Surbana Jurong unit bags new projects

PAKISTAN offers immense new business opportunities for companies looking to expand their operations overseas. A Singapore business that has been successfully growing its presence in the South Asian country is the Surbana Jurong group.

It has just announced two new major projects in the country thus deepening its already well-established business ties with Pakistan. SMEC, which is a part of the Surbana Jurong group, last month said that it has bagged two new hydropower projects of 90 MW and 150 MW - both located in Pakistan's Swat district - which are funded by the World Bank. The estimated development and construction cost of the two new hydro projects is US$600 million.

A SMEC-led consortium will undertake the design review, detailed design and construction supervision of these World Bank supported projects over a period of about 7 years.

"Pakistan needs to balance its energy mix by reducing the power plants run by fossil fuel and increasing power production from renewable projects. This will result in cost reduction of electricity to the consumers as well as help the industry and agriculture sectors to be more price competitive in the international market," says Hari Poologasundram, CEO SMEC and CEO International, Surbana Jurong.

"These two hydropower projects will provide clean energy to Pakistan which is not only economically advantageous but in line with the goals set out by the UN to address climate change," he tells The Business Times in an e-mail interview.

Poologasundram says that SMEC first designed industrial and building projects in Pakistan in the eighties and nineties. In 2016, SMEC became a member of the Surbana Jurong Group, thus giving the Temasek-owned business a very strong presence in Pakistan for the development of infrastructure projects.

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"Pakistan is an emerging economy with great potential in both its natural and human resources with approximately 65 per cent of the population under the age of 30. Even with the Covid-19 pandemic the pace of development in Pakistan has taken an upward turn," he adds.

"In addition, Pakistan's geostrategic importance cannot be overlooked. The China Pakistan Economic Corridor project is part of China's Belt & Road Initiative (BRI). As a result, within SMEC's South & Central Asia Division, Pakistan is identified as an anchor market."

SMEC has provided consulting services on a number of major projects in Pakistan including:

• Lahore - Islamabad Motorway, completed in 1998;
• Sukkur - Multan Motorway, substantially completed in 2020;
• Khanki - Barrage: completed in 2018;
• 800 MW Mohmand Dam, one of world's highest CFRD dam (concrete face rockfill dam), under construction;
• 720 MW Karot Hydropower project; and
• Completed the Master Plan of Capital Smart City near Islamabad, Urban Project, Phase 1.

The company's experience in doing business in Pakistan has been good. "SMEC has been working in Pakistan for over 40 years, primarily on projects funded by international funding agencies. While security has been a major concern in the past, particularly for those unfamiliar with the country, over the past 10 years there has been a significant shift towards stability as a result of steps taken by the Pakistani government," says Poologasundram.

SMEC places great importance on using local talent in its business and has found that capable and well qualified local experts are readily available. The local talent is also exposed to some of the major projects and receive on the job mentoring and training from international experts to enhance their skills.

By using local talent and coming to better understand the cultural environment during its many years of working in Pakistan, the company has been able to successfully build a key part of its South and Central Asia business in the country.

Asked how conducive is the country's business environment to foreign businesses, he says: "Over the past 10 years Pakistan has become an increasingly viable option for foreign business investment, as demonstrated by its improved business ranking by the World Bank.

"With an increased offering of incentives by the government and readily available skilled local labour we are seeing more and more foreign investors coming into Pakistan across a range of industries including pharmaceuticals, engineering, apparels, automobiles, and agriculture to name a few."

He says that Singapore businesses can benefit by exploring new opportunities in Pakistan. "There are much larger opportunities for investment in Pakistan by Singapore businesses, especially in the IT sector which has an expected growth of 75 per cent in 2022. Manufacturing is another area of opportunity due to readily available labour.

"When looking at opportunities in Pakistan it is important to do some preliminary research on investment opportunities, visit the country, meet the agencies facilitating foreign investment such as Board of Investment to collect required information and interact with the local businesses in your area of interest."

Asked about the company's plans for doing business in Pakistan going forward, he says: "Pakistan has been identified as an anchor market within SMEC's South Asian Division with an average growth of over 10 per cent over the last five years. SMEC plans to further consolidate its operations in Pakistan through diversification in key sectors, future technology including smart cities, focusing on renewable projects and environment, as well as continuing to invest in infrastructure and urban projects."

Looking ahead, he says that Pakistan's economic outlook is positive. Despite the Covid-19 pandemic, the GDP growth projection indicated by international agencies for 2022 is approximately 4 per cent. The China Pakistan Economic Corridor (CPEC) projects, including Gwadar port are substantially complete. The government is now focusing on setting up Special Industrial Zones (SEZs), special incentives to industry, training of youth, and promoting the IT sector. From an infrastructure perspective there has been a remarkable increase in the construction activity with cement production showing a healthy year on year growth of 35 per cent in 2021.

SMEC is a global engineering, management and development consultancy delivering innovative solutions for its clients and partners. Leveraging its 70-year history of delivering nation building infrastructure, it provides technical expertise and advanced engineering services to resolve complex challenges across the project lifecycle, from initial concept, feasibility, planning and design through to construction, commissioning, and operation and maintenance.

The Surbana Jurong Group, headquartered in Singapore, has a global workforce of over 16,500 employees across 120 offices in more than 40 countries in Asia, Australia, UK, the Middle East, Africa and the Americas.