Pakistan has signed a multi-billion dollar deal with China to buy eight submarines for its navy.
“Pakistan and China have reached an understanding on matters of defense cooperation relating to Pakistan Navy,” the Pakistan finance ministry was quoted as saying by The Express Tribune today.
“Financial arrangements to this effect were also concluded,” Ministry said after a meeting with Chinese authorities.
According to a briefing that the defence ministry gave to parliament in April this year, Pakistan was negotiating a deal for acquisition of submarines from China. In the same month, the UK-based Financial Times cited a retired senior official in a report that the contract could be worth $4 billion to $5 billion, the largest defence deal ever by China.
The finance ministry officials said that Pakistan would make down payments to China in four installments and the delivery of the submarines will be made in the coming years.
The financial arrangements were agreed during a meeting between Finance Minister Ishaq Dar and Xu Ziqin, President of the Chinese state-owned China Shipbuilding & Offshore International Company Limited (CSOC).
CSOC is the trade arm of China Shipbuilding Industry Corporation (CSIC) and its main business is the manufacture, repair, lease, and sales of military ships and submarines.
Last month, both the countries had also signed an agreement for construction of six patrol vessels for the Pakistan Maritime Security Agency (PMSA). The agreement had been signed by China Ship Trading Company (CSTC) and the Pakistani defence production ministry.
The agreement stated that four ships will be constructed in China while the remaining two will be built at Karachi’s Shipyard under a transfer of technology agreement.