Inordinate delay in announcement of national Auto Policy has deprived the country of investment of billions of dollars both from new entrants and existing players, well informed sources told Business Recorder. On March 7, 2016, the "controversial" draft five-year auto policy was tabled by a sub -committee headed by Minister for Water and Power, Khawaja Asif before the Economic Co-ordination Committee (ECC) of the Cabinet presided over by Finance Minister, Senator Ishaq Dar.
However, Finance Minister, once again deferred a discussion on the policy on the plea that one of the members of the sub-committee ie, Chairman Board of Investment (BoI), Dr Mifta Ismail, was not present in the meeting. Minister for Industries and Production, Ghulam Murtaza Khan Jatoi did not attend the meeting despite being in Islamabad. The official press release issued after the ECC meeting stated that the committee has been directed to again hold a meeting to evolve consensus; however, minutes of the ECC meeting did not convey any such thing.
One of the sub-committee members facetiously maintained that a "black goat" should be given as "sadqa" for approval of the much delayed auto policy. In reply to a question, the sub-committee told Business Recorder that a consensus has already been evolved on the auto policy but if Chairman of the ECC still wished for more consultation, the sub-committee would hold another meeting.
The existing key assemblers - M/s Toyota, M/s Honda and M/s Suzuki - are reluctant to give an assurance of new investment until government extends similar incentives being offered to new entrants. M/s Suzuki has already submitted an investment plan to the federal government which is conditional to incentives at par with new entrants. Japanese embassy in Islamabad is also very active and successive Japanese ambassadors have worked towards safeguarding the interest of Japanese auto companies.
"There could be a diplomatic uproar if existing OEMs are excluded from the benefits of the new auto policy. Japanese ambassador has personally been in touch at the highest levels of the government to provide input for the draft auto policy," claims a document of EDB. According to sources, all the existing players, ie, Pakistan Automotive Manufacturers Association (PAMA), Pakistan Association of Automobile Parts & Accessories Manufacturers (PAAPAM) have rejected what they term a discriminatory policy. PAAPAM, in its comments, said the proposed scope for Greenfield investment by auto parts makers under Category C is highly restrictive and will fail to attract investment to domestic manufacturing.
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