Supreme Court orders BoI and Crescent Chemicals to resolve dispute in a month

The Supreme Court on Friday directed the Board of Investment to have a meeting with Crescent Industrial Chemicals Limited within two weeks about the investor's grievances and report back within 30 days. The three-member bench presided over by Justice Muhammad Nawaz Abbasi and comprising Justice Mian Shakirullah Jan and Justice M Javed Buttar passed the order after hearing arguments from CIC counsel, Barrister Aitzaz Ahsan, and Deputy Attorney-General Naheeda Mahboob Ellahi.
The Crescent Chemicals, with an investment equal to $106 million, was set up for the manufacture of acrylic fibre in the Special Industrial Zone at Windher (Lasbela - Balochistan). At the time when the project was planned (1996), Ahson told the Court, the demand for the fibre, met by import, was 24,600 tons which has now jumped to 60,000 tons annually.
In scheme advertised widely, the government had offered a special package of providing land and utilities, like gas, power, phone service, roads, police station, banking services, fire stations, health centres, customs offices, postal services, schools, parks and places of worship at its cost. It had also promised facilities for personal food imports by foreigners to a certain limit.
In addition, he said, the government had promised a "fiscal incentive package" providing relief from income and sales tax, customs and excise duties and had notified these in several SROs.
After having negotiated with American, German and Japanese financiers, it arranged for foreign currency loans and ordered the manufacture of machinery which is now lying at Karachi Port as the authorities had failed to comply with their part of the commitment.
Though he accepted the blame directed by Deputy Attorney-General and also a representative of the BoI that CIC had failed to bring the project into commercial production by June, 1999, he attributed it to failure of SIZ authority to meet its commitment.
The civil works of the project, he said, had been completed but the promised infrastructure had not materialised.
Naheeda and a Deputy Director of the Board of Investment said that the government had purported to extend the date for commencement of project to end-December, 2002, but the investor had failed to make use of it. It was because of this failure that the BoI finally withdrew the facilities offered for the SIZ.
The Balochistan High Court had dismissed a petition challenging the withdrawal of facilities, inter alia on the ground that the investor had failed to meet the production deadline. The present appeal before the Supreme Court is against that order.