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Our ‘final hope’ for industrialisation, according to CPEC

ISLAMABAD: Khalid Mansoor, the Prime Minister’s Special Assistant for China Pakistan Economic Corridor (CPEC) Affairs, said on Tuesday that several countries and the World Bank have expressed keen interest in developing infrastructure projects and industrial units under the CPEC umbrella, claiming that CPEC is the country’s last chance at industrialization.

He delivered a brief review of pre-CPEC constraints, current status, and possibilities for phase –II to a group of media while sharing his perspective on CPEC. He stated that any country may join the CPEC, and that it is a condition of China’s Belt and Road Initiative.

According to him, the country suffered 2 to 2.5 percent GDP losses in 2013 owing to a severe power deficit. Under CPEC, an additional 17,000 MW of energy was planned to cover the country’s power needs.
According to him, FY 2020 was the year to cultivate markets and identify important impediments in economic and social development that needed to be resolved in order to improve economic growth.

Mansoor claimed he was part of the group when the CPEC was first proposed, with a $53 billion investment for projects including as electricity, ML-I, and infrastructure. Energy projects of $ 13 billion worth of 5300MW have already been developed under CPEC, he added.

Also read: Projects under newly created CPEC working groups are reviewed at this meeting

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).

Also read: Pakistan is considering expanding the CPEC to include Afghanistan

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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