LAHORE, Feb 3: Federal Minister for Industries, Production and Special Initiatives, Jehangir Khan Tareen, has said the government will not allow consumer exploitation and cartelisation by industry, also pledging it wont let cement bag price go up to Rs300 in near future.

He was answering questions about the car premium and increase in cement prices at a press conference held in connection with the recently-announced auto policy of the government at the office of Small and Medium Enterprise Development Authority here on Saturday.

He said premium was part and parcel of the car business in certain cases. New models were always sold on premium on their launch, but there was always a discount or gift offers on the purchase of old models, he said.

Tareen claimed the government had always watched the interest of the consumers. It had allowed import of cars to discourage charging of premium on delivery of new cars, he added. The premium-level had been reduced and the delivery period had also been cut to a reasonable level as a result, he claimed. The industry, he said, had also been forced to improve the quality of products to compete with imported cars.

The minister said the government had taken up the issue of premium with Honda and was informed that its plant had remained closed for one month for expansion of annual production capacity. Prime Minister Shaukat Aziz will inaugurate the plant on Monday (tomorrow).

He said the company had also acquired land for installation of a new plant within two years. The government, he added, would meanwhile continue watching the market closely and take action in case the premium did not come down during the next 15 to 20 days.

He said the auto industry’s annual production had jumped from 30,000 units to 200,000 during the past six years due to government policies. The production could be increased to 500,000 units per annum by 2011-12 if the present trend of expansion and investment continued, he claimed. The expansion would not only help develop the small and medium auto-part vendor industry but also create new job opportunities.

He said the auto-policy approved by the Economic Coordination Committee pertained only to cars. The policy on production of buses and trucks was being formulated and a workshop on the same will be held at Islamabad on February 13. It would be followed by policies on manufacture of motorcycles and tractors, he added.

Tareen said the country’s economy was working according to the rules of free market, but it did not mean free for all either. The auto policy had been changed because the deletion strategy was not WTO compliant, and could harm the industry’s interests if continued. It was changed to tariff-based system under which import of auto parts being produced in the country were subjected to 15 per cent duty, he said.

He said the government had countered the increase in cement prices not only by allowing imports but also by offering subsidy. Cement production had not only doubled from 11 million to 22 million tons during the past four to five years but 2.5 million tons would also be exported this year, he said. It was, however, selling at four-year old price, which was reasonable, he said and pledged it would not be allowed to go up to Rs300 per bag under any circumstances.

He said the ECC had approved development of a state of the art industrial estate on 1,000 acre land owned by the Pakistan Steel Mills earmarked for downstream industry. The proposed estate would be developed in one-and-a-half-year period on public-private partnership basis on Sundar Industrial Estate model. Another industrial estate was being developed on 259-acre area in Korangi in consultation with a Singapore-based company. Similar estates would be developed in other provinces later on.

He said the plots to be developed in the PSM industrial estate land would be sold at the rate of Rs7 million per acre — Rs1.5 million as price of land and Rs5.5 million as development charges. No speculation would be allowed on land, he said, and added that the buyers failing to set up the industrial units in two years would have to surrender the plots for re-allotment to others. He said the industrial plots were being sold at the rate of Rs3.5 million in Sind.

He said the Punjab government had offered free-of-cost plots to Chinese investors subject to a minimum level of investment because it wanted to encourage foreign investment.