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Western route of CPEC to be completed earlier: Chinese envoy

ISLAMABAD: Acting Ambassador of the People’s Republic of China, Zhao Lijan has said that under the China Pakistan Economic Corridor (CPEC), western route of the project would be completed earlier than the eastern route.

Speaking at the National Press Club Islamabad about CPEC Project, the Chinese envoy dispelled rumors about the Western Route and said that western route of CPEC would be completed earlier than the eastern route.

He said work on various project under the CPEC was going with full speed and 22 projects would be completed during the current year while 18 projects would be completed next year.

He said around 70,000 Pakistanis had got employment in these projects.

The Chinese envoy said under the CPEC, the government had plan to complete a total of 200 projects till 2030 which would provide jobs to hundreds of thousands of people.

He expressed the hope that the next government in Pakistan would also continue the pace of progress on CPEC projects.

About Gwadar Port, he said, Gwadar International Airport would be completed in October this year. He said fisheries was an important sector of Gwadar and establishing a re-processing plant at the port Pakistan could further increase its exports.

He invited the overseas Pakistanis to come to their country and invest in Gwadar Port, adding that more than 30 Pakistanis companies had been registered at the Port.

He said the investors were being provided facilities of electricity, gas, water and wifai.

In energy projects under the CPEC, he said, $13 billion were being invested, adding that several energy projects had been completed which had overcome load-shedding problem in Pakistan to a great extent.

Under the CPEC, he said industrial parts would be established in Pakistan.

To a question, he said Pakistani were hard workers and capable people and if they could make an atomic bomb then stabilizing their economy was not a big task for them. He said in the 1970s decade Pakistan’s Gross Domestic Product (GDP) was equal to China, adding that today’s success story of China was a result of hard work and dedication of Chinese people.

SOURCE:https://arynews.tv/en/western-route-cpec-complete-before-eastern-route/

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India refuses to endorse CPEC at SCO summit

India was the only country on Sunday not to endorse a high-profile Chinese project at the end of the 18th Shanghai Cooperation Organisation SCO summit in Qingdao even as Prime Minister Narendra Modi stressed that New Delhi’s priority was connectivity with the neighborhood and between the SCO countries.

All remaining seven members of the SCO summit bloc supported the China-Pakistan Economic Corridor (CPEC) project which is part of President Xi Jinping’s Belt and Road Initiative (BRI) – a multi-billion inter-continental connectivity mission. The 17-page joint Qingdao declaration said all other seven member countries had endorsed the project and agreed to work towards implementing it. India was not expected to endorse the BRI in the Qingdao declaration which was released soon after Prime Minister Narendra Modi speech at the plenary session.

The China-Pakistan Economic Corridor (CPEC) is one of the flagship projects of the BRI. India has stayed away from the BRI – the only SCO country to be opposed to it – saying the CPEC violates its territorial integrity.

Earlier on Sunday, Prime Minister Modi said India supports connectivity projects that are inclusive, transparent and respect territorial sovereignty.

Speaking at the plenary session of the summit, Modi said India’s priority was connectivity with the neighborhood and between the SCO summit countries in the region. “We have again reached a stage where physical and digital connectivity is changing the definition of geography. Therefore, connectivity with our neighborhood and in the SCO region is our priority,” he said and emphasized the need for inclusiveness and transparency in connectivity projects to be successful.

Published in Daily Times, June 11th 2018.

SOURCE: https://dailytimes.com.pk/252018/india-refuses-to-endorse-cpec-at-sco-summit/

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CPEC: transport or economic corridor?

Three CPEC routes are expected to form an impressive transport corridor connecting China to the Arabian Sea. If the Chinese start using these routes to trade with Middle East and North African countries, CPEC will turn into a cross-border trade and transit corridor. With enough traffic, we might also get some toll income. But the real returns are to be expected for Pakistan, only if CPEC truly becomes a vibrant economic corridor. how can we make it happen? Merely by creating a few special economic zones? And what is an economic corridor anyway?

Trade corridors have been in existence for centuries, with famous Silk, Spice and Incense routes connecting the Orient with the Occident. Trade corridors depict movement of goods and services in specific geographical patterns. Transport corridors, a most recent phenomenon, generally refer to a linear area, connecting two or more economic centres and often employing a combination of surface transport networks such as road and rail.

