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Execution of CPEC projects: China asks Pakistan to keep stability in taxes, power tariff

Execution of CPEC projects: China has asked Pakistan to maintain stability in its taxes and power tariff while establishing a better regulated and more efficient power market for execution of CPEC projects.

By Mehtab Haider
November 18, 2019

ISLAMABAD: China has asked Pakistan to maintain stability in its taxes and power tariff while establishing a better regulated and more efficient power market for execution of CPEC projects.

The Chinese side through its official communication also emphasised upon the need that “both sides shall enhance communication and coordination, analyse the impact of changing policies on CPEC projects, and be aware of potential risks so as to ensure sustainable development of CPEC energy projects”

Official documents showed that Pakistan and China agreed on the need to ensure CPEC policy stability for sustainable development of projects. The two sides agreed that all CPEC projects had been strictly reviewed and granted approvals by the Pakistani side on a case-by-case basis.

These projects are consistent with and fall within the policy and regulatory framework of Pakistan. The current CPEC policies and agreements shall be jointly executed by both the Chinese and the Pakistani side. The Chinese side proposes that the Pakistani side maintains stability in its taxes and power tariffs while establishing a better regulated and more efficient power market.

On industrial cooperation, the Joint Cooperation Committee (JCC) under CPEC noted that from October 14th to 19th, 2019, a team of Chinese experts was sent by China International Engineering Consulting Corporation (CIECC) for an industrial diagnosis of Pakistan. The expert team provided intellectual and technical support to the industrial and SEZ development in Pakistan and their work achieved good results. It is hoped that the two sides set up a long-term mechanism to deepen China-Pakistan industrial cooperation.

The JCC gives high attention to the Rashakai Nowshera, Allama Iqbal Faisalabad and Dhabeji, Thatta SEZs, for which the development work will start soon. The Chinese side hoped the Pakistani side to install external infrastructure facilities, introduce targeted preferential policies, and provide “one-window” service in the SEZ at an early date. The Chinese side encourages the participation of competent Chinese companies in the bidding process of the Dhabeji SEZ that will soon be started.

The Pakistani side gives high priority to the upgrade of Pakistan Steel, and theChinese side recognises the importance of this project to the Pakistani side. At present, Metallurgical Corporation of China (MCC) and Donghua Steel have signified their willingness to participate in the project. It is hoped that companies from the two sides maintain close communication for an early settlement of related issues and push for substantive progress as soon as possible.

The JCC appreciated the activities of China-Pakistan Young Workers’ Seminar Camp. Four seminars have been held since the project was launched and these activities have helped to boost the technical exchanges and people-to people connectivity between Chinese and Pakistani workers.

The All-China Federation of Trade Unions and Ministry for Planning, Development & Reform of Pakistan will sign the MoU of Cooperation for further strengthening the worker’s exchanges between the two sides. Pakistan side informed that special incentive package is at final stage of preparation and will be shared soon.

On Socio and Economic Development, the JCC highly appreciates the progress achieved by Joint Working Group (JWG) since its establishment. Practical cooperation in a variety of fields on social and economic development has played important role to achieve the expected results in advancing social and economic development in Pakistan, improving Pakistani people’s livelihood, and build public support for CPEC development.

The JCC agreed to follow the MoU on social and economic development and proceed with the 27 agreed-upon priority projects in a steady and orderly manner, of which the 17 fast-track projects shall be commenced before 2020.

The JCC agreed that the Pakistani side shall confirm the good list of the project Provision of agricultural equipment and tools as well as the good list of the project of China-Pakistan joint agricultural technology laboratory by the end of November 2019, so that the two sides may complete LOE procedures at an early date.

Meanwhile, the Pakistani side should provide project proposals of the remaining 10 priority projects by the end of 2019 for the Chinese side to start feasibility studies at an early date. The JCC agreed to convene the second meeting of JWG on Social and Economic Development in Pakistan at due time after the LOE procedures of all the 17 fast-track projects are completed.

Both sides agreed to accelerate the procedures for the projects including Balochistan Solar Power Lighting Equipment, drinking water equipment supply (Solar powered pumps in KP and water filtration plants in AJK), smart classroom project for higher education, provision of medical equipment and material and Pakistan vocational schools equipment upgrading and renovation project.