Rashakai economic zone overselling

KP Chief Minister Advisor on Information Ajmal Wazir said in a media briefing that special economic zone at Rashakai will be inaugurated soon. It will attract domestic investment alone of Rs.4 billion and provide jobs to 200,000 people after becoming fully operational. Speaker National Assembly has even set a deadline, saying that the inauguration of this economic zone will take place next month and it will be linked with Torkham-Peshawar economic corridor.

Given this claim, neither Khyber Pukhtunkhwa government nor the federal one has divulged anything about the finalisation of PC-1 by Power Division for the installation of 200 megawatt electricity grid station and another PC-by the Ministry of Petroleum for the provision of gas. The approval of the cost of these projects from CDWP and ECNEC can fast-track the process of establishment of Rashai economic zone. It will house industries that shall be relocated from China and some units of joint ventures between the Chinese investors and local entrepreneurs.

Currently there is no level playing field for both foreign and domestic investors because of extremely unfavourable economic environment. The tariffs of electricity and gas are sky-high, cost of petroleum products is unaffordable, skilled manpower is scarce, imported raw material is expensive and credit facilities for fresh investment are squeezed because of high interest rate besides extremely narrow base of Research and Development Institution, let alone their dysfunctional status. The industrialised countries had outsourced their industries of fourth and fifth generation technologies to Malaysia, Vietnam, Bangladesh and India in the pursuit of reasonably low prices of energy inputs, cheap but highly skilled manpower, abundance of locally produced raw material, flourishing institutions of Research and Development and above all tax holidays of a number of years. Transfer of latest technology and its indegenisation is the vital ingredient of industrialisation and its accruing economic benefits.

There are no bold indications that federal government will announce shortly an industrial policy, offering attractive fiscal and monetary incentives to the entrepreneurs for fresh investment, induction of latest technologies and products’ innovations. The Prime Minister has directed for providing electricity at 7.5 cents per unit and gas at 6.5 cent per mmBtu to export industries but ECC has not approved that incentive. On the contrary Central Power Purchase Authority has sent a petition to NEPRA for the approval of raising the electricity price by Rs.1.48 by way fuel price adjustment. Khyber Pukhtunkhwa has no transmission and distribution system of its own for providing cheap hydel power to industrial sector and is compelled to sell it to NDTC. Quite recently, PEDO has signed ‘Wheeling Agreement’ with PESCO for providing electricity generated from Pehur hydel power station at preferred tariff to five industrial units in Gadoon industrial estate. Public relation exercise is no substitute for grim ground realities.