KARACHI: Auto vendors are not in favour of the government’s proposal that different ministries and departments will deal with the auto sector issues following the closure of the Engineering Development Board (EDB) as per directive of Prime Minister Nawaz Sharif.
In a meeting with auto vendors on Wednesday, Federal Minister for Industries and Production Ghulam Murtaza Khan Jatoi had said the Ministry of Industries would look after the auto and two wheeler sectors, tariff would be dealt by the Federal Board of Revenue (FBR), free trade agreement (FTA) by Ministry of Commerce while standardisation will be handled by the Ministry of Science and Technology.
Talking to Dawn on Thursday, Chairman Pakistan Association of Parts and Accessories Manufacturers Association (Paapam), Mashood Ali Khan said the vendors are not in favour of this proposal.
EDB acted as a ‘one-window’ for the auto sector which dealt with issues related to tariffs, FTAs, etc and then sending the recommendations to the relevant ministries, he explained.
“One-window is necessary for the industry’s growth,” he stressed.
Paapam will meet Secretary Industries Khizar Hayat Gondal on Friday to highlight the negative impact in case the EDB, a strong arm of MoI, is dissolved. So far the government has not issued any notification regarding the dissolution of EDB, he added.
The EDB has called its 35th board of management meeting on July 10 in order to implement the directive of Prime Minister Nawaz Sharif regarding disbandment of EDB.
A bike maker said the EDB is working normally which is evident from the letter issued to bike assemblers three days ago regarding submission of details of yearly production, procurement of local and imported parts and any in house changes. He said all assemblers provide these details on yearly basis to the board.
Pakistan Automotive Manufacturers Association (PAMA) has not shown any anxiety over the fate of EDB.
Even car assemblers are not ready to offer any comment on this development.
Mr Khan said the news of EDB’s closure emerged in a meeting of the Cabinet Committee on Energy (CcoE) in which the board was criticised for delaying approvals of the China-Pakistan Economic Corridor power projects and supposedly involved in rampant corruption.
This led to the directive from the prime minister to dissolve the organisation since it was no longer to serve any useful purpose, he added.
He said interestingly through an amendment made in the Finance Bill 2016-2017, the requirement of EDB’s verification for availing duty exemption had already been removed for IPP projects above 25MW.
Therefore, the CCoE may have been wrongly briefed about the so called delay in processing of power project proposals by the EDB. In fact, EDB’s role for processing cases of power projects over 25MW has been handed over to the Ministry of Water and Power, he added.
The Paapam chief said CCoE needs to review uncalled for criticism and unjust position taken on EDB’s performance.
At a press conference on Thursday at a local hotel, the Paapam chief said there has never been a single scandal of corruption or malpractice at the EDB since its inception in 1995.
The board promoted domestic auto industry and localisation of auto parts which stands at 70 per cent in cars followed by 95pc in bikes, 90pc in tractors and 50pc in trucks and buses, he added.
EDB implemented deletion programmes in the 1990s, followed by the Tariff Based System and formulated the first auto policy in 2007 besides discouraging imports at concessionary rates of duty. The board also revived trucks/buses manufacturing by controlling smuggling/misdeclaration, preparation of the second auto policy in 2016 and efficient management of auto sector regulations (including SROs 655, 656 and 693).
He said since 2010, the government has failed to give due importance to EDB or the engineering sector. The EDB was kept under-staffed and even operated without a CEO from 2012 to 2015. Finally, once again, EDB is without a permanent CEO since March 2017, he added.
There is no merit in the corruption allegations being leveled against EDB officials, he said.
“Our members have not experienced any instances of corruption at any level in EDB. The industry has bounced back and there are new entrants,” he said.
He urged the prime minister to hold a meeting with Paapam members on EDB issues.
Former chairman Paapam Aamir Allawala said the boost in the auto sector in the last three years has played a major role in overall GDP growth.
The EDB also supported the industry’s point of view during ongoing negotiations among China, Pakistan and Turkey over FTA, he added.
Published in Dawn, July 7th, 2017