PM Imran has given directives for fast completion of infrastructure work in the SEZs in an attempt to attract foreign direct investment through the industrialisation process. PHOTO: FILE
Pakistan is going to enter the industrialisation phase of CPEC and the government wants China to relocate some of its industrial units to the SEZs. The government also wants to open the SEZs for investors of all countries.
The setting up of industrial units in the SEZs will give a boost to Pakistan’s exports, which have remained almost stagnant for the past many years. The industrialisation wave will create opportunities for jobs and the transfer of technology.
As energy provision is vital for running the industries, the Petroleum Division has asked the government to allocate Rs495.27 million for Sui Southern Gas Company (SSGC) and Rs6.14 billion for Sui Northern Gas Pipelines Limited (SNGPL), which will supply LNG to the factories in the SEZs.
The Economic Coordination Committee (ECC) had decided earlier that the cost of providing utility services like gas and electricity for the SEZs would be met through the PSDP.
The government has planned to set up nine SEZs under CPEC in an attempt to give a fresh impetus to industrialisation and ramp up exports from the country.
Officials claim there has been unprecedented progress in three SEZs including Rashakai in Nowshera (Khyber-Pakhtunkhwa), Allama Iqbal Industrial City in Faisalabad (Punjab) and Dhabeji in Thatta (Sindh).
The Rashakai SEZ is estimated to cost Rs1.2 billion whereas the Dhabeji SEZ will be set up at a cost of Rs185 million.
Exemption from PC-1
Separately, the public gas utilities - SSGC and SNGPL - have sought exemption from preparing Project Cycle-I (PC-I) for laying the gas pipeline network up to the SEZs.
The Petroleum Division has backed the gas utilities, saying they should be exempted from submitting the PC-I that covered the cost of pipeline infrastructure and laying the external network up to the zero points of the SEZs.
In order to provide industrial gas connections, the gas utilities lay the pipeline network based on 100% cost recovery from the applicant and developer for expeditious completion of projects. Since the ECC has already decided that the government will meet the cost of the external network, the cost estimates have been shared with the Ministry of Planning, Development and Reform for inclusion in the PSDP 2019-20.
Furthermore, the gas utilities undertake pipeline projects in such a way that all activities were covered ie detailed route surveys, material procurement, land acquisition, temporary way leave, drawing up site maps, etc. These functions are interconnected and are performed simultaneously for which 100% financing is required in advance.
Seventy to seventy-five per cent of the material required for the projects is procured in one go instead of purchasing it at regular intervals.
Keeping that in view and in order to complete the projects expeditiously, the gas utilities recommended that SEZ projects should be exempted from submission of PC-I in the case of government funding for the gasification of towns and villages. The public utilities want the Executive Committee of the National Economic Council (Ecnec) to approve their proposal.
Prime Minister Imran Khan has given directives for fast completion of infrastructure work in the SEZs in an attempt to attract foreign direct investment through the industrialisation process in the allocated zones, which will be set up in all four provinces of the country. The CPEC Authority has already been set up to oversee and monitor CPEC projects despite criticism by the opposition parties.
Published in The Express Tribune, October 25th, 2019.
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