Pakistan, China to ink Rashakai SEZ agreement today

ISLAMABAD: Pakistan and China will today (Monday) sign a development agreement for the first Rashakai Special Economic Zone (SEZ) in Khyber Pakhtunkhwa.

The agreement is a part of the multibillion China Pakistan Economic Corridor project (CPEC). The agreement will be signed at the Prime Minister’s House, Islamabad. Federal ministers, officials from the line ministries and KP government and other stakeholders will attend the signing event.

In a statement, Chairman Board of Investment (BOI) Atif R. Bokhari said the signing of Rashakai SEZ agreement would help realize the vision of special economic zones’ development, ultimately leading to a prosperous and industrial Pakistan.

He said sufficient headway had been made on the project and the zones were now becoming ready for business. He said Pakistan’s proximity with China would allow these SEZs to foster economic interdependence for mutual economic advantage.

The agreement provides a road map for establishment of an SEZ while holding the federal and provincial governments and the developer jointly responsible for development and successful operations.

Rashakai SEZ is to be developed under the public private partnership mode by the Khyber Pakhtunkhwa Economic Zone Development and Management Company (KPEZDMC) (a Section-42 company of Government of Khyber Pakhtunkhwa) in collaboration with China Road & Bridge Corporation (a state-owned Chinese enterprise).

An SPV Company of these two firms, named Rashakai Special Economic Zone Development and Operations Company (RSEZDOC), has been created for implementation of the agreement, which is first of its kind with the Chinese counterpart being one of the parties.

A project of $128 million, spanning over 1,000 acres, was awarded the SEZ status on August 6, 2019 and its concession agreement was signed in April 2019.

The BoI promoted establishment of this SEZ with the goal of capitalizing on investment inflow under the CPEC, inclusive economic development of KP province, creation of job opportunities, industrial development, and export generation in Pakistan.

Rashakai SEZ holds a unique competitive advantage due to its proximity to the first juncture of CPEC route, and significant resource and manufacturing base in the region. Due to such factors, it has the potential to become one of the primary investment destinations for foreign investors – particularly Chinese investors who are looking to find new and cheaper markets to relocate their industrial base.

Chairman BOI, Atif R. Bokhari said the BoI had successfully expedited the process of provision of promised utilities, facilitated allocation of fiscal incentives and concession to the co-developer of the SEZ.

To enable successful operations of this SEZ, the federal government has committed Rs1.8 billion for provision of 210MW electricity, and Rs1.2 billion for provision of 30 mmcfd gas from the federal PSDP. Provision of required utilities on SEZ doorstep as per the required timelines of the project will allow for on-time construction and development of the SEZ, he added.