Approval of new EPZs

At a meeting last Monday (April 5), the Economic Co-ordination Committee of the Cabinet (ECC), chaired by Finance Minister Shaukat Aziz, a number of important decisions were taken to promote economic activity in viable areas besides removing hurdles in certain micro-economic spheres.
The decision to declare Industrial Estate-3, Gujranwala, and Duddar Lead-Zinc Project in Lasbella district of Balochistan as export processing zones, will be seen as the right step to develop the export potential in these areas.
In the case of Gujranwala Industrial Estate, it is planned to establish small and medium industries ranging from electrical engineering goods, ceramics, clothing and other items, for the production of which the area is already well known.
The establishment of EPZ would appear to be fully in conformity with the proposal spelt out in the Trade Policy to set up industrial clusters with a view to promoting exports through development of small and medium industrial units in different parts of the country.
It may also be recalled here that an airport near Sialkot is also under construction, for facilitating exports from the surrounding districts. Thus the EPZ will be a timely move to translate export plans into a reality.
The conditions of allotment of plots in this area as approved by the ECC make it obligatory upon the allottees to establish industrial units within a period of three years, failing which they will be charged a penalty in the form of non-utilisation fee.
Further delays in the establishment of industrial units would lead to cancellation of allotments.
It may be pointed out here that the existing EPZs in other parts of the country, including that in Karachi, are known to be facing problems in pursuing export efforts in keeping with the plans and incentives designed for these areas. But some reports indicate that the customs authorities impose such levies as are not usually justified in the light of the promised incentives.
It may be emphasised here that such interference in the performance of industries/exporters would negate the very objective for which the EPZs are established.
The other EPZ in Lasbella, approved by the ECC, aims exclusively at commercial exploitation of lead-zinc deposits in Duddar. The MCC Resources Company of China is associated with this project for exporting the lead-zinc ores either in raw form or after some processing.
The commercial exploitation of mineral deposits in Balochistan is indeed a welcome instance of foreign investment.
The ECC at long last has taken note of the problem of burdensome unsold stocks of sugar held by the sugar industry as a whole on account of which, the industry is seemingly faced with a severe liquidity crunch besides experiencing a depressing outlook on the price front.
Another disturbing aspect of this problem is that the sugar industry has held up the payments due to cane growers.
The ECC decision envisages instructions to the TCP to buy 200,000 tons of sugar but the deal would be subject to clearance of payments by mills to growers from May 15 next, and at the same time they will have to promise that they will start next crushing season in the first week of November, as done in the past.
It is hoped that the decision would serve as a timely relief to the sugar industry while the growers will also be able to recover their dues from the defaulting mills. However, the implementation of the decision should be taken up in right earnest by the TCP and other authorities concerned.
The ECC also approved the establishment of three hydel power projects at Rajdhani, Gulpur and Kohala, in which investment interest has been shown by the private sector.
The appropriate step for the ECC would be to refer these projects to the Water and Power Ministry.
The federal ministry has already received proposals for both hydro-based projects and thermal projects from the private sponsors within the framework of the new power policy of the government.
A number of projects are reported to have been approved and instructions conveyed to the sponsors for submitting feasibility studies.
The Ministry of Industries reportedly informed the ECC that following the reduction in custom duty on re-rollable scrap from 25 percent to 10 percent, the prices of re-rolled steel products, specially iron bars which are used in construction projects, had declined by about Rs 15,000 per ton and as a result, the demand for cement was on the increase.
This could be seen as a welcome development for the revival of housing construction, which would ensure new job opportunities for the workforce at large.