Islamabad Capital Territory

Islamabad | ReNews Pakistan Federal Board Approves SEZ Status for 6,409-Acre Karachi Industrial Park The project will use Pakistan Steel Mills land near Port Qasim to attract manufacturing investment, but t Islamabad | ReNews Pakistan The federal government has approved Special Economic Zone (SEZ) status for the 6,409-acre Karachi Industrial Park (KIP), planned on Pakistan Steel Mills land near Port Qasim. The decision gives the project a formal investment framework, while its development will depend on the provision of infrastructure and the arrival of investors. The Board of Approvals for Special Economic Zones approved the application at its 11th meeting on October 23, 2026. Finance Minister Senator Muhammad Aurangzeb chaired the meeting. The government aims to attract local and foreign manufacturers to the site, with a focus on export-oriented production, value addition, technology transfer and employment. Its location near Port Qasim could support access to shipping routes and imported inputs. The immediate challenge is turning the designation into an operational industrial estate. The approval announcement did not specify a construction schedule, utility delivery dates, financing arrangements for the full site or confirmed investors. Earlier planning envisaged development in phases. The initial concept covered 1,500 acres, while a 500-acre block—estimated to cost Rs 7.40 billion—was approved by the Central Development Working Party in February 2025. The latest SEZ decision covers the wider 6,409-acre area; it does not, by itself, establish that the entire site is ready for development. At the same meeting, the board approved general criteria for government-funded provision of essential infrastructure to eligible privately developed SEZs. Under the Special Economic Zones Act, 2012, support may include roads, electricity, gas and water up to a zone’s designated zero point, subject to case-by-case consideration. The board also approved a land lease policy for public-sector SEZs and industrial estates in Punjab. The policy is intended to lower upfront land costs and encourage longer-term industrial investment. The Special Investment Facilitation Council has supported the Karachi project as part of broader investment and industrial development efforts. The Finance Ministry’s announcement, however, did not identify direct IMF financing or a specific IMF investment approval for the park. The project’s progress will therefore hinge on implementation: infrastructure delivery, clear land and lease arrangements, investor commitments and a predictable policy framework.

Islamabad | ReNews Pakistan

Pakistan will require approximately US$18 billion, equivalent to around Rs 5 trillion, in federal financing over the next decade to develop strategic water infrastructure, improve irrigation efficiency and strengthen protection against floods, according to a new Planning Commission report.

The National Water Security Framework, prepared under the URAAN Pakistan initiative, outlines major reforms in reservoir development, irrigation management, groundwater regulation and flood protection to address the country's growing water security challenges.

The report sets a target of increasing water-use efficiency from the existing 40% to 70% by 2029. It also aims to raise water availability at farm gates from 58.3 million acre-feet (MAF) to 79 MAF during the same period.

According to the Planning Commission, Pakistan's current usable water storage capacity stands at approximately 15.318 MAF, which the government aims to increase to 23.54 MAF by 2029.

The report warns that existing live storage capacity represents only about 11% of the annual flow of the Indus River system, leaving the country vulnerable to seasonal water shortages and extreme weather events.

Ongoing projects under the Public Sector Development Programme (PSDP) are expected to add approximately 9.821 MAF of water storage capacity.

Meanwhile, proposed strategic projects, including the Akhori Off-Channel Storage Dam, Shyok Dam and Skardu Dam, could collectively provide another 14.5 MAF of storage capacity.

The Planning Commission estimates that approximately US$18 billion in federal financing will be required over the next ten years for major reservoirs, flood management infrastructure, canal modernisation and other strategic water development projects.

To improve transparency and accountability in water distribution, the report proposes establishing a Water System Integrator function under the Indus River System Authority (IRSA).

The proposed system would strengthen monitoring and coordination of water allocation from rivers through irrigation networks to agricultural fields.

Agriculture accounts for approximately 95% of Pakistan's freshwater withdrawals, while overall irrigation water-use efficiency remains around 40%.

The framework recommends accelerating the adoption of drip and sprinkler irrigation systems through financial incentives, reforming irrigation water charges, commonly known as abiana, and adjusting cropping patterns to improve water productivity.

It also identifies approximately 20.58 million acres of potentially suitable agricultural land outside the formal irrigation network, highlighting opportunities to expand agricultural production if adequate water and infrastructure become available.

Groundwater depletion is another major concern identified in the report.

According to the Planning Commission, groundwater levels in Punjab are declining by approximately 0.5 to one metre annually, while the Indus Basin Aquifer has been identified as the world's second most overstressed groundwater system.

The report warns that the increasing use of solar-powered agricultural tube wells may accelerate groundwater extraction because the additional energy cost of pumping water is extremely low.

It recommends linking subsidies for solar-powered tube wells to groundwater registration and sustainable extraction limits to discourage excessive pumping.

Flood preparedness also features prominently in the proposed reforms.

The report highlights a sharp reduction in flood early-warning time at Marala Headworks, from approximately 40 hours in 2014 to just 5.5 hours in 2025.

To address increasing flood risks, the Planning Commission recommends implementing the National Flood Protection Plan-IV, introducing national legislation for glacier protection and monitoring, and updating flood protection designs using the latest hydrological data.

The framework also proposes recycling at least 25% of urban wastewater to reduce pressure on freshwater resources.

According to the report, approximately 53% of monitored urban water sources were found unsafe for human consumption, underscoring the need for improved water treatment and sanitation infrastructure.

The Planning Commission has recommended treating water security as part of Pakistan's national security agenda, emphasising that water scarcity, declining groundwater reserves and climate-related disasters require coordinated national action.

The report concludes that achieving the 2029 targets will depend on sustained investment, stronger institutional coordination, regulatory reforms and efficient management of available water resources.

However, the estimated Rs 5 trillion represents a projected federal financing requirement over the next decade rather than funding already approved or fully secured.