Industrial Zones and special export processing zones established in different cities of the country would now be converted into Special Economic Zones (SEZs) which would be enclaves for sector specific economic activities.
Sources told Business Recorder on Wednesday that SEZs would be given incentive-laden package to make them more competitive in the international market. The SEZ, which would be an enclave for enterprises operating in well-defined geographic location with certain economic activities which are sector specific are promoted by a set of policy measures generally not applicable to the rest of the country.
In consultation with the Ministry of Industries, the Ministry of Privatisation had moved a summary to ECC on Special Economic Zones framework to make the industries to be sold more attractive for the prospective buyers, which the ECC had approved.
It was proposed in the summary that these zones be given handsome concessions like the incentives being carved for the Special Re-construction Opportunities Zones (ROZs) for encouragement of Zone developers and investors that included corporate income tax holiday of up to 10 years.
The other incentives include: minimum size of the Economic Zones reduced from 500 to 50 acres; the condition of minimum 40 percent foreign equity would not be applicable in these economic zones; and country/company specific provision would be deleted.
Policy framework for the establishment of SEZs would be protected through an Act of Parliament, which is being drafted at the federal government level.
The policy framework for SEZs emphasises development and operational management of SEZs by the public sector or through Public-Private Partnership. It includes governing of all aspects of the zones from planning, development, land allotment and zone management; to defining mechanism for the establishment and administration of SEZs.
The framework also encompasses incentives for promotion of investment; industrial estates, parks and small industrial parks; and reconstruction opportunities Zones (ROZs) in the NWFP and Balochistan with special status as accorded by the United States.
The modalities of the SEZ policy framework include a Board of Approval (BoA) at the federal level. The BoA will be comprised of relevant ministries, business leaders, and provincial governments and will be chaired by the Prime Minister. It would have the authority to grant SEZ status to all new and existing zones. The BoI will work out details of the administrative methods for processing applications for approving SEZs. The BoI will provide secretariat services to the BoA and will cater for all matters of SEZs through creation of SEZ Cell by hiring services of required professionals.
The private sector or public-private partnership zone developers, once approved for SEZ status, shall have authority to develop their master plans, allot land and approve individual investors in compliance with the rules set forth in the SEZ policy frame work.
Zone developers may purchase land privately on ownership or lease land from Federal/Provincial/Local Governments. The minimum size of an SEZ would be 50 acres with lease period of 50 to 100 years. The SEZ cell, BoI would facilitate investors in acquisition of already notified land in co-ordination with concerned government/department.
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