ENGINEERING POST March 2022 Pak-China sign Framework Agreement on Industrial Cooperation Pakistan and China have signed The agreement reaffirms the pri- the much awaited Framework oritised development and operations Agreement on Industrial Coop- of the nine CPEC SEZs, with primary eration under CPEC. focus on the early completion of During the recent visit of Prime Rashakai SEZ in KP, Allama Iqbal In- Minister, Imran Khan to Beijing, he dustrial City in Punjab, Dhabeji SEZ held held a one-on-one meeting with in Sindh, and Bostan SEZ in the Chairman National Development Balochistan. For colonisation of these and Reform Commission (NDRC), He SEZs, business-to-business match- Lifeng. After the meeting Board of In- making mechanism of Pakistani and vestment (BOI), Pakistan, and the, Chinese enterprises has also been NDRC signed the Framework Agree- emphasised, which will proliferate ment on Industrial Cooperation the people-to-people and institution- under the CPEC. Minister of State to-institution linkages. and Chairman BOI, Muhammad The agreement holds a paramount Azfar Ahsan and He Lifeng, chair- significance for CPEC Phase II and man NDRC were the signatories of its future course of action and devel- the agreement. opment. Kharian Rawalpindi Motorway to be built on BOT mode Kharian Rawalpindi Motorway cession period as per concession the extension of Lahore agreement and will hand over the fa- Sialkot and the under con- cility to the National Highways Au- struction Sialkot Kharian Motorway thority (NHA) after completion of the will be executed under Public Private concession agreement. After that, the Partnership (PPP) mode on a Build- NHA will be responsible for opera- Operate-Transfer (BOT) basis. tions and maintenance. The project has been approved by The total cost of the project is Rs Executive Committee of the National 108.41 billion included government of Economic Council (Ecnec) after de- Pakistan share is Rs 36.112 billion tailed deliberation. According to [Capital - Viability Gap Funding sources the project has been proposed (VGF): Rs 7.5 billion, overhead costs: on BOT basis and its concessionaire Rs 16.012 billion, operational VGF): will build, operate and maintain the Rs 12.6 billion] and Concessionaire motorway facility up to the full con- share is Rs 72.298 billion. 51
ENGINEERING POST March 2022 Minerals Development in Balochistan Engineering Post Report past few months regarding minerals development in the province are Balochistan is the largest listed briefly below: province, area-wise, of the Balochistan Mineral Exploration country constituting 43 per Company Limited and Balochistan cent of the total national landmass. Minerals Resource Company Lim- The country in general and the ited have since been established as province in particular is endowed by a joint venture of the federal and the nature with substantial mineral provincial governments with 10 per wealth. cent and 90 per cent shares respec- Mineral industry can play an im- tively. Main objective behind this portant role in boosting up the socio- major initiative, jointly by the fed- economic set up in Balochistan as eral and provincial governments, is agriculture in other parts of the to attract private investment and country . But somehow due atten- boosting the government revenue tion could not be given to the explo- via large scale mining in the ration and development of the province. mineral sector due to financial con- PC-1 for the establishment of a straints, heavy risk investment and full-fledged university in the field of lack of infrastructure as the de- minerals and natural resources, has posits are located in remote and far also been approved which would be flung areas of the province. a milestone in the field of minerals. However, efforts are being made This will be, perhaps, the first uni- for scientific exploration and ex- versity of its kind in the country. ploitation of the mineral resources. Furthermore, Geological Survey The government has given prompt of Pakistan (GSP) has also been attention towards the development tasked with mapping 50 top sheets of minerals. Various national and of outcrop area in order to identify multi-national companies are in- minerals potential in Balochistan volved in exploration of gold, copper, for which adequate funds have al- precious metals and associated min- ready been allocated under the erals in Chagai and other districts . Public Sector Development Pro- Besides, the province also has large gramme (PSDP) of the Federal deposits of limestone, gypsum and Government. This initiative will coal (raw material for cement man- help to maintain a database for fu- ufacturing) and investment oppor- ture exploration of the occurrences tunities for installation of cement of metallic and non-metallic miner- factories are available in the als potential, dimension stones, ag- province. gregates and limestone reserves in Major initiatives taken in the the province. 52