Economic corridors however are a wider concept. They represent not just connectivity and trade but also widespread economic activity in a geographic area, in the shape of industrial and economic clusters, connected markets, and a network of economic centres. Connectivity is a prerequisite for establishing economic corridors but not sufficient.

History shows that transport corridors do transform into economic corridors through gradual development, urban agglomeration and increased trade and economic activities, leading to formation of new settlements and economic clusters. This however takes time. The present Grand Trunk (GT) Road is an example of a trade and transport route turned into a vibrant economic corridor, with numerous urban centres and economic clusters along the route. This route however has been in existence for more than two millennia, upgraded by Sher Shah Suri in the 16th century.

If we could wait for centuries, CPEC might transform into a vibrant economic corridor on its own. But if we want it sooner, we need to catalyse this process through a well thought-out strategy.

Firstly, it is important to realise that economic corridor is not a linear concept, meaning thereby that CPEC, besides connecting China to Gwadar, needs to spread horizontally connecting to a network of secondary cities and smaller markets. Research shows that productivity impact of connectivity is higher for rural areas, which previously had poor connectivity. This requires aligning of public investments with CPEC through an integrated spatial planning strategy and plugging existing missing links, especially in less-developed regions.

Secondly, a real economic corridor of this scale cannot take off by public investments only. Therefore, the next step is to mobilise private investment, which would require regulatory and business environment reforms. Public investment should only be used to provide infrastructure or to address market failures in selected cases.

The third area is to ensure equitable growth. With new corridors coming up, there is a risk that much of the investment would flow to already flourishing urban and economic centres. The role of the government is therefore to ensure fair distribution of dividends of these new investments and remove any disparities.

These steps however require well-coordinated actions by multiple federal and provincial government departments. We therefore need to carefully think through our governance structure for corridor development. Other countries have established fully-empowered private sector-driven statutory bodies that coordinate actions across a range of departments and are accountable for clear performance indicators such as quantum of investment mobilised and number of new jobs created, rather than showing summits, conferences and roadshows as their achievement.

Investment for CPEC road infrastructure stands around $11 billion. At 2% interest and 20-year repayment period, it translates into $672 million debt-servicing payment every year. The toll payments alone will not be sufficient to pay back this amount. Economic corridor development is therefore the only way to go.

Published in The Express Tribune, June 5th, 2018.

SOURCE: https://tribune.com.pk/story/1727674/6-cpec-transport-economic-corridor/

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Media urged to play role in success of CPEC by discarding negative perception

ISLAMABAD: Local and international media have a pivotal role in ensuring successful execution of China Pakistan Economic Corridor (CPEC) projects by discarding propaganda of anti-CPEC and anti-Pakistan elements.

“CPEC has become an important element of Pak-China friendship and its success would be great depending upon the dissemination of correct information regarding the corridor,” Project Director of CPEC, Ministry of Planning, Hassan Daud Butt said while addressing an International Conference on News Agencies here on Monday.

He also stressed the need to enhance interaction with international media players for sharing the true image of Pakistan.

The two-day Conference titled “Pakistan-Media Opportunities and Challenges”, was organized by Associated Press of Pakistan (APP) here at a local hotel to establish direct and hassle-free linkages to cope with emerging competitive environment for news agencies in the world.

The conference was attended by representatives from news agencies of over 20 countries.

Hassan Butt said the government was sharing information to build a long-term and trustful relationship with media to ensure the accurate and positive reporting in this regard.

He said the government had promoted access to information by publications and websites, besides regular engagements with media (press briefings, seminars, summits).

He said besides other topics like politics etc, journalists should promote development communication in Pakistan by projecting the positive aspects of the corridor.

Giving a presentation on the current status of CPEC projects, Butt said most of the Early Harvest Projects had already been completed or were in the final stage.

He said CPEC had helped Pakistan in removing major bottlenecks in the way of the country’s economy, especially in energy and infrastructure sectors, paving the way for increased and sustainable economic growth.

“In 2013, Pakistan’s economic growth rate was around 3 percent. However, after the successful launch of CPEC, the growth rate kept on increasing and this year, the growth rate was recorded at 5.8 percent and next year’s target has been set at 6.2 percent,” he added.

The CPEC Project Director informed that the western alignment of the corridor had almost been completed while the Central route was expected to be completed by 2015.

