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Pakistan seeks Japanese investment in SEZs under CPEC

Source: The Nation

ISLAMABAD  –   Pakistan Wednesday invited Japanese investment in the Special Economic Zones under the multi-billion-dollars China-Pakistan Economic Corridor project.

In a meeting with National Security Adviser to the Prime Minister of Japan Kentaro Sonoura here, Foreign Minister Shah Mehmood Qureshi said Pakistan will provide facilities to the Japanese investors in all sectors.

Briefing the Japanese side on CPEC, an economic undertaking between China and Pakistan, the Foreign Minister invited Japanese investment in SEZs, said a foreign ministry statement.

Welcoming Kentaro Sonoura, the Foreign Minister said that Pakistan regarded Japan as a close friend and a key economic partner.

Pak-Japan bilateral trade currently stands at around $2.3 billion with Japan’s exports to Pakistan recorded at $2.03 billion against the latter’s exports to the former at $250 million.

This year, Pakistan’s exports to Japan declined 1.18 per cent. Japan’s overall import from the world increased to $57.662 billion in June from $55.632 billion in June last year, up 11.7 per cent.

The Japanese National Security Advisor expressed his earnest desire to further strengthen bilateral relations between Pakistan and Japan in the days to come, said the foreign ministry.

He said that Japan recognised the efforts and sacrifices rendered by Pakistan in fight against the menace of terrorism.

Foreign Minister Qureshi appreciated Japan’s acknowledgement of sacrifices and contributions made by Pakistan in the global fight against terrorism and Japan’s commitment to work closely with Pakistan in this regard.

He reiterated that Pakistan was focusing on socio-economic uplift of the people of Pakistan and furthering regional peace and stability.

Both countries expressed firm resolve to further increase high level interaction between the two countries. They exchanged ideas on enhancing cooperation in political, defence, economic and commercial sectors. The Foreign Minister welcomed the upcoming sixth round of Joint Government Business Dialogue scheduled to be held on December 10 in Tokyo and hoped for concrete outcome of the meeting.

Meanwhile, Simon Milner, Vice President Public Policy Asia Pacific of Facebook called on Foreign Minister Qureshi, here yesterday.

The Foreign Minister welcomed Milner to his first ever visit to Pakistan. FM Qureshi lauded the role of Facebook for development and progress of e-commerce in Pakistan, its contributions in facilitating people to people contacts across the globe and for spreading awareness among the masses.

Foreign Minister Qureshi further underscored that the “use of social media presents us with both opportunities and challenges.” Qureshi said that his government firmly believed in the right to freedom of expression. “However, it cannot be used to propagate hate and extremist ideologies,” he added.

The minister emphasised that it should not be used to hurt the sentiments of adherents of any religion. “All efforts must be aimed at preventing the spread of this content through social media that leads to hatred and intolerance,” Qureshi said.  He highlighted the Indian clamp down on internet and social media in occupied Jammu and Kashmir which was serving to conceal the facts of brutal suppression by the forces of occupation.

Vice President Simon Milner said that Facebook remained cognizant of its social responsibility and expressed his desire to work with the government of Pakistan “to make efforts in addressing concerns about the use of social media for spreading hateful, provocative and extremist views.

World Bank official lauds BRI, CPEC role in promoting intra-regional trade

Source: The News
Date: 5th December, 2018.

ISLAMABAD: The World Bank (WB) on Tuesday disclosed that around 71 countries under Belt and Road Initiative (BRI) obtained around 5 percent debt from China including Pakistan but stressed upon the need for ensuring more access to the data and transparency.

While addressing at SDPI conference here on Tuesday, Caroline Freund, WB’s Director Macroeconomics, Trade & Investment said that BRI and China Pakistan Economic Corridor (CPEC) were playing important role for promoting intra- regional trade by building infrastructure but the trade facilitation was required to enhance trade among different regions of the world including this part of the world. The infrastructure alone cannot promote trade but other requisites such as facilitation can help a lot to ensure trade among different parts of the world.

