FAISALABAD — Allama Iqbal Industrial City (AIIC), the first Special Economic Zone prioritized under the China-Pakistan Economic Corridor (CPEC), has drawn more than 327 billion rupees ($1.2 billion) in committed investment and allotted 223 of 424 planned plots. But a field survey of the zone’s authority and four operating firms – including a China-Pakistan joint venture – found that basic infrastructure has not kept pace with that investment. The zone management itself now lists the resulting gaps among its most urgent priorities.

The survey was conducted on-site using structured research instruments and covered Faisalabad Industrial Estate Development & Management Company (FIEDMC), which administers the 3,966-acre zone along the M-4 Motorway, and four operating firms; the findings are diagnostic rather than statistically representative. It found that water is supplied only through self-boring – individual firms drilling and managing their own wells – because no zone-wide piped potable network exists. Sewerage infrastructure remains under construction, while the zone’s assessment indicates that no Combined Effluent Treatment Plant (CETP) has yet been funded, leaving firms to manage industrial wastewater largely on their own.

“CETP and utility reliability” was the single most urgent reform named by FIEDMC’s own senior officials – spanning its general manager for engineering and its estate, zone, and land managers – when asked directly what the AIIC needs most. They also flagged the need to make the zone’s “One-Window Operation” facilitation service fully functional and time-bound, and to establish dedicated public transport and stronger security for workers commuting to the site.

Those official priorities broadly align with concerns reported by the four tenant firms surveyed independently. Ocean Ceramics, a wall-tile manufacturer employing 230 people at the AIIC since 2022, said in its response that “transport facilities are not available for local travelling” and that mobile signal and internet coverage across the zone is weak and slow – potentially constraining firms that increasingly depend on digital systems for customs filling and coordination with overseas buyers. The firm reported annual revenue of 1-5 billion rupees, but currently exports none of its output. Ocean Ceramics said reduced gas and electricity costs would do more than anything else to improve its performance.

A China-Pakistan steel joint venture that entered the zone in 2024 with 88 employees reported similar concerns about shared infrastructure, rating the zone’s common effluent-treatment and testing facilities only average. 

Among the zone officials surveyed, customs facilitation ranked as the most serious barrier to exports at the AIIC – ahead even of energy costs, which firms described as “costly” rather than simply scarce. The survey found that AIIC currently has no on-site warehousing, logistics, or customs facilities of any kind – all three were explicitly marked “not included” in the zone’s own infrastructure assessment. 

For a zone being developed as an export-oriented manufacturing hub under CPEC, the absence of such basic trade infrastructure is a striking finding, and one that officials say compounds the customs delay already facing exporters.

Equally notable is what the four-firm sample reveals about how some firms operate once inside the SEZ. Of the four companies surveyed, three – including the China-Pakistan venture – reported no supply or sourcing relationships with any other AIIC tenant, describing themselves as operating as stand-alone units rather than as part of an integrated industrial cluster. Only Matco Foods, a food-processing exporter with 250 employees, reported a working intra-zone linkage, sourcing construction steel from a neighboring tenant. 

Two of the four firms surveyed, including the China-Pakistan steel venture, reported exporting none of their output at all. FIEDMC’s own records on firm-level export performance – the number of exporting firms, export value, and destination markets – were left entirely blank, suggesting that systematic firm-level tracking of exports remains incomplete.

Since its 2020 notification, the zone has attracted 117 investors, drawing 147 billion rupees in foreign capital and 180.53 billion rupees in domestic investment – figures consistent with the more than $1 billion in commitments publicly reported by Pakistan’s Board of Investment. Investors from China, Germany, Switzerland, Canada, and the Netherlands sit alongside a large base of domestic firms.

Field work adds a granularity often missing from official announcements. The picture, drawn directly from the zone’s operators and tenants, is that of a flagship CPEC project whose investment pipeline has outpaced the utilities, logistics, and transport infrastructure needed to convert that investment into functioning, export-ready industry. 

With FIEDMC’s own leadership now naming utility reliability, streamlined customs facilitation, and worker transport as top priorities, the findings point less to a dispute between government and industry than to a shared, and increasingly urgent, agenda for the next phase of the AIIC’s development.

The next measure of the AIIC’s success, therefore, should not be how many plots are allotted or how much investment is committed, but how effectively those investments are converted into operating factories, industrial linkages, exports, and jobs.