By Fakhar Alam
PESHAWAR, Dec 20 (APP): Naturally situated at most strategic location with major international markets of Central Asia, Afghanistan, China and SAARC in its close proximity, Pakistan is going to emerge a key hub of investment and trade business in the wake of China Pakistan Economic Corridor projects including multi-faceted Rashakai Special Economic Zone (RSEZ), which is all set for groundbreaking.
The country’s key strategic location having landlocked Afghanistan in west and onward Central Asians Republics (CARs), Iran in south-west with Middle East countries beyond, SAARC in south-east and China in north-east, India in east and a large active seaport of Karachi in south, have made Pakistan most attractive and favourable for domestic and international investors to earn maximum returns on their investment in projects under CPEC.
Following PTI Govt’s goal-oriented economic and investment policies and reforms, the flow of direct foreign investment (DFI) have been diverted to Pakistan under CPEC, a major component of China’s One Belt, One Road (OBOR) initiative, has entered into an advanced phase of industrialization after signing of the landmark RSEZ development agreement between Pakistan and China on September 14, 2020, paving the way construction for gigantic RSEZ on 1,000 acres land located on the most strategic location in Nowshera district.
After official announcement of CPEC, around 37 zones have been proposed as Special Economic Zones (SEZs) for all provinces of Pakistan out of which establishment of nine SEZs were prioritized including RSEZ at Nowshera, Dhabeji, Bostan Industrial Zone, Allama Iqbal Industrial City Faisalabad, ICT Model Industrial Zone Islamabad, Industrial Park Pakistan Steel Mills Port Qasim, Mirpur Industrial Zone AJK, Mohmand Marble City and Moqpondass in Gilgit-Baltistan.
However, RSEZ is holding a unique competitive advantage due to its close proximity to the first juncture of CPEC route, close location with Peshawar Airport and ML-I besides a significant resource and manufacturing base, making it an attractive destination for domestic and international investors to capture local and international markets.
The project was initiated after MOUs were signed during KP-China Roadshow in April 2017. After long deliberations, KP Govt had signed the Concession Agreement with China Road and Bridge Corporation (CRBC) to develop RSEZ during Prime Minister Imran Khan’s historic visit to China where he attended Second Belt and Road Forum (SBRF) and Beijing International Horticulture Exhibition (BIHE) 2019.
Having an expected foreign investment of US $128 million, the project was awarded SEZ status on August 6, 2019 before its Concession Agreement was signed in April 2019. These agreements have provided a comprehensive roadmap for establishment of RSEZ while holding federal and provincial governments besides developers were jointly responsible for its timely development and completion on modern lines.
A flagship project of CPEC for Khyber Pakhtunkhwa, RSEZ has entered into matured stage for inauguration and was all set for its formal groundbreaking expected next month, said Javed Khattak, Project Director, KP Economic Zone Development and Management Company (KPEZDMC) while talking to APP.
“The project’s groundbreaking was scheduled on November 18 last but was postponed due to a spike in COVID-19 cases and was likely to be performed next month for which all preparations were completed,” he said.
Javed Khattak said it was a three- years project that would be developed on 1,000 acres in three different phases, adding total area designated for Industrial use is 702 acres and as per Federal SEZ Areas Regulations, of which 159 acres would be developed in Phase I, 279 acres in Phase II and 264 acres in Phase III besides 76 acres land was allocated for commercial use.
“For RSEZ, we have so far received about 1,700 applications from domestic and foreign investors including 700 from overseas Pakistani,” Mr Khattak said, adding foreign investors from brotherly countries of Turkey and Afghanistan had also shown keen interest in this mega CPEC project.
In the first phase, he said industries related to textile, garments, home building materials, general merchandise, electronics, mines and minerals, electrical appliances, automobile, mechanical equipment and food processing plants would be set up in RSEZ and at later stages more industries would be included to gain maximum capital.
“The construction activities in RSEZ have already started where a Century Steel Mill was being constructed on 40 acres of land,” he said, adding all essential services including gas, roads and electricity were being provided to the facility,” he said.
