Board of Investment (BoI), with a secretariat for Special Economic Zone (SEZs) under the China-Pakistan Economic Corridor (CPEC), is yet to notify the status of Allama Iqbal Industrial City Faisalabad as SEZ which was inaugurated by Prime Minister Imran Khan on Friday.

Pakistan and China had agreed to develop nine SEZs across the country and decided to complete three SEZs on priority basis including Allama Iqbal Industrial City, Faisalabad, and two others located in Rashakai in Khyber Pakhtunkhwa and Dhabeji in Sindh.

Sources said that Board of Approval (BoA) of BoI is yet to approve the status of Allama Iqbal Industrial City as SEZ or of other SEZs to be established in the four provinces of the country. The BoA, the highest approving forum is headed by the Prime Minister with membership from economic ministries, provincial governments, public and private sectors.

Sources said that all the provinces are requesting an amendment to the rules of BoA of SEZs which they are claiming were drafted without prior consultation with them. The first meeting of BoA presided over by the then Prime Minister Raja Pervez Ashraf was held in the Prime Minister's secretariat on January 23, 2013. No meeting of BoA was held during the tenure of Pakistan Muslim League-N. Rashakai Economic Zone, M-1, Nowshera, and China Special Economic Zone Dhabeji are scheduled to be inaugurated in April 2020. Board of Investment has been unable to operationalise a single SEZ during 18 months of Pakistan Tehreek-e-Insaf (PTI) government. Informed sources told this correspondent that an amendment in Special Economic Zone Act 2012 to facilitate industrial zones under the CPEC is also required. Under the proposed amendments, federal government must allow 100 percent ownership by foreign companies investing in SEZs. The proposed incentives for SEZs include income tax exemptions, no taxes on non-residents and income tax exemptions for expatriates till 2040. The BoI has submitted PC-I for SEZs to Planning Division for the approval of Executive Committee of National Economic Council (ECNEC) headed by Adviser to Finance, Hafeez Sheikh. Investors are reluctant to invest in SEZs owing to the unavailability of utilities-power, gas and water. Some Chinese firms who bought plots in the under-construction Allama Iqbal Industrial City were reported to be delaying construction of their facilities unless the management gave firm guarantees for the provision of electricity and other utilities. "I think there's a tendency to believe that Special Economic Zones might be the cure to difficulties in attracting investors and I don't think that's our experience. Our experience is demonstrating that the framework for doing transparent business and predictable business is available", says Wilson Center Ambassador Alice Wells, the Principal Deputy Assistant Secretary of State for South and Central Asia at the U.S. Department of State while talking about China's Belt and Road Initiative, or BRI, and particularly the Pakistan component of BRI, CPEC.