He said work on up-gradation of railways’ Mail Line-1 project would start soon while up-gradation of ML-II and ML-III had also been included in the Long Term Plan of CPEC.

He said Gwadar was transforming into a state of the art international port city at a rapid pace and soon “we will see Gwadar as the hub of trade in the region”.

Regarding social sector and education projects, he said top ten business schools from China and Pakistan had reached an agreement for mutual cooperation and sharing the research work, done in the development sector.
He said CPEC had become a benchmark for other countries who are part of the Chinese One Belt One Road Initiative.

He said the Government of Pakistan wanted to bring the country’s population out of poverty at a fast pace just like China did in the past.

To a question, Butt said CPEC would be a joint venture and will be a win-win model for the two countries as both countries will equally benefit from the project.

SOURCE: https://nation.com.pk/14-May-2018/media-urged-to-play-role-in-success-of-cpec-by-discarding-negative-perception

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Karachi Expo Centre to be re-modelled for CPEC

Karachi: Federal government initiated remodeling and expansion of the Karachi Expo Centre (KEC) at the cost of Rs 8 billion within next four years to accommodate growing number of exhibitors and visitors.

The purpose of the expansion was to make the Expo Centre compatible with China Pakistan Economic Corridor (CPEC).

Groundbreaking ceremony of the project was performed by Secretary Commerce, Muhammad Younus Dagha in Karachi Expo Centre.

KEC is being expanded and re-modelled to incorporate new facilities. A total of three more exhibition halls would be added to the Centre. Presently, the centre has six halls.

Under the remodelling project, a convention centre for holding trade related conferences, a multi storey information technology (IT) tower for offices and other facilities including a parking lot would be constructed.

The master plan of the project has been designed by the National Engineering Services Pakistan (NESPAK).

“We studied studied all major expo centers existing around the world and came up with the most modern concept of the designing. The project will have its own parking plaza which will be able to accommodate around 5000 vehicles”, said NESPAK Managing Director Arif Chengezi while expanding on the remodeling project.

Federal Secretary said that the purpose of the expansion project was not only to modernize the present centre but also to create capacity for meeting the ever increasing trade related needs of the country.

He said that the remodelling project was in perfect conformity with the government’s trade objective of earning more foreign exchange for financing the developmental needs of the country.

The Commerce Secretary applauded the role of trade development authority of Pakistan in pursuing the project and completing its legal formalities diligently.

He said that the Ministry of Commerce through video conferences with missions abroad had achieved quite a lot. In these conferences, added the secretary, the hurdles were identified and removed through collective expertise to enhance trade.

Commerce Secretary also appreciated the role of business community in increasing exports of the country this year. In the year 2017-18, the exports increased from July to April by 14 percent.

The Secretary added that there was a broad based expansion, in terms of both product sectors and destinations, in the exports this year.

He added that over all from July to April this year, our textile and clothing export had shown a growth of 8 percent, agro food had grown by 30 percent and other sectors like mineral and metal, engineering goods and surgical instruments had also respectively grown by 12 percent, 13 percent, and 14 percent. Exports to the USA had also increased by 17% . There was also an 8% increase in exports to UK and China both.

The expansion of the Karachi Expo Centre was not an isolated effort of the government. Only last year, Ministry of Commerce had launched an initiative titled “Emerging Pakistan” with the aim of promoting various strengths of the country and dispelling negative stereotypes about Pakistan, abroad.

The secretary informed the gathering that the Economic Coordination Committee (ECC) of the cabinet had approved the three year expansion for the prime minister’s (PM) Export Enhancement package. He hoped that the same zeal would be shown to complete the project within the scheduled timeframe.

“The construction of IT tower is a special feature in the expansion and up gradation of the KEC, which will soon meet the needs of the service sector”, Secretary Commerce stated.

Secretary of Trade Development Authority of Pakistan (TDAP) Inam Ullah Khan while giving a brief overview of the Karachi Expo Centre said that many national exhibitions were held there. He explained that in these exhibitions, select buyers, from around the world, were shown the entire range of products made in the country.

Inam Ullah Khan said that KEC was being expanded and modernized in order to create a capacity for holding larger exhibitions for the country.

