July 25, 2003	Friday	Jumadi-ul-Awwal 24, 1424

ISLAMABAD: July 24: The federal government is expected to offer early next week a policy package to the private sector to develop grain handling and storage facilities, according to sources.

More than 600,000 tons of storage capacity is envisaged for Karachi alone while state-of-the-art silos would also be set up near major production centres throughout the country.

A formal approval to this effect would be accorded by the Economic Coordination Committee (ECC) of the cabinet which meets here on Monday (July 28), the sources said.

The major objective of the policy package was to attract the private sector towards building up storage capacity mainly for agricultural export surplus and also for maintaining strategic stocks for local market interventions.

All the facilities and silos were envisaged to be developed on ‘build-own-operate’ basis. The package is aimed at commercialisation of the agri sector through private sector involvement.

The government was targeting to export all surplus agricultural products including wheat, rice, fruits, onions, chilies, potatoes, etc., to broaden its export base and improving the trade balance. This required quantity storage, better marketing and packaging, international competitiveness and reliability of suppliers, the sources said.

Under the package, private sector investors would be allowed to submit their proposals within 30 days and another 40 days would be taken by the government for negotiations, evaluation and award of the contract.

For this purpose, the Board of Investment (BOI) would act as “one-window operator” to facilitate private sector investors. The investors would be free to develop higher capacity than the capacity negotiated with government at their own.

Furthermore, railways and PASSCO would make the land available on 33-year lease further extendible or on rent of 15 per cent of the market value.

The package is expected to include incentives like 14 per cent mark up, 100 per cent foreign equity for initial 5 years, 10 per cent customs duty on import of engineering material and 50 per cent tax relief for first year allowance.

The ECC would also review sensitive price indicators, economic data and availability of essential commodities as usual.

The meeting is also expected to approve a project for commercialization of aerial wing of the department of plant protection being sponsored by the ministry of food, agriculture and livestock.

The ECC would also consider revised leasing price for Paksat-1 transpondence and approve establishment of dry port at Sukkur.

The ECC would also discuss settlement of outstanding central board of revenue claims running into tens of billions of rupees worth of claim on account of sales tax and income tax liability picked up by the Privatization Commission in case of privatized units.