AIIC: Revving up for economic growth

July 16, 2023

Out of the nine Special Economic Zones planned under the CPEC, Allama Iqbal Industrial City is the only one where production has started

AIIC: Revving up for economic growth

Industrial units in Allama Iqbal Industrial City, the country’s largest Priority Special Economic Zone have become operational, solidifying Faisalabad’s identity as a hub for industrial development.

The Priority Special Economic Zone (PSEZ), aligned with China-Pakistan Economic Corridor (CPEC), was established with the aim of ‘strengthening industrial ties’ between the two countries and facilitating the relocation of Chinese industrial units to Pakistan.

Allama Iqbal Industrial City (AIIC), inaugurated in January 2020, spans an area of 3,217 acres and is strategically situated near Sahianwala Interchange on the M4 motorway, opposite M3 Industrial City, Faisalabad.

Out of the nine Special Economic Zones (SEZ) planned under the CPEC, the AIIC is the only one where production has started. It is also the only PSEZ under the CPEC in the Punjab.

AIIC: Revving up for economic growth

“Five industrial units from China and eight from Pakistan have already commenced production in the AIIC,” says Muhammad Tanveer Jabbar, the chief executive officer of Faisalabad Industrial Estate Development and Management Company (FIEDMC), which is overseeing work at the AIIC.

The FIEDMC specialises in developing SEZs. The company has already established three industrial estates in Faisalabad: M3 Industrial City (4,356 acres), Value Addition City (225 acres) and the Garments City.

“The AIIC has attracted significant direct foreign investment ($312 million), accompanied by local investments of $543 million,” Jabbar tells The News on Sunday.

“The AIIC’s prime location - adjacent to the M4 Motorway with Faisalabad International Airport situated 52 km away, the Railway Station 15 km away and the Dry Port 20 km away - makes it attractive for investors,” he adds.

The AIIC caters to several industries including textiles, garments, pharmaceuticals, automobiles, packaging, electrical and electronics, chemicals and dyes, light engineering, iron and steel re-rolling, food processing, building/ construction materials, plastics and agriculture, says Jabbar.

According to the CEO, the allocation of 300 acres of land for light engineering, 200 acres for a Health City, 200 acres for a Furniture City, and 50 acres for an Apparel City speaks of the AIIC’s comprehensive development plan. “The investment in the AIIC is projected to generate more than 500,000 jobs,” he claims.

Jabbar says given the overwhelming demand, the FIEDMC has proposed further extension of the AIIC and asked for the allotment of an additional 3,000 acres of land for it. “This will transform the AIIC into the country’s largest economic zone, equipped with modern facilities,” he says.

In the past, Faisalabad’s exceptional performance across seven indicators in the Doing Business Report (2010) positioned it as the most favourable location for the development of the PSEZ.

While the AIIC has become operational, the rest of the SEZ projects planned under the CPEC have not.

The CPEC Secretariat of the Ministry of Planning, Development and Special Initiatives has stated that developmental work is under way at other economic zones such as the Bostan Special Economic Zone in Balochistan (1,000 acres) and the Rashkai Special Economic Zone in Khyber Pakhtunkhwa (1,000 acres). 1,530 acres of land has been acquired for Dhabeji Special Economic Zone in Sindh. However, developmental work has yet to begin.

The ICT Industrial Zone Islamabad; an Industrial Park at Pakistan Steel Mill land at Port Qasim, Karachi; Mirpur Industrial Zone, Azad Jammu and Kashmir; Mohmand Marble City, Mohmand Agency; and Muqpandas Special Economic Zone, Gilgit-Baltistan, are still in the pipeline.

The PSEZs offer substantial economic incentives for domestic businesses and have enhanced the country’s attractiveness for foreign investments. These have the potential to foster long-term benefits by enabling collaboration between Pakistani and Chinese investors and promoting export-oriented manufacturing activities.

Once completed, these are expected to create two million jobs and achieve a turnover of Rs 1 trillion.

While policymakers recognise that the PSEZs as crucial drivers of output growth, technology transfer and import substitution, concerns surrounding political stability, extremism, national debt, firms’ solvency decline, currency devaluation and soaring trade deficits continue to discourage investment.

Some manufacturers have cited a lack of clarity and government reluctance to share information as their primary concerns.

The writer has been associated with journalism for the past decade. He tweets @ naeemahmad876

AIIC: Revving up for economic growth