ISLAMABAD, July 4: The government plans to set $3.5 billion Foreign Direct Investment (FDI) target for 2005-06, which would not be a problem to achieve.

“The FDI figure for 2004-05 is likely to touch $1.35 billion and now we plan $3.5 billion target for 2005-06,” said the Chairman, Board of Investment (BoI), Wasim Haqqie.

He told Dawn here on Monday that the FDI had created a new history after 1995-96 when it crossed $1 billion mark. But for 2004-05, he pointed out, FDI figure was touching $1.35 billion, which also included privatization proceeds worth around $320 million.

Responding to a question, the chairman BoI said that the $3.5 billion FDI target, being set for the current financial year, would also include $2.6 billion privatization proceeds to be received from Etisalat company of the UAE on account of the disinvestment of 26 per cent shares of the Pakistan Telecommunication Company Limited (PTCL).

He was confident that positive environment would attract sizable FDI every year. “About 37 new spinning mills are being set up in Nooriabad industrial zone for which the government is ensuring all possible infrastructure facilities for the investors,” he said.

Regarding shortage of gas and electricity, the BoI chairman said that 27 power projects, costing about $8 billion were in the process of being set up in the country. These projects would be commissioned in seven to eight years and mainly included gas fired, coal fired and hydel projects.

Besides overcoming power shortage, these projects, he said, would generate roughly $1 billion investment every year in the power sector alone. Similarly, he said $1 billion FDI was expected to come in the telecom sector annually.

To another question, he said that a number of investors of Middle East, Singapore and Malaysia had promised to invest in various projects of hotels, shopping malls, housing and entertainment sector.

He said that the government was expecting substantial local and foreign investment in the Small and Medium Enterprises (SMEs). In this regard, he referred to 20 per cent concession in the corporate tax to the SME industry, given in the budget for 2005-06. “This will certainly boost investment in the SME sector,” he added.

However, the chairman BoI admitted that lack of infrastructure facilities especially gas, electricity and human resource development was a big challenge for the government.

Asked about the much talked about ‘one window operation’, he said people should understand that such an operation or a facility could not be provided overnight. He said that shortage of gas and electricity was a major problem due to which all facilities under one roof could not be offered to the investors.

He termed as ‘misnomer’ the terminology of one-window operation and said, “let us face the fact that we are short of gas and power,” he said adding that other infrastructure facilities like land, telephone, water, etc., were readily being provided to the investors.

The BoI, he pointed out was playing a role of facilitator so that maximum investment could take place in the country.