May 11, 2006	Thursday	Rabi-us-Sani 12, 1427

LAHORE, May 10: Draft Auto Industry Development Programme (AIDP) prepared by the Engineering Development Board was reviewed by a 13-member committee appointed by the auto industry at a meeting held here on Wednesday.

The meeting, presided over by Zahid J. Yaqub, general manager, policy development, EDB, was attended by CEOs and directors of car assemblers and office-bearers of the Pakistan Association of Automotive Parts and Accessories Manufacturers.

According to the EDB spokesman, the AIDP aimed at expanding the auto industry capacity, achieving competitiveness, encouraging localization and integration with global markets.

It also provides for a safe and relatively risk free transition of the industry from the deletion programme to an open Tariff Based System (TBS).

The programme has recommended an import duty at 35 per cent for CKD kits (un-indigenized), 50 per cent for indigenized components for three years and an import duty at 35 per cent for spare parts. It contained yearly phase down of tariffs on indigenized parts with certain percentage points. But the committee recommended that the same rate should be protected for five years in order to facilitate long-term investment by the industry.

The programme contains ‘productive asset investment incentive (PAII)’ to create more capacity, upgrade and modernize the existing facilities and introduce advanced technologies through investment in the productive assets both in assembly and component manufacturing sectors. It includes die and moulds, jigs and fixtures, designing and styling, in-house manufacturing, logistics and software and research and development.

The PAII will be available on capitalized productive assets. Incentives may include duty credit equal to certain percentage of the value of total productive assets invested. It spreads over five years in equal parts for use to import plant and machinery, jigs, and fixtures, tooling, etc., against the rationalisation of platforms.—APP