Abu Dhabi's Expo 2020: PM expresses unwillingness to approve $50 million participation cost

Pakistan is likely to withdraw its participation in Abu Dhabi's Expo 2020 reportedly due to financial constraints and the Prime Minister has expressed his unwillingness to approve around $ 50 million participation cost of this event, well informed sources in Trade Development Authority of Pakistan (TDAP) from Karachi told Business Recorder.

Pakistan was deliberating on participation for more than a year and for this purpose a steering committee has held five or six meetings so far.

Giving the background, the sources said, initial proposal was floated by Pakistan's former ambassador to UAE, who is now in a senior position in Ministry of Foreign Affairs. At the time he had indicated that the bulk of the participation fee would be paid by the Pakistani diaspora in UAE whereas the GoP will contribute a minimal amount which the GoP has already remitted.

However, the newly appointed ambassador to UAE sought an amount which shocked the government including the Prime Minister who decided to scrap the idea. When he was cautioned that by doing so, Pakistan's relations with UAE will be affected, the Prime Minister reportedly replied 'don't worry I will he directly talk to UAE.'

Pakistan's Mission in Abu Dhabi, sources said, is also in a state of shock over the decision to withdraw participation in the Expo2020, the sources continued. According to sources, Chief Executive TDAP, Arif Khan, wrote a letter to the federal government a couple of months ago, according to which $ 27 million (approximately) were required for participation in the event with only $ 5 million received and remitted to the Section Commission Generals' Office in Abu Dhabi. There are two issues on the financial part. First is the commitments/ availability of the funds for the works awarded and secondly, the issue of financing the deficit.

The ambassador of Pakistan in Abu Dhabi, being Section Commission General had initiated works that were to be done for the project. This included award of tender for construction of Shell & Core of the project, for which the estimated amount was $ 15 million. The moment the contract was to be awarded, it would entail a liability on the part of the Government of Pakistan (GoP) of the same amount. Rest of the amount, approximately, $ 12 million is required for soft component of the project. According to the CE TDAP, it is legally binding on GoP, to cater to finances required for the purpose, which implies that even if the immediate transfer of the amounts in question is not possible, at least a confirmation at this point in time to proceed with the award of tender and commitment of funds totalling $ 27 million of the project is an absolute a must.

TDAP has been verbally informed that in addition to an initial $ 5 million approved and remitted to the SCG at Abu Dhabi, another amount of $ 5 million has been approved by the Prime Minister, which leaves a deficit of an estimated amount of $ 17 million. The issue of how the financing of $ 17 million would be achieved, and whether TDAP and Commerce Division should start working on a project without any firm commitment of the finance required, needs to be further discussed.

A directive of Prime Minister of October 1, 2018 was conveyed to TDAP to encourage private sector sponsorships which has not been forthcoming yet.

"I do agree that a full scale campaign in this regard has not yet been undertaken but even when we embark upon it, how successful it is likely to be, is an aspect that we must deliberate upon," he added.

Since participation in Expo 2020 would be a major opportunity to showcase Pakistan which can have tremendous opportunities (if properly encashed) for business development as well, therefore, one option is partial funding of the project from EDF. TDAP has been doing it in the past for Expo-Pakistan and Texpo. Since Expo 2020 is an event with a much greater impact on Pakistan, therefore, TDAP suggested that funding from EDF be considered. As estimated amount of Rs 6 billion per annum is collected under this head. TDAP proposed that an amount equivalent to 50 per cent of the total annual collection be committed there from for Expo2020 in the financial year 2019-20 and at the end of each month from September onwards, be remitted to TDAP. Extra funding over and above this amount can also be tapped into by the contributions from the State owned Enterprises (SOEs).

On the physical works and inner journey, the cost of the Shell & Core is estimated at $ 15 million, it is expected that the soft component being developed by the Theme Committee may perhaps cost an equal amount as well. Besides that, there is also supposed to be a programming part, including B2B meetings, cultural performances, events, accommodation and logistic costs of the artists etc. that are projected. The budgeting thereof has been catered to at this point in time. On the inner journey, a Theme Committee was constituted whose mandate was the development of the concept as well as later on execution of the theme as well as the inner journey of the "experience" of the visitor to the Pavilion. These ideas of the Theme Committee relating to the design, theme and curation of the journey of the Pakistan Pavilion have been in principle, approved by the Prime Minister during the meeting held at the Governor House on May 24, 2019. Therefore they need to be executed, as presented to the Prime Minister.

There are two aspect of the work being done by the Theme Committee: (i) the Intellectual Property Rights (IPR) of the inputs given by the Theme Committee and approved by the Prime Minister; and (ii) The financial component of these IPRs of the Theme Committee.

CE TDAP argued that it is not possible to tender out these IPRs because this would inevitably lead to legal complications and therefore be detrimental to the timely completion of the works related to Expo 2020. The only way forward in this case is to present these concepts to the private sector, if they approve then the sponsors can directly contact the authors of the sponsorships collected from private sector via a fund management team.

On the issue of the cost of the project, keeping in perspective the current economic situation, there are two proposed options which may be considered: (i) moving along with the Theme Committee's proposed plans for the exterior as well as the inner journey, at an estimated cost of $27 million; or (ii) progressing with the original design presented by M/s PICO and having the inner journey experience enhanced as much as possible, by the Theme Committee as per the concepts presented before and approved by the Prime Minister along with a separate tender for a million turnkey project at an estimated cost of around $ 21 million ( Shell & Core amounting to $ 15 million and $ 6 million for the soft component).

"I must reiterate that though these estimated costs, which increase or decrease on the actuals, there are issues relating to not only increase in the tendering part relating to IRPS and the complexity of sourcing of the IPRs but also of the estimated cost difference of around $ 5-6 million as well," TDAP stated.

When contacted, CEO TDAP, Arif Khan said that Pakistan has not yet withdrawn its bid to participate in the Expo 2020, adding that deliberations on this issue were underway.

In reply to a question, he said that the estimated cost of participation in Expo 2020 would be between $ 27 million to $30 million and not $ 50 million. "We are negotiating with the concerned authorities, the outcome of which is expected during the next few days," he concluded.

Copyright Business Recorder, 2019