Management Company (KPEZDMC) and China Road and Bridge Corporation (CRBC) for the implementation of Rashakai Special Economic Zone (SEZ) in the northwestern province of Khyber Pakhtunkhwa, making it the first SEZ under the Belt and Road Initiative of the China-Pakistan Economic Corridor (CPEC). It was acknowledged that Rashakai would be a model for other SEZs.
The main objective of the Rashakai Economic zone project is to promote industrialization through optimally priced, world-class industrial infrastructure in the province, which enables industrial investment, job creation and economic uplift. The execution of the project is conceived in the PPP mode. Pakistani professionals and engineers will be able to work in the SPV Company, resulting in capacity building in the development, management and operations of industrial parks and infrastructure.
RSEZ will house the following industrial clusters:
- Garment and Textile Products
- Home Building Materials
- General Merchandize
- Electronics and Electrical Appliances
- Automobile and Mechanical Equipment.
- K-P IT Board's 100 Acre Technology City (incorporating and Electronic Manufacturing Centre).
According to official documents, the Feasibility studies of SEZs were already shared with the Chinese side. The MoU and Engagement Agreement for the development of the zone project was also signed between KPEZDMC and CRBC in January 2018. The two parties set out to negotiate the terms of the Joint Venture Agreement, which has already been signed in November 2018. Recently, the two parties were in end stages of finalizing and signing the Concession Agreement, following which the Ground Breaking of the project will take place. While the concession agreement has been finalized, the utility services to the zone are yet to be provided. A request for 209 MW was made to NTDC and PESCO while a request for 30 MMCFD was also made to SNGPL.
Other SEZs are yet to attract Chinese companies and investors for lack of facilities and progress on required services. Earlier Pakistan had requested China for cooperating in developing at least one SEZ.
Apart from the allocation of land to SEZs, according to sources, the key issues for these zones were the provision of requisite infrastructure, power, gas, and security. According to the documents, three SEZs including Rashakai, Dhabheji, and Allama Iqbal industrial city were needed 740-megawatt electricity and at least 170 MMCFD gas to be operational. It does not include other priority zones under CPEC.
Earlier Economic Coordination Committee (ECC) had also observed that provision of utilities i.e. electricity and gas, was the responsibility of the federal government. Without gas and electricity, no SEZ can be developed. The ECC had directed power and petroleum divisions to prepare plans for uninterrupted electricity and gas supplies to the SEZs in consultation with the provincial governments. The expenditure on the provision of utilities like grid stations shall be met through PSDP. The ECC also observed that the provincial governments are required to speed up work on the establishment of SEZs and provision of requisite infrastructure for the establishment of industry.
