ISLAMABAD: The federal government is pushing for expedited completion of formalities to launch two special economic zones (SEZs) — one each at Islamabad and Port Qasim, Karachi — this year under the China-Pakistan Economic Corridor (CPEC).

“We want to present the federal SEZs as models for Chinese investment so that the two zones take off during the current year,” a senior government official told Dawn on Tuesday. The top priority of the federal government is to ensure that CPEC physically enters the next stage of industrial cooperation this year.

He said the Board of Investment (BoI) as the federal government’s lead agency for foreign investment was holding meetings on a daily basis with National Industrial Parks Development and Management Company and Capital Development Authority for finalisation of all legal and procedural requirements for Port Qasim and Islamabad industrial zones.

The economic zones will be used as model for provinces to replicate

He said the zones would be given a shape that could be followed by the provincial governments in development of their respective SEZs. Around 1,500 acres of land out of Pakistan Steel Mills had already been identified and earmarked for Port Qasim SEZ but its pricing has to be approved by the PSM board of directors in its coming meeting.

On the other hand, the land for Islamabad SEZ is yet to be finalised. The official said there were some issues with availability of a compact piece of land and therefore the CDA had been directed to submit a detailed report on availability of land within 20 kilometre radius of the capital. The CDA had been given two options including a railway land around Golra Railway Station and Thalian on the outskirts of Islamabad on the motorway.

The CDA would be directed on the basis of its report to start immediate land acquisition so that one-window facilities and infrastructure could be made available for their development and offered to the private sector for investment.

Responding to a question, the official explained that all seven other SEZs in provincial and special areas of Azad Jammu and Kashmir (AJK), Gilgit-Baltistan (GB) and the Federally Admi­nistered Tribal Areas (Fata) were final and the governments of China and Pakistan had given their consent for their development.

He said the expedited development of Port Qasim and Islamabad SEZ had been taken in hand in view of comparatively slower processes at the provincial level for seven other SEZs because of their localised challenges.

Officials said the industrial cooperation would be the most crucial part of the CPEC’s long term plan over the next 13 years for job creation and export growth.

The two sides have set up an expert group on industrial cooperation to scrutinise detailed feasibility studies of the provincial SEZ.

The group is meeting on monthly basis to go though the feasibility studies and address issues as they arise.

The main task for the expert group is to complete the planning phase of these SEZs and make sure it enters the implementation phase during 2018.

During the interim period, the two countries are set to pass through the political transitions – expected to be completed in two months in China and about six months in Pakistan.

The BoI and the Planning Commission are engaging with prominent chambers of commerce and industry in KP, Punjab, Islamabad, Sindh, GB, AJK, and the Federation of Pakistan Chambers of Commerce and Industry, among others, for briefings about upcoming SEZs.

All the nine SEZs — identified so far in all four provinces and special areas including AJK, GB and Fata — would be initially developed by provincial governments for building infrastructure in various forms of public-private partnerships.

This would be followed by setting up industrial units for which the federal government would offer equal incentives to all investors irrespective of their Chinese or Pakistani origin. Provincial governments would also be free to give additional tax incentives to attract local and foreign investors. The federal government would offer complete tax holiday for these SEZ if investments start before the end-2020.

The special economic or industrial zones also include the Dhabeji economic zone in Sindh, for which 1,000 acres have been earmarked, whereas the development of an industrial park on 1,500 acres of Pakistan Steel Mills’ land at Port Qasim is awaiting land transfer.

Moreover, the 200-acre Bostan Industrial Zone in Balochistan, Allama Iqbal industrial city near Faisalabad, Mohmand marble city in Fata, ICT model industrial zone in Islamabad and a mix-industry special zone in Mirpur, AJK, are under process but have yet to take off.

China’s key objective is to gain the quality and efficiency improvement of the textile and clothing industry, expand its size and increase the supply of high value-added products, and in the process promote the Kashgar Economic and Technological Development Zone, and Caohu Industrial Park to adopt means like export processing.

On the Pakistani side, the key objective is to expand cooperation in the appliance industry, promote Pakistan’s industries from assembling imported parts and components to localised production of parts, and encourage various forms of Chinese enterprises to enter the Pakistani market to improve the development of energy efficient appliance industry.

It also envisages industrial capacity cooperation in sectors such as chemicals, engineering, agro, iron and steel and construction materials, and the of use efficient, energy-saving and environmental friendly processes and equipment to meet the demands of Pakistan’s local markets while further expanding into the international market.

Published in Dawn, February 7th, 2018