KP signs deal with Chinese company for SEZ at Rashakai in a hurry

ISLAMABAD: The Khyber-Pakhtunkhwa (KP) government has engaged China Road and Bridge Corporation (CRBC) for the development of its Rashakai Special Economic Zone (SEZ). While Rashakai has been put on the fast track for development, previously preferred Hattar SEZ apparently has been put on the backburner. Incidentally, CRBC has already been awarded the contract for the development of Hattar, situated close to Havelian Dry Port.

Two agreements, a memorandum of understanding and an engagement agreement, were inked in the space of 24 hours between the KP government and CRBC – a subsidiary of China Communications Construction Company (CCCC).

KPEZDMC Chief Executive Officer Adil Salahuddin and CRBC, Pakistan General Manager Li Zhihuai signed the engagement agreement was with the KP chief minister in attendance.

According to officials in the KP government, the provincial administration has engaged CRBC despite the absence of feasibility study or master plan on the Rashakai SEZ.

The project is a part of China-Pakistan Economic Corridor (CPEC), as is Hattar.

A KP official said: the MoU had been signed to merge both the Rashakai and Hattar SEZs as one project.

The CRBC’s parent organization CCCC is reportedly confronting transparency issues, as the Transparency International in July 2016 penciled it in among the companies with “huge corruption scandals” and accused it of causing “immense damage to local economies”.

Previously, in 2011, the World Bank penalizing it for fraudulent practices had slapped a ban on CCCC and all its subsidiaries until January 12, 2017. That notwithstanding, the CCCC is engaged in quite a few CPEC road projects of high import.

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Chief Minister Parvez Khattak has preferred the CRBC preference over China National Electric Engineering Company Limited (CNEEC) despite the KP government signing an MoU with the latter in January 2017 for development of the Rashakai SEZ in the presence of PTI chief Imran Khan.

Subsequently the CNEEC had completed the Rashakai project’s feasibility study, divulged officials of the company, but were denied the engagement agreement, the reason cited being the company quoting a high price for development.

In the 7th meeting of Joint Cooperation Committee of CPEC about three months ago in Islamabad, both the federal and the KP governments wanted to develop Rashakai SEZ on priority basis while China had pushed Hattar, situated near Havelian dry port, on the fast-developing eastern corridor.

The SEZs have been planned to promote bilateral industrial cooperation under CPEC and will be at the centre of long-term economic relations. The industries being set up in the prioritised SEZs will be entitled to special, concessionary tax regimes.

A state-owned company and is 100% subsidiary of China National Machinery Industry Corporation (Sinomach Group), the CNEEC has undertaken 733 projects in 48 countries including those falling under the One Belt and One Road initiative, amounting to $73.6 billion.

Source: https://profit.pakistantoday.com.pk/2018/01/30/kp-signs-deal-with-crbc-for-sez-at-rashakai-in-a-hurry/

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