The Engineering Development Board (EDB) advice to public sector organisations for giving preference to local manufacturers having maximum localisation may hurt the introduction of high tech industry in country. Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) former Secretary, Inam-ul-Haq, stated this on Tuesday.
He said the order issued on March 8, 2005 in pursuance of SRO 827(1) of 2001, is itself against the spirit of this SRO.
The SRO 827(1) of 2001 suggested that public sector institutions would extend special preferences and tariff advantages to local manufacturers of engineering goods that have attained 30 percent and beyond indigenisation.
The SRO notification said that those having 30 percent and beyond indigenisation would be treated at par while offering tariff concessions during local procurements.
Those companies are quite concerned, which have recently shifted to high tech manufacturing by compromising on the ratios of their indigenisation to bring in new technology.
This has resulted in lowering their level of indigenisation compared to the point they had attained earlier.
"On one hand they have brought in latest technology, while on the other they were being placed at a disadvantage compared to companies using obsolete/out-dated technologies resulting in lack of efficiency and precision in their products", Inam said.
He said that basic objective of the EDB's measures should not be only to encourage localisation but also support introduction of latest technologies in the country.
Inam said that it would take two or more years for producing parts based on new concepts and technology. It would be unfair to catch a company on the wrong foot during this period of transition and deprive it of a 'fair and level playing field', he added.
He averred that latest explanation released by EDB would not only ruin the domestic industry, that was trying to induct state-of-the-art technology, but would also establish monopolies, creating a situation where consumers would suffer at the end of the day when the public sector organisations would purchase goods produced through out-dated processes, for subsequent supplies, Inam added.