Khyber Pakhtunkhwa on the road to flourish

on 05/07/2017

In Khyber Pakhtunkhwa, work on construction of seventeen Industrial Economic Zones is in progress, under China Pakistan Economic Corridor CPEC. Radio Pakistan quoting official sources said that these zones are being constructed in Hattar, Rashakai, Ghazi, Jalozai, Chitral, Bannu, Karak, D.I.Khan, Nowshera, Buner, Swat, Gadoon, Jehangira, Mansehra, Kohat, Battagram and Risalpur. The project will be completed at a cost of about thirty-three billion rupees by 2025.

Chinese not buying industrial plots in Karachi

on 05/07/2017

Chinese investors have not yet shown any interest in acquiring plots in industrial areas of Karachi like SITE (Sindh Industrial & Trading Estate). Chinese are generally investing in auto sector, but do not appear keen on setting up other plants. Market watchers consider cost of plots as a factor discouraging Chinese investment in Karachi. In auto sector, Chinese deal specially in light commercial vehicles, cars and vans. Five Chinese auto companies jointly with local partners have applied for investment in setting up plants in Pakistan – 3 in Lahore and 2 in Karachi. Mashood Ali Khan, Chairman Pakistan Association of Automotive Parts and Accessories Association (PAAPAA), said his members are entering into joint ventures with Chinese. They are entering bike parts manufacturing without involving Pakistani partners, which is alarming. About this we have informed the government, he added.We will be happy, to see Chinese make us 10-20 % partners as it will create jobs, he added. Asad Nisar, Chairman SITE Association said Chinese are procuring cheap land which is not available in SITE where prices hover between Rs150 million to 200 million per acre. Chinese are interested in trading goods like tyres, consumer goods and plastic items instead of setting up factories, he said. And added, they look towards Port Qasim Industrial Area where land price is comparatively lower than SITE and Korangi Industrial Area. In SITE, some Chinese investors have been present for several decades. Their supervisory staffs and petty contractors are visible in KII and KIII projects, he added. Masood Nagi, Chairman Korangi Association of Trade and Industry (KATI) confirmed that Chinese have kept out of KATI where land prices range between Rs200m-Rs300m per acre. Chinese are installing waste treatment plants, RO plants, sewerage system, water desalination and some other mechanical and engineering works, he said. Jawed Bilwani, Chairman Pakistan Apparel Forum said, No Chinese company has contacted us for any deal. I do not see any China-Pakistan joint venture in apparel sector as Chinese garments are cheaper, he added. Jawed Suleman, Chairman FB Area Association of Trade and Industry said, `So far not a single Chinese company has shown interest in our area despite two meetings with Chinese Consul General. Akhtar Ismail, Chairman North Karachi Association of Trade & Industry also has similar views.

Goods train relaunch lauded

on 05/07/2017

Pak-Afghan Joint Chamber of Commerce and Industry (PAJCCI) has welcomed re-launching of Goods-in-Transit-to-Afghanistan (GITA) train after the service remained closed for seven years. PAJCCI Senior VP Zia-ul-Haq Sarhadi has in a statement hoped federal government would withdraw statutory regulatory order (SRO) 121. The steps would allow handing over empty containers in Karachi to shipping lines to let 70% Afghan Transit Trade goods shift to Iran’s Chahahar Port and be attracted back to Pakistan. He said that restoration of GITA train was long standing demand of Sarhad Chamber of Commerce and Industry (SCCI) and Frontier Customs Agents Group. The decision was hailed by all stakeholders including customs clearing, forwarding, border shipping agents and Afghan traders, who are satisfied over it. Chairman SCCI, Railway and Dry Port standing committee said federal government’s decision will provide cheap, secure and trustful goods transportation facility plus earn millions of rupees revenue for railways and also strengthen provincial economy.

