ISLAMABAD: The federal government has assured full financial support to finance phase-II of Reko Diq project as per the already prescribed criteria between the Centre and Balochistan province.
This assurance was given by Petroleum Minister, Ali Pervaiz Malik, during his recent visit to Quetta, as a federal government’s team member led by the Finance Minister Senator Muhammad Aurangzeb. The Economic Coordination Committee (ECC) of the Cabinet recently approved a set of proposals about the Reko Diq project which are being negotiated with the concerned parties/ investors.
The provincial team led by Chief Minister Balochistan Sarfraz Bugti presented a long list of demands to the federal government’s delegation which promised to extend all-out support to resolve the issues of provincial government.
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On the issue of a one-time amnesty for registration of boats, the provincial government stated that the request was already made to the Ministry of Maritime Affairs (MoMA). It was pointed out that this requires a waiver of tax on part of Federal Board of Revenue (FBR) and exemption from the federal cabinet. A fresh list was also requested from the provincial government in this regard.
The meeting decided that the GoB will provide a list of approximately 6000 boats. FBR will exempt the tax after cabinet approval. MoMA will process the case for the cabinet. Curtailing illegal trawling: It was highlighted that large trawlers from Sindh enter Balochistan’s territorial waters and indulge in illegal fishing and destroy delicate ecosystem. Rough estimates suggest Rs 200 billion of illegal fishing by these trawlers per annum.
According to the provincial government all this is happening despite the regulatory and monitoring role of multiple federal agencies in addition to government of Sindh. The issue is alive on the agenda of Special Investment Facilitation Council (SIFC) but so far there is no solution in sight. It was decided that Prime Minister Office (PMO) coordinates consultations between various federal agencies to agree on coordinate mechanism.
Operationalisation of GPA/ CPEC infrastructure: The provincial government suggested that Afghan Transit Trade, as well as, import and export from Afghanistan should be diverted towards Gwadar Port. The proposal has multiple benefits some of which transcend commercial interests only. It was decided that Ministry of Commerce will take lead in suggesting the strategy to the federal government. Ministry of Planning, Development and Special Initiatives would make it part of the operationalisation of Gwadar Port. MoMA was tasked to ensure state of preparedness of the port and Authority.
Saindak Metal Limited payment disruption: The federal government’s team was informed that the GoB gets 60 per cent of net profit of Saindak Metals Limited since 2010. It has been stopped for the last two years with approximately Rs 3 billion as arrears. The mine has almost eight years of useful life. Lease extension for the remaining period was requested by Petroleum Division. An offer to assume management control by the GoB has been tendered but a large amount is being proposed to be converted from grants to loans, which render the whole proposition unfeasible. The meeting decided that Petroleum Division will release the amount whereas lease will be renewed three days before the expiry period. It was also decided that a revised financial model shall be presented to enable the GoB to take management control.
BMEC Equity Structure: It was apprised that federal government owns 10 per cent of the shares in BMEC (Balochistan Mineral Exploration Company) through PMDC (Pakistan Mineral Development Company). Since BMEC is reactivated and this small share is causing decision-making problems; therefore, the federal government should transfer their share to the provincial government free of cost (Rs 160 million).
The meeting decided that with the new investment by the GoB in BMEC, shareholding of PMDC will reduce further that will resolve the issue of delayed decision-making. Petroleum Division will facilitate in any manner required.
Approval of Reko Diq financing: It was apprised that the federal government had agreed to pay the 15 per cent share (paid equity) of government of Balochistan in Reko Diq to ensure Phase-II finances. Minister for Petroleum and Natural Resources Ali Pervaiz Malik stated that the agreement may be cleared from the provincial government. The meeting decided that the provincial cabinet will accord its approval. The federal government will finance phase-II as per the already set criteria.
Provincial share of 2.5 per cent in Margand Block and Block 28(North): The meeting decided that necessary relaxation of rules shall be obtained. Payment issues Jandran Block: Minister for Petroleum responded that as per federal government’s policy of February 2014, an offer was made to the provincial government but no response was given within 30 days after which the offer expired. Hence, share is not being provided.
It was agreed that the lapse was on part of Balochistan government. Request was made to get a one-time relaxation. It was decided that share of province be ensured for the past transaction, as well as, for future.
Copyright Business Recorder, 2025
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