Sindh Industry Associations

Federal ' B' Association Of Trade & IndustryST-7 , Block-22,Federal 'B' Industrial Area, Karach-75950

Tel # (92-21) 6340362,6360193,6806962Fax # (92-21)-6360203URL: www.fbati.comEmail: [email protected]

CONTACT PERSON:Mr.M. Siddique (Secretary)Cell # 03062553947

SITE ASSOCIATION:

H-16 SITE Karachi. Tel: 2562883-2560705-2581025 Fax: 2560704 E-mail: [email protected] - [email protected]

With a view to promote industry in a manner calculated to be most attractive to the industrialists, the Government of Sindh established Sindh Industrial Trading Esates Liminted as a Government guaranteed company in November 1947 on the pattern of the Trading Estates in the United Kingdom. The main object was to establish planned industrial areas, where prospective industrialists could obtain all the facilities, such as land, roads, railway, water supply, electricity, gas, telephone, godowns, sanitation, drainage, labour colonies and other necessary public amenities, These facilities were calculated to offer attraction oit the intending industrialists and were to result in a saving of initial capital investment on

land besides difficulties in obtaining the required facilities at one place.

SITE Limited has been established on NO PROFIT & NO LOSS basis and all the income and revenue is utilized exclusively for the development of industrial areas. All the policies and procedure are farmed by the SITE Board of Directors who is the Supreme Authority to run the business of SITE Limited. This procedure has been adopted since the Government feels that an organization dealing solely with trade and commence should be run in commercial manner, thereby enabling quick action to be taken and eliminating the delay usually associated with Government way of working. At present SITE Board is comprised of fifteen (15) Directors.

Site has seven Industrial Estates viz Sindh Industrial Estates at Karachi. SITE Super Highway Karachi Ph-O & Ph-II, Nooriabad, Kotri, Hyderabad. Tando Adam & Sukkur in the province of Sindh .

TopManagement

The Company functions under a Memorandum and Articles of Association. Wherein the objectives of the Company have been laid down.

There is a General Body consisting of 60 members, of which 35 are government officials and 25 are non-governmental members.

The Board of Directors consists of the following :-Additional Chief Secretary (Dev) ChairmanSecretary IndustriesSecretary, Excise & Taxation.Managing Director, Suite Southern Gas Co. Ltd.Managing Director, K.E.S.C.Managing Director, KW&SBChairman, Electricity Board, Hyderabad.Managing Director, SITE LimitedChairman, SITE Association, Karachi,Tow Tenant Directors for SITE Karachi.One Tenant Director from SITE Super Highway Karachi.One Tenant Director from SITE Nooriabad.One Tenant Director from SITE Hyderabad / Kotri.One Tenant Director from SITES Sukker.

TopMandate

To develop industrial areas all over the province wherein all necessary facilities like water, gas, electricity, sewerage, roads

are available

To manage such industrial areas through development and repair & maintenance.

To coordinate with different government and non-governmental organizations for the provision of different facilities.

To deal with all land management issues pertaining to the plots in various industrial areas.

TopIndustrial Areas Under SITE Limited

Name of Estate Land Available

SITE KARACHI No

SITE SUPER HIGHWAY PHASE –I No

SITE SUPER HIGHWAY PHASE –II No

SITE NOORIABAD Yes More Land is acquired

SITE KOTRI Yes

SITE HYDERABAD No

SITE TANDO ADAM No

SITE SUKKUR Yes

SITE NAWABSHAH (SITE as Executing Agency) Yes

TopSource of Income

Premium (per acre)

License Fee

Transfer Fee

Conversion Fee

Sub-Division Fee

Amalgamation Fee

Sub-Letting Fee

Additional Trade Fee

Change in Trade Fee

Change in Constitution (per acre)

Reglarization Fee

Sub-Lease Fee

Lease Execution Fee

Non-Utilization Fee

Drawing Fee (Sq. ft)

Penalty for Un-Authorized

Water Charges

Development Charges

Road Cut Charges

Water Meter Testing Charges

Fire Charges

Korangi Association of Trade & Industry:

1st Floor, Aiwan-e-Sanat, Plot # St. 4/2, Sector 23, Korangi Industrial Area, Karachi-74900 Pakistan.

