ISLAMABAD: Over ten projects of Rs25 billion in various sectors like automobile, auto parts, steel and pharma have been marred by delays due to failure of granting them tax exemptions permitted in Special Economic Zones (SEZs).
The setting up of SEZs across Pakistan was initiated to lure foreign and local investors to establish industrial plants and providing incentives of one-time waiver of custom duties for plant/machinery alongside a 10-year income tax holiday on condition these units came online before June 2020, reported Dawn.
UAE-based Al-Futtaim Group has chosen Bin Qasim Industrial Park (BQIP) for setting up its plant for rolling 30,000 Renault cars per annum which was bringing foreign investment worth $120 million.
National Industrial (NIP) Allotment Committee gave go-ahead for allocation of 50 acres of land to Al-Futtaim for establishing its auto plant. But according to industry vendors, not wanting to be named disclosed NIP had still not given official approval of land allocation to Al-Futtaim Motors.
NIP’s delay to formally approve the land allotment, has caused the sponsors who made the Al-Futtaim Motors investment possible have stopped transfer of $120 million equity and could take back its investment.
Also, Sindh government’s delaying go-ahead of SEZ enterprises is creating impediments in investments of provincial SEZs. As a result, over ten projects are languishing, and sponsors are paying exorbitant custom duties and sustaining heavy demurrages at port.
Lucky group was allocated 130 acres of land by NIP for the establishment of a plant to manufacture KIA compact vehicles at BQIP. The company has failed to claim incentives permitted under SEZ Amendment Act 2016, due to it not being classified as an SEZ enterprise by Sindh Government.
Various companies facing delay at being classified as SEZ enterprises by Sindh government include, Young’s Food, Universal Packaging, Mehran Commercial Enterprises, Pinnacle Pharma, Sci-Life Pharmaceuticals, Barkat Frisian and Techno Auto Glass.
According to vendors, Punjab government is speedily issuing SEZ enterprise statuses to companies within two weeks for projects being setup in Quaid-e-Azam Apparel Park (QAAP), M3 Industrial City and Value Addition City compared to Sindh.
Sindh Board of Investment (SBI), Chairperson and Vice Chairperson of SEZ Authority, Sindh Naheed Memon said there were no problems in assigning statuses of SEZ Enterprise to investment projects.
She disclosed that delays were occurring due to SEZ status approval to industries will be approved by Sindh Chief Minister, Murad Ali Shah, who is also Chairman of SEZ Authority Sindh in a meeting to be held shortly.
Memon said to Dawn “Since there are other agenda items related to developing and building the capacity of this authority, this meeting needs to be held. “I am trying my best to give approval of SEZ status to the investors as soon as possible.”
