In a landmark move to accelerate industrialization, the federal government has approved plans to establish a sprawling Special Economic Zone (SEZ) across 6,409 acres of land previously allocated to Pakistan Steel Mills (PSM) and the Karachi Industrial Park (KIP). The project, finalized during a high-stakes meeting of the Special Investment Facilitation Council (SIFC) Apex Committee, aims to transform the region into a global industrial hub through a two-phase development strategy.
Sindh Chief Minister Murad Ali Shah confirmed that the provincial cabinet had greenlit repurposing 4,875 acres of PSM land including 1,675 unmutated acres for industrial use, effective September 2024. The federal Ministry of Industries and Production has been directed to expedite land transfer procedures, merging the PSM and KIP sites into a unified federal SEZ, tentatively named Karachi Industrial Park (Federal SEZ). A formal notification is expected by February 15, 2025.
Phase 1 of the project will focus on developing 1,534 acres of KIP land by December 2025, backed by Rs 30 billion in federal funding under the Public Sector Development Programme (PSDP). Construction is slated to commence by mid-February 2025, pending final approval of the PC-1 proposal. Phase 2, covering the remaining 4,875 acres of PSM land, is targeted for completion by June 2027.
To attract investors, the government introduced a flexible land-use model offering sale, lease, or licensing options. A proposed annual lease rate of $10,000 per acre without additional security deposits aims to enhance affordability. The Board of Investment (BoI), in collaboration with provincial authorities, will finalize a tailored lease framework by February 2025, aligned with Section 16(1)(c) of the SEZ Act.
The Planning and Finance Ministries have pledged to prioritize funding, while SIFC explores a Government-to-Government (G2G) model for undeveloped sections. Stakeholders, including federal ministers and provincial chief secretaries, will design eligibility criteria to ensure rapid industrialization.
This mega-initiative marks a strategic shift toward revitalizing Pakistan’s industrial sector, leveraging underutilized assets to spur economic growth and foreign investment.
