A Dawn Article.

The two-day Joint Cooperation Committee (JCC) meeting of the China-Pakistan Economic Corridor (CPEC) sets the stage for the second phase of the multibillion-dollar cooperation between the two nations.

The main focus of the seventh JCC will remain special economic/industrial zones even though all the five joint working groups (JWGs) — Gwadar, energy, transport infrastructure, special economic zones and planning — would meet on the first day (today) to remove any irritant and suggest the way forward.

Even though Pakistan had originally lobbied for its financing, it has already been settled in recent interactions that the $14 billion Diamer-Bhasha Dam would not be made part of the CPEC because of unacceptable demands from Beijing for the transfer of its ownership. The key projects expected to formally become part of the CPEC are $8bn Main Line-I (the 1,875km railway line from Karachi to Lahore to Peshawar) and $3.5bn Karachi Circular Railway. The financial appraisal of these new projects has been completed and their future course of action will be approved.

 

 

On the second day, the JCC — led from the Chinese side by vice-chairman of the National Development and Reforms Commission (NDRC) and from the Pakistani by Minister for Planning Development and Reform Ahsan Iqbal — will meet all the four chief ministers, heads of regional governments and the Federation of Pakistan Chambers of Commerce and Industry.

The Board of Investment would sign an overarching agreement with its Chinese counterpart for all the nine SEZs on behalf of the provinces and regional governments, ie Azad Jammu and Kashmir (AJK), Federally Administered Tribal Areas (Fata) and Gilgit-Baltistan (GB).

Under the road map, the Chinese side would start investing in the SEZs immediately after JCC’s clearance to avail benefits of tax exemption.

There is a strong possibility that Chinese institutions and the private sector will pick a dedicated SEZ or industrial park, most probably Rashakai near Nowshera owing to its compact feasibility and 100 per cent 1,000-acre land acquisition, and another at Maqpoondas in GB for its close proximity with Kashgar in Xinjiang.

Moreover, the 200-acre Bostan industrial zone in Balochistan, Allama Iqbal industrial city near Faisalabad, Mohmand marble city in Fata, ICT model industrial zone in Islamabad and a mix-industry special zone in Mirpur, AJK, are under process but have yet to take off.

One challenging aspect of the CPEC is the availability of portable water for Gwadar Port City, for which authorities are running from pillar to post. Against the requirement of 12 million gallons per day (MGD) for the port city, the authorities have been able to ensure around 1MGD for now. The supply would be increased to 5MGD with the installation of a desalination plant in six to 10 months.

As for the Long Term Plan, the draft has already been finalised by the two sides under which CPEC should take an initial shape by 2020, addressing major bottlenecks to Pakistan’s economic and social development, and for the CPEC to start boosting economic growth for both countries.

“By 2025, the CPEC building shall be basically done, the industrial system approximately complete, major economic functions brought into play in a holistic way, the people’s livelihood along the CPEC significantly improved, regional development more balanced and all the goals of Vision 2025 achieved,” says the LTP.

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