1

Karachi 27st April 2017 Trade with China

Gawadar Port

2013 2014 2015 Million US$ Million

JF-17 Thunder -China joint project.  Pakistan and China signed a Free Trade Agreement in 2006

 Total FDI in Pakistan FY-2016 : USD 1,280 million  Half of FDI originated from China : USD 594 million

Source: TradeMap.org Trade with China (FY 2015)

USD 1.7 B – 66% shareholding

US$

Exports in Million Million in Exports

US$ Imports in Million Million in Imports Source: TradeMap.org China Engineering Co. The Economy 4

GDP: The economy of Pakistan has shown US$244 billion Per Capita GDP: resilience and has fared well overall 1300 USD despite a global meltdown during the last decade Languages: Urdu, English, Market Size: 200 Punjabi, Sindhi, million consumers 45% Urbanization Balochi, Siraiki Diversity in religion, language and ethnicity Centralized Administration- Ongoing devolution through 18th amendment to Districts:135 Punjab: 36, 1973 constitution Area: : 29 796,095 km² Baluchistan: 30, Coastline 1,050 Islamabad KPK: 26 KM FATA: & Agencies  Federal capital 13, Islamabad: 1 Labour force:  Legislative assembly 104 million-52% of the total  Supreme court population 60% skilled Sea Ports in Pakistan 5

Karachi Port is the hub and got the pivot status in the Cargo handling TEU No. of cargo economic development of the country as 98% foreign trade Name is conducted through this port and it also handles 65% of Liquid Dry Containers birth nation’s cargo --- Million tons --- Karachi Port 14 12 650,000 33 Bin Qasim Port is the oil hub for the country, it got 2 oil terminals with a total capacity of 10 m tons of furnace oil per M. Bin Qasim 10 12 1,100,000 4 annum Gawadar 19 6 350,000 5

Gawadar port is the core of CPEC. Its strategic importance is far greater than any other port. The 45,000 acres Gwadar master plan encompasses development of an airport, industrial zones, export processing zones, beach resorts, housing facilities and all civic amenities over the next 50 years

The Sindh government has decided to revive the Keti Bandar project along with the installation of a 10,000-MW coal-fired power plant. Sindh

Provincial GDP : US$78 billion* 50% Urbanization Per Capita GDP 1400US$ Market Size: Diversity in religion, language and 44 million ethnicity Provincial consumers Capital: Karachi Youth:17 million Urban: 22 million Strong Administration Abundant agricultural and mineral resources Area: Languages: 141 square km Karachi English, Coastline 350km Road network: Urdu, Sindhi 53000km Financial & commercial capital 7th largest city of the world Districts: 29 Port City Natural Gas in Sindh Natural Gas

3,000 MMCF 2,749 5% 9%

Sindh 17% Balochistan 2,000 KPK Punjab 69% 1,563 1531

1,000 669

362 242 175 182

0 Sindh Balochistan KPK Punjab Gas Supply Gas Consumption Source: Ministry of Finance, GoP 2015 Sindh Board of 8 www.sbi.gos.pk Investment

Government of Sindh’s Primary Business and Investment Facilitation Agency

Sindh Board of Investment (SBI) is established with broad based responsibility of promotion of investment in all sectors of economy; facilitation of local and foreign investors for speedy materialization of their projects and to enhance Sindh’s international competitiveness and contribute to economic and social development. How do we help? 9 To help investments into Sindh?

Promote Bridge Policy Develop OSS

Investment Promotion Acts as the Focal Point Provides Framework for Supports and develops One–Window at the Agency of Sindh to for all Investment related implementation of Public Private Provincial level for facilitate Foreign & Local activities in the Province Investment Policy Partnerships facilitation of local and Businesses foreign investors Strategic Projects 10 We are the custodians of

Special Economic Zones and Industrial Parks

SEDF: A Fund for development of Agribusiness

Education City: Asia’s largest Education City

Marble City: State of the art marble refinery park

GoS’s agency for improving ‘Ease of Doing Business’ Ease of Doing 11 Sindh’s Connectivity with CPEC Business

