The Dhabeji Industrial Zone project has run into difficulties

The Dhabeji Industrial Zone project has run into difficulties. The newly awarded contract for the Dhabeji Industrial Zone (DIZ) project, part of the China-Pakistan Economic Corridor (CPEC), has been held following a legal challenge.

On Monday (today), the Sindh High Court will hear a case alleging that the contract was awarded in violation of SEZ guidelines.

According to the provincial government, because DIZ has not yet been granted SEZ status, the rules governing special economic zones do not apply to it. Additionally, the CPEC Authority submitted a formal declaration to the high court expressing satisfaction with the bidding process and asserting that no impropriety occurred in the contract award.

However, according to a document from the Sindh Economic Zones Management Company (SEZMC) (SEZ), the DIZ will be deemed a special economic zone.

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The multibillion-dollar DIZ, which will be created through a public-private partnership between the winning bidder Zahir Khan & Brothers (ZKB) and the Sindh government, is a component of CPEC and may eventually be designated as a special economic zone.

The 1,500-acre project is being implemented jointly by the Centre, Sindh government, and CPEC Authority with the goal of transforming it into a hub for key economic activities in the province.

In February of this year, the Sindh government invited bids for the project. However, one of the bids was ruled ‘technically unsuitable’ following a two-month examination. The provincial government then conducted a re-bid process, with ZKB emerging victorious. The government then issued a Letter of Award (LoA) to the successful enterprise.

However, the contract award was contested before the court on Nov 29. (today).

Earlier this month, during a meeting, Prime Minister Imran Khan expressed the hope that all economic zones, including Dhabeji Industrial Zone, would be completed and economic activity begin as soon as possible.

He, however, lashed out at the Sindh administration for the province’s poor rate of development.

When questioned, Sindh government spokesman Saeed Ghani stated that he was not completely aware of the facts of the project but believed there was nothing improper with the contract’s award.

Meanwhile, a top SEZMC official stated that the provincial government ensured openness and fairness in the award process by quoting Rs16.25 billion for the winner bidder and Rs13.75 billion for the second lowest bidder.

He stated that the project will create Rs32 billion in revenue and that the successful bidder would be required to pay the province government Rs16 billion over the next five to seven years. The remainder would be paid to the provincial government through the sale of economic zone plots, he added.

According to the official, the DIZ, like 17 other industrial zones in the country, had not yet been granted SEZ status, but the province government will seek for it later.

“The Allama Iqbal Economic Zone in Lahore was founded in 2006 but did not receive SEZ status until 2016,” he explained, noting that economic zones do not always receive SEZ status.

Unfortunately, the official stated, the court had been deceived by the petitioner, who claimed that the laws governing SEZs had not been followed in awarding the contract for the DIZ.

Meanwhile, it has been learned that the DIZ project is being delayed owing to litigation, since the selected bidder has yet to sign the agreement with the Sindh government, even a month after the LoA was issued.

The selected firm will design, finance, construct, run, and maintain DIZ on a build, own, operate, and transfer basis.

The DIZ is located on the N-5 National Highway, near the Bin Qasim and Karachi ports, and approximately 700 kilometers from Gwadar Port, which connects Central Asia, the Middle East, Europe, and Africa. The DIZ will contain 130 heavy, 145 medium, and 211 light businesses, 82 warehouses, commercial and office space, grid stations, highways, lanes, mosques, and recreation places, as well as a captive power production facility and PTCL/SSGC/K-Electric intake points, according to the layout design.

The Dhabeji Industrial Zone project has run into difficulties.

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