The ministry of industries has challenged the Planning Commission's authority to formulate new motorcycle entrant policy, well-informed sources told Business Recorder on Friday. Earlier, the Planning Commission, under the leadership of Dr Nadeemul Haq, directed the commerce ministry to submit a summary to the Economic Co-ordination Committee (ECC) of the Cabinet on motorcycle project.
According to official documents, the Deputy Chairman of the Planning Commission maintained that artificial barriers needed to be removed and no further protection was justifiable after 40 years to local industry. Local industry protested over a move to offer the Japanese firm, Yamaha, 5 per cent duty instead of 100 per cent duty for incorporating Electronic Fuel Injection (EFI) engine and automatic transmission technology.
The Federal Board of Revenue (FBR) was consulted in this exercise, which was evident from the minutes of the meeting held on April 5, 2011 under the chairmanship of the Deputy Chairman of the Planning Commission. "Wherever we go in the ministries, officials claim that they are under pressure to facilitate Yamaha," a source added.
The ministry of industries, which focused on protecting the interests of local engineering industry through the Engineering Development Board (EDB), expressed serious reservations over the tariff proposed by the Board of Investment's (BoI) to Yamaha's motorcycle project. "With regard to the recommendations of the Planning and Development Division, the Ministry of Industry... (finds it) important and thus the appropriate forum is to take the instant summary to the ECC of the Cabinet," the sources quoted the Joint Secretary Industries as saying in a letter to the Planning Commission.
This letter, sources said, had been written on the instructions of Secretary Industries Aziz Ahmad Bilour, an officer of Income Tax Group. Bilour was one of the candidates who failed to secure the lucrative post of the Chairman of FBR despite hectic efforts.
New investment policy is an integral part of the Auto Industry Development Programme (AIDP) formulated by the ministry of industries in consultation with all stakeholders and duly approved by the Cabinet in 2007. Local industry maintained that it was not consulted at any forum on the proposed new entrants' policy. "Proposed changes should not be made without involving the ministry of industries as well as the stakeholders," the sources quoted high-ups of the ministry as saying in the letter. The ministry of industries, extrapolating its stance, urged the Planning and Development Division to give it the mandate to formulate proposals on motorcycle industry.