February 19, 2006	Sunday	Muharram 20, 1427

ISLAMABAD, Feb 18: The State Bank of Pakistan has granted permission to Saudi Pak Industrial and Agricultural Investment Company to set up its new “Saudi Pak Real Estate Development Company” to finance infrastructure projects and housing schemes in the country.

Sources told Dawn on Friday that the central bank was expected to formally inform the officials of Saudi Pak in a day or so about its decision regarding the establishment of a separate real estate unit.

The new company will also provide funding for the development of new tourist spots, shopping malls, hotels and office blocks. It will have a complete corporate and management structure for promoting long-term investment horizon in Pakistan for which a necessary regulatory approval by the Securities and Exchange Commission of Pakistan (SECP) is also being sought.

Necessary spadework relating to the setting up of the real estate development company has been completed, and according to the sources, as soon as the formal approval was granted, its activities will start in all the four provinces as well as in Azad Kashmir.

The board of the directors of Saudi Pak Investment Company, which is 50:50 joint venture of Saudi Arabia and Pakistan, has approved an initial capital of Rs500 million for the new company.

A decision has also been taken to set up a regional office of Saudi Pak Company in Riyadh to attract Saudi investment in Pakistan.

When contacted, Saudi Pak Investment Company Chief Executive Rashid Zahir confirmed that the central bank was about to formally send him a letter, granting permission for the setting up of new company.

“This will be a first ever organized company to cater to the huge requirements of housing, infrastructure, etc., in Pakistan,” he said, adding that the new company would offer substantial loaning to help meet housing and other related requirements.

He said the new real estate development company was being established in Pakistan on the pattern of Malaysia, China, Saudi Arabia and the UAE.

Asked whether he would seek more financial support from Saudi and Pakistani governments for new investment in the country, he said after an initial Rs1 billion funding — Rs500 million each by them — his company never sought finances from them.

He said that Saudi Pak approved net financing and investment of Rs7.119 billion in 2005. The amount is 40.1 per cent higher than Rs5 billion of 2004. This financing, he said, was extended to traditional sectors like textile, cement and sugar and also to upcoming sectors such as telecom, media, oil and gas and construction.