ENGINEERING POST March 2022 CPEC authority warns about hidden costs of Saindak project The extension of Saindak Proj- agreement was concluded in consul- hiring a professional person/ firms to Commerce and Investment, Abdul ect lease has been approved by tation with all the stakeholders in- ensure that expenses are booked Razak Dawood was of the view that the ECC for a period of 15 cluding the provincial government. fairly. the lease period should be reduced to years. That might be the case but the While agreeing with the opinion of ten years instead of the fifteen years, Minister for Energy Hammad Chairman, China Pakistan Eco- the Chairman, Finance Minister has as previous lease was also for ten Azhar while commenting of the proj- nomic Corridor (CPEC) Authority is directed the relevant departments to years. But during discussion the Pe- ect on his twitter account said “…the of the opinion that hidden cost in make arrangements for an annual troleum Division responded that any Government of Pakistan’s share in O&M of Saindak Copper-Gold Proj- review by experts/ firm to bring change in the terms and conditions profit has increased from 50:50 to ect can reduce government profits transparency in the working of the at this stage could undermine the 53:47 in Pakistan’s favour,” he fur- after the agreement. To prevent this company. whole transaction; therefore, it was ther added that the newly negotiated from happening he has suggested Adviser to the Prime Minister on not recommended. 53
ENGINEERING POST March 2022 Federal budget 2022 - 23 in first week of June Engineering Post Report expected to finalized sometime 2022. will be announced sometime in in May 2022. The federal budget According to the information April 2022. Annual Plan Coordi- Federal budget for financial has to be presented, debated in available from the Finance Min- nation Committee will be 2022-23 is most likely to the National Assembly and ap- istry sources, Budget Strategy chaired by the Federal Finance be presented in the Na- proved before June 30,2022 as Paper will be finalized on April Minister and it will review the tional Assembly in the first the new financial years com- 15 2022 following which the in- Annual Plan 2021-22 perform- week of June 2022. Federal Fi- mences from July 01,2022. dicative budget ceilings for cur- ance and accord approval to the nance Minister Senator Shaukat Federal Ministries/Divisions rent and development budget annual plan for the next finan- Fayaz Ahmed Tarin will present have been asked to get down to will be conveyed to the federal cial year. the federal budget which will be the important work of prepara- ministries and divisions in the Prime Minister Imran Khan last and final presentation of the tions of their budget estimates third week of April 2022. will preside over the highest eco- incumbent federal government of current and development ex- All important meetings of the nomic body, NEC, meeting of its stipulated constitutional penditures by March 15,2022, Annual Plan Coordination Com- which will approve the budget- term of five years. the meetings of the budget re- mittee (APCC) and the National ary proposals and public sector Exact date for the announce- view committee will commence Economic Council (NEC) will be development programme for fi- ment of new federal budget is in the fourth week of March held in May2022 for which dates nancial year 2022-23. 54
ENGINEERING POST March 2022 BoI directed to undertake aggressive marketing of SEZs In a bid to facilitate the sec- made considerable progress in Commerce Department of cooperation. ond phase of CPEC the the development of Special Eco- Balochistan in the forthcoming Regarding establishment of Board of Investment has nomic Zones. Now the concerned meeting of the JWG on indus- Industrial Zone at Minwar been directed to start aggressive authorities need to start aggres- trial cooperation. Gilgit, it was unanimously en- marketing of Special Economic sive marketing of the SEZs so It has also been decided that dorsed that proposals submitted Zones (SEZs) to pique the inter- that the investors can start relo- the proposals submitted by the by the P&D Board Gilgit est of Chinese and other in- cating their industries to Pak- Planning and Development Baltistan will be discussed with vestors in the region. istan. (P&D) Board AJ&K for the es- NDRC to be included as agenda An inter-ministerial meeting On inclusion of Bostan Special tablishment of Special Economic items for the 6th JWG on indus- on Joint Working Group (JWG) Economic Zone into priority list Zones at New Industrial Area trial cooperation. P&D Gilgit on industrial cooperation under of future development, BoI will Mirpur will be reviewed before Baltistan should provide de- CPEC during a recent meeting be made part of the agenda in inclusion as agenda item for the tailed feasibility studies of these discussed that Pakistan has consultation with Industries & 6th JWG meeting on industrial projects. 55
