The provincial industries department failed to utilise a single penny of the Rs 300 sanctioned three years back by the then provincial government for attracting and promoting investment in the province, sources in the department told Business Recorder.
The previous Muthahida Majlis-i-Amal (MMA) government in its industrial policy unveiled during an international investment conference had announced incentives for attracting both local and foreign investment to the province. The incentives were included a rebate of 25 per cent on the consumption of electricity for the newly established industrial units.
The industrial units established or those started production during the period of July 1, 2005 to June 30, 2008 were entitled to apply for the concession. In fiscal year 2005-06, the provincial government released an amount of Rs 30 million.
The same amount was once again replicated in the provincial budget for financial year 2006-07 while for financial year 2007-08 an amount of Rs 10 million was sanctioned in the budget. The conditions for qualifying the concession were tough and only those industries, which have either established with new machinery or producing a product never produced in the province in past were entitled to avail the incentives.
The department of industries surrenders the sanctioned amount in both years. However, in the last financial year, three units applied for the obtaining the incentive, which were White Cement unit of the Kohat Cement, Sil Wood, Peshawar and Imperial Electronics that was producing energy savers.
"The department followed all three cases and sent the summary to Investment Facilitation Committee (IFC) and Chief Secretary for approval. Consequently, both IFC and Chief Secretary approved the cases ," said an official. But, interestingly, the chief minister approved the cases when the scheme was already dropped by the Planning & Development Department from the annual development programme.
As the incentive was granted for the industrial units established during the period and had started production of new item. But, none of the three units were granted the incentive as the time period of the scheme lapsed. When asked about the causes of the failure in utilisation of the fund, he said that unfortunately the decision was not taken at the gross-root level and the industrial sector was not consulted.
He said that incentives should not a period specific and the government should have made it a regular feature for a long period. The success of an industrial unit is required a period of 10 years, but in the case of our province the incentives were granted for a short period of three years.
For future incentives, he suggested the government to arrange supply of subsidised electricity to Gadoon Amazai Industrial Estate from the 18 MW Pehur hydel power project. He said unlike other industrial units, Gadoon Industrial Estates is situated so close to the power project this did not require distribution system.
He said that a number of private companies had already offered interest in the installation of the grid stations. The estate, the official said, is also suitable for the establishment of US sponsor Reconstruction Opportunity Zone (ROZ) as it has better infrastructure than other industrial estates of the province.
A recent survey jointly conducted by the Small & Medium Enterprises Development Authority (Smeda), provincial department of industries and Sarhad Development Authority (SDA), said the number of closed industrial units in the province was 702, which was 32 per cent of the total 2.254 industrial units.
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