PESHAWAR: The Khyber Pakhtunkhwa government has approved a proposal to develop proper structure for the Special Economic Zone Authority, which currently exists on paper only, in the next financial year at a cost of Rs150 million.

It has also given the green light to the removal of Seza chairman Ghulam Dastagir.

A summary in this respect was moved for the chief minister’s approval few months ago, an official told Dawn.

Govt also approves removal of Seza chairman

Mr Dastagir, a noted industrialist and former chairman of the board of directors of KP Economic Zones Development and Management Company (EZDMC), was made the Seza chairman in 2015.

He’d lost the EZDMC position in Nov last year when the provincial government reconstituted the company’s board after removing private members due to disinterest in work.

“Following Mr Dastagir’s removal, the chief minister will be the chairman of the authority as originally enshrined in the law,” the official said.

The Seza Act, 2012, empowers the federal and provincial governments to set up SEZs by themselves or in collaboration with private sector on an area measuring no less than 50 acres.

Under it, the SEZs will receive benefits, including one-time exemption from the custom duties and taxes for capital goods imported for the development, operation and maintenance of zone both for the developer as well as zone enterprise and exemption from all taxes on income for a period of 10 years.

The provincial SEZs are required to move the applications received from the developers to the federal Board of Investment (BOI), which will act as the secretariat to the board of approval, headed by the prime minister.

A source told Dawn that though the provinces were required to set up Sezas and enact their own legislation, the issue remained on backburner for one or the other reason thus far.

He said that the summary moved for the removal of the Seza chairman also proposed to create a skeleton setup of the authority to reap the benefits available to the province under the law.

The source said it had been proposed to earmark Rs150 million in the next annual development programme 2018-19 for the skeleton setup of the Seza, its operation and employees’ salaries.

He said other provinces, too, had failed to set up those entities in line with the Seza Act, 2012.

He said KP would be first province to set up a full-fledged Seza.

The source said currently, the entity existed only as a committee headed by the chief minister as laid down in the law but in future, it would have a proper structure to undertake activities to benefit the province.

He said the government was also working on the Seza-related legislation, which would be forwarded to the law department for vetting before its laying down in the provincial assembly for its approval.

The source said the government’s decision to appoint Ghulam Dastagir as the Seza chairman was anomalous in itself.

He said Mr Dastagir was the chairman of EZMDC board until Nov 2017 and that the company was tasked with submitting the SEZ applications to the Seza for putting them up to the BOI, implying conflict of interest.

Published in Dawn, March 29th, 2018