KARACHI: The country’s biggest city enjoying an edge due to twin ports, Karachi has emerged as the most sought-after metropolis in terms of land prices for businesses despite deteriorating infrastructure in various industrial areas.
High industrial land rates in Karachi are a cause of concern for many small- to medium-sized investors. Over the years, some industrialists from Karachi have either shifted or expanded in Punjab due to rapid industrialisation, cheaper land price and better infrastructure. Along with Punjab, industrial estates in Khyber Pakhtunkhwa are coming up as alternative sites as the law and order situation improved considerably in recent years.
Talking to Dawn, Site Association of Industry (SAI) President Abdul Hadi said no vacant land exists in the Site industrial area. The prices of industries — ranging from small to large units — carry a price tag of Rs200-600 million.
Comprising over 3,500 units situated on 5,000 acres of land, the share of textile units in the Site area is 60 per cent, 20pc pharmaceutical and 10-12pc food industries. Labour and workers usually arrive from Banaras, Manghopir, Orangi, Nazimabad and Shershah areas.
In Korangi Indutrial Area, with over 4,500 operating units, there is limited availability of vacant plots. The price of land is Rs250m per acre, President of the Korangi Association of Trade and Industry (KATI) Saleem uz Zaman said.
Land value in Korangi has been the highest and unchanged for the last two and a half years owing to its location situated near the Defence Housing Authority (DHA), followed by Karachi and Port Qasim ports.
President of the Federal B Area Association of Trade and Industry (FBATI) Muhammad Ali said that despite limited availability of land, the price hovers between Rs100,000-150,000 per square yard which were Rs60,000-80,000 per square yards some two and a half years back.
Talking to Dawn, Secretary General of the Bin Qasim Association of Trade and Industry (BQATI) Abdul Rehman Ismail said there are 450 operating units, adding that “still there are vacant plots”.
The current land price in North Western Industrial Zone is Rs60m per acre which was Rs40m per acre some two and a half years back. In the Eastern Industrial Zone, the price of land is Rs25m per acre as compared to Rs10-15m some years ago.
President of the North Karachi Association of Trade and Industry Faisal Moiz Khan said there are 3,500 operating plots spread over an area of 725 acres comprising mostly SMEs while some 40-50 plots are vacant. Current rate of plot is Rs100,000 per square yards as compared to Rs40,000 per square yards some two and a half years back.
Executive Member of the Korangi Creek Industrial Park Mashood Ali Khan said more than 26 industries are in operation. “ Some 24 companies are under construction, and construction work of another 50 firms has been delayed due to Covid-19,” he added.
As per the initiative of National Investment Park (NIP), the land would only be sold to industries with no resale to investors, making land prices attractive for investors. However, land prices hover around Rs25m per acre. Opportunity for direct and indirect employment stands at 50,000 and 500,000 workers respectively after full operation.
Directors of Hi-Tech Alloy Wheels Munir Bana and Abdul Majid Shaikh said the Ministry of Industries and Pakistan Steel Mills Committee usually decide land prices in this special economic zone (SEZ), but the prices are substantially higher compared with other zones of the country. Hi-Tech’s wheel plant is located at Bin Qasim Industrial Park (BQIP) where the current provisional per acre price is Rs35m.
Established in 2008-09, BQIP has a total area of 930 acres comprising 214 industrial plots. So far only 16 plots have been leased while remaining 198 plots are awaiting buyers.
Incentives offered are common for all parks under the SEZ Act 2012 and SEZ Amendment Act 2016 but BQIP lags far behind in implementation, Mr Shaikh claimed.
Meanwhile, a spokesperson of Punjab Industrial Estate Development Management Company (PIEDMC) said the Quaid-e-Azam Industrial Estate, Lahore, which was established in 1960, has been completely sold while 509 units are operating here.
Similarly, Lahore’s Sundar Industrial Estate, set up in 2004, has also been completely sold where 530 plots are functioning. Set up in 1980 and 2006, Multan Industrial Estate Phase I and II are also completely sold where 243 and 120 units are running. In the above four estates, no vacant plot exists.
The PIEDMC spokesman said at the Quaid-e-Azam Business Park in Sheikhupura, some 602 plots are available at a price ranging between Rs24-28m per acre. So far no unit has been set up here.
Set up in 2012, Bhalwal Industrial Estate has 139 available plots and only three units are functioning where the price of land is Rs10.5m per acre.
The per acre price in Rahim Yar Khan industrial estate, established in 2012, is Rs11.5m. Three units are operational while 77 plots are available.
He said at Vehari Industrial Estate, some 91 plots are available and the per acre land price is Rs7.5m per acre.
“Approximately, 20pc businessmen from Karachi have either shifted or expanded in different industrial estates of the PIEDMC,” the spokesperson claimed.
Talking to Dawn, President of the Khyber Pakhtunkhwa Industrial Association Peshawar (KPKAP) Zarak Khan said around four industrial estates exist in the province. Peshawar Industrial Estate carries an official price of Rs10m per acre while its market price is Rs30m per acre.
The official land prices in Nowshera, Gadoon and Hattar are Rs12m, Rs2.5m and Rs10m per acre respectively.
At Rashakai SEZ, the land price is $150,000 per acre while the land price in Hattar Phase-7 SEZ is Rs7.4m while its market price is Rs15m.
Mr Zarak said Peshawar, Gadoon and Hattar are 100pc sold as they are very old industrial estates. The number of operational units has increased over the past few years mainly due to decrease in terrorism in KP, he added.
Published in Dawn, February 28th, 2021