Jago Times "English Edition" Best Online Newspaper
ISLAMABAD: Talks with Saudi Arabia on the sale of stakes in the multibillion-dollar Reko Diq gold and copper mine will begin soon, the head of the Planning Commission said on Tuesday, as a share-price evaluation of the project is now complete.
Talking to the media, Dr Jehanzeb Khan stressed that the $70 billion foreign direct investment anticipated through the Special Investment Facilitation Council (SIFC), a high-level civil-military collaborative body, is based on real offers from friendly countries.
However, he stressed that the inflows would now depend on the emerging Gaza crisis and the ability of the authorities to provide an enabling environment.
“This ($70bn investment) was not an abstract number,” said Dr Khan, who is also the secretary to the SIFC’s apex committee.
This was the first official confirmation of the targeted $70bn investment from friendly countries under the SIFC, although there had previously been unattributed reports about the ambitious figure.
Dr Khan, speaking at the SIFC’s first media briefing since its inception in June, revealed Saudi Arabia’s proactive investment interests in Pakistan. These were initially discussed in the context of Islamabad’s efforts to increase foreign exchange inflows as part of negotiations with the IMF. Saudi Arabia has expressed its intention to set up a $25 billion fund to channel investment in Pakistan.
He said the Saudis would invest through that wealth fund and their advisers were now looking into possible investments.
“It is now our responsibility to create a conducive environment. They have sought relevant ingredients and we are now working on that,” he said, adding that a greenfield refining policy had been approved and shared with Saudi Arabia and its advisers were looking into that.
He said there had been interactions with other investor groups as well, including from Turkiye, Japan, Qatar and Sweden, which had created a lot of goodwill, but it would now “depend on our ability and capacity to materialise the $70bn investment”.
Likewise, internationally reputed consultants had been appointed to outsource airports, while tariffs had also been determined by the regulator for a solar substitution programme for which bidding was currently in process.
He said that since every project had its own gestation period, the investment pipeline would take time to materialise.
Dr Khan said the Saudi side had shown interest in mineral deposits and Pakistan wanted to offer them an exploration block adjacent to Reko Diq.
However, since the Saudis wanted first to become a part of Reko Diq and then expand elsewhere, the government was now looking to transfer 50pc shares each of Canada’s Barrick Gold Corporation and Pakistan’s entities through a transparent process.
He said Pakistan had appointed reputed international consultants to evaluate the share price of the Reko Diq copper and gold mine with a Dec 25 deadline.
“The advisers have completed their task ahead of time and the report is now with us,” Dr Khan said. “Soon talks will begin as to what are their (Saudis’) expectations and what we can offer.”
Barrick Gold Corp, which owns a 50pc stake in the mine, considers it one of the world’s largest underdeveloped copper-gold areas. The remaining 50pc of the mine is held by the governments of Pakistan and Balochistan.
Barrick Gold previously expressed unwillingness to dilute its stakes in Reko Diq but said it would have no problem taking in Saudi investment through the government of Pakistan’s shareholding.
However, Dr Khan said both sides would hopefully reduce their stakes to rope in Saudi Arabia and ensure no one was in the minority.
“But this is commercial discussion,” he said, adding that advisers from both sides would discuss the matter and see what comes out.
He emphasised that it was a collective decision that there would not be distressed sale of assets, whether it was PIA, airports or any other item. That would also apply to the signing of bilateral investment treaties or free trade agreements for which international advisers would help to secure the fair value of assets and hedge future interest.
Dr Khan said Saudis had also acquired immense technological knowledge in agriculture, including heat-tolerant and water-resistant seeds because of water shortages in that country. Therefore, Pakistan could greatly benefit from Saudi Arabia’s experience and interest in agriculture, he said.
Responding to a question, Dr Jehanzeb Khan said Punjab had 70,000 to 80,000 acres of prime agricultural land that it had been unable to benefit from and thus entered into an agreement with armed forces, which had developed agriculture capacity that would bring better management practices. Due diligence on this was in progress, he said.
To another question, he said Pakistan was committed to the China-Pakistan Economic Corridor (CPEC) — an initiative that would last until 2030, although there had been problems faced by the Chinese side relating to payments against power plants and the Multan-Sukkur Motorway. He said China was a friendly nation, but no investor would do business for a loss.
On the SIFC’s creation, Dr Khan said the country’s governance and administrative structure had become dysfunctional to the extent that decisions once made by respective joint secretaries now reached the prime minister level.
He hoped the political transition would not affect the thrust of the SIFC, given that it was created by the Pakistan Democratic Movement’s coalition partners and enjoyed the institutional support of the military, meaning that a realisation was there at all levels.
Even the previous PTI-led coalition had also created a National Development Council on the same lines with the military’s support, although it could not take off after a couple of sessions.
Besides, the SIFC had been given the protection of the law that would stay in times to come.