He also was of the view that the intended expansion of the KEC was in keeping with overall up-gradation of the infrastructure of the country under the CPEC.

He added that the expanded KEC would provide an export outlet to the series of special economic zones (SEZ) being established under the CPEC program in the country.

 

SOURCE: https://dailytimes.com.pk/247785/karachi-expo-centre-to-be-re-modelled-for-cpec/

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China-Pakistan Economic Corridor developed faster than expected: Chinese experts

BEIJING : The China-Pakistan Economic Corridor (CPEC) has developed faster than expected: Chinese experts, but political stability in Pakistan will be the backbone of future sustainable growth, experts said Wednesday. The recent inauguration of a superhighway project under the CPEC will improve regional connectivity, which will be a positive outcome of the multi-billion-dollar project, Zhou Rong, a senior research fellow at the Chongyang Institute for Financial Studies at the Renmin University of China, told the Global Times.

“The development of the China-Pakistan Economic Corridor (CPEC) is getting better and better, as improved infrastructure will help link upstream and downstream businesses,” he said. Pakistani Prime Minister Shahid Khaqan Abbasi.

On last week inaugurated the Sharqpur-Rajana section of the Lahore-Abdul Hakeem Motorway, or M-3, in Rajana Town near the textile city of Faisalabad in eastern Punjab province, according to the Xinhua News Agency. The 138-kilometer section is a vital part of the 230-kilometer M-3, which is being funded by the Pakistani government and built by China Railway 20th Bureau Group.

“Besides the motorway project, other projects – for example, some power plants – have already begun to deliver benefits to local people,” Zhou said.

He noted that China-backed energy projects had resolved electricity shortages in major industrial cities, which also made those areas much more competitive than previously.
The Pakistan Neelum-Jhelum project, one of the most significant hydropower stations in Pakistan, saw its first turbine generator, which is designed to generate 243,000 kilowatts, officially start supplying electricity to the national grid, according to Beijing-based Economic Daily. Construction work on the project began in 2008, with China Gezhouba Group Co as the major contractor.

“In the past few years, investors from both China and Pakistan got too excited about the China-Pakistan Economic Corridor (CPEC), and they overlooked the problems with the Pakistan economy,” Mei Xinyu, a research fellow at the Chinese Academy of International Trade and Economic Cooperation. He told the Global Times. “Now, they need to carefully assess potential risks in some projects, and Pakistan’s ability to repay its debts,”

Mei warned. In the first 10 months of the fiscal year 2017-18 which ends on June 30, Pakistan’s government borrowed $9.6 billion from foreign countries. Of that, loans from China stood at $1.5 billion.

Pakistan expects to obtain new Chinese loans worth $1 billion to $2 billion to help it avert a balance-of-payments crisis. On May 24, China increased the size of a currency swap agreement with the South Asian country by 10 billion yuan ($1.57 billion) to 20 billion yuan.

“Political instability and widespread corruption are still serious issues in Pakistan, and it is crucial to strike a balance between political strategy and business profitability,” said Wang Yiwei, director of the Institute of International Affairs at the Renmin University of China.”Still, the CPEC can be an example of regional growth and stability,” he noted.

As Pakistan’s general election which will take place in July nears, the international community is keeping a close watch. The results may affect the continuity of policies, Zhou noted.

“More importantly, the country has to push forward construction of industrial parks under the CPEC, which can be a driving force for attracting clusters of industries,” he said.—APP

SOURCE: https://pakobserver.net/cpec-developed-faster-than-expected/

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Gwadar: From ghost town to gold rush town

From the sky, Gwadar (gold rush town) looks like a dust bowl as the ATR aircraft, which regularly flies along the Makran coast from Karachi, circles in for landing. The new airport, currently being designed, will be the largest in Pakistan once it is completed, but for now one has to settle for the old airport. Its VIP section is used often as ministers, senators and even the prime minister and the army chief regularly visit this once sleepy fishing port. They have all proclaimed Gwadar to be the jewel of the upcoming China-Pakistan Economic Corridor(CPEC).

The drive from the airport along the newly built corniche (a wide road bordering the blue sea) is promising. However, other than this new road, there is very little visible development. Billboards proclaiming future housing estates are still to be found everywhere. Land speculation is continuing at a frantic pace, with property being bought and resold at exorbitant rates. However, a recent ad taken out by the Gwadar Development Authority in one of the Urdu papers has just declared a major chunk of these “housing estates” to be fraudulent.

