KARACHI, Aug 6: Federal Commerce Secretary Tasneem Noorani said on Friday that the government would set up joint stock companies to execute and implement the development work of existing industrial estates.
Addressing directors and members of the Karachi Cotton Association (KCA), he said the trade policy for 2004-05 had laid down a plan for upgradation and improvement of existing industrial estates throughout the country.
The secretary further said that since the industrial activity was directly linked with exports the federal government under the new trade policy had assumed the development responsibility of these estates.
However, Mr Noorani said that the rehabilitation and improvement work of these industrial estates would be carried out through joint stock companies which would be jointly run by public and private sectors on profit and loss basis.
As per the trade policy, he said, the federal government would be funding up to 50 per cent, provinces 25 per cent, 10 per cent by district governments and 15 per cent private sector or relevant trade body.
He further said that the management of these joint stock companies (JSCs) would be run by private sector. The objective of JSCs would be to hire the services of professionals like engineers, accountants and MBAs for planning and execution of various development and rehabilitation works for these industrial estates.
Referring to a point raised by KCA chairman Iqbal Umer in his address of welcome, the secretary commerce said since he did not know much about the hedge trading in cotton, therefore, he would not say much about it.
However, Mr Noorani said if the hedge trading in cotton was good for all the stakeholders there should be no problem in allowing it to function, particularly, when the State Bank of Pakistan had already recommended in its favour.
He also noted the objection raised by the KCA directors over the issue of allowing others to run National Commodity Exchange, where trading in cotton would also be carried out.
They said that since pre-partition the KCA which was founded in 1933 had been dealing with cotton trade and hedge trading was part and parcel of its system which was discontinued in 1973 after the takeover of cotton trade by the government.
The KCA members expressed their dismay over the role of the Trading Corporation of Pakistan (TCP) and pointed out to the secretary that when "prices go up the corporation does not intervene and it only moves into the market when cotton prices crash down."
Mr Noorani said that the TCP had been asked to intervene only if it was essential and this was being done to protect the interest of growers. He said if the grower's interest was not protected then there would be lesser cotton in coming years and this will also damage cotton trade as well as entire textile industry.