“We are conducting a detailed study about BRI but our initial assessment shows that debt has not become major problem for loan recipient countries under this mega initiative. It stands at around 5 percent of total loans portfolio of 71 countries of BRI,” she added. The trade, she said, had gone up in recent years among different countries and regions of the world.

She said the debt provided by China to BRI countries was highlighted as major problem but their study showed that it was not as big as mentioned in recent news reports. However, she stressed upon the need for sharing more data and placing transparency to ascertain facts based on reality.

On the occasion, Deputy Mission Chief of China’s Embassy in Pakistan Lijian Zhao said that the misconception of debt trap levelled against BRI proved a lie through the work done by the WB. He said that the BRI helped generating 200000 jobs out of which 75000 jobs were created in Pakistan through CPEC. He said that Pakistan became the largest recipient of FDI from China and largest trading partner with help of CPEC. He said the industrialisation was pre-requisite for economic development and in next five years the setting up of factories into Special Economic Zones (SEZs) would be the priority areas between China and Pakistan.

The first SEZs, he said, would become operational in Rashakai and concession agreement between Chinese company and KP government would be signed soon. He said that all SEZs being established in Pakistan would be open for all other countries. All those who complained about missing train in earlier energy projects now they can catch up for the establishment of entities into upcoming SEZs, he maintained.

He said the CPEC would be expanded to Afghanistan and Iran and the upcoming trilateral meeting scheduled to be held on December 15 at Kabul could become the starting point to move ahead.

He said that people to people contact must be the priority areas. He mentioned that there were more than 67000 students belonging to Korea who are studying in China and Pakistani students were in the range of 22000 at the moment. With population of 50 million, there are more than 1000 flights between China and Korea so Pakistan with population of over 206 million must realise its real potential.

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/

Investors to get hefty incentives for industries in Special Economic Zones

ISLAMABAD: Pakistani and Chinese investors, preparing to set up industry in Special Economic Zones (SEZs) will get significant incentives including exemption from duties and taxes, concessional loans, land on instalments and the facility of one window operation to help them in dealing with federal and provincial departments.

According to an official document of China Pakistan Economic Corridor (CPEC) Secretariat, the Pakistani government has provided a policy package to attract potential investors including Chinese enterprises.

The incentive package includes one-time exemption from all customs duties and taxes on plant and machinery imported into Pakistan for installation in Special Economic Zones.

The investors will get an exemption from all taxes on income accruable in relation to the development and operation of the SEZs for a period of five years and an exemption from all taxes on income for enterprises commencing commercial production by June 30, 2020, in the SEZs for the next ten years.

Pakistan and Chinese governments in their 7th Joint Cooperation Committee (JCC) meeting held in November last year decided to establish nine special economic zones in different regions.

The list of priority Special Economic Zones (SEZs) include: SEZ in Rashakai, Khyber Pakhtunkhwa, SEZ Dhabeji Sindh, Bostan Industrial Zone in Balochistan, Allama Iqbal Industrial City (M3), Faisalabad in Punjab, SEZ Maqpoondas in Gilgit Baltistan, ICT Model SEZ in Islamabad, Port Qasim SEZ on Pakistan Steel land in Sindh, Mohmand Marble City in FATA and SEZ in Mirpur in Azad Jammu and Kashmir.

Pakistan will provide gas, electricity, water and other supporting facilities and working shelters in the industrial parks, set up under China Pakistan Economic Corridor (CPEC) project.

The package includes the provision of plots on instalments (50 per cent down payment and remaining 50 per cent in four biannual instalments).

The investors will also get the markup support at the rate of 50 per cent of the markup to a maximum of 5 per cent on the loans taken in Pakistani currency for financing the project. The support is to be provided by the respective governments for the zones in their jurisdiction. Freight subsidy of 50 per cent will be provided on the inland transportation of plant and machinery for installation in any of the priority SEZ.

