The government is reportedly not giving equal treatment to all the foreign investors as promised under the Foreign Investment Act, which led to substantial decline in FDI in the country. Recently, Board of Investment (BoI) discouraged three potential foreign manufacturers from building CNG buses and setting up CNG stations in big cities of Pakistan on the ground that the country was facing gas shortages and no new venture in this sector was feasible.
Recently, Foton Group of China met with President Asif Ali Zardari, Sindh Chief Minister Syed Qaim Ali Shah and Board of Investment Chairman Saleem Mandviwala and approved project of 2000 CNG buses for public transport. The Chinese firm discussed the co-operation of Sindh government for plying 2000 CNG buses, preferably first in Karachi and then Hyderabad and gradually in other cities of the province. It was decided that the MoU would be signed very soon while other bottlenecks and issues will be discussed and resolved.
Earlier, Chief Executive Officer, Argentina Company Galileo, Osvaldo C del Campo called on Chairman BoI in November 2010 and showed interest in setting up CNG refilling terminals in 10 big cities of the country for public transport. The CEO even agreed to transport CNG from any other point if not available at the stations. Chairman BoI said to have declined the proposal of $6 million investment on the plea that Pakistan was facing gas shortage.
A similar request has been submitted by Ukrainian Company LAZ, which is interested in introducing European model buses in Pakistan, but there was no response from Pakistani side. A diplomat commented, "LAZ Company wrote letters to BoI, but no response was received even in one-and-a-half years despite several reminders." Recently, POSCO, Korean company was another foreign investor, which was interested in building CNG transport. The BoI suggested to them that due to non-availability of CNG fuel, they should come up with fresh proposal of buses on LPG fuel.
When contacted, BoI Chairman Saleem Mandviwala said, "It was misquoted that Chinese FOTON Company would run the buses on LPG not CNG." "A Chinese bus manufacturer, Foton Motors Company, would sign an MoU with the Sindh government on Saturday for provision and operations of 2000 CNG buses."
According to Pakistan Energy Security Overview, total consumption of fuel in the country is 38,768,000 TOE. The share of transport is 30 percent mix fuel; industry 40 percent, agriculture 2 percent, commercial 4 percent and domestic 22 percent and others 2 percent.
The FDI inflow in Pakistan has declined considerably after 2008 from $5.590 billion to $2.016 billion in 2010, revealed World Investment Report 2011 released by the United Nations Conference on Trade and Development. According to the report, the total FDI inflow in the economy declined from $5.590 billion in 2007 to $5.438 billion in 2008 and $2.338 billion in 2009. The FDI inflows further declined to $2.016 billion in 2010.
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