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The Risalpur Export Processing Zone, set up 12 years ago, has been a failure. It has less than half a dozen functioning industrial units.
Spread over 200 acres, the REPZ has some 198 unutilised plots still available for setting up export-oriented industrial units and trade warehouses. It was set up in 1997-98 on demand of KP’s industrialists and traders.
However, the Export Processing Zones Authority has not lost all hopes. The newly appointed EPZA chairman, Muhammad Tariq Hassan, paid two visits to Risalpur and Peshawar to apprise himself of the reasons behind its failure. He listened to the business community’s concerns and agreed to look into their recommendations for making REPZ a viable and attractive option for investors.
He promised the traders to get an approval from the federal government for allowing REPZ-based warehouses to trade with Afghanistan through land route, currently prohibited.
As per EPZA’s rules, normally 80 per cent of the goods produced by any manufacturer in an export processing zone has to be exported while the remaining 20 per cent can be sold in local markets.
However, REPZ is an exception. The manufacturers in this zone, can sell 30 per cent of their products in local markets. According to the EPZA rules, duty-free import of machinery is allowed and import of duty-free vehicles with certain conditions is also permissible.
Given the state of insecurity in the country, to quote EPZA Chairman Tariq Hassan’s words, “EPZs offer ‘200 per cent’ security and round the clock electricity and gas supply and one-window facility.”
Despite all these facilities, the REPZ did not succeed. Why the zone did not click in spite of being situated at a few minutes’ drive from the motorway (M-1), 45-minute drive from Peshawar, and about 2-hour drive from the country’s border with Afghanistan?
Local businessmen talking to an EPZA official at the Sarhad Chamber of Commerce on November 26 last, spoke of better options available to them for conducting their export businesses. One such option is the Federal Board of Revenue’s ‘Duty and Tax Remission for Exports.’
Then investment in foreign exchange is a hurdle. Zahidullah Shinawari, a Peshawar-based industrialist, says the rules permit investment in foreign currency that does not make much sense. If an investor has to purchase dollars from the open market, why would anybody invest in the EPZ?, he asks.
