'We need to harness our human resource capacity to engage, and create linkages with, investors,' says Naheed Memon, Chairperson of the Sindh Board of Investment

Naheed Memon is the Chairperson of the Sindh Board of Investment (SBI) and an adjunct faculty of Institute of Business Administration (IBA), teaching Economics and Strategy. She was the CEO of Manzil Pakistan, a think tank based in Karachi before she took over responsibilities as Chair at SBI.
She has worked in London at the Bank of America Merrill Lynch and has run her own management consultancy firm based out of London. She holds an MSc in Economics from Birkbeck College, and an MBA from Imperial College, London. She sat down with BR Research for a candid conversation on investment activities in Sindh; the piloting of new industrial projects; challenges Pakistan faces in creating a flourishing investment climate; and the legacy she wants to leave behind.

<B>BR Research: What role is SBI playing in getting and facilitating foreign and domestic investors, and what sectors are being focused on?</B>

<B>Naheed Memon:</B> SBI is the only investment business facilitation department of the Government of Sindh formed after the 18th amendment because policy in some sectors became autonomous. Provinces now have autonomy over developing, prioritising, attracting, and facilitating businesses and investments in their own regions.

In the energy sector, the Sindh government is very focused on encouraging energy development of smaller power projects (20MW-50MW). There is interest in the renewable energy space which we are prioritizing. We have 300MW already on the grid with wind power. Then, Thar coal mining power generation is a big priority - we have a project of $2 billion for Thar Coal which is a private sector deal between Yankuang Mining and Shanghai Electric Power Construction (SEPCO).

We are focusing on the development of industrial parks, and setting up Special Economic Zones (SEZs). We have one industrial park that is being done with China over 1,000 acres in Dhabeji. We are also developing a port at KT Bandar, which is a $5 billion project. This will include a port, rail-links, coal-fired power generation and a hybrid solar-wind 1GW power project, including an industrial park.

We are considered an agency for foreign investments, but now we are working on guiding and channelling domestic investments as well because there are so many opportunities, particularly in our SEZs and industrial parks, and not just CPEC-supported.

Another major sector where we are pushing domestic investment is the agri-food sector, whereas traditionally, we have been focused on textiles. Due to the lack of infrastructure, a lot of sectors could not take off earlier. Now, because we have support to build the fundamental infrastructure-road networks, highways, and energy-opportunities are cropping up.

<B>BRR: Do you focus primary sector then agri-based development?</B>

<B>NM:</B> Agri business development is our tomorrow. We have not been able to add value and reach export markets. About 40-60 percent of our horticulture is wasted and we are unable to convert it into processed industrial products like pulp or concentrate, so I am really focused on doing a few pilot projects of this sort in the agri business space. There is a lot of interest from investors. We just need to get the linkages in place.

The Sindh government has established a fund called the Sindh Enterprise Development Fund, which is a properly innovated fund like none other in the country and it supports the development of agri businesses in the rural economy of Sindh. In the SME sector, we are supporting businesses - for between Rs 200 million to Rs 300 million, to financially support them by taking on their interest rates.
For the first time, we have facilitated PMEX - the commodity exchange to trade agriculture - so red chillies grown in Sindh are now being traded on PMEX platform; and SBI, via its Sindh Enterprise Development Fund, has taken on the trading fee for PMEX (which is Rs 2.5 per kiloton for the red chillies) as well as the KIBOR subsidy. We have put together a consortium - National Foods is buying the red chillies, SGS is doing the quality assurance, Agility is doing the logistics and PMEX is doing the contracting, while we also have 3-4 banks including Meezan, Zarai Taraqiati Bank, and Sindh Bank that are lending to the farmers.

<B>BRR: What other projects are in the pipeline?</B>

<B>NM:</B> We have a Marble City project - a 300acre land allocated to the development of a marble city which is a public private partnership. The investment, if it takes off the ground, is a $40 million investment. The idea is to bring the many marble processors and refiners in the informal sector to this special zone and set up a state-of-the-art refining facility. We have interest from Italians and Chinese investors. We are in the process of tendering for the development of the project.

Another big project is the Karachi Education City. It is a 9,000 acre land dedicated to the development of a specialized education city, within which there is a 200 acre IT city. When the feasibility was done years ago, the whole development was estimated at $800 million including development of roads, infrastructure, and power. Agha Khan University Hospital is building a liberal arts college on 1,000 acres land. We also have awarded 23 institutions with land already and by June 2017 we will go into brick and mortar phase.

<B>BRR: If you compare Sindh development with Punjab, there is a stark difference. Punjab is growing so much faster. Karachi has so many challenges with massive urbanisation on the cards. Do you think the region is prepared for the demographic changes?</B>

<B>NM:</B> Karachi is a very complex story but the security situation is better. We have removed encroachments on roads for the first time since 2008. In six months, we will see the green line to facilitate public transport. We have also signed on Chinese companies to handle solid waste management in two districts, South and East, worth $30 million. Plus traffic management, roads, and inner city accessibility are all being worked on.

We need to do proper town planning. I have suggested that we set up a think tank just dedicated to the provincial government that would look at industrial policy, town planning, environment and business facilitation since the government is busy governing; we need strategy and planning from objective sources to guide and feed in intelligence to the parliament and governments in the center and provinces.