Ports Market Growth

Karachi Port and Investors access Port traffic – Bin Qasim to Regional historically 8% handle 95% of market: more annual growth Pakistan’s trade than 4 billion customers Doing Business in Sindh 12 Karachi has the highest weight

35% Lahore

Doing Business Karachi Has the highest 65% weight contributing to the index of world doing Karachi business report. 100% Pakistan

Lahore Karachi Pakistan Doing Business in Sindh 13 Karachi’s Contribution to the Economy

15% Pakistan’s GDP

42% Value Added LSM $ $ 25% Revenue to Government

Home to Pakistan Stock Exchange 5th Best Performing Exchange in the World which had 42% Growth in 2016 and lists 512 companies with a market capitalization of 92 Bln USD Doing Business in Sindh 14 Priority Indicators for Sindh

Starting A Business

Registering Enforcing Contracts Property

Dealing with Sindh, through Construction Karachi, has a 65% Permits weightage in Pakistan’s overall DB ranking Fiscal Incentives

. Ten years income tax holiday for entities operating in SEZs

. Zero sales tax on import of machinery in SEZ’s

. Business Losses are adjustable for six subsequent tax periods

. Import of raw material for export manufacturing is zero-rated for tax

. Avoidance of double taxation treaties with 52 countries,

. Tax exemption for profits earned from refining or concentrating mineral deposits – Thar Coal

. Pakistan allows 100% foreign ownership of businesses and unrestricted repatriation of profits to encourage investment in the country Public Private Partnership

• Sindh PPP Act 2010 1st PPP law in Pakistan

Provides legal cover to the Institutional Framework • PPP Policy Board • PPP Unit • PPP Projects • Departmental PPP nodes

Regulates the contractual relationship between public and private sectors

Covers processes regarding project approval and spending from: • PDF (Project Development Fund) • VGF (Viability Gap Fund) Energy Mix

Renewable Energy Wind Solar Hydro (Run of River)

Thermal Oil & Gas Coal

Constitution After the 18th Amendment, energy is in Part II of Federal Legislative List

Installed capacity – 24,000 MW Available capacity 17,000 MW

17 Energy Resources

Wind Corridor Solar Coal

Location Coal 180x60KM Wind One of the (Billion tons) Corridor at Jhimpir highest solar Thar 175 (Thatta) has got insulation in the Lakhra Potential for world ranging 1.33 generating 60,000 from 5 KWh- Sonda-Jherruk 7.11 MW 7.5/m2/per day Jhimpir 0.43 Indus East 1.78 Badin 1.36 Total 187.01 Wind Power Projects

Wind Power in Sindh Land to 35 Projects (23,000 acres)-indicated capacity 1,925 MW Contribution to Grid - 530 + MWs by June 2016

Upcoming projects

Three projects under CPEC of 200MW: 400 MW WIND FARM AT JHIMPIR a) UEP b) Hydro China Dawood c) Sachal

 Upcoming 9 projects – 477 M

 10 MW Wind Project of Ismail industries Ltd in Sindh -Thatta region

 50MW Wind Power Project of New Park Energy - Nooriabad 50 MW PROJECT AT NOORIABAD Solar Power Projects

Solar Power Projects in Sindh

Geographic solar insolation (5.3 kwh/m²/day ) is very high in Pakistan specially in upper Sindh

Three pilot project completed by the GoS in November, 2014

Village and School Solar Electrification i) 350 schools - Nangarparkar (Thar) ii) 140 houses - Sanghar iii) Street lights - 5 villages in Malir & Ghotki Solar Power Projects

5 Projects (PPP mode) 20 MW each

 Jhimpir (Thatta)  Shaheed Benazirabad 17 Projects (IPP) total 900 MW  Sukkur 20 MW Solar Park at Jhimpir  Larkana  22 firms applied -17 shortlisted  Khairpur  Land allocated  Awaiting grid connectivity from Federal Government

1. SCATEC (Norway) with Nizam Energy (2x50MW) projects in upper Sindh 2. Hybrid Energy Project, 50 MW at Jhimpir 3. DACCLLC Solar Project, 50 MW 4. National Solar 50MW at Thatta Coal Mining and Energy Projects

Thar Coal is the only major source of power generation in the country and the key resource of Petro Chemical Industry

