Russia invited to invest in PSM, railways, oil & gas sector

ISLAMABAD: Pakistan has invited Russia to invest in Pakistan Steel Mills, Pakistan Railways (PR), and the oil and gas exploration activities in a joint venture with Oil and Gas Development Company Limited (OGDC) under proposed Bilateral Investment Treaty (BIT), Business Recorder has learnt.

The two countries are expected to make some progress during the upcoming visit of President Asif Ali Zardari to Russia in the second week of next month. The two sides may enter into agreements on co-operation in bilateral investments, banking sector, rail and communication networks.

Minister of State for Finance and Economic Affairs Division (EAD) Hina Rabbani Khar along with Commerce Secretary tabled proposals for BIT, Preferential Trade Agreement (PTA), avoidance of double taxation agreement and Free Trade Agreement (FTA) in a meeting of Pak-Russia Inter-Governmental Commission (IGC) held on Tuesday in Russia.

Two-member Pakistan delegation also raised the issue of $100 million outstanding refund claims of Pakistani exporters which were pending since disintegration of Russia after Afghan war. Sources said that the two countries had entered into an ‘Agreement on exporters refund claims’ but Russia has yet to make payments in this regard.

During the IGC meeting, issue of FTA between the two sides was discussed. Russia in March 2006 had approached Pakistan, seeking an increase in the volume of trade between the two countries, and pledged to enter into FTA with Pakistan. Sources said that Pakistan’s Cabinet had approved initiating negotiations to conclude FTA with Russia but Russian authorities’ lack of understanding regarding different clauses of proposed FTA delayed the finalisation of the agreement.

Pakistan-Russia Business Council (PRBC) of FPCCI has studied the opportunities existing in the two countries for enhancing bilateral trade volume and made suggestions to the ministries of textiles, commerce and the TDAP which are as follows: (i) Market access is handicapped by heavy duties and complicated customs procedures and it will be easy to have access to each other’s market by reducing duties on items of special interest under FTA; (ii) Russia may be approached to join the multi-billion-dollar IPI project to transport Iran’s natural gas to India and Pakistan; (iii) A Pakistani bank in Moscow and a Russian bank in Karachi may be set up to promote bilateral trade; (iv) Warehouse and display centres may be set up in potential business centres in Russia to enable Pakistan’s textile to become competitive in the Russian market; (v) Multiple-entry visas be made available to business visitors on both the sides; (vi) Inclusion of private sector in the Pakistan-Russian Joint Ministerial Commission (JMC) meetings; and (vii)Russian investors should be persuaded to participate in the Thar coal project – Brecorder