Ph: (92-21) 5061211-3Fax: (92-21) 5061215

NORTH KARACHI ASSOCIATION OF TRADE & INDUSTRY:

ST-1/1, SECTOR 12-C, NORTH KARACHI INDUSTRIAL AREA

KARACHI – 75850

Tel:  +92-21-6951695, 6950995 (World Call) 7689163

Fax: +92-21-6908269

Email: [email protected]

NKATI stands for North Karachi Association of Trade & Industry, which is a registered trade body

representing the commercial industrial and service units located in North Karachi Industrial Area

(NKIA). NKIA is the largest Industrial Area in terms of small and medium enterprises (SMEs). It came

into existence in 1974. Initially there were plots of poultry farms which were converted into industrial

plots that is why the net work of the roads of NKIA basically comprises of small streets as well as

connected roads. It is scattered and spread over an area of 725 acres.

The maintenance of this Area was the responsibility of KDA but it was neglected. Consequently, the

Area suffered from lack of infrastructure facilities and the process of dilapidation started. For these

ostensible reasons, a few individuals initially formed an Association which was not registered and as

such it could not provide satisfactory services. Ultimately, the owners of the factories already

established in the Area felt the need of having a representative body that could look after the

problems of the industrialists of the Area.

In order to achieve this objective, some of the conscientious industrialists of the Area came to rescue.

After considerable struggle, an Association by the name of North Karachi Trade & Industry (NKT&IA)

came into being in 1991. Capt. A Moiz Khan was its Founder and Convener. Other founder members

were: Mr. Sadiq Muhammad, Mr. S.Azim Ali, Mr. Noor Ahmed Khan and Mr. S. Iqtida Ali. The Association

was registered with the Government of Sindh and it continued to arch ahead till 1994 when fresh

elections were held and it was then registered with joint Registrar of Companies Under section 32 of

the Companies Ordinance 1984 (XI VII of 1984). The following industrialists formed the first Managing

Committee:

1 Capt A. Moiz Khan  (Chairman)

2 Mr. Iftikhar Ahmed Malik(Vice-Chairman)

3 Mr. Noor Ahmed Khan(Vice Chairman)

4 Mr. Aslam Chughtai (Member)5 Shaikh Jaffar Bhai (Member)6 Mr. S. Azim Ali (Member)7 Mr. Zahir Alam (Member)8 Mr. Nazir Ahmed Khan  (Member)9 Mr. Sadiq Muhammad (Member)10 Mr. S. Iqtida Ali (Member)11 Mr. M. Amin (Member)12 Mr. Akhlaq Ahmed (Member)13 Mr. Liaquat (Member)

This Committee, under the Chairmanship of Capt. A Moiz Khan actively performed till 1994 and

remained in force for 3 years. Subsequently, during the same year, the Association was licensed and

registered with Director of Trade Organization (DTO) Ministry of Commerce, Islamabad, under section 3

of the Trade Organization Ordinance 1961) with the amended name of North Karachi Association of

Trade & Industry (NKATI) and thus it became a fully representative body and simultaneously got

affiliated with Karachi Chamber of Commerce & Industry.

A special credit goes to the team-mates of Capt. A Moiz Khan who enthusiastically worked for

establishing this Association and brought it in operation for betterment of Industrial units of the

Industrial Area. Bravo!

The very first elections of the Association were held in 1994 governed by Memorandum & Article of

Association approved by the Government of Pakistan. The first Chairman elected was Capt. A Moiz

Khan who continued as Chairman for a period of 3 years from 1994-95 to 1997-98 and the very first

Managing Committee elected was as follows:-

1 Capt A. Moiz Khan  (Chairman)2 Mr. Noor Ahmed Khan (Senior Vice Chairman)3 Mr. Iftikhar Ahmed Malik (Vice Chairman)4 Mr. Aslam Chughtai (Member)5 Mr. Sadiq Muhammad (Member)6 Mr. S. Iqtida Ali  (Member)7 Mr. S. Azim Ali (Member)8 Mr. Muhammad Shafi  (Member)9 Mr. Abdus Salam Sattar  (Member)10 Mr. Zia Ahmed Khan  (Member)11 Mr. Ashraf Lodhi (Member)12 Mr. Faraz Mirza (Member)13 Lt. Col. (R) Amir Mohd Malik    (Member)

In accordance with the election rules laid down in the Memorandum & Articles of Association 1/3 rd of

the total strength of Managing Committee Members retired every year and new members elected

through democratic process of annual elections. The Managing Committee members also elected new

office bearers comprising Chairman, Senior Vice Chairman and Vice Chairman respectively amongst

themselves. This process of Annual Elections continued until such time the new Trade Ordinance No.

LXX1 of 2007 was promulgated by President of Pakistan and new Trade organizations Rules 2007

dated 7th June 2007 were framed under which fresh Applications were invited for grant of new License.