GoS Goal : Generate 5,000 MW by 2020 using Thar Coal (175 billion tons, worth 9 trillion USD)

Policy Priorities

Develop Thar Coal as ‘core resource’ to achieve affordable and reliable energy security

Development of Coal Mining Sector leading to poverty alleviation Thar Coal Field

Developed 12 blocks Allocated 8 blocks Partners a)Sino Sindh Resources (Pvt.) Limited (Pak-China) b) Sindh Engro Coal Mining Company (Under Way- CPEC) c) Asia Power Thar Coal Limited (UK) d) Harbin Thar Energy (Pvt.) Limited (China) 3rd Largest Lignite Coal Reserves e)Underground Coal & Gasification Power Project f) Sindh Carbon Energy Ltd (Oracle, UK) Financial Close- CPEC g)Fauji fertilizer Company Limited h)TharPak. Consortium (LLC–US) i) Pakistan Energy & Resource Company Karachi: Node City on CPEC www.kwsb.gos.pk www.kwsb.gos.pk Critical Needs/ Opportunities for Investment www.sswmb.gos.pk

Water Supply www.sindhpnd.gov.pk (Karachi Water & Sewerage Board) www.urbandirectorate.gos. Sewerage System pk www.sindh.gov.pk/dpt/phc/p (Karachi Water & Sewerage Board) olicy.html Solid Waste Management www.sindh.gov.pk/dpt/works (Sindh Solid Waste Management Board) andservices

Housing (Planning & Development & Initiatives Department, GoS)

Roads, Bridges & Infrastructure (Works & Services Department,Karachi’sGoS) Area : 3,527 km² , Elevation : 8 m Karachi New Development Model

Special focus on planning Karachi City Foreign Investor partnerships with private sector and provincial Government Priorities: Industries, Urban Development, Environment, Transport Management and financial partnerships with Local and Provincial Government – Opportunities for business Karachi Mass Transit System

To provide safe, reliable, comfortable and affordable means of transportation to travelling public by creating enabling environment for private investment in the sector leading towards development and prosperity. Goals • Current situation Proper regulation of public transport through implementation of motor vehicle laws.

•Encourage private sector to bring more investment in the transport sector by providing incentives.

•Initiate public sector schemes and programs where private investment is slow or not forth coming so that safe, reliable, comfortable and affordable transport is available to public.

Future vision Karachi Mass Transit System

 Public Transport Vehicles are 4.5% of all road traffic

 More than 9 million people (44%) travel in public • Six Bus Rapid Transits (BRTs) • Karachi Circular Railway (KCR) Karachi: Bus Rapid Transit Plan Green Line: Work in Progress. Infrastructure by GoP Orange Line: Work in Progress. GoS project Yellow Line: Concession awarded to Chinese contractor in PPP mode Red Line: ADB sponsored project

Lenghth Cost Ridership Name Route (KM) (million per day USD) YELLOW LINE Qaidabad to Saddar 26 160 150,000

GREEN LINE Surjani Town to Jama Cloth Market 17 160 400,000 Orangi Town to KDA Chowrangi ORANGE 4.7 20.36 50,000 LINE RED LINE Model Colony to Mazar e Qaid 21.5 140 350,000 BLUE LINE Bahria Town to M.W Tower 54 N/A 357,000

BROWN LINE Nagan Chowrangii to Nigar Cinema 18.5 1,160 736,000 Karachi: Circular Railway Route Route Length (total) 43.24 km On-ground 15.68 km Elevated 23.86 km Trench 2.28 km Bridge 1.42 km Number of Stations 24 On-ground 10 Elevated 12 Trench 2 Locomotive Electro Mechanical Ridership 600,000 Per Day

JICA completed feasibility.

