Karachi: In a setback for setting up of SEZs under CPEC, Sindh government declined to provide funds for a special incentive package, the federal govt had approved in May, reported a local newspaper.
This package had been proposed for the relocation of dying industries from China to Pakistan, which now will impact Chinese investment in the country, sources said.
A letter sent to the federal govt by the Sindh Board of Investment (SBI) has called for re-reviewing the Special Incentive Package for the relocation of dying industries from China to Pakistan.
With Sindh’s objections, the SEZ project could be thrown into turmoil as zero progress has been witnessed in the nine sites identified for its setup.
The aim of this special incentive package was to lure Chinese investment in the country for those dying industries in China and move to Pakistan, which would result in creating thousands of jobs for the local population.
Only those investors are eligible for this special incentive package who are investing in nine CPEC zones and current SEZs cannot avail it.
The letter written by SBI Chairperson, Naheed Memon said “The proposal of giving incentives was quickly developed with brief consultations with provinces.” The 50pc mark-up subsidy by provinces is unreasonable,” she said.
According to Board of Investment (BOI), Acting Secretary Shah Jahan Shah detailed meetings in the regard had been held with Sindh’s representatives and all its reservations had been addressed too.
Shah answered the reservations of Sindh by saying that subsidy would only be provided in case of loans being taken in Pakistani currency.
And the second incentive would involve Pakistan getting 50pc of the freight subsidy on inland transportation of plant and machinery, which would be installed at those special SEZs.
Opposing this measure, Memon said freight subsidy payments to be made by provinces were unreasonable and the federal govt needed to adjust the incentive against import tariffs.
The third incentive would involve provincial govts offering plots by getting 50pc payment in advance and the rest in four bi-annual instalments.
This special package will offer the developers of these SEZs income tax holidays, customs duty relaxation on import of machinery and equipment. They will also be permitted to procure electricity and gas supplies in bulk from utility companies.
These developers will also be allowed to supply gas and electricity to entities at rates approved by the SEZ authority and would be able to rent out sheds for industrial usage purposes as well.
