The Khyber Pakhtunkhwa Economic Zones Development and Management Company (KPEZDMC) is once again in the headlines as its CEO has resigned ahead of the launch of Rashakai Special Economic Zone, the company’s most anticipated project.
Saeed Ahmad, the company’s chief executive officer, sent his resignation from Canada where he had gone on French leave. Ahmad has cited personal and family reasons for the resignation sent to the KP’s secretary of industries last Saturday.
Newsmen reported this as a serious blow to the company ahead of the Rashakai SEZ launch, a joint venture of the KP government and China Road and Bridge Corporation (CRBC) under the China Pakistan Economic Corridor Project (CPEC). Many also questioned how the resignation of the CEO at this crucial time would affect the project.
The company’s board of directors (BOD) dismissed rumours that Ahmad’s resignation would have a negative impact on the project. In a statement, it said that the board had already given acting charge of CEO with full powers to the company’s chief commercial officer, Adil Salahuddin.
The board had passed a resolution on September 3, authorising Adil Salahuddin to hold the charge of acting CEO in the absence of Ahmad. Sources in the company say that Ahmad had applied for ex-Pakistan leave. However, the KP secretary of industries, who is currently the chairman of the company’s BOD, had rejected the application on the grounds that his absence will affect finalisation of agreements of Rashakai SEZ.
KPEZDMC has been mired in many controversies and remained in the headlines since its establishment in 2015 in the previous tenure of Pakistan Tehreek-e-Insaf’s (PTI) government. It was intended to replace the Sarhad Development Authority (SDA) for rapid industrialisation and attracting investment to the militancy-hit province and create job opportunities.
After absorbing the assets of the defunct SDA, KPEZDMC became mired in a management crisis. In July 2017, then CEO Mohsin Syed resigned when the National Accountability Bureau started an inquiry against him in a case in the Punjab. The next month, the company received another blow when the board of directors, in a controversial move, fired two senior executives – chief financial officer and chief human resource officer – citing incompetency. This was bizarre, given that the company had given them performance bonuses only a month before they were expelled. Since then, the company has been in the news for several other controversies and has been criticised in the media.
The provincial government dissolved its board over dismal performance and its private members were replaced with new faces. In January 2018, the government appointed Saeed Ahmad as the new CEO for the company. He became controversial over his dual citizenship and irregularities were reported in his appointment. The NAB also started an inquiry in his appointment and sought records from the company.
Insiders in the company say that the company management and its board have been struggling to achieve targets for which it was established by the government. They referred to the company’s financial and performance audit conducted by the auditor general of Pakistan who had pointed out gross irregularities in its finances from 2015 to 2018.
“Neither the CEO nor the board were moved by the report of the AG office,” said a source close to these developments.
In July 2017, then CEO Mohsin Syed resigned when the National Accountability Bureau started an inquiry against him in a case in the Punjab
Insiders say that the CEO’s resignation was another dent on the company and it was failing to establish itself as a strong and well-managed institution. “Although the resignation will have no impact on the Rashakai project, it will give a negative message to investors regarding the stability of the institute,” an insider said.
The company’s only remarkable achievement in four years would be the realization of the Rashakai SEZ project, which is likely to be launched by the end of October. Rashkai is one of nine SEZs being setup under CPEC and the only one in the province.
The KP government had signed a joint venture agreement with CRBC in November last year in Beijing to execute the project. The Chinese company is likely to put in about US$ 130 million into this project, while the KP government will provide land and utilities in the SEZ which will be built over an area of 1,000 acres along the Islamabad-Peshawar Motorway (M1) in three phases over a period six years.
The KP government is hopeful that this project will generate thousands of jobs in the province.