Karachi, January 03, 2017 (PPI-OT):As promised, Murad Ali Shah, Chief Minister of Sindh, returned home from Beijing, with very good news for the people of Karachi, for the people of his province, and for Pakistan. He along with his crew had gone to attend the 6th Joint Cooperation Committee meeting in Beijing with an ambitious and critical agenda where they would argue for the inclusion of Karachi Circular Railway (KCR), Keti Bunder Port and Power Park, and a Special Economic Zone at Dhabeji, Thatta, into the list of projects supported by the Chinese Government in its CPEC programme.
The Government of Sindh has made many attempts over the last decade, to secure financial support for KCR to meet the living and work needs of the world’s 7th largest city and despite commercial feasibility conducted by JICA deeming it viable, under its belt, it was unable to revive this facility.
On the 29th of December, the Chinese side approved support for revival of this railway system to provide ridership to more than 700,000 passengers everyday, travelling up to 43 km on rail, estimated at 2 billion USD. What this means for Chinese State owned enterprises, is that it makes the project exponentially commercially viable on account of easier funding and gives them a guarantee from Government of Pakistan backing Chinese investment in this project.
It now falls on GoS to seek and tender for the development of KCR via a financial viable scheme and partner with the right Chinese company. The Sindh government team in Beijing has already signed an MOU with a specialist SOE for rail projects and a number of other Chinese mammoths are lining up. Chief Minister Sindh Syed Murad Ali Shah was meted similar generosity in his bid for the inclusion of a coal jetty and port and a 10,000 MGW power park at Keti Bunder along with a transmission line to connect Keti Bunder to Jamshoro and Matiari grid as well as a railway link from Islamkot to Keti Bunder.
This is in principal the realization of Shaheed Benazir Bhutto’s dream and her vision was translated into the minutes of the 6th, JCC in Beijing. As Murad Ali Shah later witnessed the signing of an MOU with a Chinese company, which has interest in participating in this 5 billion USD project, his emotions were palpable. All at GoS had courted the Federal government to endorse this development through CPEC. This initiates the industrialization and development of Sindh’s coastal belt and will ensure modern life to millions living in this part of the country in the years to come.
The Chinese are now talking industry on ground and discussing transfer of surplus industry to Pakistan. The initial phase of projects included in CPEC, whether in early harvest, actively promoted or long term had so far been either in energy, infrastructure or transport. The fourth pillar of Chinese regional integration strategy has now been included into CPEC, i.e. Special Economic Zones. Each province pitched its top priority SEZ for the development and commercialization support through CPEC.
GoS would like the Chinese to develop and relocate their industry in collaboration with Pakistani businesses at Dhabeji on 1000 acres in a purpose built industrial park. The Chinese side has in principal approved the list of SEZ’s submitted by GoP and the provinces have three months to submit commercial viabilities, forge possible partnerships between Chinese and Pakistani businesses, budget infrastructure development and ensure availability of gas, electricity and water.
The federal government has committed to devising an industrial policy to render a conducive investment environment to attract Chinese businesses to relocate, transfer technology, create jobs and increase domestic income in Pakistan. Murad Ali Shah’s team is committed to making a state of the art industrial enclave at Dhabeji in Thatta.
The two most important criteria for SEZ success are location and access to an urban commercial hub. This makes China Special Economic at Dhabeji the most viable proposition in Pakistan. given Karachi, Pakistan’s commercial nerve centre with a population of 22 million people, is 41 km away and the zone is located on the CPEC eastern route with N5 half a km away and M9 at a distance of 35 km.
The Sindh government has invested in and prioritized Thar coal mining and power generation from local coal and Thar coalfields were included in CPEC at the very outset, signalling the importance of national energy security and the development of Thar Desert. This JCC marked another landmark achievement by Murad Ali Shah; after successful commencement of Block 2, Oracle local coal power plants and mining of Block 6, was upgraded to the prioritized list or Early Harvest, at the cost of a strategic downgrade of Rahim Yar Khan coal power project to the list of actively promoted projects.
This translates into an immediate commencement of operations of yet another Thar Coal block. However, what is newsworthy is that this project, owned by a UK company listed on the market in London, can now attract large equity financing from world class Chinese mining and power companies. The financial close of this project will be the largest private sector transaction in Pakistan at 2 billion USD.
This also makes clear the confidence that UK capital markets have in long term investments in Pakistan and also establishes what we had set out to achieve; i.e. make Pakistan a destination for investment where multilateral business relationships amongst, Pakistan, China, UK and others are successfully forged and operations bearing long term guaranteed gains for investors on all sides commence in the short term. Indeed, the government of Murad Ali Shah has much to be proud of as it gears up to prove its mettle in the New Year.
For more information, contact:
Chief Minister House, Sindh
Tel: +92-21-99202019 (Ext: 336)