Special Economic Zones Authority (SEZA) will put in place a one window operation and the respective provincial governments will delegate authority for implementing labour, environment and other laws and for the collection of local and provincial taxes or will depute representatives of the departments in SEZA office. The federal government departments including utility companies, Federal Board of Revenue and Securities and Exchange Commission will depute representatives to perform similar functions in the zone.

The developer shall also be allowed to purchase gas, electricity, and other utilities from utility providers in bulk and supply the same to the enterprises at rates that are duly notified by SEZA in consultation with the stakeholders.

The developer would also be allowed to rent out sheds for industrial use. To encourage upscaling of the industry so that it can become part of global supply chain, certain guidelines have been prepared by the government, to give a thrust to the industrialization process.

SOURCE: https://profit.pakistantoday.com.pk/2018/04/08/investors-to-get-hefty-incentives-for-industries-in-special-economic-zones/

Chinese delegation to visit Pakistan next month

A high level Chinese delegation will visit Pakistan next month in a bid to expedite the China Pakistan Economic Corridor (CPEC) projects agreed by the both sides during 7th Joint Coordination Committee (JCC) held here in November 2017.
“The delegation will interact with high level government officials, and local trade bodies besides while it will also visit all the provinces to ensure speeding up work on all nine Special Economic Zones (SEZs) to be established under the umbrella of CPEC,” Project Director CPEC, Hassan Daud Butt told APP here.
He said 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.
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.—APP

Chinese groups due next month to review CPEC projects

ISLAMABAD  –  Three Chinese experts groups are arriving Pakistan in March for preparation and early kick off of CPEC Industrial Zones, review energy project progress and explore the way forward in oil and gas sector.

The experts groups, working under Joint Working Groups, that are arriving in March includes industrial experts, experts of energy group and sub-group on oil & gas sector, official source told The Nation here Wednesday.

The source said that the energy experts will review the progress on the CPEC energy projects and will also discuss the inclusion of new hydropower projects in the CPEC portfolio. The hydro projects located in AJK, GB and KP will be the main focus of the experts’ interaction, the source added.

Regarding the industrial expert group the source said that their main focus will be the industrial cooperation particularly in the Special Economic Zones(SEZs).  

The SEZs will be developed in phases and in the first phase the economic zones of Sindh, Punjab and KP will be developed. However , the source said, that now the federal government has also accelerated work on its economic zones which is also likely be discussed with Chinese experts.

Chinese Small and Medium Enterprises (SMEs) are showing interest in the SEZs which is encouraging and will help the early completion of SEZs, the source said. Under CPEC China and Pakistan have agreed to establish nine SEZs throughout Pakistan.

The third group is a sub-group on oil and gas, of the main Joint Working Group on Energy, is coming to Pakistan to further explore ways for the oil and gas cooperation between the two countries under CPEC.

In July last year Pakistan and China agreed to establish an oil and gas sub-group under the Energy Working Group (EWG) aimed at facilitating the existing and future oil and gas sector projects.

Later on, oil and gas was incorporated in the CPEC Long Term Plan (LTP).

Earlier under the Short and Medium Term Plan of CPEC China was developing energy projects in Pakistan which was further expended under LTP.

As per the LTP “China and Pakistan should strengthen cooperation in the electricity and power grids, and focus on promoting the construction of major projects of Thermal power and renewable power generation, and thermal power, hydropower, coal gasification, supporting power transmission networks, in order to enhance its power transmission and supply reliability.

The experts from both countries will explore the possibilities of setting up refineries, storages and oil and gas pipelines along the CPEC route.

“We want cooperation in oil and gas sector in a way to make it win win situation for both the countries,” the source said. The source said that investment in the oil and gas sector will further enhance the CPEC portfolio.

