we can monetize (existing infrastructure) and that can help create capital for new projects, I think it’s very good for the country... Why can’t we do the same on (power) transmission lines?"
Under the ToT model, the National Highways Authority of India auctions the right to collect tolls on selected national highway stretches for 30 years against an upfront payment. The first such award fetched Rs9,681 crore from Australian private equity investor Macquarie, surpassing the government’s expectations of Rs6,258 crore.