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ENGINEERING POST March 2022 KPK in process of receiving foreign assistance of Rs 41812. 282 million Engineering Post Report ceiving foreign assistance of Rs 41812.282 million Programme; KP Cities Digital Transformation for continuing implementation of its number of Centres; Construction of Infrastructure Provincial Government of Khyber development projects in different sectors from in- Malakand Region Project; Promotion of Olive in Pukhtoonkhwa (KP) is in the process of re- ternational financial institutions and banks dur- Khyber Pukhtoonkhwa, among others. ing current financial year 2021-22. Khyber Pukhtoonkhwa was estimated to re- ceive Rs 23709.592 million during last financial year 2020-21 but the province received lesser for- eign assistance to the tune of Rs 18772.381 mil- lion from its international development partners as per the revised estimates. Development projects being financed by secur- ing loans from foreign agencies and banks in- clude Mass Transit Facility in Peshawar; Balakot Hydropower project 300 MW district Mansehra; Provincial Roads Rehabilitation Project; Access to Clean Energy; KP Provincial Roads Project (214 KM); KP Emergency Road Rehabilitation Project; KP Rural Roads Improvement & Reha- bilitation Project; Preparation Advance Facility of World Bank proposed KPK Hydro Power De- velopment Project; KP Renewable Energy Proj- ect; Integrated Tourism Area Development 58
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ENGINEERING POST March 2022 IPPs may default due to overdue payments The China Pakistan Economic volving account (RA). The RA has Corridor Authority (CPECA) still not been set up even after the has urged the government to Private Power and Infrastructure devise a mechanism to pay the over- Board (PPIB) has signed Supple- due receivables of Independent mentary Agreement (SA) with the Power Producers (IPPs) on a priority CPEC IPPs. Consequently the basis otherwise they might default. lenders have put their dividends A presentation given to the Cen- stopper on IPPs because establish- tral Power Purchasing Agency-Guar- ment of the RA is part of financing anteed (CPPA-G) has explained i) documents. overdue/ receivables of Rs 250 bil- Due to the non-payment of receiv- lion;(ii) IPPs may go in default be- ables to existing projects Sinosure, cause of rising prices of coal in Chinese state owned Export & international market; and (iii) IPPs Credit Insurance Corporation, has may suspend the operations of power stated that it could not support new plants as per suspension clauses of projects in Pakistan anymore which Power Purchase Agreements (PPAs). is also leading to delay in the imple- As a somewhat temporary solu- mentation of second phase of CPEC. tion it was decided to open up a re- 60
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ENGINEERING POST March 2022 Power Division urged to expedite approvals for small dams Managing Director Private ment (IA), Energy Purchase Agree- result, the draft summary was sub- ated in detail and approved the con- Power Infrastructure ment (EPA), Water Use Agreement mitted to Power Division. Subse- cept of “take and pay” with “must Board (PPIB), Shah Jahan (WUA) were prepared. For projects quently, after clarifications and run” condition with respect to two Mirza has written a letter to the within the AJ&K territory, the receipt of comments from various committed SHPPs i.e. 7.08 MW Ri- Power Division stating that un- GOAJ&K Implementation Agree- stakeholders, the final summary alli-II and 8 MW Khattai-lI. But wanted delays in approval for small ment (AJ&K IA) were prepared for was submitted to the ECC by the their final decision could not be re- hydropower projects (SHPPs) are SHPPs. But due to one reason or Power Division on October 4, 2021. flected completely in the minutes of severely affecting the confidence of another the final approval is still ECC considered the summary and the meeting. Due to such delays investors in Pakistan. pending. directed the Power Division “to first and unnecessary hindrances the Following the mandate of Power In early January 2021 the Board place the matter before the Cabinet SHPPs are constantly suffering and Generation Policy 2015, Standard of PPIB had authorized submission Committee on Energy (CCoE) for critical milestones are being ex- Security Package Documents com- of summary for approval of stan- consideration. After the matter was tended without any fault on the prising of Implementation Agree- dard documents by the ECC. As a placed before the CCoE it deliber- part of sponsors. 62
IMS Engineering acquires Heavy Electrical Complex Recently the government asked for bids cal Complex (HEC). According to Privatisa- 40MVA (high-voltage) along with services for for the divestment of 14.10 million tion Commission (PC), six parties had testing, repairs and onsite commissioning of shares (96.6 per cent) of Heavy Electri- reached the pre-qualified stage; however, only transformer. three bidders deposited the earnest amount and participated in the open bidding. IMS Engineering (Pvt) Ltd, the Karachi based firm was declared successful at the bidding process after it offered the highest bid of all the bidders. After the bidding process the PC convened for due deliberation on the one point agenda of HEC bidding. The board members welcomed the price offered by the successful bidder for the state-run en- tity. The reserve or the reference price of Rs98.23 per share was fixed by the Cabinet Committee on Privatisation (CCoP) but IMS Engineering offered its bid at the price of Rs99.99 per share or Rs1.9 billion to acquire 14.10 million shares (96.6pc stake). In its competition two other bidders were present namely Waves-Singer Pakistan Ltd and Pak Elektron Ltd (PEL) which had offered Rs26.250 and Rs17.731 per share, respec- tively. HEC, located in Hattar Industrial Estate, manufactures power transformers of 132kV and 66kV with units ranging from 6.3 to
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