Pakistan has urged China to expedite the technical and financial teams’ visits to finalize agreements for the first phase of the $10 billion Karachi-to-Peshawar railway line (ML-1) and the construction of two model Special Economic Zones (SEZs) in Karachi and Islamabad.

During a CPEC review meeting, Minister for Planning and Development, Ahsen Iqbal, informed participants that he had emphasized this week during consultations with the Chinese Ambassador in Islamabad the need for simultaneous visits from technical and financial experts for the ML-1 project.

He reminded that during his visit to Pakistan in October, the Chinese Prime Minister had agreed to send a technical team of railway experts, which is eagerly awaited. The financial team, working alongside the technical experts, will help finalize the financial arrangements for the first phase of ML-1, valued at approximately $1.1 billion between Karachi and Hyderabad.

According to an official statement, during the recent meeting with the Chinese Ambassador, it was agreed that a financial team would accompany the technical team to ensure the effective and simultaneous resolution of all matters related to the project.

Minister’s Instructions to Authorities

Ahsen Iqbal directed the Economic Affairs Division, Ministry of Railways, and Ministry of Finance to complete their homework as soon as possible to ensure that both the financial and technical aspects of these key projects are finalized concurrently. The Chinese Ambassador assured the Minister that, as per the Chinese Prime Minister’s decision, the technical team would soon visit Pakistan.

Iqbal also briefed the meeting that the Karakoram Highway and ML-1 would be two major components of CPEC. The second phase of the Karakoram Highway will be completed in line with the arrangements made for the first phase, and no new commitments will be required.

Special Economic Zones (SEZs)

The Federal Minister highlighted Pakistan’s request to China to develop and populate model industrial zones in Islamabad and Karachi, which would serve as templates for the remaining seven SEZs in Pakistan. He further mentioned that Pakistan had also requested China to establish two model industrial zones, which China would develop on a priority basis.

The meeting directed the Board of Investment (BOI) to finalize land availability for the development of SEZs in Islamabad. Additionally, the Power Division and PESCO were instructed to activate the internal network of the Rashkai Special Economic Zone and ensure the provision of electricity to meet its current requirements.

Tax Exemption Policy for Gwadar

Regarding the tax exemption policy for Gwadar, the Federal Board of Revenue (FBR) clarified that under the Finance Act, China Overseas Port Holding Company (COPHC) and other businesses operating in free zones are entitled to tax holidays and related incentives.

A statement said that relevant notifications have already been issued, confirming that SEZ enterprises operating in Gwadar are exempt from turnover tax. The notification was immediately shared with the Chinese side.