It is pertinent to mention here that separately the government of Pakistan is planning to  develop a mega oil city at Gwadar under the China-Pakistan Economic Corridor and 80,000 acres of land is being acquired for the purpose.

Source: https://nation.com.pk/15-Feb-2018/chinese-groups-due-next-month-to-review-cpec-projects

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/

K-P hastens deal to develop Rashakai Special Economic Zone

ISLAMABAD: 

The Khyber-Pakhtunkhwa (K-P) government has hastily engaged China Road and Bridge Corporation (CRBC) for the development of its once-favoured Rashakai Special Economic Zone (SEZ) despite the fact that the same company till recently was pushing the case for construction of Hattar as a prioritised zone.

The provincial government signed two pacts – a memorandum of understanding and an engagement agreement – with CRBC in a span of 24 hours, raising transparency concerns in the deal.

CPEC Cultural Caravan warmly welcomed in China

The provincial government entered into an engagement agreement with the CRBC despite not conducting any feasibility study on the Rashakai SEZ of the China-Pakistan Economic Corridor (CPEC), according to officials in the provincial government.

The China Road and Bridge Corporation  CRBC is a subsidiary of China Communications Construction Company (CCCC) that faces transparency issues. In July 2016, Transparency International named CCCC among firms that face “huge corruption scandals” and cause “immense damage to local economies”.

In 2011, the World Bank had also debarred CCCC and all its subsidiaries for fraudulent practices until January 12, 2017. But the CCCC is engaged in some of the critical road projects of CPEC.

K-P Chief Minister Parvez Khattak has given the China Road and Bridge Corporation CRBC preference over another Chinese company – China National Electric Engineering Company Limited (CNEEC). In January 2017, the K-P government and the CNEEC had signed the MoU for development of the Rashakai zone in presence of PTI Chief Imran Khan.

The provincial government did not sign the engagement agreement with the CNEEC despite it completing the feasibility study of Rashakai project, said officials in the CNEEC company.

The CRBC had pushed the case of Hattar for prioritised economic zone over the Rashakai during a meeting of the 7th Joint Cooperation Committee of CPEC, held in Islamabad three months ago.

In the meeting, both the federal and the K-P governments wanted to construct Rashakai-Mardan as the prioritised SEZ. However, China wanted to promote the Hattar site, which is near Havelian dry port and falls on the fast developing eastern corridor.

The prioritised 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 tax treatments.

But quite surprisingly, on January 19, the Khyber Pakhtunkhwa Economic Zones Development and Management Company (KPEZDMC) signed MoU with the CRBC for the construction and development of Rashakai SEZ. The very next day – January 20 – the provincial authority and the CRBC signed Engagement Agreement for development of Rashakai SEZ.

The engagement agreement was signed by KPEZDMC Chief Executive Officer Adil Salahuddin andChina Road and Bridge Corporation  CRBC, Pakistan General Manager Li Zhihuai. The K-P chief minister witnessed the signing ceremony.

KPEZDMC’s response was awaited till the filing of the story.

The government did not sign the engagement agreement with CNEEC, as the company had quoted a very high cost for development, said a senior official of the planning department of the K-P government while defending the deal with CRBC. He claimed that CRBC was way ahead of the CNEEC and the decision to engage it was taken at the highest level.

But the claim about low cost of development by CRBC is surprising, as the CRBC has neither yet conducted a feasibility study of the Rashakai zone nor prepared its Master Plan.

In a letter dated January 18, 2018, which was also the last day of its one-year MoU, the CNEEC managing director informed KPEZDMC about completion of the fifth version of the feasibility study. The letter showed per acre land price at Rs6.8 million or $16 per square meter.

The CNEEC has also submitted feasibility study of the Rashakai project in the 7th JCC meeting. The CNEEC is a state-owned company and is 100% subsidiary of China National Machinery Industry Corporation (Sinomach Group).  The company has undertaken 733 projects with total contract amount of $73.6 billion in 48 countries along the Belt and Road project. For Rashakai SEZ, the CNEEC engaged IPPR that also designed 22,600 acres of China-Belarus Industrial Park. The provincial government official said that under the engagement agreement the CRBC will conduct the feasibility study. He said that the MoU had been signed to merge both the Rashakai and Hattar zones as one project.

