- Minister for Economic Affairs Ayaz Sadiq floats alternate proposal of investment of $2-3 billion
ISLAMABAD: Qatar has reportedly turned down finance minister Dr Miftah Ismail’s request for a deposit, after which Sardar Ayaz Sadiq, Minister for Economic Affairs, floated alternate proposal of investment of $2-3 billion in Pakistan.
This transpired during background discussions with officials and action plan sent by Pakistan’s embassy in Qatar to Islamabad, as a follow up of Prime Minister’s visit to Qatar on August 23-25, 2022.
Sharing the details, sources said, on August 22, 2022, Finance Minister, Dr. Miftah Ismail held a meeting with Qatari Finance Minister Ali bin Ahmad Al-Kuwari and put forward a request for deposit by Qatar. Qatari Minister for Finance regretted the possibility of a deposit in his meeting with his Pakistani counterpart. Pakistan was expecting a deposit of at least $2 billion from Qatar.
On August 24, 2022, an alternate proposal was floated by Minister for Economic Affairs, Sardar Ayaz Sadiq in his meeting, the sources said, adding that Qatari Finance Minister was receptive to the alternative proposal of Minister for Economic Affairs. Both the Qatari Finance Minister and Pakistan Economic Affairs Minister are directly in touch with each other.
On August 23, 2022, Dr. Musadik Malik Minister of State for Petroleum had a meeting with Qatari Minister of State for Energy Saad Sherida Al-Kaabi to discuss procurement of LPG by Pakistan including an Expression of interest to procure LPG from Qatar and Nomination of Focal Person to engage with VP of LPG Marketing in QE.
Both sides also discussed possibility of re-engagement on cooperation in LNG sector. However, Qatari side indicated that the reforms had come too late for Energas project; however, in view of the reforms Qatari side would look into possibilities of re-engagement.
The government will share details on reforms undertaken by Government, i.e., one-window operation, exemption from third party access and allocation of pipeline capacity.
Acquisition of Islamabad and Karachi Airports on long-term concession basis: The issue was discussed at a breakfast session on aviation attended by Minister for Aviation, Coordinator to PM and Director General Civil Aviation Authority (CAA). QIA side stated that they will only be interested in the lease if it includes Aeronautical income (which is major part of airport’s income). Any attempt to only lease the retail areas and real estate developments will have limited chance of success.
Ministry of Aviation and Civil Aviation Authority will prepare type of lease/ concession model including lease terms, rent, use of the premises, regulatory compliance, terms and fee, etc.
The sources said, proposal will also be prepared to separate the role of airport owner/ regulator in line with international standards. Ministry of Aviation to also discuss with International Finance Corporation (IFC) Pakistan, a part of World Bank group and very experienced in advising government on airport projects.
QIA would also be interested to include Lahore Airport in the deal. Ministry of Aviation will send initial financial and operational data to QIA at earliest and resume the work of previous advisor. It will also provide return on investment, debt/ equity coverage and capital requirement.
Acquisition of two LNG power plants by QIA consortium: QIA side believes this is the lowest hanging fruit and the deal should be completed on priority basis. QIA would like to revive the privatisation transaction under G2G model. Parties have done considerable amount of work on the project for past three years, which has been put on hold. Ministry of Finance will discuss options regarding GoP debt and plant receivables with its advisors and appoint focal persons to discuss the project with QIA.
Q Terminals: Minister for Maritime Affairs, Faisal Subzwari presented the KPT bulk cargo opportunity to QIA. Separately, he had two meetings with the Q Terminals management, which reminded him that KPT had called for bids from 11 pre-qualified bidders for establishment of a bulk cargo terminal at KPT in 2019. In the technical stage only Q Terminals, Qatar owned terminal operator, submitted a responsive bid with the bid bond of $ 2 million. But after 6-7 months of unnecessary delays, the process was put on hold. It was agreed during the meeting in Doha that both parties have to close the gaps and the agreement is achievable. Q Terminals is working towards updating their proposal as per discussion in Doha.
Solar Power Projects: Minister for Economic Affairs, Minister for Commerce, Syed Naveed Qamar and Minister for Investment, Ch Salik Hussain held with Mansoor Bin Ebrahim Al-Mahmoud, CEO Qatar Investment Authority on August 24, 2022 who stated that the proposal would be a priority and the ‘case from Pakistan should be very strong’.
The sources said, details of Solar Power Policy is being finalised as September 15, 2022 is deadline to give final touch to it.
Project proposal details to include tariff review mechanism as per international standards, and modalities for land allocation. List of Chinese companies with technical experts in solar power will be shared as well.
Road and Railway line to connect Karachi Ports with main highways: CEO Qatar Investment Authority stated that his organization does not invest in road infrastructure and had lately been involved in a highway project in Turkiye.
The sources said the BoI will share details of proposal including tariff review mechanism, guarantees for minimum car flow and modalities for revenue on foreign exchange.
Sea Resort on Coastline (Tourism): CEO Qatar Investment Authority stated that QIA would review the proposal which could also be shared with private Qatari investors. BoI will share proposal with possible sites and modalities of land allocation.
To attract investment in the green field projects of establishing solar parks near LNG powered power plants, a meeting was held between QIA delegation led by Sheikh Faisal Ali Thani Al-Thani with Minister for EAD, Minister for Finance, Minister for National Food Security and Research, Minister for Maritime Affairs, Minister for Aviation, Minister of State on Petroleum and Advisor to PM.
According to sources, BoI and Ministry of Energy (both Petroleum Division and Power Division) will finalize their proposal by September 15, 2022 which will include location of lands identified for installation of such solar parks is required to be communicated to Qatari side. The authorities will also share legal frameworks (G2G basis) relating to these projects including details/ actions taken on the price discovery mechanism, list of operators identified for such solar projects will be communicated. Copy of the draft implementation requirement, power purchase agreement will be shared with QIA. A delegation QIA will be invited for the visit of the identified sites for such projects and for negotiation of EPC, supply, installation of operation & maintenance agreement.
QIA rejected a proposal of Ministry of National Food Security and Research for a Joint Venture in Supply Chain, saying that based on their prior experience in such investments they do not like to invest in supply chain.
Qatar side has also regretted a proposal of five PTDC motels of Gilgit-Baltistan to QIA on the justification that the value of these motels is too small, adding that they would be interested in hotels in Lahore, Karachi and Islamabad.
The issue of increase in workforce from 200,000 to 300,000 in the coming months was discussed at a meeting between Prime Minister Amir of Qatar, Ministry of Overseas Pakistan and Human Resource Development (OP&HRD) and embassy of Pakistan in Qatar are identifying the areas where Pakistani workforce would be recruited.
Copyright Business Recorder, 2022