Efforts under way to form joint stock company: Rehabilitation work in industrial area
By Aamir Shafaat Khan
KARACHI, Sept 13: On the instruction of the commerce ministry, city's industrial associations are expediting their efforts to form a joint stock company for the execution and implementation of the infrastructural and rehabilitation work in industrial areas.
Some associations have sent the draft to the chief secretary Sindh who will assist and facilitate the formation of private limited companies. The chief secretary will also assist the associations in preparing PC-1 for its submission to the Planning Commission.
In order to rehabilitate infrastructure in the industrial estates of Karachi as per initiatives announced in the Trade Policy 2004-05, Commerce Secretary Tasneem Noorani held a meeting with chairmen and members of the industrial associations in August.
The Site Association, North Karachi and the F.B. Area Association of Trade and Industry have sent the draft for the joint stock company to the provincial government, while others are in the process of preparing the draft.
Mr Noorani made it clear in the meeting "that the federal government would contribute 50 per cent of the total cost of the infrastructure development in the industrial areas if the provincial government contributes 25 per cent, the city government 10 per cent and the private sector (stakeholders concerned) 15 per cent."
He said financing by the federal government would be made through the development budget under the Public Sector Development Programme (PSDP). He said that an independent legal entity would be set up for the execution and implementation of the development work in the industrial areas. This entity could be a joint stock company that would have in-house technical capacity to look after the implementation.
It was also decided that private limited companies would be registered at an early date. The PC-1 for effluent treatment plants and other infrastructure projects of the industrial areas would be handled by the respective private limited companies.
Export Promotion Bureau Chairman Tariq Ikram informed the meeting that a summary seeking funding of Rs1 billion for the Korangi Road was sent to the finance division.
The finance division had observed that being an infrastructure development initiative, the project should be funded through the PSDP for which a PC-1 should be made and submitted to the Planning Commission for approval of funds.
City Nazim Naimatullah Khan said total cost of the Tamir-e-Karachi Programme (TKP) was estimated at Rs29 billion. Of this, the federal government would share Rs5 billion, the provincial government Rs6 billion, the city government Rs6 billion and the private sector Rs12 billion.
He said the funding of Rs2.5 billion for the construction of effluent treatment plant should come through the Export Development Fund (EDF) as envisaged in the programme approved by the President of Pakistan.
Noticing the pensive mood of the city nazim, the commerce secretary tried to explain that the EDF was not meant for industrial infrastructure development, but the nazim was insistent that the highest authority in the country had proposed the programme and if that could be abandoned then others had no meaning.
According to sources present in the meeting, the city nazim said that whenever Karachi became the recipient, many legal complications and implications came up. The nazim said Sialkot and its industrial areas had been developed from the EDF.
The sources said the EPB chairman tried to comfort the nazim by saying that the Korangi Road on which Rs1 billion was to be spent would be funded under the PSDP, while other projects would be taken up under new schemes to avoid duplication of work.
The nazim did not agree with the explanation as he asserted that millions of rupees were collected daily under the EDF and the federal government was taking away half of it. The EPB chief confirmed it by saying that 50 per cent of the amount is given to the finance ministry.
Tasneem Noorani said that on the advice of the finance ministry to source infrastructure development funds through the PSDP, the ministry of commerce also approached the Planning Commission for their views.
The arrangement has been agreed upon by them. Once put into place, the arrangement would make available around Rs2 to 3 billion every year through the PSDP for the development of industrial infrastructure.
He said the EDF was already facing serious resource constraints as around 72 schemes were already being funded through the EDF. He assured that the federal government would also share capital costs of setting up of effluent treatment plants in the industrial areas to the extent of 75 per cent provided the balance 25 per cent is contributed by other agencies and stakeholders. The sharing formula for 25 per cent would soon be developed, he added.
District Coordination Officer Mir Hussain Ali said that separate industrial area development boards had been set up for industrial estates of Korangi, Landhi, F.B. Area and North Karachi.
These boards have been notified by the city government under the Sindh Local Government Ordinance 2001, and the arrangement had also been vetted by the law department, Sindh. These boards would work under the city government and have representatives from the trade.
Meanwhile, North Karachi Association of Trade and Industry Chairman Sadiq Mohammad told Dawn that he had also sent a draft to the chief secretary for the joint stock company, but he had some reservations. He said that when separate industrial area development boards had been established, there was no need for the joint stock company.
He said time was very short to upgrade and carryout massive infrastructure development works in the industrial areas when WTO challenges were knocking the doors. Roads and sewerage lines are in pathetic conditions that need to be upgraded on urgent basis, he added.
