ISLAMABAD, July 23: Japan has agreed to help set up two power plants of 500MW each.

A 15-member visiting Japanese business delegation, which met Minister for Finance Syed Naveed Qamar here on Wednesday, also expressed its willingness to further increase investment in the automobile industry of Pakistan.

A participant of the meeting told Dawn that Japan’s Marubeni Company is expected to install two power plants within a period of one year.

The company also offered to provide 75 GE American railway locomotives at a cost of $200 million.

The head of the delegation, Mr Makoto Kakebayashi, said that the government of Japan and the Japanese investors were also keen to modernise basic infrastructure in Pakistan through Official Development Assistance (ODA), JICA and JPIC funding in health, education, water and communication sectors.

He said projects of Khanki Barrage and Karachi Circular Railway were already under way.

A report of the Pakistan-Japan Business Forum’s joint study would be submitted to the Government of Pakistan by the end of the year to greatly facilitate Japanese investment in the country, he said.

Syed Naveed Qamar, who is also the Minister for Privatisation and Investment, assured Japanese investors to soon establish special economic zone for Japanese investors on a priority basis, which would be equipped with basic infrastructure.

He also told the delegation that Pakistan’s economy was under pressure, particularly after its current account deficit widened due to oil and food imports and was being curtailed through effective measures.

Efforts, he said, were under way to improve security environment for the private sector and that the details of outright sale of various privatisation transactions would be made public within next 10 days.

The finance minister appreciated the interest being taken by the Japanese investors in power projects considering the existing power shortages in Pakistan.

In order to curtail the smuggling of diesel to the neighbouring countries, subsidies on certain petroleum products would be reduced gradually, he added.

He further informed the delegation that the Pakistani workers remittances have gone up to $6.5 billion in 2007-08 as compared to $5.5 billion of last year.

The minister directed the Board of Investment to work together with the Pakistan Japan Business Forum in conducting an in-depth study to find out the