Pakistan opens gates for Gulf investment

In a major development, Pakistan’s new Special Investment Facilitation Council (SIFC) a hybrid civil-military forum has in principle approved 28 projects worth billions of dollars that would be offered to Gulf countries for investment, including the construction of Diamer-Bhasha dam and mining operations at Reko Diq in Balochistan’s Chagai district.

The list of the approved projects suggests that if all the schemes are picked up by countries, including Qatar, Saudi Arabia, the UAE, and Bahrain, the quantum of investment under the SIFC banner can be greater than the $28 billion under the China-Pakistan Economic Corridor (CPEC).

Initially, the approved schemes are in the food, agriculture, information technology, mines and minerals, petroleum, and power sectors. They include cattle farms; the $10 billion Saudi Aramco refinery; explorations of copper and gold in Chagai; and the Thar Coal Rail connectivity scheme.

The Diamer-Bhasha dam has also been offered to China for investment under CPEC.

In order to give legal cover to the SIFC working, parliament this week approved a host of amendments to the Pakistan Army Act and the Board of Investment (BOI) Ordinance.

Amendments to the Election Act have also been introduced to ensure the continuity of work on these schemes during the tenure of the caretaker government.

Pakistan has set up the SIFC for what Prime Minister Shehbaz Sharif described as a move to “foster synergy between the federal and provincial governments to facilitate timely decision making; avoid duplication of efforts; enhance investor confidence, and ensure swift project implementation”.

Pakistan established the SIFC to “foster synergy between the federal and provincial governments to facilitate timely decision making; avoid duplication of efforts; enhance investor confidence; and ensure swift project implementation,” according to Prime Minister Shehbaz Sharif.

According to sources, the government has designated 23 nations for presenting these projects, although the primary focus will be on Saudi Arabia, the United Arab Emirates, Qatar, and Bahrain.

In order to expedite the implementation of the programmes, Pakistan would provide priority visas to people of certain nations.

The challenge will be in the implementation stage, as even critical projects such as CPEC may not be completely realised due to a variety of factors such as bureaucratic bottlenecks, Pakistan’s backtracking on sovereign obligations to China, and its indecision regarding geopolitical alignments.

Islamabad and Beijing had envisaged a total $62 billion investment through CPEC, but only about $28 billion has been realised.

Last month, Pakistan narrowly escaped a sovereign default after the prime minister and the military establishment assumed control of economic issues and secured a fresh $3 billion arrangement with the International Monetary Fund (IMF).

The source said after the SIFC’s principle endorsement last week, these projects were again discussed by the implementation committee of the primary body this week.

They added that now these projects would be tabled before the SIFC’s apex committee next month for final approval.

The sources continued that the SIFC had approved the setting up of technology zones, a project for investment in the optical fiber network, the establishment of Cloud infrastructure and a semiconductor designer, the manufacturing of smart devices, a global skill hub scheme, and various centers of excellence.

The SIFC has given the nod to Chiniot Iron Ore project, the Barite-Lead-Zinc project, and the explorations of copper and gold in Chagai as well as lead and zinc in Khuzdar.

The SIFC approved a $10 billion Saudi Aramco oil refinery and the TAPI Gas Pipeline Project for investment under its auspices.

Some important power sector projects have been selected for investment sharing with Gulf countries.

The Diamer-Bhasha Dam and Thar Coal Block II were both multibillion-dollar projects.

The Solar PV Projects in Layyah and Jhang have also been approved.

The SIFC has also approved a hydroelectric project in Rajdhani, as well as two transmission lines from Ghazi Barotha to Faisalabad and Matiari to Rahim Yar Khan.

According to the sources, the plan also included a Reactive Power Compensation Devices project and battery storage for frequency management.

The SIFC approved a $10 billion Saudi Aramco oil refinery and the TAPI Gas Pipeline Project for investment under its auspices.

Some important power sector projects have been selected for investment sharing with Gulf countries.

The Diamer-Bhasha Dam and Thar Coal Block II were both multibillion-dollar projects.

The Solar PV Projects in Layyah and Jhang have also been approved.

The SIFC has also approved a hydroelectric project in Rajdhani, as well as two transmission lines from Ghazi Barotha to Faisalabad and Matiari to Rahim Yar Khan.

According to the sources, the plan also included a Reactive Power Compensation Devices project and battery storage for frequency management.

The SIFC also agreed to perform a feasibility assessment on a proposal to build a water reservoir for excess flood water for irrigation in Cholistan, and it requested an update on the Chashma Right Bank Canal proposal.
The National Assembly adopted changes to the BOI law to provide legal protection for the SIFC’s work.

The new law states that the SIFC will serve as a single point of contact for multi-domain collaboration in important domains with Gulf collaboration Council countries in particular, and other countries in general.

It will create a policy climate conducive to investment and development, recommend permissions, carry out commercial transactions, and enter into arrangements and agreements with local and foreign investors, either directly or indirectly.

The SIFC has also been given the authority to summon federal regulatory agencies, authorities, public sector enterprises, divisions, and departments.

The body has been given the authority to relax or exempt itself from regulatory compliance.

SIFC will be completely immune from any lawsuits, prosecutions, or other legal procedures or actions.
According to the new law, no investigating department, anti-graft body, law enforcement agency, or court can inquire into or launch a probe into any commercial transaction, arrangement, or agreement executed by the SIFC.

Another significant change is that the amended BOI Ordinance will take precedence over all existing legislation.

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