ON 30th November 2002, the Federal Minister for Industries and Production asked the Pakistan Industrial Development Corporation (PIDC) to convert its vacant plots at Korangi and an abandoned location housing a cement factory into industrial estates. Fostering industrialization was cited as the main reason. Total land of the two probable locations was estimated as 900 acres.

The minister also directed for taking swift action so as to attract investment from local and foreign investors to develop small and medium enterprises. He also assured to coordinate for the speedy provision of necessary infrastructural services. Whereas the intention to promote small and medium scale enterprises is well meaning, the usage of industrial estates as a tool to achieve this objective needs sound analysis.

In Karachi, industrial land use has been earmarked through various land allocation exercises. There are two categories of such land-use which is obvious from city development pattern; formally categorized land for industrial use and informally converted land that is used for industrial purposes. In the former category, major industrial locations are placed that include Sindh Industrial Trading Estate (SITE), Landhi Korangi Industrial Area, West Wharf, industrial areas in Federal ‘B’ Area and the newly emerging Pipri Bin Qasim industrial zone. Most of these areas have existed historically and have accommodated exclusive land-use for extensive industrial and partial ware -housing development.

Traditionally the designated industrial locations have been the storehouse of large industrial establishments. It is for this reason that large-scale manufacturing, processing and assembling industries mostly exist along the major industrial locations. The other type of industrial spaces have been rampant through out the cityscape. They are the locations of small and medium industrial enterprises. Key locations include Lyari, Nishtar Road, I.I. Chundrigar Road, Saddar, Preedy Quarters, Shershah / Manghopir, M.A. Jinnah Road, Liaquatabad, Nazimabad, Old Town / Juna Market, Garden / Jamshed Road and Soldier Bazar, Jehangir Road / PIB Colony, Societies Area, Clifton and Frere Town, Orangi Town and Baldia Town.

A wide range of industrial functions are being housed in these locations in converted properties of varied plot sizes, densities, building types and dimensions. This pattern has been existing ever since Karachi gained momentum as an industrial and commercial centre. Some of these establishments exist since pre-partition days. Nature of non-hazardous industrial activities also make it logical to have a mixed land-use since most industries do not require any exclusive locational arrangement. For instance, Banarsi weavers and cloth makers have extensive presence in Orangi. It makes it feasible to manufacture the cloth/product in a residential location since the labourers live in the vicinity or even undertake manufacturing in their own houses.

Tailoring shops which deal with the vending orders of garments are spread in Nazimabad and many other locations where such jobs are undertaken. Skilled work force finds it convenient to complete the jobs at their respective residential locations. Similarly computerized embroidery works have spread in New Karachi, North Karachi, Orangi and parts of Nazimabad as a major small and medium scale enterprise.For all such tasks, the logic of production, nature of enterprise, satisfaction of entrepreneurs, scale of operations and resulting employment patterns endorse the survival of small and medium scale enterprises in a mixed land-use situation.

Only such enterprises and activities which are environmentally damaging, socially incoherent and operationally problematic need to be located according to the respective zoning criteria. Tanneries, packaging industries, chemical warehouses, metal works, flour and grain mills, oil mills etc, are few types that require proper consideration for their placement. The historic quarters of Karachi house chemical and metal markets which are highly hazardous to nearby residents. Similarly grain market and allied wholesale activities coupled with haywire warehousing have created a dilapidated environment which is degrading continuously. These activities await proper re-location.

It must however be remembered that industrial land is lying vacant in very large proportions in Karachi. This factor alone questions the logic of promoting any further industrial location. The studies undertaken under the auspices of the Karachi Development Plan 1986-2000 show that as much as 707 hectares of land has been developed for industrial locations during the previous two decades. About 60 per cent of the entire land allocated for industrial purpose has been lying unoccupied.

Most of such land has been owned by industrialists or developers for real estate gains on value increment. Despite the fact that a non-utilization fee has been imposed on unutilized parcels of land, the owners of such plots find it feasible to keep the land open / unutilized, as the price escalation factor is higher than the charges paid to the concerned authorities. It clearly shows that there is no need to have any additional land converted to industrial use as there are several options already available for the purpose. The relationship of industrial production activity and the infrastructural provisions is vital. Among them, water, sewerage, electricity, gas and telephone are the key components. As there is no valid city master plan in force that could lay down the zoning guidelines, the infrastructure agencies do not exercise any restraint in provision of connections under industrial activity any where in the city. In the case of water, after the completion of administrative formalities and laying of internal infrastructure, including storage facilities, the bulk water connection is normally provided by the concerned agency.

Similarly industrial electrical connections can be provided any where in the city on the completion of formalities and payment of prescribed charges. Thus no restriction remains on the siting of small and medium enterprises any where in the city where the concerned investor wishes to invest. Over the period of time, strict segregation of industrial space has been modified to interconnected land uses, mainly due to change in industrial operations. For instance, computer, electronics and information technology related enterprises tend to locate close to main business districts.

These activities require high quality labour and sought-after professionals who normally operate within the city space. Their clientele also evolves from nearby areas. Unless a very specialized output is pursued, such tasks are carried out in city centre or at least main business locations. Besides there are reasons for such investors and prospective entrepreneurs to avoid entering into designated and distant locations for industries.

One, small and medium enterprises are found to be informed in many cases. In such a situation they do not fulfil the administrative and regulatory pre-requisites of operation. Thus they wish to hide away from an checks or surveys that would unveil such characteristics of their existence.

Two, such enterprises often produce goods that are not duly approved for selling or promotion or are unregistered. Therefore entrepreneurs prefer to keep away from designated industrial areas.

Three, the scale of profit of various such enterprises is low — that is to say they cannot withstand high taxation of any kind. It becomes difficult to evade taxes while operating in high visibility areas such as industrial estates.Therefore it is found as detrimental to their operations.

Four, small and medium enterprises tend to locate in areas of multiple conveniences including vendor operations with larger enterprises, sale and marketing prospects, nearness of the supply of raw material / objects of production and labour force. More often than not, these locations do not offer all such conveniences in a single location.

And five, choice of such locations is often questionable where law and order situation is not conducive. Harassment, extortion and bribery are factors that hamper in the development and sustenance of several of such locations.

In addition to the above arguments, the conversion of the cement factory land, which lies in the centre of the built-up area of the city, is questionable. With the exception of a few type of operations, industrial activity is bound to generate a great deal of physical pollution. It also causes strain on the existing infrastructure which is laid down to serve the residential needs. Besides, several industrialist who are located in Korangi have complained about the deteriorating law and order situation. The splinter groups of various political parties have had a history of extorting sizable amounts from the local entrepreneurs and businessmen. Unless the law and order situation is not improved, conditions for industrial location development shall not be conducive.

For determining and allocating locational choices for industrial development, several aspects need to be considered with specific reference to small and medium enterprises. A comparison has to be scientifically made between promoting such enterprises in the context of a mixed land use or in exclusive locations. Similarly the provision and allocation of land should be made in correspondence with actual needs for it. Efforts should be made to control the unwanted speculation of industrial land which affects the overall outlay of capital costs for genuine industrialists. The initiative of launching such drives must evolve from the local entrepreneurs and their representative institutions. Time and again, it is proved that whenever such planning decisions are imposed from the top, their effectiveness remains constrained to a great extent.