KP attracts investment proposals worth $30 billion

LAHORE: The Khyber Pakhtunkhwa province is rapidly emerging as a prospective hot investment hub following introduction of business-friendly policies and development of infrastructure for rapid industrialisation, said a senior official on Wednesday.

At present, the KP government has successfully attracted $30 billion in investment proposals in the shape of letter of interests (LOIs) for development of infrastructure and industrial sectors. 

In less than two years, after establishment of Khyber Pakhtunkhwa Economic Zones Development and Management Company (KPEZDMC), the business environment of the province has transformed in a way that it has grabbed the attention of local as well as global investors. Most of these investment proposals are from China, coupled with proposals from Canada, Italy and some other countries, said Mohsin Syed, CEO, KPEZDMC.

Talking about initiatives taken for improving the confidence of investors, he said, before year 2015, the morale of businessmen in KP was generally low, and many of them were in the process of migrating to other provinces. “Following doing preparatory work and getting feedback from industrialists, we have prepared highly attractive package for investors,” Syed said.

As a first step, he said, KPEZDMC decided to invite investors to establish industry in Hattar Industrial State, located in Haripur district under the special investment package. As per packages, KP government announced five percent discount in interest rate, while 25 percent discount was given on price of land and also on electricity bill. The KP government also announced 25 percent rebate on the cost of transporting plant and machinery through land route. The infrastructure at the estate is similar to landmark Sundar Industrial Estate.

After the announcement of this package, all the 424 acres of land were sold like hotcake in less than a month. Moreover, officials said, investors queued for buying another 700 acres of land for establishing industry.

Keeping in view the huge response of industrialists, KP chief minister gave a go ahead for buying another 1,000 acres of land. “We will offer this land to investors in the next few months,” the company’s CEO said.

One of the biggest investments being made by investors is from a leading biscuit manufacturer, who wants to invest Rs10 billion on a new facility with the aim of increasing sales from Rs30 billion to Rs50 billion, he observed.

This will be their 3rd plant, one in Hattar, second in Karachi and now third again in Hattar. The potential investment of a leading biscuit manufacturer in Hattar has virtually reinvigorated the interest of the corporate sector in KP’s business environment. It acted like the investment of the top multinational beverage company’s investment did for the development of Sundar Industrial Estate, the CEO of company said. It has stimulated a buying spree by top-of-the-line investors, including prominent glass and gas manufacturers, who have come up with investment plans of Rs10 billion each worth of funding. Following the footprints of local investors, foreign magnates, including Chinese industrialists also turned up with investment plans one after another.

Now, he added, we have a solid investor who wanted to manufacture a steel railway track. This track would be used for laying railway line from Peshawar, DI Khan-Quetta up to Gwadar. Sensing the investment climate of KP province, the China North Industries Corporation or Norinco has also been in contact with local officials for boosting investment in the province.

For the first time, Syed said, the concept of circular railway was being introduced in the province, as the top management of KPEZDMC was working with an investor for connecting Peshawar-Nowshera-Sawabi-Charsadda-Mardan through a loop of 150km with $1.5 billion investment.

There will be no loan involved in this transaction, as China Communications Construction Company (CCCC) will invest this amount and recover its financing through sale of tickets. “Following a visit of China in December 2016, China State Engineering Corporation is in talks for building a road in the rugged mountains for connecting Gilgit-Shindoor-Chitral-Dir. The company wants to invest in the road-link in addition with plan to lay railway line as well,” the CEO of KPEZDMC said.

"On hydropower front, letter of interests for 3,000MW generation capacity have been signed. Moreover, 7,000MW of further capacity would be showcased for investment. “We will also seek investment proposals for 10,000MW of transmission lines.”