Prime Minister Shahid Khaqan Abbasi will perform groundbreaking ceremony of M/s Hyundai Nishat Motor (Pvt) Ltd, a unit of Nishat Mills, on Wednesday (today) being established in Faisalabad. This will be the first auto sector plant in Pakistan which will be set up as a joint venture which will manufacture one ton vehicles in the country and the project is expected to get tax concessions under the Auto Development Plan 2016-21.
Hyundai Nishat Motor recently signed a investment agreement with the government of Pakistan (GoP) to assemble and sell passenger and 1-ton commercial vehicles in Pakistan. The company would invest up to $500 million in the manufacturing plant.
On June 21, 2017, in pursuance of the decision of Economic Coordination Committee (ECC) of the Cabinet, Ministry of Industries and Production had awarded category-A Greenfield Investment status to M/s Hyundai Nishat Motor for assembly/ manufacture of vehicles covered in the exclusive contract agreement signed by the firm with the principal, subject to the following conditions ;(i) M/s Hyundai Nishat Motor shall strictly adhere to the conditions laid down in the ADP 2016-21; (ii) the company would enter into agreement with the Ministry of Industries and Production to ensure compliance with conditions of the ADP, SRO 656(1) 2006 and various timelines for completion of the project for availing incentives under ADP and; (iii) EDB shall issue the manufacturing certificate and list of importable components to new investors after it verifies that the manufacturing/ assembly facilities established by the firm are adequate to produce roadworthy vehicles.
Auto industry sources said the plant of M/s Hyundai Nishat Motor (Pvt) Ltd is being established early because the Punjab government has facilitated the project as was required under the policy. However, the Sindh government is rather creating hurdles in the establishment of auto sector plants instead of facilitating investment in auto sector.
Industry sources are of the view that Dubai's Al-Futtaim had signed agreement to assemble, sell Renault cars in Pakistan but the investment plan appears to be in jeopardy due to inactiveness of provincial government headed by Murad Ali Shah. Al-Futtaim has established a company of worth Rs 8 billion and is ready to inject equity into it but they have put their foreign investment on hold fearing if the circumstances remain the same, their investment could be in hot water.
The case of M/s Lucky -Kia Motor (Pvt) Ltd is also facing the similar hurdles in Sindh like other 9-10 cases of investment. Insiders claim Engineering Development Board (EDB) is responsible for facilitating investment in auto sector under ADP 2016-21 but according to official documents, rampant corruption in the origination and its "incompetent" CEO have made it ineffective.
The newly appointed Additional Secretary In-charge, Mian Asad Haya-ud-Din will get a detailed presentation on the role and performance of EDB in a couple of days.
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