ISLAMABAD: Ministry of Planning, Development and Reforms Tuesday said no preferential treatment had been extended to Chinese Companies in energy sector projects; executed in Independent Power Project (IPP) mode as per policy of Government of Pakistan for the last 15 years that catered the needs of all private power producers and investors.
“Incentives offered under the policy are not restricting any Pakistani firm to invest in power sector,” spokesperson of the ministry Asim Khan said adding that the Chinese companies had hired Pakistani engineers and workers in large numbers for execution of early harvest China Pakistan Economic Corridor (CPEC) projects, which even touched 30,000 in number.
Furthermore, there are a number of CPEC power and infrastructure projects which are being implemented by consortium of Chinese and Pakistani companies. For instance, power and mining projects in Thar, Sindh are being implemented by a consortium with two Pakistani firms.
The spokesperson further said Pakistan’s construction industry had witnessed a boom, mainly due to CPEC as cement, steel and other raw materials were consumed by Chinese companies for construction projects. CPEC finances are not limited to loans only, infact, the projects in energy sector are being executed in IPP mode where around 35 Billion US Dollars, foreign investors’ financing comes under foreign direct investment (FDI without any obligation on Pakistani government. Gwadar Port is being developed under BOT—Built Operate and Transfer mode, purely Chinese investment while a number of project in the Port City is implemented through grant from Chinese Government.
He said the projects in infrastructure sector are implemented through government concessional loans or interest free loans. On Average, a 2.3% interest has to be repaid over a period of 20 to 25 year on these projects thus creating very minimum burden on Pakistan compare to the benefits available due CPEC.
It has been time and again said on public forums that the incentives for development of CPEC’s Special Economic Zones (SEZs) are not limited to Chinese but open for all, with the objective to develop trade and industry of Pakistan, the main gain from CPEC and a driving force for economic growth.
Story first published: 9th January 2018