CPEC termed our ‘last chance’ for industrialisation
Special Assistant to the Prime Minister on China Pakistan Economic Corridor (CPEC) affairs Khalid Mansoor said on Tuesday that several countries and World Bank have shown keen interest in development of infrastructure projects and industrial units under the umbrella CPEC, maintaining that CPEC is the last chance of industrialization in the country.
Sharing his vision about CPEC with a group of journalists, he gave an overview of pre-CPEC bottlenecks, current status and prospects of phase –II. He said any country can participate in the CPEC, adding that CPEC is quid pro quo of China’s Belt and Road Initiative.
According to him, in 2013, there was acute power shortage due to which the country was suffering 2 to 2.5 GDP losses. To meet the country’s requirements of power, addition of 17,000 MW of electricity was envisaged under CPEC.
He said, FY 2020 was the period of market cultivation and to sort out major bottlenecks to economic and social development which needed to be addressed to boost economic growth.
Mansoor said he was part of the delegation when CPEC was formally envisaged with an investment of $53 billion for projects including power, ML-I and infrastructure. He said, energy projects of 5300MW worth $ 13 billion have already been established under CPEC.
To a question, he said, there is a wide difference in the cost determined in the feasibility of ML-1 and the cost calculated by the Pakistani side. The cost calculated in the feasibility was $9.2 billion whereas Pakistani officials say it should be $6.8 billion.
He said, he has written a letter to the Chinese government to take the project ahead, which is under active consideration with the Chinese authorities. The project is included in the list of strategic projects.
The issue of insurance of Chinese loans by Sinosure, (China Export& Credit Insurance Corporation) is one of the major delays in project progress in the pipeline and under construction. He said six power sector projects worth $5 billion are facing delay due to no approval from Sinosure. The interest on Government loan was 2 per cent while on commercial loan it is 5.2 per cent.
He said the overdue amount of Chinese power projects was about Rs250 billion, adding that efforts are being made to clear this amount so that the Chinese companies can give dividends to their shareholders.
To another question, he said that three or four Chinese companies have shown interest in Quaid-i-Azam solar project of 1000MW in Bahawalpur of which 400 MW has already been established, adding the remaining project would be offered on competitive basis.
He further stated that his focus is now on four Special Economic Zones (SEZs) which are necessary to attract foreign investment.
Masoor explained that medium term projects have to be established by 2025. It will be a period of expansion and development and balanced regional economic development, processing and manufacturing industries, which will bring improvements in peoples’ livelihood.
He said, 2030 will be period of maturity for long-term projects and mechanism for sustainable economic growth, adding that CPEC will play a leadership role in the region.
In reply to a question, he said, a conference is being organised on November 15, 2021 to be attended by 140 Chinese companies.
In December 2021, another international conference will be held which will be attended by international investors.
He said, phase –II will focus on export growth (textile, IT, etc) and import substitution (steel, agricultural productivity, etc.) sectors by creating local employment opportunities and promoting joint ventures to make Pakistan a manufacturing hub. Now the focus is on science and technology, agriculture and Information Technology.
Answering another question, he said, a facilitation centre is being established at the CPEC Secretariat to provide one-window facility to the international investors through coordination of various ministries and provinces. He, however, dispelled the impression that it would be duplication of Board of Investment (BoI).
Replying to yet another question, he said, he has finalised a comprehensive presentation to attract Chinese private sector including textile sector.
He further stated that ambassadors of different countries are approaching to get information on investment opportunities in the SEZs. The World Bank has also held a meeting with him on prospects of infrastructure projects.
He said industrial cooperation under CPEC was as follows: (i) nine SEZs and a Free Zone at Gwadar; (ii) four SEZs and Gwadar Free Zone being developed on priority; (iii) strong local and international investor interest in SEZs (Century Steel (China), Apptak Ltd (Germany), Strong Stich (UK), Akzo Nobel Ltd (Netherlands), Zhenbang Agriculture (China).
“Investment in SEZs is open to investors from all over the world,” he said, adding Americans are also around as they have to find new opportunities.
He said development at Gwadar Port should have been faster as it is not up to as per expectations, adding that he cannot bring the past back. There is neither electricity nor water in Gwadar as 300MW coal-fired project has not been established as per plan.
“Everything is ready but there are delays due to Sinosure,” he concluded.
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