Amid the natural calamity of novel coronavirus pandemic, Global Investment Consortium (GIC) has shown interest of investing 30 to 50 billion euros in highly productive mega projects, having a multiplier effect on increasing national income and employment. The projects for which financing window shall be opened include Naya Pakistan Housing Scheme, multidimensional Diyamer Basha hydropower project, Riko Diq gold and copper project and some other hydro power projects. The GIC will be providing capital on the basis of engineering procurement and construction (EPC) and public private partnership for infrastructure development.
The likely of opportunity of foreign investment equal to the size of CPEC is good omen. Pakistan has been facing difficulties in getting foreign funding for Diyamer Basha dam. The hydropower project has to be withdrawn from CPEC framework due to certain conditions of the financier, which were unacceptable about which Chairman WAPDA had informed Senate Standing Committee on water resources. The total cost of the project is Rs.628 billion, including foreign exchange component of 153.2 billion PKR or 1 billion US dollars. Multilateral donor agencies such as Asian Development Bank and World Bank have shied away from the funding the project. Negotiations with Swiss Bank and Asian Infrastructure Development Bank had made no headway. If foreign exchange component funding form GIC does materialise, then construction work on this can be started which has been delayed for several years for different reasons both political and economic. It was approved by Executive Committee of National Economic Council (ECNEC) in May, 2018. It may be recalled that EPC bidding process form Aid-to-Pakistan Consortium in the decades of 60s and 70s had remained transparent and competitive as compared with CPEC related projects, having a strict condition of allowing bidding among the Chinese companies. Cost benefit analysis of Tarbella and Mangla dams amply explains it. Likewise, comparison of capital expenditure of World Bank Dasu hydropower phase 1 with ongoing hydropower projects under CPEC tells that construction cost of the latter projects is on very high side.
Riko Diq is under litigation and Pakistan is seeking the annulment of $6 billion dollars award given by International Center of settlement of Investment Disputes in favour of Tityan Copper Company of Australia. Investment by GIC in this project may not come till the dispute is resolved. However, funding for Naya Pakistan Scheme, hydro and wind energy along with infrastructure projects will help break the lingering recessionary cycle, provided investment friendly environment is created.
