Federal govt agrees to pay 15% share of Balochistan for Phase-II financing of Reko Diq project

The federal government has agreed to cover Balochistan’s 15% paid equity share to ensure financing for the second phase of the Reko Diq project, following discussions between a delegation led by Petroleum Minister Ali Pervaiz Malik and a team led by Balochistan Chief Minister Sarfraz Bugti.

As per media reports, the meeting, which took place in Quetta, focused on resolving issues related to the province’s share in the project, tax exemptions, and other pressing concerns.

The Economic Coordination Committee (ECC) had recently approved proposals regarding the Reko Diq project, which are being negotiated with relevant parties and investors. 

Malik assured the provincial government that the federal government would finance Phase-II of the project according to the agreed-upon criteria between the Centre and Balochistan, further solidifying the partnership. The federal government confirmed that it would pay the 15% share (paid equity) of Balochistan to ensure Phase-II financing. This agreement is awaiting approval from the provincial cabinet, which is expected to give its consent soon.

Bugti led a provincial delegation that presented several demands, including a one-time amnesty for the registration of boats. The federal government committed to facilitating this by providing a list of approximately 6,000 boats, with tax exemptions to be granted by the Federal Board of Revenue (FBR) following cabinet approval. The Ministry of Maritime Affairs (MoMA) was tasked with processing the case.

A significant issue raised during the discussions was the illegal fishing practices by large trawlers from Sindh in Balochistan’s territorial waters. The provincial government estimated that Rs200 billion worth of illegal fishing occurs annually, despite the efforts of multiple federal agencies to regulate the sector. 

The meeting decided that the Prime Minister’s Office would coordinate consultations between various federal agencies to address the issue and create a coordinated enforcement mechanism.

Another key topic was the full operationalisation of Gwadar Port, with the provincial government proposing the diversion of Afghan Transit Trade to Gwadar. 

The Ministry of Commerce was tasked with developing a strategy, while the Ministry of Planning, Development, and Special Initiatives was asked to integrate the proposal into the port’s operational plans.

On the matter of Saindak Metal Limited, Balochistan’s 60% share of net brackly newss has been withheld for the last two years, accumulating arrears of approximately Rs3 billion. 

The federal government agreed to release the overdue payments, and a revised financial model for the lease renewal was to be presented, ensuring the province’s continued involvement in the project.

Additionally, the issue of Balochistan’s shareholding in Balochistan Mineral Exploration Company (BMEC) was raised. The federal government owns 10% of BMEC through the Pakistan Mineral Development Company (PMDC), but this small share has caused decision-making delays. 

The federal government agreed to transfer its share to the provincial government to expedite the process, with PMDC’s shareholding being further reduced.

The meeting also discussed Balochistan’s share of 2.5% in the Margand Block and Block 28(North). The provincial government requested a relaxation of rules to secure their share, and it was agreed that necessary steps would be taken.

Finally, the issue of Jandran Block payments was addressed, with the federal government stating that an offer had been made in 2014, but no response from the Balochistan government led to the expiration of the offer. 

However, the provincial government’s request for a one-time relaxation was considered, ensuring that the province’s share would be maintained for future transactions.