In the end it will be detrimental to the project
CPEC remained at the forefront during the past few week in Davos where in various meetings prime minister Shahid Khaqan Abbasi hailed it a success and game changer with the “results already coming in”. At home however a different conversation over the project was taking place particularly in the Senate.
Questions were raised concerning the huge tax holiday granted to a Chinese company that would be exempt from federal excise duty and sales tax on imported materials and goods for the Karachi-Peshawar Motorway. The exemption will amount to around Rs11 billion.
That it was done through an SRO – already considered a controversial method to pass tax law – means that it was not necessary to have a debate on it in the parliament. The ECC passed the SRO which in itself is against the law as only the federal cabinet can approve such exemptions.
What makes it more controversial is that the exemption is for one particular company. Passing the buck to the ministry of communication; Minister of State for Finance Rana Muhammad Afzal stated that a summary for the SRO had originally been passed by the former and the ECC merely complied.
Legitimate concern was expressed in the lower house last year as well when it was revealed that 91% of the revenue form Gwadar port would be given to the Chinese for the first 40 years after the port became operational. Details of this one sided deal had not been shared earlier let alone a debate on it allowed to take place.
Unfortunately it has become a habit of this government to disclose the minimum possible amount of information regarding CPEC. Vital details on the structure of financing for its many infrastructure projects remain vague.
When asked valid questions by other stakeholders the government goes on the defensive. Ahsan Iqbal, the chief spokesperson for CPEC as the Minister for Development and Reforms gets frustrated over how ‘every detail of CPEC is made controversial.’
Perhaps he is still unable to understand that as long as the government continues with its policy of secrecy around the national project it will continue facing such questions which, only delays progress on this massive undertaking.
