KARACHI, July 8: Leather garment exporters have not received a single freight subsidy claim from their banks even after six months of the announcement of the subsidy. In a statement issued on Friday, Pakistan Leather Garments Manufacturers and Exporters Association (Plgmea) chairman Fawad Ijaz Khan said that the freight subsidy on export of leather garments was announced by the EDF Board, Ministry of Commerce on January 4, 2005, and the necessary instructions were issued to Export Promotion Bureau to start releasing this subsidy at the rate of 25 per cent of freight amount paid on all export of leather garments from January-December 2005 shipments.

He said that presently EPB was paying freight subsidy on exports under three schemes. These schemes are general freight subsidy, freight subsidy on export of leather garments and inland freight subsidy on export of furniture and marble.

The Plgmea chief said that EPB paid around Rs400 million against general freight subsidy, Rs190 million has been sanctioned for leather garments and Rs10 million for inland freight. These funds are paid out to EPB by the EDF Board of Ministry of Commerce.

Mr Fawad, also the member of the EDF board of administrators, said that exporters are unhappy with the role of the EPB in handling the procedural matters of these schemes. The slow pace of payments of general freight subsidy is evident from the fact that during 2003-04, EPB disbursed Rs459 million as freight subsidy but during 2004-05 it paid around Rs250 million despite the fact that exports had increased.

He said in the EDF board meeting of May 18, 2005, he had suggested that there was urgent need to revamp the schemes of freight subsidy so that exporters could get their subsidy claims without delay. The EDF board had decided in its last meeting to appoint a consultant for revamping the freight subsidy scheme, and terms of reference (TOR) for a consultant would be discussed in the next EDF board meeting.

The Plgmea chairman stressed that steering committee of freight subsidy, which was currently headed by the chairman EPB should be headed by a renowned exporter. Presently only one member of our export association is a member of this freight subsidy steering committee. Therefore, without the inclusion of more exporters in the steering committee there is no one to guide this committee for smooth operation of freight subsidy scheme.