Century Steel Group, a Chinese steel producer, has issued a final warning to the Pakistani government to resolve longstanding issues at the Rashakai Special Economic Zone (RSEZ) in Khyber Pakhtunkhwa. Failure to address these concerns will result in the company dismantling its plant and exiting Pakistan, the company announced in a letter to Prime Minister Shehbaz Sharif.
Unfulfilled Promises and Financial Losses
The company’s CEO, Li Chunjian, expressed frustration over unresolved challenges despite a $30 million investment in the first phase of their steel project. These issues have led to losses amounting to $7.5 million in staff and maintenance expenses over five years.
The project, part of the China-Pakistan Economic Corridor (CPEC) initiative, was intended to become Pakistan’s largest steel mill, with plans to produce 500,000 tonnes of steel annually in its initial phase.
Ambitious Plans Now at Risk
Century Steel had aimed to invest an additional $200 million to expand operations in two more phases, transferring advanced steel technology from China. The final capacity was projected to reach 1.5 million tonnes, contributing significantly to Pakistan’s GDP, job creation, and regional steel exports.
Government’s Response
In response to the ultimatum, Prime Minister Shehbaz Sharif has formed a committee led by Federal Minister Abdul Aleem Khan to address the company’s complaints. This committee comprises members from both the federal and Khyber Pakhtunkhwa governments.
However, despite assurances, Century Steel stated that prolonged inaction has forced them to consider notifying the Chinese embassy and international press about the situation.
The Bigger Picture
Century Steel’s potential withdrawal signals challenges in attracting and retaining foreign investment in Pakistan. The outcome of this dispute could impact future collaborations under CPEC and Pakistan’s economic growth trajectory.
This ultimatum serves as a wake-up call for policymakers to urgently address concerns and uphold commitments to foreign investors.