Dr. Faizullah Abbasi reappointed as VC DUET

on 05/07/2017

Sindh Governor and Chancellor Mohammed Zubair has appointed Dr. Faizullah Abbasi as Vice Chancellor of Dow University of Engineering and Technology Karachi for further four years. The Governor also appointed Prof Dr. Mohammed Tufail as Pro-Vice Chancellor of NED University of Engineering and Technology Karachi for a four-year term. Dr Faizullah Abbasi is the first vice-chancellor of DUET who had assumed charge of the office today in 2013.The institution, which was formerly known as Dawood College of Engineering and Technology (DCET), received university status recently in February 2013, when the Sindh Assembly passed an act.He has been the Head of Mining and Metallurgical engineering at Mehran University of Engineering and Technology. Dr Abbasi did his post-graduation in production management from the University of Strathclyde, Glasgow, and a doctorate from Sheffield City Polytechnic, United Kingdom. He also served Sui Southern Gas Company (SSGC) as managing director and has vast experience teaching, research and administration.

Subcontracting in huge CPEC projects

on 04/07/2017

 Govt, Pak companies face big challenge: Al Kazim Mansoor

Soilmat Chief talks about reasons why Pak companies fail to reap benefits from CPEC

There are two views in Pakistan in the backdrop of the China Pakistan Economic Corridor (CPEC). First, Pakistani industry will be devastated by this initiative, second, CPEC would not affect us at all. I do not agree with both the views as they are two extremes, says Al Kazim Mansoor, the Chief Executive of Soilmat Engineers while talking to Engineering Review.
Pakistan has never seen such magnitude of development which is being witnessed under the CPEC, he believes.
Initially, the impact did not appear as our companies which work under the guidelines of the PEC and PEPRA met the criteria—the work experience and financial stability—set for comparatively low-cost projects.The issue surfaced when big projects like Sukkur-Multan Motorway started coming, he said. Let’s suppose they cost Rs100 billion and Chinese companies are to pass on works worth Rs.30 billion to Pakistani companies provided they meet the criteria in terms of their work experience and financial strength. Unfortunately, Pakistani companies fail to meet the standards which were fit for them in smaller projects. Now, the Chinese companies seek permission for giving such contracts to others.
This is a crux of the issue, he believes.

“This is an issue which, at least at the time, the government even do not know how to resolve.”

The question is how come big names like FWO and NLC also cannot meet the standards for acquiring huge projects under the CPEC?
Al Kazim guesses they may be exhausted as they are doing many projects like Karachi-Hyderabad Motorway, Karachi-Thatta National Highway and other full sections of roads.
He said there was yet another aspect as well. The Chinese are not westerners which give contracts to local companies as they find local companies cheaper. For instance, he said his company (Soilmat) worked on Reko Dik Project for which just 10 – 15 people arrived in Pakistan. They got the work done from them (Soilmat) and hired a foreign company for vetting their report. In contrast, the Chinese do it themselves. They pay $700 to $1000 to a fresh engineer who is equal to fresh Pakistani engineer thus the Chinese engineer is cheaper for them. In sum, Pakistanis may not have benefited much from them.
Moreover, purchases is also an issue. The Chinese companies have benefit of exemptions on import duties in Pakistan. They win projects because they bid the lowest rates as Pakistani companies cannot compete because of high taxation on purchases of material. This is a jolt to Pakistani industry.
Citing an under-construction building in Karachi as an example, he said: our developers also find Chinese companies cheaper and also better in building and material quality so they get attracted to them. Therefore, this question is not so easy to respond.
How to resolve it then? Is making consortium a way out if Pakistan companies do not meet standards for subcontracting?
“We are actually a hasty nation. We have to push things hurriedly. We do many things keeping elections in mind and it all becomes political too. There is no culture of thought process in the country. Like, Pakistan is going for the privatization of its airports—a decision which neighboring India took ten years back when Manmohan Sindh was the Prime Minister. They looked at all the aspects of the decision and implemented it. Here we are in hurry. It harms the country.
Yet another example is the projects launched by Mustafa Kamal in Karachi. They were done in a hurry and thus compromised quality. It also happened in Lahore but they now have expertise. Still the projects done in haste are faulty. When asked if the Chinese companies will bring workers from their country also? It seems so, he replied. Their eye is on benefits. I believe there will be some projects here on which Chinese laborers shall work.
On perception that there are a few companies in Lahore which get the lion’s share, Al Kazim said it was difficult to comment. Normally, the companies earn a lot of confidence of their client and consultant. They work together. Everything is open and every company is active. Thus, it is not possible to hide it if someone is denied. Relationships do work but still hoodwinking is not possible when there are many institutions involved.