At its meeting held recently with Prime Minister Shaukat Aziz in the chair, the Federal Cabinet deemed it expedient to finalise a package for industrial and business units in the Gwadar Special Economic Zone (SEZ). This has reference to formation of a committee under the Ports and Shipping Minister, asking it to submit its report to the Cabinet within a month. Moreover, the need of a new body was reportedly felt due to strong resistance the Central Board of Revenue was reported to have offered to the move for grant of seven-year tax holiday to the investors by carrying out necessary amendments in the Income Tax Ordinance 2001 towards that end.
It had argued that no area in Pakistan, other than Fata and Pata, could be exempted from income tax. It will thus appear that, seemingly, with a view to averting an avoidable controversy in the matter at this stage, the Prime Minister did well to put in place a new mechanism to deal with the complexities of developing situation on a project as unique as the Gwadar deep-sea port. There can be, of course, no disputing the objection raised by the Revenue Board on the advisability of tax holiday.
Nevertheless, it will be noted that the proposal for income tax exemption in the context of multi-faceted development of the Gwadar Port should have been examined in a perspective entirely different from that of Fata and Pata, or any other place or project, for that matter.
Reference, in this regard, may specifically be made to the exhaustive preview of Gwadar deep-sea port, which Prime Minister Shaukat Aziz, then the Finance Minister, had presented two years ago.
That was in the wake of groundbreaking ceremony of its first phase. Needless to recall, it had promptly inspired prospective investors with ideas of tremendous opportunities ahead.
Elaborating on its multiple gains, he had pointedly observed that it would not only result in outburst of diverse industrial activity in mills and factories around the place on completion of the port, but also brighten the scope for other commercial activities too. He had made no secret either of the government's urge to declare the entire Gwadar area as a Special Economic Zone (SEZ), with a view to attracting sizeable investment for the country's third deep-sea port.
It goes without saying that the Gwadar Port project must have come to many as an effort to build from a scratch, as the post-independence spell of industrialisation had been viewed by the country's early planners, that is, in the absence of basic infrastructure facilities and other essential prerequisites.
Moreover, the scope of setting up warehouses and storage facilities to help speedy transfer of large bulks of goods to Karachi, the Middle East, Afghanistan and beyond, into the land-locked Central Asian states was also viewed as arousing unprecedented entrepreneurial interest.
More to it, the perception of Gwadar developing into a free port, was, additionally, apt to spark bright ideas of numerous other trade activities, of course, including setting up hotels, restaurants and tourist-related projects. As for various supplementary business projects, directly and indirectly, associated with the port project, these were conjured as many and varied, including food, fisheries and service industries.
Similarly, the prospects emanating from completion of road links from Karachi to Gwadar and Gwadar to Chaman, thereby, setting vision of the whole vast and uninhabited area into coveted gateway to Central Asia, offered attractions of their own.
All this, put together, will certainly point to the need of familiarising the potential investors with the prospects of enhanced and assured profits, marked with minimal risks, at least during the initial stages of development. With prospects so strong and facilities for development so few and far between, the translation of the Gwadar dream into reality, called for a whole set of multi-directional enabling effort.
That being the driving force behind the development of Gwadar, the concept of Gwadar Special Economic Zone will be viewed as ideally suited to the gigantic task. Short of full realisation of all that is needed, it could remain an unfulfilled dream. Now that a great deal will appear to have remained left to be desired, understandable should be the decision of the cabinet to set up a special committee to spur development of Gwadar before it becomes too late.
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