China-Pakistan health corridor along CPEC proposed

However, the provincial government cannot take this decision, as these powers rest with the federal government and National Development and Reforms Commission (NDRC) of China.

The provincial government official said that a case for the merger has been submitted to the Board of Investment and NDRC. On January 3 of this year, the provincial government had also signed an engagement agreement with CRBC for development of the Hattar zone. Now a single company has been given the gigantic task of completing two competing SEZs. 

Source: https://tribune.com.pk/story/1621416/2-favouring-k-p-hastens-deal-develop-rashakai-special-economic-zone-business/

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.

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/

What does CPEC mean for Gilgit-Baltistan?

China Pakistan Economic Corridor (CPEC) is a part of One-Belt One-Road (OBOR) initiative of the Chinese government to expand its economic horizons around the globe. CPEC is famously coined as a “Game Changer” for Pakistan, as it is expected to enhance economic development in the country. However, some have also argued that it is “the end of the game”, basing their arguments on the challenges associated with this gigantic project.

CPEC aims to develop Special Economic Zones in Pakistan through a combination of infrastructure projects including transportation, energy and port development. CPEC will connect Western China with Gawadar port in Baluchistan province of Pakistan.

China transports 80% of its oil, through Strait of Malacca to Shanghai on ships and covers a distance of16000 km which takes around two or three months, whereas via CPEC it will cover 3218 km, shrinking down the shipment time to a few days.

The initial budget for CPEC was projected near $45 billion. However, the portfolio is reported to have grown to $110 billion. It is important to note that CPEC is not just a road rather a network of connectivity, industrialization, energy generation, promotion of trade and tourism.

While discussing CPEC, the importance of Gilgit-Baltistan (GB) cannot be neglected, because Gilgit-Baltistan is the gateway for CPEC, and also the proverbial Chicken Neck.

The mighty Karakorum Highway (KKH) – known as the 8th wonder of the world – was built in 1968-78 to connect China to the Western World by giving access to Arabian Sea. CPEC will continue to build on the existing KKH, passing through the mountains of Gilgit-Baltistan. The KKH will be improved and few new roads will be constructed for smooth travel, moreover new bridges, tunnels and railway track is expected to construct to connect Kashgar city of China to Havelian in Pakistan. As GB shares its border with China therefore the business terms has remained friendly between this region and China for past many years, although the Free Trade Agreement was signed between the two countries in 2006.

What does CPEC have for the people of Gilgit-Baltistan?

The distribution of CPEC related projects all overall Pakistan shows that GB is going to gain very little from this project, as so far no hydropower project or industrial project is included for this region, other than the Magpoondas Special Economic Zone and the Optic Fiber connection.

However, if we look at some indirect impacts of the project, the it is apparent that GB is likely going to benefit in terms of business development, energy generation, infrastructure development and telecommunication. The connectivity through road and train plus intra-city roads will aid to increased social and economic integration. Moreover, resource development is expected in the region as people are getting trainings, learning Chinese language and business skills.

CPEC is also fraught with myriad challenges for the region including potential negative influence on local environment, indigenous economy, and the culture. With roll-out of KKH expansion and construction of other roads and due to increased transportation the ecology of the region will be badly affected. Only smoke emitting from trucks will be left out for the local people to inhale while the foreign traders, businessmen and entrepreneurs will reap profits. It will also exacerbate an already dire situation of solid waste management across GB especially in Hunza valley and Gilgit city.

