1

Karachi

27st April 2017

Trade with China

Source: TradeMap.org

Millio

n U

S$

2013 2014 2015

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

JF-17 Thunder

Pakistan-China joint project.

Gawadar Port

Trade with China (FY 2015)

Source: TradeMap.org

USD 1.7 B – 66% shareholding

Ex

po

rts

in

Millio

n

US

$

Imp

ort

s in

Millio

n

US

$

China Engineering Co.

4

The EconomyGDP:

US$244 billion

Per Capita GDP: 1300 USD

Market Size: 200 million consumers

Area: 796,095 km²

Coastline 1,050 KM

Labour force:

104 million-52% of the total population

60% skilled

Districts:135

Punjab: 36, Sindh: 29

Baluchistan: 30, KPK: 26

FATA: & Agencies 13, Islamabad: 1

Languages: Urdu, English,

Punjabi, Sindhi, Balochi, Siraiki

The economy of Pakistan has shown

resilience and has fared well overall

despite a global meltdown during the

last decade

45% Urbanization

Diversity in religion, language and

ethnicity

Centralized Administration- Ongoing

devolution through 18th amendment to

1973 constitution

Islamabad

Federal capital

Legislative assembly

Supreme court

5

Sea Ports in Pakistan

Karachi Port is the hub and got the pivot status in the economic development of the country as 98% foreign tradeis conducted through this port and it also handles 65% of nation’s cargo

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 annum

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 KetiBandar project along with the installation of a 10,000-MW coal-fired power plant.

Name

Cargo handlingTEU

Containers

No. of cargo

birthLiquid Dry

--- Million tons ---

Karachi Port 14 12 650,000 33

M. Bin Qasim 10 12 1,100,000 4

Gawadar 19 6 350,000 5

Provincial GDP : US$78

billion*

Per Capita GDP 1400US$

Market Size:

44 million consumers

Youth:17 million

Urban: 22 million

Area:

141 square km

Coastline 350km

Road network: 53000km

Districts:

29

Languages:

English, Urdu, Sindhi

Provincial Capital: Karachi

50% Urbanization

Diversity in religion, language and

ethnicity

Strong Administration

Abundant agricultural and mineral

resources

Karachi

Financial & commercial capital

7th largest city of the world

Port City

Sindh

Natural Gas

69%

17%

9%5%

MMCF

Sindh

Balochistan

KPK

Punjab

0

1,000

2,000

3,000

Sindh Balochistan KPK Punjab

2,749

669

362

182

1,563

242175

1531

Gas Supply Gas Consumption

Source: Ministry of Finance, GoP 2015

Natural Gas in Sindh

8

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.

Sindh Board of

Investmentwww.sbi.gos.pk

Government of Sindh’s Primary Business and Investment Facilitation Agency

9

How do we help?To help investments into Sindh?

One–Window at the

Provincial level for

facilitation of local and

foreign investors

OSS

Investment Promotion

Agency of Sindh to

facilitate Foreign & Local

Businesses

Promote

Provides Framework for

implementation of

Investment Policy

Policy

Supports and develops

Public Private

Partnerships

Develop

Acts as the Focal Point

for all Investment related

activities in the Province

Bridge

10

Strategic ProjectsWe are the custodians of

Marble City: State of the art marble refinery park

Special Economic Zones and Industrial Parks

SEDF: A Fund for development of Agribusiness

Education City: Asia’s largest Education City

GoS’s agency for improving ‘Ease of Doing

Business’

11

Ease of Doing

BusinessSindh’s Connectivity with CPEC

Karachi Port and

Bin Qasim

handle 95% of

Pakistan’s trade

Ports

Investors access

to Regional

market: more

than 4 billion

customers

Market

Port traffic –

historically 8%

annual growth

Growth

12

65%Karachi

100%Pakistan

35%Lahore

Doing Business

Karachi Has the highest

weight contributing to the

index of world doing

business report.