The vision of a city of skyscrapers rising out of the sand is still far from being realised.

“The dream of a new Dubai is downloading at the moment – we are just having connectivity problems”, joked Sajid Baloch, one of the local journalists we met.

For now, Gwadar is a thirsty gold town where electricity comes and goes and water is so scarce that the local fishermen tell me they haven’t bathed with clean water in years. The last cyclone hit Jiwani in 2007, bringing heavy rains along the coast. In the last three years, it has not rained at all, drying up the local Akra Kaur Dam, which provided drinking water to Gwadar. At the moment, everyone is dependent on tankers to fetch water from as far as the Mirani Dam in Turbat.

“Tube wells are no good here – we only get brackish water which is not even fit for bathing,” said Abdul Majid, one of the fishermen we met.

Fishermen in Gwadar complain about lack of electricity and water

There is garbage everywhere, for no one comes to collect it and the wind whips it up. Gwadar means “door of winds” in the local language, and there is always a breeze on the hammer head shaped peninsula jutting into the Arabian Sea.

We walk around the old part of town the next day – the roads are full of potholes and there are demolished buildings everywhere. It is disappointing to re-visit the oldest and most historical part of Gwadar (gold town), the Ismaili quarter. It has fallen further into disrepair, and it seems almost all the Ismaili families (followers of the Aga Khan), who had been living here for four generations, have now moved abroad.

The crumbling old Ismaili quarter

The multi-storied buildings, which could easily be restored, with their wind catchers and wooden balconies, are now rotting away. The 16th century Portuguese watchtower, made of sturdy coral bricks, is still intact, but the staircase leading up to the rusted canon is boarded up. Near the tower is the Ismaili Jamaat Khana, which was built in 1805, and one can still see the Portuguese influence in the architecture. The building is well maintained but padlocked – it only opens up during prayer timings.

The Portuguese watchtower in the old part of Gwadar

Gwadar has always had an interesting history. Long after the Portuguese left in the 16thcentury, for almost two centuries it was owned by the Sultan of Oman. In 1781, the Khan of Kalat granted an exiled prince of Muscat the revenues of Gwadar as maintenance, while he lived on the Makran coast. The prince later returned to Oman and became the Sultan, but he did not return Gwadar to Kalat. In 1839, the British conquered Kalat. After Pakistan came into being in 1947, the Pakistani government once again took up the question of the ownership of Gwadar. Finally, Pakistan’s then Prime Minister Sir Feroze Khan Noon entered into negotiations with the British, which resulted in Gwadar being returned to Pakistan in 1958.

Today, the idea is to capitalise on Gwadar’s location near the Persian Gulf and turn it into a high-tech duty free zone and regional shipping hub. The state-owned China Harbour Engineering Company Group is working at a furious pace at the deep sea port, which we visited on our last day in Gwadar.

The deep sea port

According to the Director Operations for the port, Phase I is now complete, with four ships being handled per month, and work has started on Phase II, which will see the port being expanded. With its smooth roads, greenery and signs in Chinese, the port seems like another country once you pass the security checks. The Chinese workers live in their own China Town inside the port, and in a span of just six months, they have completed a brand new Business Centre, complete with hotel rooms, an auditorium and office spaces inside the duty free zone.

The new Business Centre in the duty free zone of the port

In the lobby is a large marble mural showing the map of Asia with China in pink and Pakistan sticking out in green. A line of dots, which light up at night, show the new trade routes to be created by CPEC, from the west of China, through the high mountains, and down across Pakistan to Gwadar and beyond to the Middle East by ship.

The lobby of the Business Centre with the map of China and Pakistan

The lobby of the Business Centre with the map of China and Pakistan

The deep sea port has now been dredged to a depth of 14.5 metres, and ships are regularly coming in to berth. The people working for the Gwadar Port Authority say there has been a lot of progress in the last two years. The duty free zone opened up in January this year and already they have held a large expo at the Business Centre.

There are now two state of the art desalination plants inside the port built by the Chinese. The larger one, which can provide 254,000 gallons of clean water per day, has just signed an agreement with the Government of Balochistan to supply water at Rs0.80 a litre for the people of Gwadar (gold town). Now the tankers can fill up here and no longer need to go all the way to the Mirani Dam. The Pakistan Army is also hurriedly making a large new desalination plant with the assistance of the UAE and Swiss governments, which will provide the local people with 4.4 million gallons of water per day soon after Ramazan.

