ISLAMABAD: Special Assistant to the Prime Minister (SAPM) on CPEC Khalid Mansoor said that if political stability remains intact, the Chinese investment commitment of $20-30 billion for the establishment of a petrochemical complex and the relocation of refineries to Gwadar could materialize.
“If we ensure political stability, Chinese companies will make huge investments ranging from 20 to 30 billion dollars for the establishment of the petrochemical complex and the relocation of two refineries in Gwadar over the next few years. We used to talk more and work less, but now things are in place to make that a reality,” Khalid Mansoor confirmed to The News after speaking at the Pakistan Petrochemical Symposium organized by the Corporate Pakistan Group in collaboration with OICCI and other partners here on Thursday. .
Earlier in his address, he said that in order to move forward, it was necessary to formulate a policy framework for the gasification of Thar coal. Thar Chemical Industrial Zone could be established with special economic zone (SEZ) incentives, development and implementation of infrastructure projects in Thar including rail and water supply of Thar, establishing ties with relevant countries to bring advanced technology to Pakistan, organizing road shows and bilateral agreements with China and other countries, as well as strengthening coordination between different governments.
He said Pakistan will become a manufacturing hub in the second phase of CPEC. The CPEC would not be China-centric as it tells foreign ambassadors that the upcoming SEZs would be open to investment from all parts of the globe. He said investors were arguing over the establishment of a long-term policy with appropriate tariff protection, import duty exemptions for factories and machinery, income tax exemption of 10 years, including a minimum turnover tax, low-cost local financing and infrastructure facilitation. Thar gasification could be used to establish urea fertilizer plants in Pakistan.
Different CEOs of private companies including CEO of Lotte Humair Ijaz, CEO of Tufail Group and others have called on the government to come up with a consistent policy framework by ensuring competitive tariffs with the region and the world and removing the turnover tax to attract 4 billion dollars of investment. over the next few years. National Tariff Commission (NTC) Chairperson, Dr. Robina Aather, said the tariff is crucial in promoting industrialization and the tax structure as a narrow and discretionary basis that forces policy makers to rely on the increase in tax rates. With this prescription, she said the government embarked on a tariff rationalization program in 2019 and the weighted average tariff was reduced from 7.5% to 5.5% over the past three years. More than 2,000 tariff lines were reduced to zero and they were aimed at proposing tariff rationalization for the petrochemical sector in order to establish world-class factories, because this industry should not be overprotected.
The Prime Minister’s Trade Adviser, Abdul Razak Dawood, said he was working for a paradigm shift as hundreds of acres of available land along the ports would be made available for the iron, steel and petrochemicals instead of the textile sector. If Pakistan wants to fetch $250 billion in exports, reliance on exports could not help achieve this goal as there would be four major sectors including information technology, agriculture, iron and steel and petrochemicals. He called it factually true when a CEO of a giant corporation said there was a need to reverse this policy as the country took two steps forward and one step back, adding that it should be reversed once and for all.