Karachi PakistanLahore

Doing Business in SindhKarachi has the highest weight

13

15%

42% Value Added LSM

Pakistan’s GDP

$$

Home to Pakistan Stock Exchange5th 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 SindhKarachi’s Contribution to the Economy

25% Revenue to Government

14

Enforcing Contracts

Dealing with

Construction

Permits

Starting A Business

Registering

Property

Sindh, through

Karachi, has a 65%

weightage in

Pakistan’s overall DB

ranking

Doing Business in SindhPriority Indicators for Sindh

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

• 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)

Public Private Partnership

17

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

Energy Mix

Wind Corridor

180x60KM Wind

Corridor at Jhimpir

(Thatta) has got

Potential for

generating 60,000

MW

Solar

One of the

highest solar

insulation in the

world ranging

from 5 KWh-

7.5/m2/per day

Location Coal

(Billion tons)

Thar 175

Lakhra

1.33

Sonda-Jherruk 7.11

Jhimpir 0.43

Indus East 1.78

Badin 1.36

Total 187.01

Coal

Energy Resources

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:

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

400 MW WIND FARM AT JHIMPIR

50 MW PROJECT AT NOORIABAD

Wind 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

17 Projects (IPP) total 900 MW

22 firms applied -17 shortlisted

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

20 MW Solar Park at Jhimpir

5 Projects (PPP mode) 20 MW each

Jhimpir (Thatta)

Shaheed Benazirabad

Sukkur

Larkana

Khairpur

Solar Power 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

Coal Mining and Energy

Projects

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)

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

3rd Largest Lignite Coal Reserves

Thar Coal Field

Critical Needs/ Opportunities forInvestment

Water Supply

(Karachi Water & Sewerage Board)

Sewerage System

(Karachi Water & Sewerage Board)

Solid Waste Management

(Sindh Solid Waste Management Board)

Housing

(Planning & Development & Initiatives Department, GoS)

Roads, Bridges & Infrastructure

(Works & Services Department, GoS)

www.kwsb.gos.pk

www.kwsb.gos.pk

www.sindh.gov.pk/dpt/works

andservices

www.sindhpnd.gov.pk

www.urbandirectorate.gos.

pk

Karachi’s Area : 3,527 km² ,

Elevation : 8 m

www.sindh.gov.pk/dpt/phc/p

olicy.html

www.sswmb.gos.pk

Karachi: Node City on CPEC

Special focus on planning Karachi City

Foreign Investor partnerships with privatesector and provincial Government

Priorities: Industries, Urban Development,Environment, Transport

Management and financial partnerships with Local and Provincial Government –Opportunities for business

Karachi New Development Model

To provide safe, reliable, comfortable and affordable means of transportationto travelling public by creating enabling environment for private investment inthe sector leading towards development and prosperity.

Goals•

Proper regulation of public transport through implementation of motor vehiclelaws.

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

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

Current situation

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 transport in Karachi

• Six Bus Rapid Transits (BRTs)

• Karachi Circular Railway (KCR)

Karachi Mass Transit System

Name RouteLenghth

(KM)

Cost

(million

USD)

Ridership

per day

YELLOW LINE Qaidabad to Saddar 26 160 150,000

GREEN LINE Surjani Town to Jama Cloth Market17 160 400,000

ORANGE

LINE

Orangi Town to KDA Chowrangi4.7 20.36 50,000

RED LINE Model Colony to Mazar e Qaid21.5 140 350,000

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

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

Karachi: Bus Rapid Transit

Plan

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.

