KARACHI, May 13: The representative bodies of business community have asked the government to direct the Corporate and Industrial Restructuring Corporation (CIRC) not to auction sick units, instead they should be returned to banks for their settlement under State Bank’s revised guidelines.

The business leaders feel that if these sick and non performing industrial units are revived they would help generate employment in a shortest possible time. Secondly, these units would not require fresh foreign or local investment except for settlement of their liabilities under the SPB guidelines laid down in BPD circular No 29.

Consequently, a strong demand has emerged that the CIRC should be asked to either settle the projects or return them to banks for their settlement under the guidelines.

The president, FPCCI, Riaz Tata, told Dawn that the liquidation of these projects would be a national loss because their assets would be sold in pieces as a scrap or real estate. Whereas if these non-operating industrial units were reactivated it would not only help save millions of dollars investment in them but also generate employment and enhance industrial production.

Senior vice-chairman, Aptma, Adil Mahmood has alleged that the CIRC has already returned some of the sick units to the banks and DFIs for their settlement under the SBP’s guidelines.

He said that all these non-performing loans had been taken over from banks and are entitled to settlement under the guidelines of the State Bank. Therefore, it is urged that either these loans be settled by CIRC on the basis of BPD 29 or return them to banks for similar treatment.

Adil Mahmood said it was unjust to hold back projects for auction when they could be revived through settlement. This would enhance confidence of investors in the country and save foreign exchange on import of more capital goods.

Former chairman, Pakistan Bedwear Exporters Association (PBEA) Shabir Ahmed said that a large number of textile units could be revived once they are given a chance to settle their non-performing loans (NPLs) with the CIRC or banks.

He said the country would have to prepare itself for WTO challenges and the phasing out of quotas in 2005. It was not possible to ignore the textile sector which has 63 per cent share in country’s total exports and was the largest industrial base of the country.

Shabir Ahmed said that if these textile units are revived they could further strengthen the textile sector which will have to be more efficient and productive to meet the global demand of textile goods.