Pakistan to rope in GCC investors for CPEC

In this file photo, Chinese trucks stand on a pontoon during the opening of a trade project in Gwadar port, some 700 kms west of the Pakistani city of Karachi on Nov. 13, 2016. (AAMIR QURESHI/AFP)
Updated 17 September 2018
0

Pakistan to rope in GCC investors for CPEC

  • Chalks out plan with China to overcome current account deficit
  • To offer Arab investors the same incentives as are being extended to Chinese companies

ISLAMABAD: With an eye on strengthening its economy and to overcome the current account deficit, Pakistan’s government said on Monday that it would invite firms from Saudi Arabia, United Arab Emirates and Oman to invest in the prestigious China-Pakistan Economic Corridor (CPEC), a multi-billion dollar project.
Labeled as a “game-changer” for the country, China’s $60 billion investment is expected to develop Pakistan’s infrastructure and overcome energy shortage with the help of new projects under the Belt and Road Initiative (BRI).
“Both Pakistan and China have mutually decided to include a third party in the CPEC projects. And we will definitely seek investment from our friendly Arab countries in the industrial and energy-related projects,” Hasan Daud, Deputy Project Director CPEC, told Arab News.
He said that the initiative was discussed at length during Chinese Foreign Minister Wang Yi’s recent visit to Islamabad. “This is a mutual decision and a framework for it is being worked out,” he said.
At the meeting, both Yi and Foreign Minister Shah Mehmood Qureshi agreed to offer GCC investors the same incentives as would be extended to firms from Pakistan and China. “It is a golden opportunity for our friendly countries especially Saudi Arabia, UAE, Oman and Bahrain to invest in the CPEC projects,” Daud said, adding that they were seeking investment particularly in the “export-led industry to overcome the current account deficit”.
Rebuffing reports of a renegotiation with China on CPEC as “propaganda by detractors”, Daud said the priority was now to work toward developing the social sector, Gwadar port, special economic zones and Pakistan Railways’ main line-1.
Dr. Ashfaque Hassan Khan, member of the government’s Economic Advisory Council, said that a “third-country” was being included to dispel the misconception that “there is no transparency in the CPEC projects.” “Investment from other countries will also help broaden the base of the projects and counter allegations of corruption and fraud in the investment,” Khan told Arab News.
He added that the move would further help share dividends of the BRI and ensure regional peace and development through infrastructure and social sector development. “This is a wise strategy and that’s why both Pakistan and China have agreed to it,” Khan said.
Political analysts, however, were quick to add a caveat.
Reasoning that the move was aimed at countering criticism of the BRI, Professor Tahir Malik — an academic and a political analyst — said that the initiative would help China increase its influence in the region, particularly Pakistan, as Islamabad would not be able to repay the money invested in the country by Beijing.
Malik said that China has been under increasing pressure from the United States and other western countries for its “debt trap diplomacy” in the region and the inclusion of a ‘third-country’ was aimed at increasing its ownership of the CPEC projects. “It will be a big achievement for both Pakistan and China if they succeed in getting a tangible investment in the CPEC-led projects from another country in the given international circumstances,” he told Arab News.


Dubai property developer Damac on hunt for land in Saudi Arabia

Hussain Sajwani
Updated 18 March 2019
0

Dubai property developer Damac on hunt for land in Saudi Arabia

  • Brexit a “concern” for UK property market says Sajwani
  • Developer mulls investing “up to £500 million” on London project

LONDON: The Dubai-listed developer Damac says it is scouting for additional plots of land in Saudi Arabia, both in established cities and the Kingdom’s emerging giga-projects such as Neom.
Hussain Sajwani, chairman of Damac Properties, also said the company would look to invest up to £500 million ($660 million) on a second development in the UK, and that it is on track to deliver a record 7,000 or more units this year.
Amid a slowing property market in Dubai, Damac’s base, the developer is eying Saudi Arabia as a potential ground for expansion for its high-spec residential projects.
Damac has one development in Jeddah, and a twin-tower project in Riyadh — and Sajwani said it is looking for additional plots in the Kingdom.
“It’s a big market. It is changing, it is opening up, so we see a potential there … We are looking,” he said.
“In the Middle East, Saudi Arabia is the biggest economy … They have some very ambitious projects, like the Neom city and other large projects. We’re watching those and studying them very carefully.”
The $500 billion Neom project, which was announced in 2017, is set to be a huge economic zone with residential, commercial and tourist facilities on the Red Sea coast.
Sajwani said doing business in Saudi Arabia was “a bit more difficult or complicated” that the UAE, but said the country is opening up, citing moves to allow women to drive and reopen cinemas.
He was speaking to Arab News in Damac’s London sales office, opposite the Harrods department store in Knightsbridge. The office, kitted out in plush Versace furnishings, is selling units at Damac’s first development in the UK, the Damac Tower Nine Elms London.
The 50-storey development is in a new urban district south of the River Thames, which is also home to the US Embassy and the famous Battersea Power Station, which is being redeveloped as a residential and commercial property.
Work on Damac's tower is underway and is due to complete in late 2020 or early 2021, Sajwani said.
“We have sold more than 60 percent of the project,” he said. “It’s very mixed, we have (buyers) from the UK, from Asia, the Middle East.”
Damac’s first London project was launched in 2015, the year before the referendum on the UK exiting the EU — the result of which has had a knock-on effect on the London property market.
“Definitely Brexit has cause a lot of concern, people are not clear where the situation will go. Overall, the market has suffered because of Brexit,” Sajwani said.
“It’s going to be difficult for the coming two years at least … unless (the UK decides) to stay in the EU.”
Despite the ongoing uncertainty over Brexit, Sajwani said Damac was looking for additional plots of land in London, both in the “golden triangle” — the pricey areas of Mayfair, Belgravia and Knightsbridge, which are popular with Gulf investors — and new residential districts like Nine Elms.
Sajwani is considering an investment of “up to £500 million” on a new project in the UK capital.
“We are looking aggressively, and spending a lot of time … finding other opportunities,” he said. “Our appetite for London is there.”
Damac is also considering other international property markets for expansion, including parts of Europe and North American cities like Toronto, Boston, New York and Miami, Sajwani said.
The international drive by Damac comes, however, amid a tough property market in the developer’s home market of Dubai.
Damac in February reported that its 2018 profits fell by nearly 60 percent, with its fourth-quarter profit tumbling by 87 percent, according to Reuters calculations.
Sajwani — whose company attracted headlines for its partnership with the Trump Organization for two golf courses in Dubai — does not see any immediate recovery in the emirate’s property market, or Damac’s financial results.
“(With) the market being soft, prices being under pressure, we are part of the market — we are not going to do better than last year,” he said. “This year and next year are going to be difficult years. But it’s a great opportunity for the buyers.”
But the developer said Dubai was “very strong fundamentally,” citing factors like its advanced infrastructure, safety and security, and low taxes.
In 2018, Damac delivered over 4,100 units — a record for the company — and this year, despite the difficult market, it plans to hand over even more.
“We’re expecting north of 7,000,” Sajwani said. “This year will be another record.”