The powerful auto industry has reportedly forced Chairman Privatisation Commission (PC) Muhammad Zubair to withdraw a proposal meant to make mandatory for auto assemblers to change their models after every ten years, well informed sources told Business Recorder.
Chairman Privatisation Commission who is now incharge of new five-year Auto Policy because of other important engagements of Khawaja Asif, Minister for Water and Power/Defence, wanted to stop production of an old model but the assemblers and parts manufacturers pressurised him to withdraw this proposal from the Auto Policy.
"Auto industry players are so powerful that one cannot confront them. If someone tries to confront them they reciprocate with full force," said an official on condition of anonymity. Engineering Development Board (EDB) which is also notorious in supporting briefcase players, recently gave a detailed presentation to the newly-appointed Secretary Industries and Production(MoI&P) Arif Azeem who replaced Raja Hasan Abbas who had developed differences with the Minister for Industries and Production, Ghulam Murtaza Jatoi.
Source close to Chief Executive Officer (CEO) said that the government is considering reducing Regulatory Duty (RD) on above 1800 CC cars from 50 per cent to 25 per cent but there will be no change on existing rate of duty. Both PAMA and PAAPAM also proposed a 25 percent duty on cars above 1800 CC. It is still unclear if FBR will accept the proposal.
According to sources, duty on CKD kits will remain at 32.5 per cent during the first two years and be reduced to 27.5 per cent in last three years. There was a proposal to reduce duty on CKD to 25 per cent during the last three years, but it was not encouraged.
Commerce Minister, Engineer Khurram Dastgir maintains that Auto Policy should be for three years instead of five years. However, Commerce Ministry''s proposal will not be entertained.
Duty on local parts will be slashed from 50 per cent to 47.5 per cent during first two years whereas in the last three years duty will be 45 per cent. There will be no change in duty on motorcycles as everything is already agreed with the stakeholders.
For new entrants, CKD during first two years will be 10 per cent after which they have to meet the localisation standards of existing OEMs. The sources said, newly appointed CEO EDB Tariq Chaudhary has also given a presentation to the Minister for Industries and Production, Ghulam Murtaza Jatoi on new Auto Policy. Earlier, the Minister was unaware of Auto Policy proposals that are to be presented to the Economic Co-ordination Committee (ECC) of the Cabinet.
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