The Association completed all the formalities successfully and new License No. 28 was granted under

section 3(2)d of the Trade organizations Ordinance 2007 by the Ministry of Commerce, Government of

Pakistan, Islamabad. Presently Capt. A. Moiz Khan is the Founder Chairman and Patron-in-Chief of

NKATI. The elected members of Managing Committee for the year 2007-2008 are as follows:

1 Mr. Noor Ahmed Khan (Chairman)2 Mr. S Iqtida Ali (Senior Vice Chairman)3 Khurram Rasheed (Vice Chairman)4  Mr. Faraz Mirza (Member)5 Mr. M Younus Khamisani  (Member)6 Mr. M. Aslam Chughtai  (Member)7  Mr. Muhammad Tariq Murtaza (Member)8 Mr. Muhammad Aamir Ansari (Member)9 Mr. Rana Muhammad Yaseen (Member)10 Mr. Badaruddin Siddiqui  (Member)11 Mr. Sadiq Muhammad (Member)12 Mr. Naseem Akhtar  (Member)13 Syed Tariq Rashid (Member)

Mr. Murtaza Hasan is the Secretary General of the Association.

The elections for the year 2008-2009 shall be held in accordance with Election Rules and procedure as

given in Rules 16 to 21 of the Trade Organizations Rules 2007 during the period from1st October to

30th November 2008 and newly elected office bearers shall assume charge of offices w.e.f. 1st

December 2008.

Role of Associations

All Industrialist Associations including North Karachi Association have specific infrastructural problems

in their respective Industrial Zones and have assumed greater importance and significance in view of

WTO regime having been effective from 1st January 2005.

NKATI has been striving hard since its inception in 1974 to improve the infrastructure of the Area to

meet the conditionalities  of WTO on self-help basis. It is now being assisted by the City District

Government Karachi (CDGK) under Tameer-e-Karachi Programmed. It is doing commendable work for

the development and rehabilitation of infrastructure of NKIA which include revamping of sewerage and

water systems and construction of roads etc. Also to facilitate the Industrial sector for the

improvement of dilapidated infrastructure through the concept of private public partnership a

development management company has come into being with the blessings of President of Pakistan

and the Sindh Government which is known as North Karachi Industrial and Development &

Management Company (NKI-DMC). It has been assigned the task of rehabilitating and up grading the

existing infrastructure and identifying the projects for future needs in the industrial zone.

The existing Associations are now being governed by the Director General, Trade organizations

Islamabad under the new Trade Organizations, Ministry of Commerce Government of Pakistan

Islamabad under the new Trade Organizations Ordinance 2007. It means the working and performance

of Industrial Associations would be monitored more closely and there are no chance for any Industrial

Association to grant fake or bogus membership to anyone which were common complaints in the past. 

Against this backdrop, the role of our Association has become more prominent and effective and it is

now viable and vibrant in the real sense of the term. The Association’s member organizations are

actively engaged in boosting exports and earning substantial foreign exchange for the country.

Although the Association is affiliated with KCCI but it has to play its own distinct and positive role

independently. It directly deals with federal and provisional governments to safeguard the interests of

its member organizations and has the authority to authenticate sales tax documents and other related

documents to facilitate refund claims and connections of power and gas etc. It also assists

Government Departments, both federal and provincial, in recovering dues of excise, sales tax and all

other levies that are outstanding or imposed from time to time. It promotes, foster, encourage, protect

and advance the interest of members engaged in trade, commerce, industries and manufacturing. Also

take up, discuss and make known the views of the Association on questions and matters concerned

with or affecting the interests of such members to federal and provincial governments.

The representatives of the Association also hold meetings with the President, Prime Minister, Ministers

of federal and provincial governments for the resolution of economic, civic and law and order related

problems of the industrialists of the area.  In a nutshell the Association has a pivotal role in the

economic and industrial development of the country and this fact is acknowledged and admitted on all

hands.

Types Of Industries

More then 2500 small and medium enterprises (SMEs) are operating in NKIA About 90 per cent of them

are export oriented units. Major units are: textile and textile made-ups, leathers, Flour mills,

Pharmaceuticals, cardboards, foods and beverages, light engineering, Soap, Dyeing & Bleaching, Ice

manufacturing, Chemicals, Packaging, Marbles, Matches, Pottery, Printing etc.