Chinese engineer sampling clean water from the new desalination plant

An imported coal-based power plant, which will supply 300MW of electricity to Gwadar (gold town), is also being constructed by the Chinese around 20 kilometres from the port. There is also talk of getting electricity from nearby Iran, and opening up the border for trade and visitors. The Army has supplemented the local hospital, bringing in specialist doctors, while the security in this area has also vastly improved.

Currently, there are security check posts all over Gwadar, and everyone carries their ID cards with them. Baloch nationalists have opposed this new development but in the last two years, the Army, which is guaranteeing security of CPEC, appears to have taken control of the area. The army officials we met during our visit all explained that Gwadar and CPEC are in fact vital to Pakistan’s future economic survival, and they are just as determined as the Chinese to ensure this dream becomes a reality.

SOURCE: https://blogs.tribune.com.pk/story/66919/gwadar-from-ghost-town-to-gold-rush-town/

CPEC to prove game changer for coming generations: Marriyum

ISLAMABAD: Minister of State for Information, Broadcasting, National History and Literary Heritage Marriyum Aurangzeb Thursday said that China Pakistan Economic Corridor (CPEC) was a game changer for the coming generations as it would strengthen the economies of entire region.

Speaking as chief guest at the third anniversary of China Cultural Center at Pakistan National Council of Arts (PNCA) here she said that Pakistan and China were located at the center of the world and that was why the entire world was showing interest in the corridor.

She said that CPEC, a flagship project of Belt and Road Initiative was proof of Pak-China friendly state-to-state relations and a symbol of trust and cooperation that both sides enjoyed with each other hence the name ‘game changer’. The cultural diplomacy between Pakistan and China had further cemented the deep-rooted bilateral relations, she added.

Marriyum observed that the Pakistan National Council of the Arts under the stewardship of its Director General Jamal Shah was not only making strenuous efforts for promoting culture within the country, but was also playing significant role in strengthening cultural diplomacy between the two countries.

The minister observed that the Pak-China friendship had been given different names at different times and CPEC had unleashed a new era of bonhomie between the two countries.

Marriyum said that Pakistan was committed to the cause of economic integration, development, strengthening the bilateral

relations, promoting cultural bonds and promoting people-to-people contacts.

She said that Pakistan and China were iron brothers and the present government wished to see the relationship gaining strength with each passing day.

She said she was glad to say that China Cultural Centre, Islamabad was instrumental to strengthening the bonds of friendship and fraternity between the two countries.

She said that at the cultural center besides cultural activities, the students were being taught the Chinese language. She appreciated the efforts of the Chinese ambassador in making the center a success.

Economic Game Changer

The minister said it was her belief that sustainability of economic prosperity and cooperation required mutual understanding of each other’s culture, heritage and language.

The minister said that Pakistan’s first-ever Film and Culture Policy has been included in the finance bill for the next budget as Pakistan was unable to use screen tourism to boost its image. She said that film, national heritage, culture and languages played key role in projecting the real soft image of Pakistan.

She said when Chinese President visited Pakistan in 2014 he and the former Pakistani prime minister Muhammad Nawaz Sharif signed the historic agreements and inaugurated the CPEC.

She congratulated the Chinese government, the Chinese embassy and those associated with the centre on successful completion of three years.

Chinese ambassador Yao Jing, senior officials of Chinese embassy, DG PNCA Jamal Shah were also present on the occasion.

SOURCE: https://dailytimes.com.pk/230241/cpec-to-prove-game-changer-for-coming-generations-marriyum/

Pakistan puts off tax concessions for Chinese operator of Gwadar Port

ISLAMABAD: The government on Thursday deferred a move to give more sweeping tax concessions to Chinese operators of Gwadar Port and its free zone amid Beijing’s reservations that Islamabad was not honouring the promise of 23-year tax holiday for the port in true spirit.

Prime Minister Shahid Khaqan Abbasi put off approval of a summary that the Ministry of Maritime Affairs tabled in the Economic Coordination Committee (ECC) of the cabinet for necessary exemptions for Gwadar Port and the Gwadar Free Zone.