GoS seeks investors. Water Issues

 Gap between water demand and supply for Karachi city  Outlived water and sewerage system laid decades back  Negligible treatment of domestic and industrial waste water  Water contamination at tertiary level due to intermittent supply  Frequent electricity breakdowns at KW&SB Installations  High Non Revenue Water (NRW) Karachi Water Supply System

 Population 20 million  Maximum water demand ( @ 54 gpcd) 1,080 mgd  Available supply 650 mgd  Indus source (Kinjhar lake surface water) - Greater Karachi 280 mgd - Gharo 30 mgd - K-II 100 mgd - Additional 40 mgd - K-III 100 mgd - Steel mill 23 mgd - PQA 07 mgd - Hub Dam (surface water) 100 mgd Optimum total supply : 650 mgd

Water losses (30%) (-)195 mgd Net supply 455 mgd Forthcoming Projects Work in Progress Potential Investments  K-IV Phase-I, 260 mgd water supply

K-IV Phase-II, 260 MGD Water Supply  Greater Karachi Sewerage Plan S-III to The Project comprises of Canals, Conduits, Syphons, Rising Mains, Reservoirs, treat 500 mgd Sewage Pump Houses & Filter Plants The estimated cost of this project is PKR: 32,000 Mn (US$320 Mn.)  Construction of New 100 mgd Pump House at Dhabeji Expansion of Water Filtration Capacity  Construction of Sewage  Cumulative filtration capacity is 440 mgd, there is a short fall of 210 mgd Pumping Station at  KW&SB has planned to expand the filtration capacity to the total quantity of Clifton (CPS) water supplied i.e. 650 mgd and proposed to construct three new Filter Plants at NEK (100 mgd), COD (85 mgd) & Hub Filter Plant (25 mgd). Total cost of the Project is estimated to be approx: PKR. 7,000 Mn (US$ 70.00 Mn) Forthcoming Projects

Replacement Program for Energy Efficient Pumps at Distribution Pumping Stations

Energy saving by 40%, pressure improvement and assured water to tail-end consumers

Estimated cost is PKR. 3,000 Mn (US$ 30.00 Mn)

Rehabilitation of Major Sewage Pumping Stations

Sewerage system of southern part of Karachi is managed through major sewerage pumping stations

Two of the sewerage pumping stations were constructed 50 years ago and out lived their service lives

Frequent break downs at these pumping stations cause severe environmental and traffic problem

Rehabilitation cost of these two major pumping station is PKR. 1,000 million (US$ 10.00 Mn) Forthcoming Projects

Rehabilitation of Existing Filter Plants

Out of 7 water filter plants operating in Karachi, 4 plants are 30-40 years old & outlived their service life and need immediate major rehabilitation

KW&SB planned to revive and rehabilitate, the rehabilitation cost of 4 existing filtration plants; estimated cost is approx PKR. 1,500 Mn (US$ 15.00 Mn)

Rehabilitation of Major Water Pumping Stations

12 major pumping stations, constructed 50 years back, to operate them optimally KW & SB intends to replace these pumps with efficient energy consumption pumps

 Estimated cost of rehabilitation of the pumping stations is estimated to be PKR. 5,000 Mn (US$ 50.00 Mn) Special Economic Zones Special Economic Zone (SEZ) Act 2012

SEZ Authority Sindh  Established by Government of Sindh  Headed by Chief Minister of Sindh Incentives  Exemption on custom duties/taxes on plant & Machinery imported into Pakistan .  Exemption from all taxes on income generated from the SEZ for a period of 10 years (after 2020 for 5 years)  Additional benefits to SEZs, Zone Enterprise, regions or sectors that promote hi- tech industries or particular under developed regions of Sindh  All SEZ are in the Customs Territory of Pakistan Developed SEZs  Khairpur Special Economic Zone  Bin Qasim Industrial Park  Korangi Creek Industrial Zone Khairpur Special Economic Cost Zones Front roadside 1 acre= US$ 35,000 Link road 1 acres = US$ 30,000 Rear roadside 1 acre = US$ 25,000

PLOT SIZE TOTAL PLOT NO OF SIZE PLOTS (ACRE) 160m 06 4 ×100m 80m×100m 08 2 80m×50m 16 1 40m×75m 09 0.75 40m×50m 18 0.50 40m×25m 28 0.25 Total Plots 85 Industrial Plots Khairpur Special Economic Infrastructure Zones 136 acres of Land allocated for the establishment of a dedicated KSEZ near Sukkur, Sindh.

Distance from Sukkur International Airport approx 30 kms.

