Mercedes-Benz plant project: GoP manages to revive $4 billion investment

Islamabad: In a bid to secure $4 billion foreign direct investment, the government has managed to revive Mercedes-Benz manufacturing plant project in Sheikhupura.

President Pervez Musharraf, who has been very keen to see Mercedes-Benz coming to Pakistan with its project offering trucks and other long vehicles' manufacturing facility for the army and other clients, used diplomatic channel to convey to the management that their investment in Pakistan was fully secure and the government will provide sovereign guarantee also.

The President asked Pakistan's ambassador in Germany to take up the matter with Mercedes-Benz Group to convince its management to review its decision of walking out of Pakistan regarding its proposed plan to set up a plant in Sheikhupura, Punjab. The sources said the ambassador held a couple of meetings with Mercedes-Benz management to convey the desire of the President of Pakistan.

The sources said in response to Pakistan's offer, Mercedes-Benz's Dubai-based partner Coastal Trading Group's representative Yusaf Najibi visited Pakistan some three weeks back and held separate meetings with President Musharraf and Prime Minister Mohammadmian Soomro and expressed willingness to revive the project on behalf of the Group.

The officials in Islamabad confirmed on Tuesday that Coastal Trading which is playing a key role in reviving the project has conveyed to government of Pakistan the Mercedes Group's interest for reviving the project and visiting Islamabad shortly for a commitment in writing.

The officials working with Coastal Group are very much hopeful that the GoP and Mercedes Group will formally sign a memorandum of understanding for the project sometime in January 2008.

Mercedes-Benz Group had entered Pakistan with its Dubai-based business partner - Coastal Group - in 2006 with a plan to set up a manufacturing plant for large vehicles. It also planned to set up parts manufacturing facility in Pakistan and export it to other countries where it has only assembling facilities. But the project was left unfinished and the investors walked out of Pakistan.