June 10, 2021 (MLN): Special Economic Zones (SEZs) attracted investment worth $646.59 million between Jan 1, 2021, and May 4, 2021, ever since the government launched the MIS module to review applications, the Ministry of Finance said in the Pakistan Economic Survey (PES) 2020-21 released on Thursday.
“As of May 2021, the 21 notified SEZs together account for approximately 10,029 acres of industrial land out of which 5,220 acres (52%) have been allotted to investors for setting up of industry with planned investments of Rs633.9 billion, 43.6% of this comprises of FDI component ($1.73bn),” the PES pointed out.
Earlier, in the pre-MIS module governance framework, SEZs between 2012 and 2020 managed to attract investment worth $1.081bn.
“The number of zone enterprises pre-SEZ MIS launch, although significant, includes certain enterprises that could not realize their planned investments and are being tracked and phased out,” said the PES while adding that “the pre-launch period that spans over eight years across 19 SEZs, due to non-availability of required infrastructure and lack of regulatory monitoring and ease could only solicit foreign investment interest of Rs173.08bn.”
However, since the launch of the MIS module, in a matter of just five months, more than half of this progress has been registered and given approval for setting up of industries, said the PES.
The government, through the Finance Act 2020 expanded by making the service sector part of SEZs and incorporation of certain key service sectors for the provision of incentives including IT, storage, communication, and infrastructure development.
“The exemption from customs duty that was earlier available on import of plant and machinery has been expanded in the scope of applicability through amendment in PCT code 9917(2) vide Finance Act 2020.”
The China-Pakistan Economic Corridor was aimed to promote the industrialization of the economy through SEZ by removing infrastructure and energy bottlenecks; however, the provision of utilities remains one of the major impediments in the development of economic zones.
The government in 2021 announced SEZ Zone Enterprise Sale, Lease, and Sub-Lease of Plots Regulations, paving a mechanism for the provision of utilities and infrastructure in a phased manner, aligned with the development timelines and requirements of the zone enterprises allowing the developers to admit more enterprises and rationalize the demand and supply of these facilities.
The government said that realized investments of $646.59in the SEZs represent one-third of the total planned investment. However, with the implementation of SEZ MIS module, the investments and allotment of land for setting up industries have been fast-tracked.
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