Construction of Main Gate, Administrative Building, dedicated Police Station complete. Construction on other infrastructure components are in progress. Overall 90 percent work is complete.

20 MWs Waste to Energy Captive Power Plant to be established

FIRST Industrial park in Pakistan to have been awarded the SEZ Status under SEZ Act 2012

Companies

Sachal Engineering Venus Pakistan Pvt Jumani Group of Industries Bin Qasim Industrial Park

Cost Rs.18 Million per acre USD 180,000 Bin Qasim 930 Acres, Located on Main National Highway (Adjacent to Arabian Industrial Park Sea Country Club) Bin Qasim Town, Karachi, Sindh

Industrial Clusters Companies  Light Engineering Yamaha Motor  Auto & Allied Marubeni  Foundry and Fabrication M/s Horizon  Pharmaceutical & Food Processing Shokozan  Warehousing & Logistics Company

Status Fully functional Site Office Main Access road completed Infrastructure development work of phase one in progress Plots available for immediate construction 37 meter wide, six lane, concrete main access road Korangi Creek Industrial Park

Cost Low Density zone USD 395,000 / Acre High Density Zone USD 1.2 million / Acre Korangi Creek 250 Acres, Near Korangi Creek and Korangi Industrial Area, Industrial Park Karachi

Industrial Clusters Companies Low Density Zone (111 Acres): Light Engineering, Food SCI Life Pharma Processing, Consumer Food & Pharmaceutical Products, Youngs (Pvt) Ltd Garments / Value added Textiles, Packaging & Printing & Faruk Impex Warehousing / Logistics Al Baraka Apparel MAL Pakistan High Density Zone (39 Acres) : Commercial and Business United Kings Centers, Information Technology, Gems & Jewelry Foods

Status

Fully functioning administrative and site office Boundary wall completed Water distribution network with underground and overhead reservoirs, pumping station and generator house completed Underground sewerage network completed Construction of electrical distribution network and sub- stations is in progress POTENTIAL INDUSTRIAL PARKS

SEZs for CPEC in Sindh Chinese Special Economic Zone, Thatta Marble City, Karachi Larkana at Rato Dero Keti Bandar SEZ Legend: CPEC Eastern Route / National Highway (N-5) : 0.5 km Jinnah International Airport, Karachi: 41 km 43 : 22 km Terrain: Flat, non-mountainous

Soil: Balanced chemistry Stable and strong through wetting and drying cycles

Dhabeji, Area Topography Thatta, Sindh

44 Karachi-Hyd motorway Port Qasim (M-9) – 35 – 22 km km* CPEC Eastern corridor/ Main Railway Line National Transport Highway – 0.5 goods to – 0.5 km km local & foreign markets

CSEZ – Connectivity & Trade 45 China Pakistan Economic Corridor An engine for growth

A corridor for trade with China and other Central Asian Republics. The premise of the Project is to develop an Economic corridor to facilitate transit trade through Gawadar port

The distance from Kashgar (China) to Gawadar is 2,815 Km; compared to Beijing 4,364 Km. The route shall save travel time by two weeks compared to current trade made by China through Sea; Advantages of trade Nodes in through Gawadar - Sindh Khunjerab Advantage Via Via Via Urumqi, China Shanghai Khunjerab Sukkur Khunjerab to Karachi ------Distance in KMs ------Hyderabad Gawadar 15,858 4,712 11,146

Dubai 16,833 5,772 11,060 London 27,436 16,552 10,884 CPEC – A Long Term Plan

2017/18

2020

2025

2030 Key Industries Steel CPEC

Light Engineering

Logistics

Textiles / Garments

Auto Parts

Building material

Food Processing

Chemicals

Pharmaceuticals Phase 1 (2015-20): Market Cultivation

Phase 2 (2020-25): Expansion & Development

Phase 3 (2025-30): Maturity Period Scheme

Components of CPEC:

 Energy USD 34.4Bn

 Infrastructure USD 9.8Bn

 Gawadar USD 0.8Bn

 Transport

 Industrial Cooperation / SEZ

 CPEC - related projects (USD 52Bn)

 CPEC - needed + spillover (USD 1Bn) Thank you

www.sbi.gos.pk