ISLAMABAD: Nov 16: The federal government has invited private sector to develop 550,000 tons capacity storage in Karachi for surplus agricultural items meant for export on ‘Build-Own-Operate’ (BOO) basis.

The “State-of-the Art Silos” with the capacity of 500,000 tons would be developed in Karachi and 50,000 capacity at the Port Qasim, an official announcement said following a meeting on policy package for development of grain storages.

The meeting, presided over by the minister for commerce Abdul Razak Dawood, discussed in detail various aspects of the overall policy to commercialize the agri sector through private sector involvement. Private sector representatives and officials of industries ministry and board of investment participated.

The minister said the government has targeted to export all surplus agricultural products including wheat, rice, fruits, onions, chilies, potatoes, etc., to broaden its export base and improve the trade balance.

Dawood said that in 2000-2001 one million tons of wheat was exported by the government, which was hard, solid and pushing effort of the public sector. If the export systems were made more organized, the export potential would be further exploited to fetch greater foreign exchange.

While giving the details for development of 500,000 tons silos, the minister said, private sector investors has been allowed to submit their revised proposal within 30 days and another 40 days will be taken by the ministry of industries and production for negotiations, evaluation and award of the contract.

He said keeping in view the international viability of Port Qasim, private sector has also been asked to come up with their interest proposals for constructing 50,000 tons silos and submit them by end of this month.

For this purpose he directed the Board of Investment (BOI) to act as ‘one-window operator’.

Dawood said that investors were free to develop higher than the capacity negotiated with government. Furthermore, Railways and PASSCO will make the land available on 33-year lease, further extendible, or on rent of 15 per cent of the market value.

He said the package also includes incentives like 14 per cent mark up, 100 per cent foreign equity for initial 5 years, 10 per cent customs duty on import engineering material and 50 per cent tax relief for first year allowance.

The minister said that 2.5 million tons of surplus wheat was expected next year and the government has already started receiving the bids for export. A letter of intent has been signed by Iraq for import of one million tons, he said.

He said that in the years to come, private sector role in exports of grains will be made more effective, broadened and grater, while the government will restrict its activities to store the strategic reserves.