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The Senate Special Committee on the Project of China-Pakistan Economic Corridor (CPEC) was informed that certain amendments are being made to the law pertaining to Special Economic Zones (SEZs) which would help reduce current account deficit by increasing national exports.
The committee met with Senator Sherry Rehman in the chair at Parliament House Wednesday. The committee discussed issues relating to SEZs, Free Trade Agreement ((FTA) and delaying tariff determination by Nepra for a coal-based energy project, etc. The Senate Special Committee on CPEC also rejected the idea of the establishment of CPEC Authority through ordinance and recommended that it should be set up through an act of parliament.
While briefing on Special Economic Zones (SEZs) under the CPEC, Board of Investment (BOI) Chairman Zubair Gilani said the exports of the country are not showing significant improvement due to the fact that there are basic flaws in SEZs Act, 2012.
"These flaws are being removed and it is hoped that the amendments in the law would be finalized by end of current fiscal year," he added. He said without removing the basic flaws in the law, industrialization can not be promoted in the country.
Bangladesh, he said, prepared its SEZ law by looking at its ground realities after which it succeeded to boost its industrialization and exports. He said under the new policy, the industrialists and exporters would enjoy all the facilities in the SEZs that Vietnam and Bangladesh are offering.
Gilani informed that during last three months a remarkable progress was made in the three SEZs including Rashakai, Allama Iqbal and Dhabeji SEZs.
Senator Azam Swati pointed out that earlier, there was no progress in the SEZs in the country due to the fact that the investors were more interested in transactions of plots of the zones rather than establishing their industries.
However, he said the PTI government is working on removing all such bottlenecks and flaws to truly promote industrialization and export in the country.
Giving presentation on the electricity requirement for the SEZs, the secretary BOI said by December this year, 10 MW of electricity would be available for Rashakai Economic Zone and Allama Iqbal Economic Zone in Faisalabad.
He further said in Dhabeji Economic Zone, 32 MW of electricity is planned to be provided by 2022.
The committee was informed that certain amendments are being made in law pertaining to SEZs. The committee was informed SEZs would help reduce current account deficit which has increased considerably in the last few years and will be beneficial to both Pakistan and China. Amendment in laws would be made to encourage exports.
After the amendments, the SEZs will be within the customs territory of Pakistan, and Zone Enterprises would be able to sell their products in domestic markets without payment of customs and other duties which will attract more foreign investors to establish their industries in SEZs. The investor friendly law will encourage rapid industrialization and economic activity in the country leading to job creation, technology transfer and development of industrial infrastructure.
The Senate Special Committee on the Project of CPEC also discussed in detail SMEs and SEZs, uninterrupted power supply along CPEC routes, delaying of tariff determination by NEPRA for coal based energy project in Gwadar and second phase of Free Trade Agreement (FTA). In addition to all of the above, the committee also discussed the bill to set up a Monitoring Authority for CPEC projects.
The committee agreed unanimously not to support any document which is presented to the Parliament for approval without being presented before the committee. The committee showed concern regarding delay in projects and the proposed CPEC Authority, which is being set up to ensure timely completion of CPEC projects as portrayed by the Ministry of Planning, Development and Reforms.
The committee chairperson clearly told the government that the committee will never support the CPEC Authority which is technocratic in nature and will lead towards centralization. Senator Sherry Rehman said, "We have recommended the CPEC Authority so that work on the corridor projects should be accelerated and the provinces could get representation in it. "We have never recommended such an authority which takes the things toward centralization," she added.
Rehman demanded that ToRs of the CPEC Authority be shared with the committee. She said, "The Senate will oppose formation of CPEC Authority through presidential ordinance, it can only be formed by an act of the Parliament and with the consensus of the provinces."
Senator Javed Abbasi said that an impression was given that the CPEC Authority is being established on the recommendations of the committee, which is not true. He said if the government wants to establish the authority through an act of parliament then bring the bill to the committee. Senator Usman Kakar said that the Authority should never be established.
The committee took serious notice of non-inclusion of Bostan Industrial Zone, Balochistan, in the list of prioritized SEZs. The committee stressed that incentives to industrialists must not be revoked as this would be a gross violation of rights.
While discussing delay in tariff determination by Nepra for coal-based energy project (300 MW) in Gwadar, the committee was informed that the company required increase in tariff rates and the Nepra increased rates to Rs 7.5 per unit; however, this was not acceptable to the company thus, the matter has been submitted to a tribunal.
The committee recommended that the tribunal must be set up immediately. The committee raised the issue of borrowing electricity from Iran. The committee was informed that 100 MW electricity was being borrowed which was reduced to 40 MW during summer.
While discussing the second stage of FTA, the committee recommended that a mechanism be formulated to ensure that Pakistani industries can compete.
At the end of the meeting, the committee also adopted a resolution proposed by Senator Muhammad Javed Abbasi. It demanded the government to take immediate steps for construction of an interchange on Multan-Sukkur Motorway at village Bhong, Tehsil Sadiqabad, district Rahim Yar Khan.

Copyright Business Recorder, 2019

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