In order to understand the economic opportunities and threats CPEC poses to the people of Gilgit-Baltistan we must try to understand indigenous economy, local capacity and livelihoods of the people. Most of the people in this region rely on small scale farming and agriculture, a considerable portion of the population are salaried persons with the government and private sector, and a small fraction of the population is engaged in small scale enterprise and businesses. Owing to lack of industry in the region, lack of experience in trade and business development, the indigenouspeople are likely to get engaged in menial jobs. Unfortunately, the academia is either not doing any good by producing good workers instead of inculcating business acumen in the young people.

In addition, local cultures will be invaded with the flow of Chinese and people from all across Pakistan.  The already vanishing languages will be further endangered. The local people, while in the pursuit of coping with the cultural shocks, it is likely they tend to assimilate in other cultures by adopting their values, traditions and language. This has already been the case in some of the smaller segments of GB such as Dumaki language for which Aziz Ali Dad has beautifully captured in his thoughtful writings; A Vanishing Voice.

What should be done to mitigate the CPEC challenges and to benefit from the opportunities?

It is crucial for the local people to organize,discern and prepare themselves accordingly. People of GB are unaware about their legal stance, citizenry rights and the potential impacts that CPEC is going to bring with it. To be able to understand what CPEC is, in what ways GB and its people are going to get affected, how we could respond to the challenges and opportunities, at community, society, and state level, I propose some of the followings steps should be taken;

There is a dire need for a think-tank where development practitioners, researchers, business experts, political leaders and even students willcome together to engage in research, advocacy, and planning regarding CEPC. This platform could serve as the evidence-based research group with a primary mandate to guide and advocate policy makers – members of Gilgit-Baltistan legislative assembly GBLA – to formulate policies that will protect indigenouspeople, its economy and culture. GBLA should have the ability to bargain with the government of Pakistan as well as with the government of China to promote and protect the rights of local people. Unfortunately, the current GBLA hasn’t taken any specific measures to promote This entity will also engage academia especially Karakorum International University to conduct research, offer specialized courses to help prepare young minds for CPEC and equip young people with marketable skills.

  • Strengthening Role of Civil Society

GB has already experienced dramatic economic transformation primarily stimulated by Aga Khan Rural Support Programme through community mobilization and social action. Almost every village in GB has a grass root platform known as Village Organizations, Women Organizations and Local Support Organizations. These institutions need to be strengthened and empowered through intensive training, sensitization and capacity building.

The importance of social organization was highlighted by the present General Manager of AKRSP, Mr. Muzaffar Uddin, while giving his interview to PTV World One thing which we learnt from AKRSP’s experience is that when Karakoram Highway (KKH) was constructed, those communities took maximum benefit from KKH than those areas of people where they were not organized so what I personally think is people who have a plan or who are organized will get maximum benefit of CPEC, otherwise it would be like the Indus River, we see it rise and fall but can’t get benefit of that. Similar thing will happen with CPEC we will see trucks going and coming but won’t get any benefit. One very important aspect which is part of RSPs movement, we call it Human Capital. Investment has been done initially and now we need to expand it more relevant to all these opportunities then we can I think get maximum benefit from mega investments, which are for people’s benefit so it’s about how we organize ourselves to get maximum benefit.”

  • Capacity Building and Training

Various training programmes should be introduced across GB to tape the opportunities. This may include high level technical skills such as IT, information management, international trade laws and marketing as well other technicalskills like cargo management, transport management, hotel management and tourismpromotion. Introduction of Chinese language in school curriculum could be another important milestone to be better equipped to handle effects of CPEC.

  • Youth Development Programmes

Specialized programmes should be introduced preparing youth for the future.  This may include awareness raising sessions, mobilizationand trainings. Different youth forums and platform should be made to engage youth in discussions related to CPEC and its impacts on socio economic dynamics of GB. Student politics at school, college and university level in Gilgit-Baltistan should be introduced as this will help them understanding and taking interest in politics of the region as well. Teachers should support students in carrying out different researches on CPEC and its implications.

Source: PAMIR Times, 24th January 2018.