According to Yu Bo, the new chairman of China Overseas Port Holding Company (COPHC), Gwadar Free Zones are going to transform into “Export Industrial Parks”.
In an interview with Gwadar Pro, Yu explained how Gwadar Port and Free Zones’ policy framework and guiding principles were created with the geo-economic significance for trans-shipment in mind. The incentives provided to investors, particularly those who intend to undertake manufacturing businesses, are exempted from all sorts of provincial taxes, federal taxes, and custom duties.
Yu added that the cost of production in Gwadar Free Zones is much lower than in the tariff area, resulting in products becoming more affordable and competitive in the international market.
To ensure that all utility facilities, including power and water, are provided to its investors, COPHC is working on power and water projects. There are two desalination plants that are already established, and a Chinese-funded 1.2 MGD desalination water plant is in its final stage of completion.
However, Bo also acknowledged that security precariousness and high costs of electricity generated with diesel-generators are the main obstacles hindering the development of Gwadar Port and Free Economic Zone. Chinese companies in Gwadar have requested permission to settle in Chinese currency Yuan instead of US dollar to alleviate the issue of Pakistan currency devaluation.
Bo mentioned that the government of Pakistan has established a Special Security Division (SSD) within the Pakistan Army to provide additional security to projects in Gwadar associated with the China-Pakistan Economic Corridor, and that policies to investment are being improved.
As of now, there are 35 companies registered in the Free Zone South, with nine in full operation, ranging from service industry to fertiliser, metal processing, and food processing. Bo’s remarks highlight the potential of Gwadar Port and Gwadar Free Zones to attract investment from Pakistan and beyond.?