Game changing bombast

Published October 14, 2021 - Updated October 14, 2021 07:53am
The writer is a business and economy journalist.
The writer is a business and economy journalist.

NOW here is something amusing. Remember that huge project that the minister for maritime affairs, Ali Zaidi, announced towards the end of September? It was called the Karachi Coastal Comprehensive Development Zone (KCCDZ) and would ‘revamp’ close to 1,581 acres of land in Karachi that belongs to the Karachi Port Trust (KPT) into some sort of a ‘state-of-the art’ coastal development community.

In bombastic language, Zaidi described the project as “something massive”, a “monumental decision” that would place Karachi “amongst the top port cities of the world”. Others from the government followed suit quickly, not to be left out of the moment of triumph.

The next day no less a person than Imran Khan himself described the KCCDZ as a “game changer”. He tweeted that it will “cleanup [sic] our marine habitat for fishermen, develop 20k low income housing units & present opportunities for investors. Will put Khi at par with developed port cities”.

A day earlier, Zulfi Bukhari, of Ring Road fame, also jumped on the bandwagon, congratulating the minister. “To build mega projects one needs great perseverance,” he said through his social media accounts, before listing all that would be built under the project’s name.

On and on the congratulations went. A map was also circulated showing a gleaming city built on what was described as marshland, a city that looked like Singapore or Hong Kong. Half a million people would have to be relocated from Machhar Colony in Karachi, it was said in passing, while “low income housing” would be built for millions in the process. This was a “game changer”, it was “historic”, it was “massive”, it would “put Khi at par with developed port cities”.

Read more: Machhar Colony dwellers don’t want to be ‘deceived in name of uplift’

“And the best thing of this project is that it’s solely based on foreign [Chinese] investment without any loan,” Zaidi told Dawn. “The Chinese work so fast and I guess that it would not take more than five or six years to complete the project.” According to his press release, “the quantum of expected investment is $3.5 billion” while the project “carries enormous potential for global investors as well”.

They have nothing more than an MoU to ‘seek a commitment’ to conduct a set of feasibility studies.

Strangely enough, the minister refused to release a copy of the actual memorandum of understanding signed between the KPT and China Road and Bridge Corporation that is supposed to execute the project. All we were told is that the Chinese have agreed to include the project under the CPEC umbrella at the 10th meeting of the Joint Cooperation Committee (JCC) held on Sept 23.

One look at the MoU itself shows why he was reluctant to share a copy. Here is what has actually been agreed to: “The aim of this MoU is to seek the commitment of the [CRBC] to deliver a commercial, technical and financial Feasibility Study of the ‘Project’ of [KPT].”

So let’s pause a moment here to figure out what all the bombast was about. Two parties sat down and agreed that they would “seek the commitment” of one of them to do a set of feasibility studies about a project. That’s it. Meaning it is an understanding to hold talks about obtaining a commitment from one group to do a series of feasibilities about a project.

In the past, for example, when a joint feasibility study was approved for the ML-1 and Havelian Dry Port project, the Chinese expected the Pakistanis to pay for the study itself. “The Committee appreciates Pakistan’s commitment for providing entire financing support for the Joint Feasibility Study” say the minutes of the 3rd JCC meeting, held in Beijing on Aug 14, 2014, at which it was agreed to carry out this study to advance the ML-1 project.

So let’s ask the minister a few basic questions. Has it been decided who will pay for these feasibility studies? What is the cost? Has the consent of the Sindh government been taken to undertake such a massive displacement of people in the city of Karachi? Does the law under which KPT holds the land in question allow them to use it for purposes other than operating a port? Has a legal opinion been taken on this question? How will the Chinese recover the supposed $3.5bn that you are claiming they will invest in the project, from port operations alone, or other commercial activity on the same land? And where did this $3.5bn figure come from anyway?

Read more: Slow pace of work on CPEC irks Chinese companies

The MoU says, “KPT hereby agrees to process this MoU in accordance with all existing procedures and codal formalities, laws, rules and regulations” of the federal government. Is the minister aware of all that is included in this language?

The short version of the story here is that all the bombast was for nothing after all. They have nothing more than an MoU to “seek a commitment” to conduct a set of feasibility studies. If you add up the number of MoUs that have been signed with the Chinese over the past decade, you’ll get a sense of what these things are worth. If you look only at those MoUs signed under the CPEC umbrella, you’ll get a similar sense. Every few months we hear some minister or the other announcing that the ML-1 project is now all set for launch, and all approvals have been obtained. What they don’t tell you is that the approvals in question only relate to those required from the Pakistani government. The Chinese are not investing the $8bn (or so) in that project as a gift. They want to recover that money, and the terms of the investment make it prohibitively expensive for Pakistan.

This is how things are happening — bombastic announcements are followed by loud cheers and rounds of mutual congratulations, only for things to wither away. One look is all it takes to deflate these hot air balloons that are floated by us every so often, mostly as distractions from the comprehensive policy failures that is the ultimate legacy of this lot.

The writer is a business and economy journalist.

khurram.husain@gmail.com

Twitter: @khurramhusain

Published in Dawn, October 14th, 2021

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