ISLAMABAD: Pakistan has received commitments from China for getting investments of $10-$15 billion for various sectors, including for establishing industrial units at 2,200 acres of Gwadar Free Zone, exploring the possibility to establish oil refinery at Pasni and relocation of industries into seven important sectors, including textile, footwear and pharmaceuticals into upcoming the Special Economic Zones.
Adviser to Prime Minister on CPEC, Khalid Mansoor, on Monday said that Pakistan took steps to address the outstanding concerns of Chinese investors such as payment of dues to independent power producers, making revolving funds functional and changing Special Economic Zones (SEZ) Act. This change in SEZ Act will pave the way to bypass 37 approvals for federal and provincial governments for making investments in SEZs.
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The government has paid Rs50 billion to IPPs while another installment of the same amount will be given by the end of the ongoing month. The Revolving Fund has been made functional,” PM’s Adviser on China Pakistan Economic Corridor (CPEC) Khalid Mansoor said while addressing a news conference here on Monday. The Pakistani delegation under PM Imran Khan had returned from China after attending Olympics Winter 2022 and on the sidelines, they held meetings with Chinese leadership, including President Xi Jin Ping.
However, both sides could not make the progress on the much-awaited multi-billion-dollar project for the construction of Mainline-1 (ML-1) to upgrade the rail line from Peshawar to Karachi. The official sources said that the resolutions of outstanding concerns, including repayments for IPPs and making Revolving Fund functional, would result in paving the way for achieving progress on striking financing agreement on ML-1.
Meanwhile, Federal Minister for Planning and Development Asad Umar told The News on Monday that the prime minister held meetings with 19 Chinese companies, inviting them to invest in Pakistan. He said that they shared the detailed documents with Chinese authorities on investment potential and comparative advantage of Pakistan in seven sectors, including textile, pharmaceutical, automotive, information technology, footwear, furniture, and agriculture.
A consortium of three Chinese companies Huazhong Technology, China Communication Construction Company (CCCC) and Zhejiang Seaport Company will set up a paper and metal recycling Park at Gwadar, which will include multiple units at an estimated cost of $4.5 billion. The park is expected to create 40,000 employment opportunities.
A Chinese textile company will establish a Special Economic Zone, which will be a Chinese textile cluster, with an investment of USD250 million.
Three Chinese companies, SINOMACH, Royal Group and Zhengbang Group, have expressed interest in investing in agriculture sector projects, such as FMD free zones, agricultural mechanization, production of pesticides, poultry and cattle feed, etc.
In information technology sector, five Chinese companies have expressed intent to invest around USD2.4 billion. These include Hunan Sunwalk Construction Group (optic fiber network), Fourishtech (research lab and mobile phones assembling and parts manufacturing) and Neusoft Medical Systems (medical diagnostic equipment); Global Semiconductor Group (semiconductor testing and assembly); NAV E-Vehicles (Pvt) Ltd (electric vehicles). MoUs have already been signed for the first two projects.
In the energy and water sectors, two large Chinese companies, China Energy Group and Power China, expressed interest for investment in water sector projects. In the housing sector, three Chinese companies, China State Construction Engineering Corporation (CSCE), China Railway Group Limited and CHINAMEX have expressed interest in implementing various projects.
In the petroleum and mining sectors, three Chinese companies i.e. China Metallurgical Group Corporation (MCC), East Sea Group Limited and Consortium of Sino Infrastructure Hong Kong Orientals Times Limited (SIOT) and Beijing Century Industrial Development Co. Ltd (CENTINCO) expressed interest in investing in various projects, including refineries. Investment agreement on industrial cooperation was signed between China and Pakistan during the PM’s visit.
Khalid Mansoor said that a number of companies came up with investment proposals for the phase-2 of CPEC that would entail multi-billion dollar investments in Pakistan. He said most Chinese companies had shown their interest to invest in country. He said the prime minister had about 20 back-to-back meetings with top executives of Fortune-500 companies to attract investment.
The adviser said that the Chinese companies had been facilitated with a compliance regime and they were not required to obtain NOCs from 37 different departments before launching any investment project in the special economic zones. They would be required to comply with the Pakistani law that would be audited later and subjected to penalties and other fallbacks in case of violations of law.
He said that Chinese companies would also help develop agriculture of the country on modern lines to enhance per acre yield and seed quality. Some companies were interested to grow maize and soybean in Pakistan while another large corporation was interested in setting up an LNG storage at Karachi Port whereas a factory for value-added products would be set up on Lahore-Kasur Road in the textile sector.
The adviser said that another Chinese company, Royal Group, was interested in investing $50 million in the auto sector of the country. Chinese companies wanted to invest $200 million in making medical devices whereas an investment of $2 billion by the Chinese companies would be made for laying optical fiber.
Responding to a question on Pakistani request for additional financial support and debt rollover, Khalid Mansoor said they acknowledged it and would consider and get back to us.
