ISLAMABAD, Oct 15: The government will establish a powerful body headed by the prime minister, which will grant special economic zone (SEZ) status to all new and existing zones.

The decision is a part of the SEZ policy framework formally approved by the Economic Coordination Committee (ECC). The modalities of the SEZ policy framework include a board of approval (BoA) at the federal level.

According to the policy, the BoA will comprise of relevant ministries, business leaders, and provincial governments and will be chaired by the prime minister.

Details of the administrative methods for processing applications for approving SEZs will be worked out by the Board of Investment (BoI). It will provide secretariat services to the BoA and will cater for all matters of SEZs through creation of SEZ cell, which will hire services of required professionals.

The SEZ cell would be supported by the Competitive Support Fund (CSF).

To meet the level of global competitiveness effectively and efficiently, the creation of SEZs in Pakistan has become an acute necessity to promote trade and investment. The ministry of finance has tasked the CSF to benchmark Pakistan and formulate a policy framework for the establishment of SEZs.

For this purpose, a benchmarking study of best practices in SEZs prevalent in regional countries like China, India, Thailand, Malaysia, the UAE and Vietnam was conducted to develop Pakistan’s policy framework.

Chief Executive Officer of CSF Arthur Bayhan in a statement issued here noted that although the policy framework has been deferred for a while, it provides excellent grounds for promoting trade and investment in Pakistan.

Policy framework for the establishment of SEZs would be protected through an Act which is being drafted.

The draft framework also proposed changes for the encouragement of zone developers and investors that included corporate income tax holiday of up to 10 years and also for zone developers. It suggests that the minimum size of the economic zones be reduced from 500 to 50 acres; the removal of conditions of minimum 40 per cent foreign equity in these economic zones; and country/company specific provision.

The draft policy framework for SEZs emphasises development and operational management of SEZs by the public sector or public-private partnership. It includes governing of all aspects of SEZ planning, development, land allotment and zone management; defining mechanism for the establishment and administration of SEZs; policy measures and incentives for promotion of investment; industrial estates, parks and small industrial parks; and Reconstruction Opportunities Zones (ROZs) in the NWFP and Balochistan with special status with the United States.

The private sector or public-private partnership zone developers, once approved for SEZ status, shall have authority to develop their master plans, allot land and approve individual investors in compliance with the rules set forth in the SEZ policy frame work.

Zone developers may purchase land privately on ownership or lease land from federal/provincial/local governments. The minimum size of an SEZ would be 50 acres with lease period of 50 to 100 years. The SEZ cell, BoI would facilitate investors in acquisition of already notified land in co-ordination with concerned government department.