LAHORE, Oct 23: The bureaucracy seems to have tricked the government into rolling back the plan to reform the Pakistan Central Cotton Committee as an effective research organisation by wresting back its control from the private sector management.

The government has already dissolved its board and handed over its administrative control to the cotton commissioner for an unspecified period.

The reversal of the PCCC reforms will adversely hurt the efforts to increase domestic cotton output, textile industry analysts said. While Pakistan is struggling to maintain its crop size at 13 million bales since early 1990s, India has already raised its output to 37 million by investing heavily into research and development.

Increase of each million bales in the domestic output means creation of one million jobs and additional export revenue of $1 billion. Thus, an analyst working for a brokerage company told Dawn Pakistan could create 13 million direct and indirect new jobs and raise its textile exports to $26 billion just by doubling its cotton output.

“Look at Bangladesh, which has successfully created millions of jobs and increased its textile exports to around $25bn although it does not grow cotton at all,” the analyst said, as he underlined potential of the country’s textile industry for pushing exports for rapid economic development and stable exchange rate.

The previous government had reconstituted the PCCC board in July last year to include majority of its members from the large-scale textile industry, farmers, ginners and others related to cotton and textile trade, and given the committee’s administrative control to Aptma by appointing its nominee Shahzad Ali Khan as vice-president with full executive powers.

The objective was to restructure the committee on the lines of modern cotton research organisations in the US, China and India to raise domestic output to 25 million bales and improve the quality of fibre by 2020. In exchange for administrative control of the committee on its demand, Aptma had voluntarily agreed to pay a higher cotton cess, which had been raised from Rs20 a bale to Rs50 to raise more funds for scientific research to increase yield.

Now the textile division and PCCC bureaucrats have convinced the government to take back the control from Aptma, advertise the post of vice-president, and dispose of its restructuring plan for an indefinite period. It has also proposed to cut representation of Aptma -- which now contributes over Rs650 million annually to finance the PCCC’s salary and other bills -- in the committee.

The dissolution of PCCC board and ouster of Aptma nominee from the top executive post has also made uncertain the future of reforms launched since the control was handed over to the private sector.

Immediately after taking over as VP of the PCCC, Shahzad Khan, a yarn exporter, had launched a series of structural reforms to convert it into a “centre of excellence” and started cutting unnecessary expenses to save money for research projects. A reputed chartered accountancy firm, M/s A.F. Ferguson & Co, was hired to reorganise the committee. On its recommendations, the now dissolved board approved hiring of an independent chief executive officer (CEO), chief financial controller (CFO), a chief scientist and two directors of research from the private sector and the jobs were advertised in newspapers.

The efforts of the new management also helped increase cess collection to Rs50 million a month and by the time Khan was removed from the job in May this year for participating in the general elections, the PCCC had a cash surplus of Rs280 million in its bank account. The improved cash flow also helped the new management pay back a loan of Rs20 million the committee had drawn from its employees’ pension fund for paying salaries to its staff before the private sector management took over.

“When we took over the control of the PCCC, we soon realised that a mafia of corrupt people was ripping it of the funds the textile industry is contributing for research,” Khan told Dawn when contacted to know the reasons for his removal from the job.

“We took measures to plug leakages and stopped payment of unapproved and fake TA/DA bills, which obviously upset the vested interests who set off to hamper reforms. We also wanted a special third-party audit conducted of the PCCC funds for the last five years but the textile division and PCCC bureaucracy impeded it because they knew it would hurt their interests,” he added.

He said Pakistan lagged behind India and other cotton producing countries because it was not investing in research and development of high yield cotton varieties as 90 per cent of the PCCC budget was eaten up by salaries and perks of employees who do not work at all or by the corrupt mafia. He said the chartered accountancy firm hired by him to remodel the committee had proposed diversion of 60 per cent funds for research and 40 per cent for establishment.

A textile division official who spoke on the condition of anonymity said the government had decided to advertise the post of vice-president as Aptma leadership had insisted to reappoint Khan. He admitted the recent decisions of dissolving the PCCC board and advertising the post would “indefinitely delay” the process of its restructuring. He said Aptma should not have anything to do with the running of affairs of the PCCC.


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