CAP chief asks for more shares in CPEC projects

Chairman of Constructor Association of Pakistan (CAP), Engr. Sikandar Hayat Khattak has called for giving more shares to local construction firms in projects being launched under the China-Pakistan Economic Corridor (CPEC). Main beneficiaries of the ongoing construction activities under the CPEC are Chinese firms which are subletting the earth work to the local construction. This work is far low than the capacity of CAP member companies, Sikandar Hayat Khattak said while talking toBusiness Recorder here on Tuesday. CAP Vice Chairman (Punjab) Iran Abbas Awan was also present on this occasion.
Replying to a query about past working experience of Pakistani firms in mega projects, he told that the local constructors completed the work of Islamabad-Peshawar motorway when the foreign firms left it in the mid. He said that the CAP members also had worked on M-2 project as well. Similarly, in Murree Road Project, local constructor has supplied pre-mix to the project due to its expertise in the sector. "This shows the ability of local constructors to compete with the international constructors", he believed.
He said that the Association contacted the government to get share in the CPEC related work and after hectic efforts succeeded in securing only four projects. Nevertheless, the conditions of these projects are very hard to meet by any local construction firm. Khattak was worried and added that the Chinese firms on other hand were getting huge incentives such as exemptions in taxes and duties. 'Pakistani firms should be given a level playing field at par with their Chinese competitors, he observed.
Similarly, condition of making a Joint Venture (JV) with local partner in mega projects is revoked by the government for the Chinese in CPEC projects which is mandatory for foreign firms while working in Pakistan. Foreign firms have to make at least 70-30 percent JV in order to develop the local sector, transfer of latest technology and human resource development, Khattak observed.
In reply to another question, Khattak said the government should focus on revival of the Pakistan Steel Mills (PSM) the CPEC projects need huge volume of steel products and PSM should be encouraged to play its role in it instead of importing these products.
He said that the government should bring down duties on import of machinery by the local constructors. These duties were brought down during Musharraf regime but Zardari government again pushed these up to 35 percent from only 5 percent.
He also appealed to the ministry of commerce and Federal Board of Revenue (FBR) to increase the age of import of used construction sector machinery to 15-year instead of 10-year age. "100-Ocatne fuel is used in the modern latest machinery which is not available in Pakistan while the fuel available was causing damage to the modern machinery", Khattak said.
Non-availability of loans and financial facilities to the construction industry were the other impediments which Khattak counted in the way of growth of this sector. He proposed setting up of 'Construction Bank' like some of the foreign countries which should provide guarantees and other banking products to the construction sector.