Conclusion of 9th Session of Pak-Saudi Arabia JMC

‘Saudi Arabia awaiting approval of GCC for FTA’

* KSA minister says decision on Pakistan’s request on $131m financial assistance for NJHP to be taken by Saudi Fund for Development

ISLAMABAD: Kingdom of Saudi Arabia’s Minister for Commerce and Industry Tawfiq bin Fawzan Al-Rabeea said here on Wednesday that Saudi Arabia is in favor of Free Trade Agreement (FTA) with Pakistan, but is waiting approval of the Gulf Cooperation Council for initiating this process.

He said this while replying to questions of the media at the conclusion of the 9th Session of Pak-Saudi Arabia Joint Ministerial Commission (JMC) that was held in Islamabad.

Pakistan and Saudi Arabia agreed to enhance bilateral economic and trade relations and decided to hold next meeting of JMC in March 2013 for taking important decisions on number of ideas.

Replying to a question on possibility of provision of crude oil on deferred payment, the Saudi minister informed that it’s a matter between oil companies. However, he informed that decision on Pakistan’s request on $131 million financial assistance for Neelam-Jhelum Hydropower Project (NJHP) is to be taken by Saudi Fund for Development, which is already assisting Pakistan on this project.

He also informed the media that there are good opportunities for investment in agriculture and other sector and Saudi companies to explore possibilities of joint ventures. The Saudi minister informed that bilateral trade between the two countries stands at $18 billion riyals and there is wide scope for its increase. He also informed that one million Pakistanis are playing their role in development of Saudi Arabia and his country would provide more white collar job opportunities in future.

Senior Minister for Commerce Makhdoom Amin Fahim led Pakistan delegation whereas the Saudi delegation was led by Al-Rabeea. The delegation comprising various senior officials arrived in Islamabad on September 24, 2012 and evaluated the progress of the decisions taken during the 8th Session of Pak-Saudi JMC held in Riyadh in 2007.

During the technical discussions held in Islamabad, delegates from both countries presented various proposals to enhance bilateral trade and industrial development, joint ventures, promotion of banking, investment and energy. Besides, discussion regarding export of labour to Saudi Arabia and exchange of youth delegations were also held.

Main decisions taken in the JMC were resumption of talks on the draft agreement for promotion and protection of investments in both countries. Facilitating necessary entry visas for businessmen in order to boost the trade and investment activity in both countries. Invitation to Saudi investors to invest in hydropower projects. Exploring the possibility of entering into industrial cooperation including joint ventures in agriculture, light and heavy industry and petroleum sector. Development of Small and Medium Enterprises (SMEs) in Saudi Arabia to uplift this important sector of economy. Initiating contacts between pharmaceutical and textile companies of both countries to explore areas of mutual interest and cooperation and collaboration in the insurance and financial sectors. Early signing of agreement on security cooperation and Memorandum of Understanding on drug smuggling.

Al-Rabeea, the leader of the Saudi delegation also made important official calls upon Pakistani leadership and discussed matters of mutual interest and regional importance.

Saudi Fund for Development (SFD) had pledged $81 million for the project and so far $30 million have been disbursed for the vital project. Similarly, Kuwait Fund for Development had also pledged $42 million. OPEC had promised $50 million for the project and so far has disbursed $31 million. Islamic Development Bank had pledged $137 million and $220 million separately for the project and Pakistan has so far received $30 million and $60 million, respectively from both loans.

He informed that so far expenditure or claims against work on the project have been recorded at Rs 56 billion and government has paid to the contractors Rs 49 billion and Rs 7 billion shortfall in payment is faced by the authorities. This additional Rs 7 billion payment is due to escalation in the cost of the project that would have to be met. Chinese construction firm has already served a notice for clearance of the said amount for continuity of their work and this payment would have to be arranged. The Water and Power Development Authority (WAPDA) has paid Rs 5 billion for the project and has been requested for Rs 10 billion loan for the project.

He dispelled the impression that there is disruption in work due to security reasons and said that the project site is free from such kind of difficulties. He also informed that tunnel rig would start functioning from October 15 against its precious schedule. staff report

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