ISLAMABAD: The Board of Investment (BoI) is likely to move the Federal Cabinet to scrap Bilateral Investment Treaty (BIT) template, and allow renegotiating with Saudi Arabia and Qatar on new BIT template, paving the way for billions of dollars’ investment, well informed sources told Business Recorder.
A huge investment from both countries is at halt due to differences on template of BIT, as both countries have proposed changes in it to include ‘exceptional’ incentives and protection of their investment, the sources added. “Federal Cabinet in 2021 approved a Model Bilateral Investment Treaty (BIT) template.
However, the draft BIT’s submitted by Saudi Arabia and Qatar has a few variations from the model template. BoI has been directed to move a summary to the Cabinet to discard the template and allow negotiations with KSA and Qatar for finalisation of BIT,“ the sources added.
FTA with GCC states making little or no headway
The sources said the issue of BIT template is under discussion with countries individually and at the level of Gulf Cooperation Council (GCC). Most recently, the issue of BIT came under hectic discussion during negotiations on Free Trade Agreement (FTA) between Pakistan and GCC countries.
Pakistan and China have also agreed to allow investment in China Pakistan Economic Corridor (CPEC) after mutual consultations.
Early this year, Qatar had agreed to consider Pakistan’s offer to buy shares/ stakes of Oil and Gas Development Company Limited (OGDCL) and Pakistan Petroleum Limited (PPL) and sell Mirage-2000 fighter aircrafts to Pakistan. Qatar is also interested in acquisition of Islamabad and Karachi airports.
Recently, Saudi Arabia conveyed its concerns over protection of its investment and rights in Pakistan.
Saudi Arabia has also shared investment proposals with Pakistan which includes establishment of refinery in Balochistan and solar power projects. A high-level forum has been informed that Riyadh wants to invest in Pakistan in the field of mines, minerals, power, and agriculture and plasma products.
Pakistan and Saudi Arabia are also negotiating on Reko Diq project. Recently, two committees were formed to negotiate with the Saudis as well as to talk to each other with intermediaries. Both sides have very high-end consultants. The interlocutors have to talk to each other. Their upcoming round of dialogue is scheduled in London. Previously, they had a meeting in Istanbul. The initial meeting in Istanbul has broken the ice, tremendously.
Board of Investment (BoI), sources said, had convened a meeting early October 2023 to discuss post-FTA negotiation and devise future strategy as FTA could not be signed until BIT is finalised. The GCC members including Saudi Arabia and Qatar are eager for the finalisation of BIT before making any investment in Pakistan.
“The teams from Qatar and Saudi Arabia were part of negotiations during the 5th round of Pak-GCC FTA to finalise the treaty in investment. However, some articles which were different from template of BIT approved by the Cabinet, were not agreed by the Pakistan team as approval of competent authority was required for it,” the sources added.
The government has directed Governor, State Bank of Pakistan and Secretary Finance, to address the concerns of foreign companies on repatriation of dividends.
Copyright Business Recorder, 2023
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