LAHORE: Lahore Development Authority (LDA) has told the government that the special economic zones (SEZs) cannot be exempted from land conversion fee, as no provision exists in the current laws, rules and regulations.

The authority also clarified that the exemption could only be given if the land was declared as an industrial zone in the master plan of Lahore or amend the existing land use rules for reduction in the conversion fee.

The LDA said this while responding to a summary moved by the Industry, Commerce & Investment Department that sought the former’s comments in this regard, Dawn has learnt.

According to the summary, the provincial cabinet in its meeting on Oct 6, 2025, had approved a proposal for conditional waiver of land conversion fee for all SEZs established in Punjab under the Special Economic Zones Act, 2012.

In this regard, when the the industries department started work following the directions of the cabinet on amending the relevant land use rules of different authorities and local governments, it came to realise that the land conversion may not be required in case of notified SEZs under the act. It further revealed that several notified SEZs fell within the jurisdiction of the Lahore division, including the controlled area of LDA.

The summary explained that all SEZs were duly approved and notified by the federal government through the board of investment after scrutiny of their submitted master and business plan. Moreover, the SEZ Act also said that its provisions override all other laws, adding that the SEZs as defined in the act were geographically defined and delimited areas that were notified and approved under the law for economic, industrial and commercial use.

LDA puts forward two options for govt for exempting SEZs from the fee

The summary proposed two options to the department. Under the first option, the department could follow the original cabinet decision and move a separate summary for necessary changes in the land use rules of all development authorities and local governments. Under the second option, the course of action justified in the summary may be adopted and the LDA may be directed to incorporate notified SEZs land in its master plan and land use plans, and until completion of such formal integration, all notified SEZs in LDA jurisdiction be treated as approved industrial estates for planning and land use purposes. The LDA didn’t agree with the request made in the summary by the department seeking exemption for SEZs.

“In fact, there is no provision related to fee waiver in our rules and regulations. So how can we exempt SEZs from this,” an official source in the LDA told Dawn when contacted.

“This can only be done if these areas are declared as industrial areas in the master plan which cannot be done without the approval of the LDA governing body,” he explained. He added that the body could not approve exempting the SEZs from the fee without amending the rules.

LDA Director General Tahir Farooq said: “The land use conversion fee waiver for SEZs cannot be given under the existing rules. Moreover, it is LDA’s major source of income”.

He said that the reduction in fee could only be allowed if the rules were amended.

Published in Dawn, December 31st, 2025