The ECC constituted a committee to remove any anomalies in the proposed amendments to the Gwadar Port Concession Agreement, according to a statement issued by the Prime Minister’s Office after the ECC meeting.

The decision to defer concessions would also save the Federal Board of Revenue (FBR) as it has already tabled the amended Finance Bill 2018 in the National Assembly. More tax concessions to the Chinese will require further amendments to the bill.

The maritime ministry informed the ECC that Chinese operators of Gwadar Port were facing problems due to ambiguity in rules and laws about the nature of tax concessions.

Three years ago, Pakistan had approved a 23-year tax holiday for the China-run Gwadar Port in an attempt to make the deep-sea Arabian port a hub of commercial activities.

The original Gwadar Port Concession Agreement was signed between the Gwadar Port Authority and Port of Singapore Authority, which the ECC approved in 2007. In February 2013, China Overseas Ports Holding Company Limited (COPHCL) took over operations of the port from the Singaporean company.

However, COPHCL contends that tax exemptions Pakistan has so far given are not “in true spirit of the tax holiday”, said officials who have been engaged with Chinese officials.

In April 2015, the ECC decided to extend the tax holiday for Gwadar Port and the Gwadar Port Free Zone from 20 years to 23 years on an understanding that the 23-year period will come into effect from 2007.

But China has now demanded that the tax holiday should be applied from 2013 instead of 2007. This would allow Chinese firms to enjoy tax-free status till 2036, even beyond the scope of China-Pakistan Long-Term Plan of CPEC that will end in 2030.

Earlier, the three-year extension had been given on the request of COPHCL.

Gwadar Port is described as the most significant strategic pearl in China’s plan of expanding its influence in the Arabian Sea – a move that India sees as a threat to its hegemonic designs.

Industrial units to be set up in the Gwadar Free Zone, being established over an area of 46,000 acres, are already entitled to the tax holiday.

However, now COPHCL has demanded that the SROs issued to give effect to these exemptions should be “notified in proper perspective as negotiated by COPHCL while negotiating the Gwadar Port Free Zone Lease Deed, which was signed during the visit of Chinese president in April 2015.”

The Chinese company has also demanded exemption from income tax on interests that Chinese lenders will earn by giving loans for port operations, according to FBR officials. They said the FBR was not keen to give that concession.

COPHCL has demanded that the concessions available to it should also be extended to its four companies. These companies are China Overseas Ports Holding Company Pakistan Private Limited, Gwadar International Terminals Limited, Gwadar Marine Services Limited and Gwadar Free Zone Company Limited.

Sources said PM Abbasi wanted the decision on further concessions to be left to the new government. The FBR was of the view that in order to give legal cover to the concessions, amendments would be required in the Income Tax Ordinance, which can be done next year.

Despite securing exemption from sales tax on local purchases by the Chinese companies operating in the Gwadar zone, the Chinese are now demanding sales tax concessions for imports made by the Chinese firms.

The Chinese have also sought sales tax and customs duty exemption for the supply of diesel, petrol and other petroleum products for 40 years.

The government has given massive customs duty exemption to COPHCL and its subsidiary companies. Against the previously approved exemption on ships used in the port and terminals, the maritime ministry on Thursday demanded customs duty exemption for all visiting ships including foreign and local fishing vessels at Gwadar Port.

It has already got customs duty exemption for all businesses to be established in the Gwadar Free Zone. COPHCL now wants to set up a duty-free shop in the zone.

SOURCE: https://tribune.com.pk/story/1712893/2-pakistan-puts-off-tax-concession-chinese-operator-gwadar-port/

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Gwadar opens new avenues of business, jobs

ISLAMABAD: Once an ignored tiny indolent fishing town located at the Arabian Sea in Balochistan, Gwadar has now witnessed a wave of development projects that is opening new avenues of jobs and business opportunities for locals and will lay a strong infrastructural foundation for the country’s future.

From 2013, the deep-water port is making its new identity. It has become fully functional since late 2016. Its free zone first phase and business centre have been constructed within an astonishing six months earlier this year and embraced its first liner in March. Now, people in the remote Gwadar could also enjoy speedy 4G mobile connection to interact with the rest of the world.

