KARACHI, Feb 24: The ministry of industries and production has expressed its dismay over the slow progress on the proposed combine effluent treatment plant (CETP) project at Site industrial area.

Industries and Production Minister Jahangir Khan Tareen held a meeting on February 2 with the members of Site Association of Industry regarding the setting up of plant at Site.

To put the project on a fast track, the minister had set up a committee comprising Site representatives and government officers concerned to discuss all aspects of the proposed project as delineated in the feasibility study of the industrial estate.

The minister had informed Site Association of Industry Chairman Dr Mirza Ikhtiar Baig that the committee held its first meeting on February 10 and the feedback of committee's first meeting indicates that "things are moving slowly as the Site association members have yet to formulate their viewpoint and recommend changes (if any) regarding the proposed technical, financial and management mechanism of the treatment plant project."

In a letter sent to the Site body chief on Feb 16, the minister pointed out that without the consent of end-users it would not be possible for the ministry to facilitate the establishment of the plant under the arrangement and programme being negotiated with the Asian Development Bank.

Needless to say that the proposed project is of national importance, Mr Tareen seeks an active participation of the association in the proposed project so that it is designed with the consent of stakeholders and implemented on a fast track.

Commenting on the minister's letter regarding the project, the Site body chief said the association had examined and reviewed the feasibility report of the project prepared by Haglar Bailly Pakistan Limited. He said the association agreed with the size/capacity of the plant (about 40,000 million gallons per day) and its location at TP-III Maripur, Karachi.

The total cost of the project is Rs2.527 billion. The proposed project is on 70:30 debt equity ratio basis. The Site association has proposed that it should be on 80:20 debt equity basis i.e. debt (80 per cent) Rs2.0212 billion and equity (20 per cent) Rs505.40 million. It proposed a contribution of Rs90 million from the municipality against the land and Rs414 million from the stakeholders (private sector).

Mr Baig said the association members found it difficult to arrange this sum of equity before commencing the project. "They are ready to pay treatment charges proposed in the feasibility report and willing to set up such project on BOT basis."

The Site association has proposed a plan on the 20 per cent equity contribution towards the project, according to which Karachi Port Trust's contribution stands at 8.4 per cent (Rs212 million), followed by four per cent by Site Limited (Rs101 million), four per cent by the Site association through the Export Development Fund or ministry of industries (Rs101 million) and 3.6 per cent (Rs90 million) by the municipality against its land.

Dr Baig said the association was ready to give ownership/ directorship to all the stakeholders' nominees on the board of the Joint Stock Company under incorporation with the chief secretary, Sindh.