SIALKOT, June 21: The Sialkot Export Processing Zone (EPZ) has failed to attract investors even after 16 years of its launch. Former caretaker prime minister Malik Meraj Khalid had laid the foundation stone of the EPZ near Sambrial in 1989. The site, 238 acres in size, is 20km from here on the Sialkot-Sambrial-Wazirabad Road.

The 900-plot EPZ has so far attracted only two industrialists to build their units there. Most of the remaining allottees are no more interested in investment there for a variety of reasons.

Its location and withdrawal of incentives by the federal government on the recommendation of the Export Processing Zone Authority (EPZA) of Pakistan are cited by the investors as negative factors.

In its suggestions for the 2006-7 trade policy, the Pakistan Sports Goods Manufacturers and Exporters Association (PSGMEA) has urged the federal government to abolish the EPZ project.

According to association chairman Arif Mehmood Sheikh, a lot of documentation was required viz a viz movement of raw material in and out of the Sialkot EPZ. “In view of the fact that sports goods industry has a large vendor base, especially in soccer balls, documentation and taxes for the EPZ were a negative factor.”

Sheikh said the government had spent not a single penny on the EPZ. Rather, proceeds from the sale of plots were used. He said the allottees should now be allowed to sell their plots so that they could invest the money on the expansion of their existing units.

To a questiom, he said initially the Sialkot EPZ investors were allowed duty free import of vehicles, but later on the rule was amended.

Sialkot Chamber of Commerce and Industry (SCCI) president Dr Nouman Idrees Butt said after a long delay the EPZ was functional now. Butt was hopeful of speedy construction in the zone in future.

Giving reason of delay, he said withdrawal of certain incentives at a time when local investors were getting ready for investment shattered their confidence.

Demanding restoration of incentives, he demanded tax exemption on construction material.

Khwaja Musharraf, one of the two industrialists who have so far set up units at the EPZ, has no regrets. He says there is one-window operation and simplified procedure. Consignment examination and other formalities are completed swiftly. Production-oriented labour laws are implemented by the EPZ authorities. “There is no involvement of government agencies in the Sialkot EPZ area. There is no sales tax on input goods, including utility bills,” Musharraf is pleased to note.

Narrating problems being faced by them, he said hurdles were faced by them in case of emergency shipment. Similarly, proper banking facility was also not available.

He rued the fact that facility of duty free construction material had not been extended for building in EPZ area. “We have to undergo various customs procedures for local procurement of raw material, as it involves extra custom and bank charges for E forms etc.”

Musharraf said there were no effective arrangements for disposal of waste at EPZ area. Free destruction and sale of waste was not allowed.

Terming his experience positive, he urged all allottees to establish their factories in the EPZ.

Some EPZA officials suggested that the authority should announce a time period for all plot owners to establish their factories.

Local exporters were of the view that the Export Processing Zone Authority (EPZA) was not sincere in making the Sialkot EPZ a successful project.

They said that EPZA chairperson Mrs Rukhsana Saleem had also cancelled her scheduled visit to the Sialkot chamber on June 20.