Fate of SEZs

Apparently, the government is bringing economic zones with those coming up under CPEC and it is going to be complex

The government has decided to finance the cost of provision of gas and electricity to all the Special Economic Zones (SEZs) out of the Public Sector Development Pro¬gramme (PSDP) and withdraw provincial mark-up support and federal freight subsidy to SEZs under the China-Pakistan Economic Corridor (CPEC). The Board of Investment (BoI) has been directed to submit the case to the cabinet for the purpose. The BoI was also directed to move a case for amendments to the SEZs Act of 2012 to further empower the provincial governments to complete the processing within 45 days mainly focusing on confirmation of availability of gas and electricity. Apparently, the government is planning to bring all economic zones already in operation in the country on a par with those coming up under CPEC so as to eliminate any gap in the economic viability between units that are already operating in the existing zones and those in CPEC zones. It is going to be a highly complex and complicated exercise. In the ultimate analysis the exercise might create more problems than solve any.

Meanwhile, nothing much has happened so far on CPEC-related SEZs. The one region that is all set for its first SEZ, Gwadar, does not have either gas or electricity in enough quantity to cater for such an undertaking. Punjab also does not have enough gas. We have enough power at the moment but because of the decaying transmission lines it is becoming almost impossible to take full advantage of the improved power situation. Dams are overflowing due to extra rains this season. It is this context one feels the decision to have the power division to “prepare a comprehensive plan, for provision of uninterrupted electricity to existing all industrial zones” as well as to devise a plan for provision of gas to all existing industrial zones in consultation with the provincial governments and present it within a month to the ECC are likely to remain only a direction and nothing more.

Published in The Express Tribune, March 5^th, 2019.

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