ISLAMABAD: The federal government to get itself out of the unnecessary businesses activities is considering to close down the Utility Stores Corporation (USC), the secretary Industries and Production said.
While answering a question raised by Senator Saifullah Niazi during a meeting of the Senate Standing Committee on Industries and Production which was held here on Friday under the chairmanship of Aon Abbas, Secretary Ministry of Industries and Production Saif Anjum said the “government wants to get out of non-essential businesses”.
He added that providing relief to Utility Stores eliminated the atmosphere for competition.
Utility stores witness historic surge in sales
He said that the work was in progress to transfer the employees of the Utility Stores to other institutions.
The secretary explained that efforts are underway to reassign USC employees to other institutions. He said the government’s subsidies to Utility Stores distort competition in the market, which is another reason for the planned closure.
Later talking to the media, Aon Abbas said that it was a very sad day for the country.
He said that the government officials were unable to share any viable plan about the future of at least 60,000 employees of the USC with the committee.
He said that 60,000 employees would lose their jobs if the government was implementing the decision.
The committee also deliberated on the inclusion of cold storage in the industrial sector and the provision of affordable electricity rates.
The matter was referred by the Chairman Senate.
Officials informed that the ECC approved the matter and forwarded it to the Cabinet for their approval to declare “cold storage” an industrial sector.
While briefing the panel on Pakistan’s Auto Policy, officials informed that 13 automobile companies are currently operating in the country. Initially, there were three companies, but as a result of the 2016-21 Auto Policy, eight new players entered the market.
These companies have installed production capacity of 500,000 units annually in more than 40 models with over 100 variants. They contribute four percent to GDP, pay Rs300 billion in taxes, and helped generate over two million jobs in the country.
The officials further informed that under the 2021-26 Auto Policy, the ministry has introduced WP-29 safety regulations for auto manufacturers. These safety standards have been adopted by all manufacturers except Suzuki for six variants. Suzuki has decided to discontinue three variants and redesign the remaining three to comply with WP-29 safety regulations.
Senator Saifullah Sarwar Khan Nyazee stated that no car manufacturer should be allowed to produce cars that do not follow WP-29 regulations, questioning who would be responsible for the lives lost in such vehicles. Officials from the Ministry of Industries and Production explained that the government has set an export target of seven percent for auto manufacturers for the year 2024-25.
However, companies have obtained a court stay order claiming they will not be able to meet the target. Senator Saleem Mandviwalla opined that cars majorly produced in Pakistan are not up to international standards and that it is impossible to find suitable export markets for these vehicles.
Senator Aon Abbas highlighted the issue of reimbursement by auto manufacturers to customers in case of delayed vehicle delivery beyond 60 days. He stated that eight major car manufacturers, including Honda Atlas Cars, Indus Motor, Pak Suzuki, Hyundai Nishat Motors, and Kia Lucky Motors, have paid around Rs5.32 billion in compensation to customers. Officials informed that the Competition Commission of Pakistan (CCP) is the concerned forum for checking malpractices by car manufacturers.
The chairman committee directed that a detailed bifurcation of the amounts paid, along with the models of cars and the extra days for which the amount has been paid, be provided to determine if the compensation justifies the delay. The committee also recommended that a universal mechanism be devised so that consumers and concerned departments can conduct real-time checks on car manufacturers.
Discussing the Electric Vehicle Policy of the country, officials stated that the government has introduced the EV policy to combat the climate crisis and diversify the automobile sector. The officials said that to promote the use of EVs in the country under the EV policy, there is a one percent customs duty on EV vehicle parts compared to 30 per cent on traditional vehicles.
The tariff for EV vehicles is also around 5-10 per cent compared to 25-30 per cent for traditional vehicles. These steps were taken to attract global EV manufacturers.
Senator Saleem Mandviwalla opined that there is a dire need to build EV-friendly infrastructure; otherwise, the EV sector will not sustain.
The committee, unanimously, decided to constitute a three-member Sub-Committee, under the convenership of Senator Saifullah Sarwar Khan Nyazee, to analyse the country’s EV policy.
Copyright Business Recorder, 2024