Question
To tap the mega business opportunities of recently announced multi-billion dollar China Pakistan Economic Corridor (CPEC), an agreement was signed out between the governments of
To tap the mega business opportunities of recently announced multi-billion dollar China Pakistan Economic Corridor (CPEC), an agreement was signed out between the governments of China and Pakistan. A Chinese well-reputed company, China State Construction Company, has been awarded few important projects of highways, link roads, bridges, intercity bus and cargo traffic stands and bulk storage facilities. The company is planning to finance the projects by bank borrowings within Pakistan and direct foreign investments from China. The company has also planned that revenue receipts from the projects will be utilized for the payment of bank borrowings and some money will be remitted to home country. The output/product of aforesaid scope of work obviously carries different risks during the phase of completion and thereafter its usage. As an established and experienced company, it has completed its initial hiring of local human resource related to business risk and legal affairs. Accordingly, the Chinese Country Head has given you, being their Risk Manager, the initial assignment to identify the risk if the company finances the projects from bank borrowings and foreign direct investments and remits the money to home country and to decide what can be done to manage and reduce the risk while doing business in Pakistan. Required: (a) You are supposed to have the ability to understand the risk response and mitigation. Identify at least 10 possible risks that the company may be exposed to in Pakistan.
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