Promoted to capitalize the investment inflow under the ambit of CPEC, he said RSEZ would help ensure inclusive economic development of KP, creation of over two lac jobs for youth, accelerating pace of economic and industrial development besides taking the country’s exports to new heights.
It would be developed under Public Private Partnership (PPP) mode by KPEZDMC of KP Government in collaboration with China Road & Bridge Corporation (CRBC). SPV Company of these two firms named Rashakai Special Economic Zone Development and Operations Company (RSEZDOC) has been created for speedy implementation of the project. Ziaul Haq Sarhadi, former President Sarhad Chamber of Commerce and Industry (SCCI) told APP that RSEZ was a significant project towards promotion of the SMEs sector that would make KP a hub of trade and investment.
He said coronavirus has adversely affected industrialization and business processes in Khyber Pakhtunkhwa and urged the government to exempt engineering machinery from all taxes and duties to generate employment opportunities and bolster the country’s exports in large scale.
He said local industries would flourish only by providing the same facilities as being provided to SEZs. Shaukat Khattak, spokesperson Board of Investment (BOI) Islamabad said special status to RSEZ has been awarded by the Federal Government that would help facilitate investors in all matters including import of engineering machineries and equipment for SEZs.
Terming RSEZ as the top priority of BOI, he said his organization was promoting ease of doing business (EODB) besides providing a conducive business environment to investors and the business community.
Shaukat Khattak said local and foreign investors were being facilitated through regulatory reforms, incentives in taxation and federal excise duties and technical support besides others incentives for attracting direct investment in SEZs. Muhammad Naeem Khan, Professor Economics Department, University of Swabi told APP that RSEZ would prove as business and trade gateway among Pakistan, Afghanistan and CARs.
The project would immensely help increase trade volume among Pakistan, CARs, Afghanistan, Middle East and China after the start of full fledged operation of Gwadar sea port, construction of ML-I and Khyber Pass Economic Highway Corridor (KPEHC), he said. “Most of modern SEZs in developed countries employ advanced technologies like robots, artificial intelligence and 3D printing and special courses in our polytechnic educational institutes should be introduced to take full advantage of SEZs,” he suggested.
The establishment of academia–industry linkages and campuses of engineering universities in premises of SEZs would significantly help open new avenues of research and provide work experience to our students in fields of engineering, IT, industries, business, economics and human resource management, he said.
Karim Khan, Special Assistant to CM KP for Industries said RSEZs offer great opportunity to domestic and foreign enterprisers, businessmen, entrepreneurs and investors besides expatriates Pakistanis to invest and earn capital profits in short time in a competitive and business friendly environment in Pakistan with around 210 million massive population.
“KP is blessed with plenty of resources including fruits, leather, marble, gems, textile, sports, arms manufacturing, gemstones, livestock, dairy, fish farming, furniture wood, carpets, pharmaceuticals, transport, engineering and food sectors and if these processing plants were established on quality standards at RSEZ can significantly enhance the country’s exports besides increasing trade with Afghanistan, CARs and Gulf.
He said an ambition Kamyab Jawan Program has been launched under which loans were being provided to youth on easy terms in order to set up their own business and contribute in the development of the country.
Projects like RSEZ and Kamyab Jawan Program would help grow labour-intensive industries, SMEs including infant industrial units and generate hundreds of thousands of job opportunities for skilled workforce and youth, he said.
Karim Khan said an announcement regarding provision of jobs by the government was being fulfilled as RSEZ alone was expected to create over two lakh employment opportunities for youth.
In spite of COVID-19, he said work on setting up of new economic zones and industrial projects including Jalozai Economic Zone, Extension of Nowshera Economic Zone were expedited.
He said groundbreaking of Nowshera Economic Zone Extension Project on 76 acres land has been recently performed that would generate over 20,000 direct jobs for youth besides attracting Rs1.6 billion investment, adding 1,365 applications were received from investors for Nowshera Economic Zone and was being examined by experts.