The federal government of Pakistan has announced a transformative initiative to develop a Special Economic Zone (SEZ) on the land of Pakistan Steel Mills(PSM) in a two-phase project
This model ensures a structured yet dynamic investment framework, making it easier for businesses to establish operations within the SEZ. The eligibility criteria for investors will be stringent to ensure credible and high-impact industrial activities.
In a recent Apex Committee meeting of the Special Investment Facilitation Council (SIFC), Sindh Chief Minister Murad Ali Shah confirmed that the Sindh Provincial Cabinet has approved the change in the purpose of 4,875 acres of Pakistan Steel Mills(PSM) land. This change allows its utilization for general industrial purposes.
Phase 1: Karachi Industrial Park Development (1,534 Acres)
- Area Covered: 1,534 acres of KIP land.
- Completion Date: Expected by December 2025.
- Budget: Estimated at Rs 30 billion.
- Funding Source: Public Sector Development Program (PSDP).
- Development Start Date: February 15, 2025.
Phase 2: Pakistan Steel Mills Land Development (4,875 Acres)
- Area Covered: 4,875 acres of PSM land.
- Completion Date: Expected by June 2027.
- Implementation Strategy: The Ministry of Industries and Production will process PC-1 approval to initiate the development process.
- Funding Strategy: The Ministry of Planning and the Ministry of Finance will prioritize the necessary financial allocations to meet project deadlines.
To optimize land utilization and attract strategic investments, the Board of Investment (BoI) will explore a Government-to-Government (G2G) model for the remaining land. This could involve engaging an international developer through PSDP funding, ensuring robust infrastructure and global industrial standards.
Strategic Partnerships and Policy Framework
Several key stakeholders will be involved in finalizing a comprehensive land lease and licensing model to facilitate seamless industrialization. The following authorities will collaborate:
- Ministry of Investment
- Ministry of Industries and Production
- Chief Ministers
- Board of Investment (BoI)
- Provincial Chief Secretaries
This model will be in accordance with Section 16(1)(c) of the SEZ Act, ensuring that the land lease structure remains investor-friendly and aligned with national economic priorities.
To make the SEZs more attractive, a proposed land lease/licensing model has been designed with the following features:
- Cost: $10,000 per acre per year.
- No Additional Costs or Security Deposits: This reduces upfront investment hurdles for industrialists.
- Lease Duration: Initially 30 years, extendable as per investor requirements.
- Available Land: The model applies to seven partially optimized SEZs and one undeveloped SEZ.
The Board of Investment (BoI), in consultation with provincial authorities, will finalize the tailored land lease model to accommodate investor preferences. This proposal will be submitted to the Board of Approvals by February 15, 2025, ensuring a seamless regulatory process.
