In a major move to encourage Chinese investment, Pakistan has approached the Chinese firms to encourage investment in the cement sector by establishing new plants in the country. Sources told Business Recorder on Saturday that the issue of new Chinese investment in Pakistan and progress of existing Chinese projects was discussed in a recent meeting between Chinese Ambassador in Pakistan Luo Zhao Hui and senior officials of different ministries at the Planning Commission.
The meeting thoroughly reviewed all Chinese projects in Pakistan, which was attended by the senior officials of the Planning Commission, Federal Bureau of Revenue (FBR), Finance Division, Ministry of Petroleum, Board of Investment (BoI), Ministry of Railways and Ministry of Foreign Affairs. According to sources, the government has invited Chinese firms to express interest in the establishment of the cement plants in Pakistan. The idea is to ensure maximum investment in potential sectors, particularly cement industry.
The duties and tax concessions on the import of plant, machinery and equipment under different FBR notifications and tax laws are available to the new foreign investors. The procedure of "advance ruling" under Income Tax Ordinance 2001 is also available for new investors to know about their income tax liability in advance before making any investment in Pakistan.
During the meeting, the Chinese Ambassador informed the Pakistani government that during the visit of President Asif Ali Zardari to China, a memorandum of understanding (MoU) on sharing of knowledge between Chinese and Pakistani Planning Commissions might be signed.
The agreement would be instrumental in strengthening long-term relationship between the two countries. The Chinese Ambassador also thanked the government of Pakistan for supporting expeditious planning and implementation of projects being executed by the Chinese companies.
Sources said that the meeting was informed that the Cabinet on September 23 2008 approved the grant of long distance license to Pak-China Mobile Company. According to sources, the meeting was also informed that the ECC of the Cabinet on September 22 approved the award of specific contracts by ERRA to the Chinese companies at the agreed rate of 25 percent of the projects' costs being funded through the Chinese Preferential Buyer's Credit (PBC) loan of around 300 million dollars.
The meeting also discussed that the significant progress has been achieved in the removal of 132 KV line and its pylons from the plot for Pak-China Friendship Centre in Islamabad, and the removal would be completed by end of current month. Revised PC-I, incorporating the demand for additional vehicles, has been approved by the Central Development Working Party (CDWP).
The land for the Pak-China Friendship Centre at Beijing has been identified. About the extension of the exploration license for Baska Block, the meeting was informed that the Ministry of Petroleum had issued extension of one year to the relevant Chinese firm.
As far as Duddar lead-zinc project is concerned, 60 kilometres of road out of a total of 106 kilometre has been completed and the balance work is being completed on fast track basis. The meeting was informed that Sichan Electric Power Company of China had completed the work on 500 KV substations at Lahore, however, due to some defects in the relay equipment, the taking over of the substation was delayed. The equipment is expected to be ready within three weeks after which the substation would be taken over for the final testing.
The Rawat substation is also ready, however, its testing would be conducted during October 10-15 and would subsequently be taken over once it qualifies the testing. The government also asked the Ministry of Petroleum and Natural Resources to take necessary steps to avoid delays in initiation of Qadirpur gas compression station project. Similarly, Sinocoal of China and Engro have planned to set up a joint venture to participate in the Thar Coalfield Block-2 and Mining and Power Generation Project.
The meeting was informed that MCC of China had shown interest in acquiring the Reqdiq project. However, the project has already been awarded to a Chilean and Canadian firm, which have invested by now 20 million dollars and are in the process of converting their licenses into lease.
The government of Balochistan has equity in the project. The MCC could join in some other forthcoming projects in the vicinity. About selling of shares of Pakistan Steel Mills, it was stated that the government was in the process of segregating the core and non-core businesses of Pakistan Steel Mills. Once the job was completed, decision on selling of the shares would be taken subsequently, the sources said.
Sources said that the Pakistan Railways had recently awarded two tenders - signalling and replacement of locos - to Chinese companies. About the Pak-China Haier Ruba Industrial Zone, the issue of land has been resolved and it has been decided that the cost of the land will be jointly borne by the Federal government and the government of Punjab.
Sources said that the Pakistan was committed to provide Rs 18 billion for the Pak-China Higher Education University. This funding would be available in addition to the Higher Education Commission (HEC) present Public Sector Development Programme (PSDP) allocation for establishment of the university during the next eight years. The HEC has been asked to start the courses in the campus of COMSATS and continue it there for next two years till a final decision is taken to establish and build a new campus.
The Chinese Ambassador expressed his concerns over non-starting of the session, since the Chinese faculty had already arrived Pakistan at the cost their jobs back in China. The relevant Pakistani authorities assured the Chinese envoys that the session would start as agreed with their counterparts.
The meeting also discussed other projects of Chinese investors in Pakistan. The satellite project with Chinese has been approved at the highest level, and the government of Pakistan is waiting the pricing, incentives and technical details from the Chinese side.
The Chinese side was requested to plan funds for the construction of Diamer Bhasha Dam. Recently, Rs 116 billion was approved for acquisition of land for the project. The Chinese side expressed its willingness to consider the funding for the dam. The meeting also discussed the issue pertaining to new location for Chinese Embassy in Pakistan.
The Chinese Ambassador said that the Capital Development Authority (CDA) was asking for some additional funding for the land reserved for new Chinese Embassy, which, in their opinion, was not a fair charge. The relevant authorities the ambassador assured that the matter would soon be resolved once the CDA Chairman was back in town. He asked the Chinese side to provide the price differential. The Chinese side agreed to provide the information for speedy establishment of new Chinese Embassy in Pakistan.
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