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Steel melting industry opposes tax break for Chinese firm

KARACHI: 

Pakistan Steel Melters Association (PSMA) has fiercely opposed the grant of duty and tax exemptions to China State Construction Engineering Corporation Limited (CSCEC), saying the concession will cost the national exchequer about Rs11 billion.

Under SRO 47(I) 2018, CSCEC, which is working on the Sukkur-Multan section of motorway, has been allowed duty-free import of construction material and machinery into Pakistan.

To record its reservations at the highest level, the PSMA has drawn attention of Prime Minister Shahid Khaqan Abbasi to this issue through a letter, requesting the premier to withdraw the disputed duty and tax exemptions offered to a foreign company at the expense of domestic steel sector.

Govt struggles to defend tax waiver to Chinese firm

In 2017, steel melting in Pakistan was coined as the fastest growing steel industry in the world as large-scale manufacturing data, published by the State Bank of Pakistan (SBP), showed that billet/ingot production had grown 62% year-on-year in the first four months of fiscal year 2017-18.

PSMA Senior Vice-Chairman Hussain Agha noted that the steel industry of Pakistan was gearing up for a massive $300-million capacity expansion in the next 24 months, which would lead to a manifold increase in the country’s revenue receipts.

“Chinese are our brothers in progress and we warmly welcome CPEC (China-Pakistan Economic Corridor), however, we must ensure that it is done on a fair and mutually beneficial basis,” a press release quoted Agha as saying.

The steel industry of Pakistan generates the largest amount in revenues within the growing industrial sectors of the country and also aims to meet the upcoming demand of CPEC projects by providing high-grade steel.

Agha, who is also Executive Director of Agha Steel Industries, said the first phase of Agha Steel’s project was expected to come on line in 2018, which would directly save the government at least $180 million per annum in import substitution and generate additional taxes for the government.

Senate panel to probe tax waiver to Chinese firm

New steel projects expected to come on stream in the next 12 months will save the national exchequer billions of dollars in import substitution.

“PSMA strongly objects to any policies that could hamper growth in Pakistan and SRO 47(I) 2018 will dampen future investments besides causing losses worth Rs11 billion to the government in revenue collection,” Agha said.

Source: https://tribune.com.pk/story/1628906/2-steel-melting-industry-opposes-tax-break-chinese-firm/

All CPEC projects including ML-I are progressing smoothly: PD

ISLAMABAD: Progress on all projects under China Pakistan Economic Corridor (CPEC) including up-gradation of Main Line-1 (ML) railway track is going smoothly and without any delay, Project Director (PD) of CPEC, Hassan Daud Butt Thursday said.

Talking to APP, he said progress of all the projects that were agreed by the both China and Pakistan during 7th Joint Coordination Committee (JCC) on CPEC held here on November 21, 2017 was on track as both sides were committed to complete the projects as early as possible.

Responding to a question regarding possible delay in the $8.2 billion ML-1 project, the project director said earlier due to huge implications in the project, the revised PC-1 of first phase got delayed, however he said ministry of railways had assured to submit the PC-1 of phase-1 by February 20, therefore groundbreaking of the project was likely to be launched in few months as per announcement made by Minister for Planning Ahsan Iqbal last month.

He said the ministry of planning had also sought time from cabinet committee on CPEC to discuss details of the project in next meeting and discussion would help further boosting the progress of project.

Giving details about preliminary design review of the project, Butt said work scope of phase-1 sub projects had already been completed. Similarly, he said work of standards and specifications, BOQs, and cost estimates both local and foreign had also been finalized.

He said now approval of PC-1 and award of Engineering, Procurement and Construction (EPC) would be given on fast track to ensure ground breaking of the project as early as possible.

The phase-1 of ML-1 project consists of seven priority sub-projects with three contract packages including Lahore-Multan (334 km), Khanewal-Pindora (52 km), Nawabshah-Rohri (183 km), and Peshawar-Rawalpindi (159 km), Taxila-Havelian (55 km) while establishment of a dry port near Havelian is also part of the project.

Under the project the entire track from Karachi to Peshawar would be made doubled and speed of passenger trains would be raised from existing 80 km per hour to 160 km per hour while freight trains would run at speed of 120 km per hour.

Moreover, signaling and control system of railways would be computerized whereas safety of train operations would be ensured by grade separation.

After completion of the project, freight traffic would be increased from five to 25 million tons per annum by 2025, and passenger traffic is likely to be increased from 55 to 80 million passengers per annum, official documents available with APP suggested.

Keeping in view the importance of Railway sector, the government decided to include the ML-1 project in CPEC and in the 6th JCC meeting held in Beijing in 2016, this project was declared ‘Strategic’. Framework Agreement on ML-1 was signed on May 15, 2017 while commercial contract for preliminary design was singed on May 2017, the documents added.

Replying to a question regarding progress on construction of Special Economic Zones (SEZs) under CPEC, Hassan Daud Butt said the governments of Pakistan and China were actively engaged for early completion of all nine SEZs in one each in federal capital, all provinces and special areas of Azad Jammu and Kashmir, Gilgit Baltistan, and Federally Administered Tribal Areas (FATA).

He informed that a Chinese special business delegation was visiting Pakistan next month to review progress of CPEC projects. He said the delegation would interact with government officials, local trade bodies besides it would also visit all the provinces to ensure expedited work on SEZs.

Regarding progress on Karachi Circular Railway, he said government of Sindh and Chinese government were directly and actively engaged on the project to ensure early launch of groundbreaking of the project.

Source: https://profit.pakistantoday.com.pk/2018/02/09/all-cpec-projects-including-ml-i-are-progressing-smoothly-pd/