Gwadar Free Zones to become Export Industrial Parks soon: Chairman COPHC

BEIJING, Apr 17 (APP):With multifaced dividends of China Pakistan Economic Corridor’s 10 years saga of development, Gwadar Free Zones are heading to become Export Industrial Parks, China Overseas Port Holding Company (COPHC) new chairman Yu Bo said.

Gwadar Port and Gwadar Free Zones offer immense potential investment opportunities for investors from Pakistan and beyond, he said in his maiden interview.

He said the policy framework and guiding principles administering Gwadar Port and Free Zones have been formulated and implemented keeping in view its geo-economic significance for transhipment. Since Gwadar Free Zones are exempted from all sorts of provincial taxes, federal taxes and customs duties, investors especially those who plan to do manufacturing businesses will be in a good position to cash in on such incentives, China Economic Net reported.

“With no additional costs in the zones, the cost of production becomes much less than that of tariff area. Subsequently, the products will be cheaper and more competative in the international market. Potential investors must take advantage of these commerce enticements.

Besides, these business encouragements provide Pakistan traders with an indispensable thrust to expand exports and strengthen foreign exchange reserves.

“Now it is completely functional,” Yu told the reporter, “It is equipped with full capacity to handle bulk cargo, containerized and LPG vessels. The three multi-purpose berths can process hundreds of metric tons of urea, wheat and DAP fertilizer.

When asked what kind of difficulties are being faced in making Gwadar Port and Free Economic Zone functional and profitable, he replied that the number one obstacle is security precariousness.

Although it has been improved over the last many months still there is a bigger room to bridge security gaps, he added. The second irksome problem is the high cost of electricity generated by diesel-generator. If they receive grid-related power, the development will be accelerated.

“Another dilemma is about Pakistan currency devaluation. Chinese companies in Gwadar have been demanding and seeking permission to be settled in Chinese currency Yuan instead of US dollar. If the government accepts it, companies will have a sigh of relief,” he added.

Responding to another question, he said that the operator of Free Zones, Gwadar Free Zone Company, makes sure that all utility facilities including water and power are provided to its investors. Thus, COPHC is working on many power and water projects.

“COPHC has established two desalination plants with a production capacity of 0.2 million and 0.1 million gallons per day in the Free Zone and Port areas respectively to supply uninterrupted water for consumption. In connection with addressing water woes, Chinese funded 1.2 MGD desalination water plant is in its final stage of completion.

Similarly, in order to ensure all power requirements of the allied industries and port facilities, the 8.5 MW diesel generator is providing electricity to keep port and free zones” operations running 24/7 without any interruption. Gwadar Port is also going to receive 20 MW from Gwadar Grid Station that will help meet electricity needs presently,” he revealed.

“Now, 85 percent of the construction work of the 1.2 MDG desalination water plant has been completed. It will be completed and start operation by this summer.

“In terms of the official inauguration and impact of New Gwadar International Airport, he said it is expected that the project will be completed by September 2023.

“In regard to the degree of satisfaction of investors and industrialists with security and law and order in Balochistan and especially in Gwadar, Yu said that the government of Pakistan has established a Special Security Division (SSD) within Pakistan Army to provide additional security to projects in Gwadar associated with CPEC. The policies for investment are being improved.

As many as 35 companies are now registered in the Free Zone South. Out of them, nine are in full operation. The operating companies are diverse in their operational category, ranging from the service industry to fertilizer, metal processing, foods processing and so on.

About the future plan of companies that will be starting operation soon in Gwadar Free Zone North, Yu mentioned that in order to give an accurate number would be too early at the moment. “However, since we signed sub-lease agreements with a number of companies last year, we hope they will undertake their construction and consequent operations soon.”