Chinese Operators Vow To Make Gwadar More Profitable Than Karachi
ISLAMABAD: Chinese operators working at Gwadar Port and its free zone have vowed to make the coastal city the single largest contributor to Pakistan’s national economic output in seven years, and said that 47,000 jobs will be created for locals with new investments amounting to billions of rupees.
China Overseas Ports Holding Company (COPHC) Chairman Zhang Baozhong on Tuesday revealed his plans after the government finally approved a 23-year income tax holiday and exemptions of sales tax and customs duties for the port and businesses that will be set up at Gwadar Free Zone.
Talking to media persons, the chairman said, “It [issuing of ordinance] is a turning point for Pakistan’s economy and now billions of dollars will be invested in Gwadar.”
He was also accompanied by the Federal Minister for Maritime Affairs Ali Zaidi and Federal Minister for Economic Affairs Hammad Azhar.
It merits mention here that the COPHC and its four subsidiaries are responsible for operating the port and its economic zones for a period of 23 years.
The concessions had been guaranteed in the Gwadar Port Concession Agreement but successive governments had failed to issue notifications in this connection. However, President Dr Arif Alvi on Monday promulgated two ordinances to set up China-Pakistan Economic Corridor (CPEC) Authority and Tax Laws Amendment Ordinance 2019.
“I believe Gwadar will be the largest contributor to the gross domestic product (GDP) growth in seven years,” Baozhong said, while adding that 95 per cent of the production in the Gwadar Free Zone would be exported.
For now, Karachi is the only profitable port that is supporting major economic activities in the country.
“We have completed the master plan of the Gwadar Free Zone that will be built in four phases over a period of seven years,” said Baozhong. “Once the zone is fully developed in seven years, 47,000 jobs will be created for the locals, and its annual sales will be well over $1 billion,” he added.
Speaking about the hurdles faced by the project, the COPHC chairman said, “Today is a big day and I had to struggle for seven years to secure these tax concessions, which had been promised in the Gwadar Port Concession Agreement. I had been trying for seven years and everybody made promises with me but nobody helped.”
Baozhong’s company received support from the National Development Council, upon whose directions the obstacles were removed in obtaining these concessions.
He praised the Pakistan Tehreek-e-Insaf (PTI) government for honouring its commitments regarding the development of the Gwadar Port.
“So far, 41 investors have come forward to invest about $500 million in Gwadar Free Zone in the first phase,” the chairman said. “These industries are being set up in the sectors of logistics, edible oil, piping, and halal food.”
Further, he said that in phase one, the $500 million investment would create 5,000 jobs for the locals, while adding that the free zone developer had made it compulsory for the investors to complete the physical infrastructure in six months and start production within one year.
He also said that in order to promote modern industries in the Gwadar Free Zone, the developer might offer free plots, cheap financing, and free housing facilities to investors.
It merits mention here that the maritime affairs minister said that the required infrastructure, including the provision of electricity, water, approval of Gwadar Master Plan and other facilities needed to make the port and free zone operational, had been provided.
Speaking on the occasion, Zaidi said that the SEZs’ incentive package would be finalised soon, which was pending for the last four years.
In May 2017, Pakistan’s federal cabinet had approved the Special Incentive Package for the relocation of industries from China and for bringing Chinese investment in nine SEZs to be set up under the CPEC.
The package was developed on the insistence of China during the sixth meeting of the CPEC Joint Cooperation Committee (JCC) held in Beijing in December 2016.
The package was primarily aimed at those Chinese industrial units which were declared sunset industries by Beijing and had chances of being relocated to Pakistan, in the hope of creating thousands of jobs.
In the sixth JCC meeting, the two countries approved nine SEZs, which would be established in the four provinces of the country, and in Azad Jammu and Kashmir, Gilgit Baltistan (GB) and Islamabad Capital Territory (ICT).