The Ministry of Industries and Production is likely to submit new auto sector policy before the Economic Co-ordination Committee (ECC) of the Cabinet for approval in its upcoming meeting. Ministry of Industries and Production Secretary Raja Hassan Abbas informed the Public Accounts Committee (PAC) on Tuesday that Engineering Development Board (EDB) had drafted a five-year automobile development plan covering a range of issues related to development of auto sector.
He said that the auto sector policy would be placed before the ECC for the second time. Earlier, the ECC had directed the ministry to consult and incorporate the recommendations of all the auto industry stakeholders, he added. He further said that the auto companies had been working on 50 percent capacity against the total installed capacity due to various factors including the import policy of used vehicles. "Pakistan is on the list of few countries, which manufacture as well as import vehicles," he said.
In an informal chat with media persons later, he disclosed some of the new features of the policy like safety, option of recall and change in design of cars. He said that the ministry had proposed to the government that the duration of policy must be five years. The option for recall of cars in case of any major fault in bulk, as the facility is available in foreign countries, is also part of the new auto policy. Safety tools like ABS brakes, seat belts etc must be installed in the vehicles. The design of car must change after every 10 years. The draft auto policy further envisages change in car designs to install alarm system in the cars manufactured in Pakistan. In order to discourage late delivery, the new auto policy proposes around 25 percent advance at the time of booking of cars and remaining 75 percent at the time of delivery.
The committee, which examined the audit paras of the Ministry of Industries and Production for the year 2010-11, showed its concern over poor performance of the EDB in the last 10 years. Member Committee, Sheikh Rashid, said the EDB completely failed in implementing its auto policy and deletion programme.
The secretary said that auto companies did not succeed in manufacturing critical auto engines and transmission parts. However, he said the companies were importing CKD units and doing the assembly of units locally. The committee also took serious notice about recovery of Rs 5.090 million, which was paid as leave encashment un-authorised to employees of EDB. The audit noted that the EDB submitted its service rules for concurrence of the Finance Division, which categorically disagreed to the provisions of leave encashment and directed to delete the relevant clause on March 24, 2005.
On scrutiny of the payment record of EDB, the audit observed that the management had made irregular and unauthorised encashment of Rs 5.090 million from 2006-2010. The Ministry of Finance also refused to regularise it. The audit objection is pending with the committee without any decision.