4G services launched in Gwadar

According to the port operator China Overseas Ports Holding Company (COPHC), some 20 companies in different businesses have already joined the Gwadar free zone with direct investment of 3.0 billion Chinese yuan, or some $460 million. The annual output could reach more than 5.0 billion yuan after full operation of the enterprises.

Abdul Ghaffar, owner of a grocery shop and a restaurant near Gwadar port area, enjoys the development of the port.

“Around 150 people come to my restaurant for lunch and as many for dinner. In the past, my sale was very low, but now my earning has become better and I have also extended my business. In the past, I used to open my shop and restaurant occasionally when the port opened in 2008, but now I don’t close my shop because work is in progress continuously.”

MoU inked to address water shortage in Gwadar

Ghaffar, who came to Gwadar for a better future from Quetta in 2008, said, “I have seen a big change here. There was nothing in this area, but now several buildings have been built all around. Whenever there was rain, all ways were blocked here, but now things have changed. They (Chinese) have made a big thing from nothing.”

Ghaffar is an early bird who came to Gwadar. Now, thousands of people have migrated from across the country to Gwadar to grab emerging business and jobs opportunities since the launch of China-Pakistan Economic Corridor. Gwadar’s population has increased from some 85,000 in 2007 to 138,000 currently. The amount of mobile SIM cards issued in the area also jumped from about 100,000 chips to over 200,000.

Rahab Ali Meerani is a laborer who travelled some 1,080 kilometres from Shikarpur district in southern Sindh province to work on a project in Gwadar port.

Chinese Red Cross medical team to arrive soon

“I came here because in our area wages are not as high as in Gwadar.”

He added, “Chinese companies are coming to Pakistan and starting projects which are bringing a great support to poor people. Now, the poverty is being eliminated.”

“There was a lot of unemployment in Gwadar, there was only fishing work, which is not a regular job. Now people are getting a variety of jobs and they are very happy,” said Muhammad Ibrahim, a worker in Gwadar, adding, “I am very happy because this area is being developed. Some people say there is no development, but actually, development is taking place.”

Ibrahim has started learning the Chinese language to advance his contacts with Chinese people.

Gwadar ignites spark for science, discovery

Gwadar’s local people are also feeling the development impetus triggered by the rapidly developing port, construction of new roads, laying of new sewerage lines, establishment and upgrading of educational institutions and hospitals, construction of a new airport and installation of water purification plants in Gwadar due to CPEC.

Javed Mehmood, a local fisherman whose family is in the fishing business for almost one century, highlighted several development projects in Gwadar and said that “the port has developed, roads are being constructed, a road has linked Gwadar with China. First, we had only one hospital named Civil Hospital, now another hospital has been established.”

“Three people from my area now have got jobs at the port, possibly around two to three people from every area got jobs,” said Mehmood, who wished that all people in Gwadar get employed.

Gwadar port aims to become new Dubai

Liaqat Muhammad, who works in a fish preservation unit, also enjoys the development as their business has multiplied after the construction of a road linking Gwadar with Karachi, the country’s southern port city.

“Now, the road infrastructure has improved and we can send fresh fish outside. The distance we covered in 24 hours in the past, can be covered in six to seven hours now,” Muhammad added.

Muhammad couldn’t have a chance to visit the newly constructed port area, but he has watched many videos related to the port development and activities.

“A lot of development works are taking place here. Imports and exports are in progress at the port, expo centre has started. I have not visited the port yet, but I have seen the development through videos on my mobile,” said Muhammad.

CPEC starts bearing fruit for people

“In one or two years, our fish containers will be exported from the Gwadar port.”

Availability of the potable water is a common issue in Gwadar, and almost every person, whom Xinhua talked to, pinned his hope on China to solve their water issue. And the COPHC has signed a contract with the Balochistan government to provide clean drinking water to Gwadar.

Zulfiqar Bajwa, a tourist who came to Gwadar with his family from Karachi, told Xinhua, “I have come here to see the port because international focus is on it. As we have seen it, it will be one of the biggest ports in the world.”

“The future of our generations depends on it (Gwadar). When it will be completed, Pakistan’s status will increase in the world. It will bring great benefits to the Pakistani nation through industrialization,” said Bajwa.

SOURCE: https://tribune.com.pk/story/1710317/1-gwadar-opens-new-avenues-business-jobs/