Karachi: Circular Railway

Route

Gap between water demand and supply for Karachi city

Outlived water and sewerage system laid decades back

Negligible treatment of domestic and industrial wastewater

Water contamination at tertiary level due to intermittentsupply

Frequent electricity breakdowns at KW&SB Installations

High Non Revenue Water (NRW)

Water Issues

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

Karachi Water Supply System

Work in Progress

K-IV Phase-I, 260 mgdwater supply

Greater Karachi Sewerage Plan S-III to treat 500 mgd Sewage

Construction of New 100 mgd Pump House at Dhabeji

Construction of Sewage Pumping Station at Clifton (CPS)

Forthcoming ProjectsPotential Investments

K-IV Phase-II, 260 MGD Water Supply

The Project comprises of Canals, Conduits, Syphons, Rising Mains, Reservoirs,

Pump Houses & Filter Plants

The estimated cost of this project is PKR: 32,000 Mn (US$320 Mn.)

Expansion of Water Filtration Capacity

Cumulative filtration capacity is 440 mgd, there is a short fall of 210 mgd

KW&SB has planned to expand the filtration capacity to the total quantity of

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)

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)

Forthcoming Projects

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

Special Economic Zones

Cost

Front roadside 1 acre= US$

35,000

Link road 1 acres = US$

30,000

Rear roadside 1 acre = US$

25,000

PLOT SIZE TOTAL

NO OF

PLOTS

PLOT

SIZE

(ACRE)

160m

×100m

06 4

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

Zones

InfrastructureKhairpur Special Economic

Zones136 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 QasimIndustrial Park

Cost

Rs.18 Million per acre

USD 180,000

Bin QasimIndustrial Park930 Acres, Located on Main National Highway (Adjacent to Arabian

Sea Country Club) Bin Qasim Town, Karachi, Sindh

Industrial Clusters Light Engineering

Auto & Allied

Foundry and Fabrication

Pharmaceutical & Food Processing

Warehousing & Logistics

StatusFully 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

Companies

Yamaha Motor

Marubeni

M/s Horizon

Shokozan

Company

Korangi Creek Industrial Park

Cost

Low Density zone

USD 395,000 / Acre

High Density Zone

USD 1.2 million / Acre

Korangi Creek Industrial Park

Companies

SCI Life Pharma

Youngs (Pvt) Ltd

Faruk Impex

Al Baraka Apparel

MAL Pakistan

United Kings

Foods

250 Acres, Near Korangi Creek and Korangi Industrial Area,

Karachi

Industrial Clusters

Low Density Zone (111 Acres): Light Engineering, Food

Processing, Consumer Food & Pharmaceutical Products,

Garments / Value added Textiles, Packaging & Printing &

Warehousing / Logistics

High Density Zone (39 Acres) : Commercial and Business

Centers, Information Technology, Gems & Jewelry

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

Port Qasim: 22 km43

Area Topography

44

Terrain: Flat, non-mountainous

Soil: Balanced chemistry

Stable and strong through wetting and drying cycles

Dhabeji,

Thatta, Sindh

45

CSEZ – Connectivity & Trade

Transport goods to local & foreign markets

CPEC Eastern corridor/ National

Highway – 0.5 km

Karachi-Hydmotorway (M-9) – 35

km*

Port Qasim– 22 km

Main Railway Line

– 0.5 km

An engine for growthChina Pakistan Economic Corridor

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;

Urumqi, China

to

Via

Shanghai

Via

Khunjerab

Advantage

Via

Khunjerab

------- Distance in KMs -------

Gawadar 15,858 4,712 11,146

Dubai 16,833 5,772 11,060

London 27,436 16,552 10,884

Advantages of trade

through Gawadar -

Khunjerab

Nodes in

Sindh

Sukkur

Karachi

Hyderabad

CPEC – A Long Term Plan

2017/18

2020

2025

2030

Key IndustriesSteel

Light Engineering

Logistics

Textiles / Garments

Auto Parts

Building material

Food Processing

Chemicals

Pharmaceuticals

CPEC

Phase 1 (2015-20): Market Cultivation

Phase 2 (2020-25): Expansion & Development

Phase 3 (2025-30): Maturity Period

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)

Scheme

Thank you

www.sbi.gos.pk