ISLAMABAD, Aug 20: The federal government on Friday hinted at allowing the import of old and second hand auto parts, not manufactured locally, that would yield up to Rs2 billion annual revenue and reduce maintenance cost of the local transportation vehicles, Dawn has learnt.
This was the crux of a meeting presided over by Industries Minister Liaqat Ali Jatoi and attended among others by Commerce Minister Humayun Akhtar Khan, chairman, CBR, Abdullah Yousaf and representatives of Engineering Development Board (EDB), manufacturers of auto-parts and dealers of used auto-parts.
The EDB came under sharp criticism from both the ministers and the used auto-parts dealers for not allowing the import of items which are in great demand but not manufactured locally that was promoting large scale smuggling, participants of the meeting told Dawn.
However, instead of lifting ban on import of used and second hand auto parts immediately, the meeting constituted six-member committee to identify parts which are not manufactured locally and formulate report on the import of used auto parts, not manufactured in Pakistan.
The committee comprises secretaries of Industries and Production and Commerce, chairman CBR, and one member each from Engineering Development Board, Pakistan Auto Parts Association of Manufacturers and stakeholders.
The meeting noted with concern that when full-fledged engines and all individual parts were available in Rawalpindi, Peshawar, Lahore, Karachi and other nook and corners of the country, brought in through smuggling, the EDB continued to resist their legal import and the law abiding transporters had to wait for months and years to import auto parts.
The committee was asked to prepare list of such parts of the old commercial vehicles, which are not being manufactured in Pakistan by the vendors. For example, it was noted that while over 200,000 big trucks of Ford and other old companies were plying on roads, the parts of such vehicles were not manufactured locally and it would be very uneconomical to dispose them off and let them go into the junkyards.
Liaqat Jatoi told the meeting that local vendor industry was flourishing with 58 per cent growth rate of auto sector and also exporting parts to various countries. He said, "the demand of the auto parts importers will be given due consideration keeping in view the interest of local vendor industry."
The meeting was informed that there were more than 200,000 commercial trucks of only one company plying in Pakistan andtheir production has been discontinued. Their parts are not being manufactured in Pakistan but second hand parts are also available in the market through various sources despite ban on the import.
Although the import of new parts is allowed but the new parts of such vehicles are very costly. They were of the view that about one million people were associated with this transport and auto parts business.
The CBR officials told the meeting that about Rs20 billion worth of old and used parts were being smuggled into Pakistan every year from across the Durand line and the country could earn Rs1-2 billion as taxes through legal import of used parts.
A participant said about 20 containers of used parts were smuggled through Pakistan-Afghan border every day and some parts were also being smuggled into Pakistan through sea routes from the Gulf and Iran.
The dealers argued that the government has allowed the import of second-hand parts for aircraft, computers, data processing, electronic machinery, leather, second hand vehicles, ambulances, boilers, textile machinery and tractors, etc., hence there was no justification to continue with ban on import of used parts for vehicles.