Just like the Special Economic Zone (SEZ) at Dhabeji, Rashakai Economic Zone (REZ) is all set to create another example of friendly ties between Pakistan and China. The project, which falls under China–Pakistan Economic Corridor (CPEC), aims to boost economic activities and create employment opportunities while setting up world-class industrial infrastructure in Khyber Pakhtunkhwa (KPK).
In this blog, we are going to learn about all the latest updates on REZ in detail, discuss its benefits along with its location in Khyber Pakhtunkhwa.
About Rashakai Economic Zone
Spanning an area of 1000 acres, Rashakai Economic Zone is one out of 33 special economic zones in Pakistan. Situated in a small town in KPK, REZ is named after the town its located in Rashakai. REZ, just like other CPEC projects, is an example of cooperation, urbanisation, and industrialisation between Pakistan and China.
Often referred to as Rashakai Special Economic Zone (RSEZ), the project functions under the flagship of Khyber Pakhtunkhwa Economic Zone Development and Management Company (KPEZDMC) and regulations are overseen by a designated department of the federal government.
As per Federal SEZA Regulations, around 702 acres from a total of 1000 acres, will be used for industrialisation and it will be carried out in three phases:
- 159 acres will be developed in Phase I
- 279 acres are going to be industrialised in Phase II
- 264 acres will be escalated for industrial use in Phase III
Additionally, an area of 76 acres from the total area has been designated for commercial use.
Rashakai Economic Zone will mainly comprise the industries mentioned below:
- Textile and apparel
- House Construction Material
- General Commodities
- Electrical Appliances
- Electronic Gadgets
- Mechanical Parts
SEZs are designated areas for commercial activities where the rules of trade and other transactions differ from those followed throughout the country. These zones have their own set of laws that are often created to favour Foreign Direct Investment (FDI). All of this coupled with incentives such as tax breaks can lead to lower costs of doing business in these areas. Since Rashakai Economic Zone falls under the umbrella of CPEC, it’s expected to bring business opportunities for both Pakistani and Chinese investors.
Now that you have a clearer understanding of the significance of the project, let’s take a better look at the prime objective of Rashakai Economic Zone as per KPEZDMC.
Prime Objective of Rashakai Economic Zone
Here’s how the government of Khyber Pakhtunkhwa defines the prime objective of REZ:
“The main objective of the project for Government of KP and by extension KPEZDMC is to promote industrialization through optimally priced, world-class industrial infrastructure in the province, which enables industrial investment, job creation, and economic uplift.”
In addition, KPEZDMC explains how Rashakai Economic Zone can benefit KPK: “The project also provides an opportunity for the Government of KP to generate some non-tax revenue through KPEZDMC. This reduces the financial burden on the exchequer, as KPEZDMC can cover some of its costs, liabilities, etc., and plough-back the earnings into further development of industrial infrastructure.”
Sharing further details about the execution of the project, KPEZDMC has revealed on the official page of the project that it will be based on the Public-Private Partnership (PPP) model. Meanwhile, KPEZDMC will build an “investment nest” that will enable and facilitate foreign investors to securely invest in the project.
On a side note, if you want to check out other important planned developments in Punjab as part of Pakistan’s SEZs, do not forget to read our blog on Allama Iqbal Industrial City (M3), Faisalabad.
Now let’s carry from where we left off: here’s a virtual tour of the location of Rashakai Economic Zone.
Location of Rashakai Economic Zone
Sitting on the edges of M-1 Motorway, REZ is in close proximity to Charsadda Road. Meanwhile, Mardan Ring Road runs near the western end of this economic zone. As per KPEZDMC, the project is located in the centre of trading hubs of the region. If we further analyse the location of Rashakai Economic Zone, we can clearly see that the road to the project is well-connected to Peshawar International Airport and Peshawar Dry Port. All of this will make communication and trade in KPK easier and more convenient.
Keeping in mind the near-perfect location of the project and the natural features of nearby areas, it wouldn’t be wrong to state that RSEZ is ideal for food business, textile and automobiles manufacturing. Moreover, its proximity to Abbottabad, which is home to natural resources like gemstones, soapstone, metal ores, magnesium and phosphate, will facilitate several industries located in this zone.
Features of Rashakai Economic Zone
The industries and businesses that will operate under Rashakai Special Economic Zone will have access to the following amenities:
- Abundant Supply of Water
- Uninterrupted Electricity
- Vocational Training Centres
- Information Technology Assistance
- Security System
Latest Updates on Rashakai Economic Zone
We have mentioned it before but we are going to repeat it for good measure – REZ is going to offer a plethora of advantages to the country’s business community by creating countless opportunities for both domestic and foreign trade.
In addition to serving the commercial zones of Pakistan, the project will also cover areas neighbouring KPK, such as eastern Afghanistan.
As per the official website of CPEC, here’s a comprehensive timeline of the overall progress of Rashakai Economic Zone:
- In January 2018, a Memorandum of Understanding (MoU) and Engagement Agreement was signed between KPEZDMC and China Roads and Bridges Corporation (CRBC) for the development of RSEZ.
- Negotiation for the terms of the Joint Venture Agreement was signed in November 2018.
- The Concession Agreement between both parties was signed in April 2019.
- The groundbreaking ceremony of RSEZ is planned to be conducted in the first four months of 2020.
This wraps up our overview of the Rashakai Economic Zone. If you have questions or suggestions, send us an email at firstname.lastname@example.org. We will keep you updated with this development in KPK, so don’t forget to bookmark this page and visit it again. If you want to keep track of all the projects under CPEC, stay tuned to our website.