January 3, 2003	Friday	Shawwal 29, 1423

KARACHI, Jan 2: Federal Minister for Industries and Production Liaquat Ali Khan Jatoi has asked Export Processing Zone Authority (EPZA) to cut the cost of land and provide free access to investors to seaport and airport.

Talking to APP here Thursday, he said that the cost of land at the zone was high and it should be reduced to minimum level to attract investors in the zone.

“The EPZA will undertake a survey for connecting the zone to airport and sea port so that the investors should have a direct access to these facilities for speedy shipments of export consignments,” the minister said.

“I have asked them to change the entire working of EPZA and make it a model of an investor-friendly organization to attract more investors,” he said.

He said that EPZA has a one desk operation where all utilities and customs facilities are provided.

“I have also promised to remove a cess which was imposed by Sindh government on EPZ investors,” he added.

He said that investors of EPZ will not be burdened with any extra tax as they are export-oriented industries.

The minister said that EPZA has been asked to remove all the procedural difficulties facing investors.

Earlier, the minister held a detailed meeting with the reconstituted Board of the Export Processing Zones Authority (EPZA) including private sector investors in Karachi Export Processing Zones (KEPZ) here Wednesday 2003.

Federal Secretary Industries and Production and representatives of KEPZ investors Ahmed Tabba, chief executive, Home Furnishers, Jamil Akhtar, chief executive, MJFA Textile Industries and Maqsood Ahmed, chief executive, Experience Jeans were also present on the occasion.

The Minister extensively reviewed the performance of Export Processing Zones in the country in general and KEPZ in particular. It was observed that despite availability of all conceivable concessions from the federal government such as exemption from import duties and taxes, peaceful working environment, single agency management system, the investment in KEPZ was as low as $65 million since its inception 22 years ago in 1980.

KEPZ exports stood at $917 million for the same period of 22 years. This worked out to be a meagre $3 million of investment and less than $42 million of exports every year.

This was an unenviable position because one similar Export Processing Zone in Bangladesh is making over $1 billion of export every year. Besides, only one overseas Pakistani investor who was a pioneering investor in KEPZ has invested $70 million in Bangladesh EPZ.

The causes of lack lustre performance of KEPZ were identified to be both internal and external. The major causes were identified to be as follows:-

The delivery of services to the investors was dismal, poor and problematic. This could only be corrected by major structural change in the management in terms of quality of manpower and their capacity for adequate delivery of service.

The Minister directed to bring about requisite structural changes in the quality and capacity of staff. It was also decided that MBAs and similar qualified staff should be picked up from the market on competitive basis. The minister also directed that no pressure of whatever nature should be accepted to compromise on the quality and merit of staff;

The procedural rigmarole had a devastating effect on the resilience of KEPZ investors. An unnecessary large number of investors had thus abandoned their factories only after a couple of years of operation.

The Federal Minister constituted a sub-committee of the Board of Directors to review the entire regulatory and procedural overhang including service changes, rents and fees, proformas and permission requirements in order to reduce the cost of doing business in Export Processing Zone.

He promised to immediately resolve the issue of 0.5 per cent levy of excise duty by the Provincial Government of Sindh in the larger interest of investment promotion and export development in Sindh Province.

It was also decided to develop KEPZ into a model of excellence to be quoted by others.

For this purpose it was decided to offer following facilities:

A well-designed package of facilities for investors; Expressway access to EPZ; Housing Colony, and Construction of Model Factories;

The federal minister offered all support to EPZA and its Board of Directors in achieving the doable and desirable proposals to make KEPZ attractive for investment especially for overseas Pakistanis and foreign companies.

Attending a briefing of Pakistan Automobile Corporation Ltd (PACO), the Federal Industries and Production Minister asked PACO to computerise and upgrade its assembly line for cutting cost and improve profitability by slashing expenses.

“I want you to modify, upgrade and computerise manufacturing facilities to produce better quality vehicles at reduced cost and increase your profits by cutting production expenses,” the minister said.

Appreciating the performance of PACO and its plan for switching over to the production of new trucks and buses of Dong Feng Motors from March 2003, he asked management to submit its plan in this regard. I will provide you maximum support in this endeavour and also approved your deletion programme for the new trucks and buses, he added.

Jatoi was of the view that the upgradation of assembly line before the start of Dong Feng trucks and buses will help PACO to meet all their standard requirement and produce good quality vehicles in the country.