KARACHI, May 16: High cost of land is said to be inhibiting industrialization in Sindh where unemployment has reached its historic levels, which could well be judged from the fact that presently the suicide rate of unemployed youth in the province is the highest in the country. For setting up an industry a huge amount of capital is required for the purchase of an industrial plot. According to market sources, presently the rate of industrial plot in Karachi ranged between Rs50 million and Rs60 million per acre. Against this, the rate in Punjab is much less and ranges between Rs3 million and Rs40 million, depending upon the industrial estates in cities and adjoining areas.
The city of Karachi once used to be a Dubai for the people coming from the upcountry for employment is presently passing through most critical juncture of its history where industrialization has almost come to a standstill. Barring balancing, modernization and replacement (BMR), no new industry is being set up and the main reason is that the cost of land is so high that no entrepreneur is willing to put such a huge amount at the initial stage which could squeeze him of his funds prior to entering into any productive activity.
The basic reason for such a critical state of affair is a wide gap between demand and supply. For over the years the successive governments in Sindh did not care to develop new industrial estates. Consequently, as of today a few industrial plots at very high cost are only available in old industrial estates — SITE Industrial Area, Korangi Industrial Area and Nooriabad.
Despite the fact that all these industrial estates lack basic infrastructure facilities but still business people prefer to set up industry in the port city of Karachi. The high cost of land has now made it almost impossible for them to go by their choice. Therefore, some are moving to Punjab while others are unable to expand their production activities.
The Port Qasim industrial area does hold some promises but again the price of land there is also so high that most of the prospective investors pull back their plans once they find it too costly. A leading group of modern re-rolling mill wanted to set up a larger capacity plant at the PQ and sought a piece of land measuring around 10 to 12 acres but after knowing its cost they shelved their plan.
There are a number of such cases which could be quoted but it is a bitter fact known to all that the prices of land in Karachi, may it be residential or industrial, are so high that a huge capital is required to make the things get going. Therefore, if an entrepreneur has options he moves away to Punjab where cost of land is not only cheap but the law and order situation is far better than Sindh.
The much-talked about ‘textile city’ at the Port Qasim is still on papers even after the lapse of one year. According to Pakistan Bedwear Exporters Association Chairman Shabir Ahmed, the government had constituted its board with such members who were already established industrialists and had little interest and stakes. He suggested that upcoming new business people should be inducted at all levels who could work hard for themselves and for the country.
Another impediment in the industrialization in Sindh is high cost of stamp duty charged for registration. The harassment of different federal and provincial government departments engaged in the collection of cess and levies such as labour department, Civil Defence, EOBI, SESSI, etc., is such a curse upon the industry that much of time is wasted dealing with them. Having land revenue powers the inspectors of these departments openly demand illegal gratifications from the industry people even if they have completed all the legal and formal requirements.
Sindh has always been unfortunate for not getting due attention towards its issues and the successive governments lacked political will to touch upon grass root problems confronting the province. Over the years no new industrial estate has been developed and the existing estates lack basic infrastructure. There are no roads, water and above all unpredictable power supply which frequently disturb production and quality of manufactured goods.
In Punjab from time to time new industrial estates have been developed. The present provincial government announced two new industrial estates — Sundar Industrial Estate and Value Added Industrial Estate. There is a cluster of industries around Lahore on Ferozpur road, Multan road and Kasur road, besides the Raiwind Industrial Estate. But Sindh has yet to see any new industrial estate being announced, which is further pushing land prices higher and higher in the existing industrial areas.