Special Economic Zones or SEZs are dedicated areas for trade and business where the laws of doing business differ from those prevalent throughout the country. China is eager to create many SEZs in Pakistan as part of the China-Pakistan Economic Corridor (CPEC), and among these is the Dhabeji Special Economic Zone, which is one of the priority projects under the umbrella of the CPEC. Let’s learn more about China’s Special Economic Zone at Dhabeji, including all of the latest updates. But first, a little about what SEZs are and how they can benefit the economy of Pakistan in the long run.
Special Economic Zone (SEZ)
As stated above, SEZs are dedicated or specially reserved regions for trade and commerce located within a country’s borders. What makes SEZs unique is the fact that the trading laws applicable to the rest of the country are relaxed or not-applicable in these economic zones. SEZs have their own set of trading laws, which are often created to favour Foreign Direct Investment (FDI) with tax incentives as well as lower costs of doing business. These economic zones are ideal for job creation, economic development, and increased investment in a wide range of industries.
The Location of Dhabeji Special Economic Zone
The Government of Sindh has marked more than 1,500 acres of pristine real estate to be developed as the Dhabeji Special Economic Zone (DSEZ) near Thatta. Along with the usual benefits that come with an economic zone, the location of DSEZ offers a range of additional advantages to the business community at large, including easy access to Port Qasim and the Karachi Airport. Being close to both air and seaports translates into extreme ease in transporting raw materials, finished products, as well as labour and foreign dignitaries from one place to another without safety or damage risks. Besides, Dhabeji is also located near the National Highway (N-5), offering plenty of opportunities for domestic trade as well.
Business Opportunities at the Special Economic Zone at Dhabeji
With respect to doing business, Joint Ventures (JVs) with Pakistani firms will be given first priority once the zone is developed, and export-oriented products and industries will be the core focus here. Steel mills, chemical and pharmaceutical companies, consumer and electronic goods, textile and garment factories, FMCGs, automotive assembling units, factories for building materials, and warehousing will be some of the key industrial sectors where investment will be ripe once DSEZ is open for business.
The project will be developed under the Public Private Partnership (PPP) model, while the above sectors have been chosen after due consultation with both Chinese as well as Pakistani investors to determine that they are aligned with the available resources in Pakistan.
Infrastructural Facilities at the Dhabeji Special Economic Zone
Once the development commences, the SEZ is expected to host the following facilities:
- Power plant
- Wastewater treatment plant
- Vocational and technical training institute
- Warehouse park
- Business centre
- Expo centre
- Residential zone
- 5-star hotel
- Fully equipped hospital
- Fire station
- Crisis response centre
Latest Updates on Dhabeji Special Economic Zone
Once the project was approved by the Chief Minister of Sindh, who is also the chair of the PPP Policy Board, the planning and development of the project shifted into the top gear to ensure that the Special Economic Zone was ready for trade and investment in due time. Here are some of the latest updates on the project:
- As of 13th February 2020, an additional 1,500 acres of land has been approved for Dhabeji SEZ, giving the project a total of 3,000 acres for development. The Board of Revenue (BoR) was also notified of the change and asked to transfer the title deed of the land so that the development can begin from 20th April 2020 as scheduled.
- According to news sources, the Dhabeji SEZ will be provided with electricity via wind energy, and the energy department of Sindh is trying to arrange this alternate energy solution for the area. The decision was undertaken because the project’s location places it directly in the path of a natural wind corridor, making it perfect for the placement of wind turbines.
- The Special Economic Zone at Dhabeji was officially launched on the 28th of October, with the zone offering state-of-the-art- utilities, infrastructure, and road, rail, and air access to national and international trade hubs.
- The Sindh Economic Zones Management Company (SEZMC) has also launched a proposal inviting bids for the development of the Dhabeji Special Economic Zone. The proposal was floated on the 29th of October 2019. It is estimated that the initial development would take around eight months to take proper shape, while another 18 months would be required to complete the development work to make the economic zone operational. This bid is only for Phase 1 of the project, and the bidder will be granted approval for Phase 2 only after 70% of the first phase has been completed.
As per the plans, Dhabeji’s SEZ will be ready for investment in early 2021, provided the development follows a strict timeline. In the meantime, bookmark this page to stay updated on the latest developments, as we will be updating the post with more news as it comes in.
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