LAHORE, Jan 7: The Punjab government is acquiring 1,700 acres at Sundar, some 35km from here near Raiwind, at a cost of Rs400 million through the recently-established Punjab Industrial Estate Development and Management Company (PIEDMC) for developing a modern industrial estate.

"The proposed industrial estate has already been notified by the provincial government and funds for the acquisition of land will be released to the company in a day or two," PIEDMC chairman and chief executive Mohsin M. Syed told Dawn here on Wednesday.

He was hopeful that the company would get possession of the land by the end of this month. The government would give Rs1 billion to the company for developing the estate.

"The entire money (Rs1.40 billion) we are getting from the government for the purchase of land and development of the estate will be considered as a loan returnable in 5-7 years," he said.

The new industrial estate, that is expected to be completed by the end of 2004, would also have a textile/garments city spread over 400 acres and an export processing zone on 500 acres. "We plan to develop between 150 and 300 industrial plots in the new estate," he said.

He said the company planned to develop at least 250 acres by the end of June and start selling and transferring them to the prospective buyers from July 1. He said some 50 businessmen had already applied for the plots to set up units to expand their existing business. "The money thus raised through the sale of these plots (to be developed in the first phase) will be used on the development of the rest of the estate," he said.

He said the plots would be sold on less than market rates. "The price will be calculated by adding 10 per cent premium to the actual cost of acquisition and development," he said. However, the purchasers of the plots would be required to set up their units in 18 months of taking possession.

"Anyone failing to meet the condition will have his allotment cancelled. We do not want to sell the plots to real estate speculators and become a real estate development agency," Mr Syed said.

He said the company would provide one-stop facilities to both the local and overseas Pakistanis and others interested in investing in the estate. He said the company would focus on attracting fresh investment in the medium-sized units.The PIEDMC has been set up by the government in order to develop industrial estates having modern facilities and upgrade the existing estates for speeding industrialization in the Punjab. It has an authorized capital of Rs1.50 billion and paid-up capital of Rs50 million provided by the province.

The provincial government has already released to the company Rs100 million for upgrading the sewerage and road infrastructure in the industrial estate in Multan and another Rs200 million for providing missing facilities at the Kot Lakhpat Industrial Estate.

"We've already begun construction work in Multan. But the work on the Kot Lakhpat estate will start once it is transferred to the PIEDMC from the LDA after removal of certain legal hitches," he said. The existing estates would be upgraded by their respective boards of management comprising the stakeholders, he said.

He said the transfer of the remaining industrial estates in the province to the company depended on its performance. The company was also negotiating with the Ministry of Commerce for setting up three water treatment plants at the existing estates in Multan and Lahore and at the proposed one.

In its very short life span, the PIEDMC has attracted a great deal of criticism. The critics object to Mr Syed's keeping both the office of the chief executive of the company and chairman of its board of directors to himself.

"Such a company needs to have a full-time chief executive if it has to succeed in the task assigned to it. Hence, no-one should be allowed to keep both the offices," said a leading exporter who is also on the PIEDMC board. Similarly, he was critical of renting the office of the company at Rs300,000 per month and the plan to purchase vehicles worth Rs10 million for the staff.