November 04, 2006	Saturday	Shawwal 11, 1427

ISLAMABAD, Nov 3: The government has asked the ministry of industries, production and special initiatives to formulate a long-term plan for attracting local and foreign investment in the country's export processing zones (EPZs).

Official sources told Dawn on Friday that Prime Minister Shaukat Aziz believed that EPZ was a great idea that "failed to take off" in Pakistan. It had big potential but somehow it kept on drifting away from its objectives, he said.

On the directives of the prime minister, the ministry of industries directed the Export Processing Zone Authority (EPZA) to develop a well thought-out strategy, which should include an aggressive marketing plan keeping in view the methodologies adopted by Malaysia, Thailand, India and Bangladesh for attracting investment in EPZs.

Based on that strategy, series of short-term plans will be worked out for proper execution and monitoring to ensure adequate foreign investment in the zones.

The marketing plan will be executed individually by the EPZA in association with the Board of Investment (BoI). The proposal for organisational restructuring and corporatisation of EPZs has also been, in principle, approved by the government.

Sources said that the prime minister was critical of the performance of the EPZA and said that it never had a vision or the strategy to pursue its objectives, therefore, it was imperative that the organisation's culture be changed by charting out an aggressive plan and by hiring dynamic people to execute it.

Sources said that the emphasis will be laid to attract prestigious and reputable investors, who have viable plans to execute their investment proposals. Top global investors installing even assembly operations would be a good beginning as their best practices bring an element of respectability to the organisation.

It was said that the infrastructure was scarce and an expensive commodity should not be wasted along with misuse of land and duty free vehicles. The authority has been asked to revamp its contracts, systems, procedures, and sanctions in such a way that transition to good corporate governance becomes smooth and seamless.

Sources said that the development of the Karachi Export Processing Zone (KEPZ) phase-II will be carried on fast track basis, which will include building of 5-story building, having recreational areas and a snack bar. They said that all possible legal remedies will be taken to reclaim the land for KEPZ phase-III along with the idea of having a jetty for direct transportation from the nearby port.

A decision has also been taken that the zones at Sialkot, Risalpur and Gujranwala will be revisited and plans for their re-vitalisation or viability be considered afresh. The establishment of an EPZ at Gwadar will be executed in the light of the guidelines given by the ministry of industries and production so as to make it a "model zone".

Similarly, all taxation and tariff related issues, including the Research and Development support for garment units in EPZs will be comprehensively examined in consultation with the ministry of commerce and the Central Board of Revenue (CBR) and the case will be submitted to the prime minister for his consideration.

Sources said that Karachi was making substantial contribution in software exports and the future prospects seemed even brighter. There were reports, they said, that US firms were on the look-out to software houses and call centre firms that can perform well.

The major reason is that Pakistani market is 30 per cent cheaper than that of India and it has under-utilised pool of computer science graduates and English language speakers.

It has been learnt that Pakistan Software Export Board is in the process of conducting a feasibility study but its exact scope is not known. Besides that, no credible survey is available, which could shed light on the potential demand of space for hi-tech businesses.

In this behalf the government has asked the concerned officials to conduct a feasibility study, which will not only help EPZA achieve its objectives, but will also be useful for the government to ascertain the gap, which will emerge in future demand and supply.