A game-changing bomb – Journal
NOW here’s something fun. Do you remember this vast project that the Minister of Maritime Affairs, Ali Zaidi, announced at the end of September? It was called the Karachi Coastal Comprehensive Development Zone (KCCDZ) and would “reorganize” nearly 1,581 acres of land in Karachi that is owned by the Karachi Port Trust (KPT) into a kind of “state-of-the-art” coastal development. community.
In bombastic language, Zaidi described the project as “something massive”, a “monumental decision” which would place Karachi “among the first port cities in the world”. Other members of the government quickly followed suit, not to be outdone at the time of the triumph.
The next day, no less than Imran Khan himself described the KCCDZ as a “game changer”. He tweeted that he will “clean up [sic] our marine habitat for fishermen, develop 20,000 low-income housing units and present opportunities for investors. Will put Khi at the same level as the developed port cities ”.
A day earlier Zulfi Bukhari of Ring Road fame also jumped on the bandwagon, congratulating the minister. “To build megaprojects, it takes a lot of persistence,” he said via his social media accounts, before listing anything that would be built under the name of the project.
The congratulations went on and on. A map was also released showing a sparkling city built on what was described as a swamp, a city that looked like Singapore or Hong Kong. Half a million people are expected to be relocated from Machhar settlement in Karachi, it has been said, while “low-rent housing” will be built for millions of people in the process. It was a “game changer”, it was “historic”, it was “massive”, it “would put Khi on the same level as the developed port cities”.
“And the best thing about this project is that it is only based on [Chinese] investment without any loans, ”Zaidi told Dawn. “The Chinese work so fast and I guess it wouldn’t take more than five or six years to complete the project.” According to its press release, “the amount of expected investment is $ 3.5 billion” while the project “also carries enormous potential for global investors.”
They have nothing more than a memorandum of understanding to “seek commitment” to conduct a series of feasibility studies.
Oddly enough, the minister refused to release a copy of the memorandum of understanding signed between the KPT and the China Road and Bridge Corporation which is supposed to execute the project. All we were told is that the Chinese agreed to include the project under the umbrella of CPEC at the 10th meeting of the Joint Cooperation Committee (JCC) held on September 23.
A glance at the MoU itself shows why he was reluctant to share a copy. Here is what was actually agreed: “The objective of this memorandum of understanding is to seek the commitment of the [CRBC] to deliver a commercial, technical and financial feasibility study of the “Project” of [KPT]. “
So let’s stop here for a moment to understand what it was about. Two parties sat down and agreed that they would “seek engagement” from one of them to carry out a series of feasibility studies on a project. That’s it. This means that it is an agreement to hold discussions about obtaining a commitment from a group to do a series of feasibilities on a project.
In the past, for example, when a joint feasibility study was approved for the ML-1 and Havelian Dry Port project, the Chinese expected the Pakistanis to pay for the study itself. “The Committee appreciates Pakistan’s commitment to provide full financial support for the joint feasibility study,” said the minutes of the 3rd CCM meeting, held in Beijing on August 14, 2014, during which it It was agreed to carry out this study to advance the ML-1 project.
So let’s ask the minister some basic questions. Has it been decided who will pay for these feasibility studies? What is the cost? Has the consent of the government of Sindh been obtained to undertake such a massive displacement of people in the city of Karachi? Does the law under which KPT owns the land in question allow it to use it for purposes other than operating a port? Has legal advice been taken on this issue? How will the Chinese get back the supposed $ 3.5 billion that you claim they will invest in the project, port operations alone, or other commercial activities on the same land? And where does this $ 3.5 billion figure come from?
Read more: Slow pace of work on CPEC annoys Chinese companies
The Memorandum of Understanding states that “KPT hereby agrees to process this Memorandum of Understanding in accordance with all existing codal procedures and formalities, laws, rules and regulations” of the Federal Government. Is the minister aware of everything that is included in this language?
The short version of the story here is that all the elation was for naught after all. They have nothing more than a memorandum of understanding to “seek to commit” to a series of feasibility studies. If you add up the number of MoUs that have been signed with the Chinese over the past decade, you will get an idea of the value of these things. If you only look at the MoUs signed under the umbrella of CPEC, you will have a similar feeling. Every few months we hear a minister or some other announce that the ML-1 project is now ready for launch and that all approvals have been obtained. What they don’t tell you is that the approvals in question are only for those required from the Pakistani government. The Chinese are not investing the $ 8 billion (approximately) in this project as a gift. They want this money back, and the terms of the investment make it prohibitive for Pakistan.
This is the way it is – bombastic announcements are followed by loud cheers and mutual congratulations, only to make things fade. It only takes a glance to deflate those hot air balloons that we float from time to time, mostly to distract us from the global political failures that are the ultimate legacy of this batch.
The writer is a business and economics journalist.
Posted in Dawn, le 14 October 2021