Contribution To National Economy

They are contributing a big share to the national economy by paying duties and taxes apart from

earning substantial foreign exchange for the country. It is on record that several (SMEs) of the Area

have won Export Trophies of FPCCI. This Industrial Area provides employment to thousands of work

force of which women living in the adjacent localities form the major part. The contribution to the

national ex-chequer is as follows.

Income tax about Rs.3.5 billion per annum

Duties and Taxes about Rs.5.5 billion per annum

Total taxes about 9 billion per annum

The Association provides a collective platform to voice the grievances and bring into focus the

problems faced by the industrialists of the Area for resolution by the concerned authorities. It also tries

to secure to them from the authorities concerned all amenities, particularly in relation to:

(a).      Regular and adequate supply of water, electricity and gas. 

(b).      Proper and adequate arrangements for transport of employees and /or labourers having their

place of work in North Karachi and in particular those employed by the members of the

Association. 

(c).       Proper and adequate means of sanitation, drains, sewers and disposals of effluent.  

(d).      Proper and adequate measures for safely and security and policing of North Karachi. 

(e).      Establishment of posts & telegraphs and telephone service sufficient for the needs of the

members of the Association.

LANDHI ASSOCIATION OF TRADE & INDUSTRY:

Address:

l

Plot No. HG-9D, Improvement Scheme No.3, Landhi Industrial Area, Karachi, Pakistan. 

Phone:+92-21-5026975, +92-21-5026964, +92-21-5022272

 Fax: +92-21-5021626

 Email: [email protected]

 URL: http://www.landhi.org

To facilitate member companies by assisting in dealings with Government and other autonomous bodies.

To strive for result-oriented and growth-accelerating environment, which entail member's business better opportunity to flourish.

To promote industrial activities in the area and to contribute positively to the economic well being of the country by way of enhancing industrial production.

Mr. Bashir H. Ali Muhammad (Sitara-e-Imtiaz)

Professional Qualification

Fellow of the Chartered Institute of Management Accountants (CIMA). United Kingdom

Current Professional Positions

Chairman, Gul Ahmed Textile Mills Limited.Director, Gul Ahmed Energy Limited.Director, Habib Metropolitan Bank Limited.Director, Pakistan Business CouncilDirector, Arwen Tech (Private) Limited.

Honorary Government Advisory & Other Positions

2006 - Member National Strategy on Textiles

2003 - Founder Trustee fellowship fund for Pakistan

Landhi Association of Trade & Industry (LATI) was established in 1967 but became dormant. It was revived in 1987 by Mr. Dawood Usman Jakhura under the guidance of Mr. Bashir Ali Mohammed our Patron in-Chief.

Jurisdiction begins from Mohd. Farooqe Textile Mill located at 8000 road Korangi to Port Qasim including Export Processing Zone and all industries located at National Highway to Khagar Phtak.

2002 - Chairman, Pakistan Britain Advisory Group

2002 - Member, Export Promotion Board, Government of Pakistan.

1999-2002 Member , Economic Advisory Board, Ministry of Finance and Economic Affairs, Islamabad.

1981-2000 Chairman, Pakistan Swiss Trade and Industry Committee.

1989-90 Chairman, All Pakistan Textile, Mills Association

1982-85 Vice Chairman All Pakistan Textile Mills Association

Business Activities Textiles

Activities start from the spinning of cotton and man made fibers and extend to weaving, processing and finishing of all types of cotton and blended fabrics, bed linen home furnishings, garment manufacturing and specialized textiles with its own retail outlets.

Power

The group has been a pioneer in the field of power generation. The textile mill runs on self generation with an installed capacity Of 30 MW. Gul Ahmed Energy operates a power plant of 136 MW Capacity with a project cost of US$ 140 million located at Korangi, Karachi. The sponsor of this project included IFC USA and Tomen Corporation Japan. The project has been in commercial operation since November 1997. The group has major interests also in chemicals and information technology.

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The LASBELA INDUSTRIALESTATES DEVELOPMENTAUTHORITY:

is an autonomous body under the industires commerce and mine ral resources department, Government of Balochistan, and was established in the year 1984.

This institution was established with the sole aim of speeding up the industrialization at district Lasbela particularly and Balochistan in general. Ther is a board of director constituted to run the affairs of LIEDA.

MAJOR TYPES OF

INDUSTIRES ESTEBLISHEDIN LIED'S ESTATES

Textile Sector- Cotton Yarn Spainning- Polyester Yarn Spinning- Textile Weaving- Poleyster Fiber

Engineering Sector- Automobile Engineering- Precision Casting- Misc: Light Engineering

Other Sectors- Pharmaceutical Units- Food & Confectionery- Chemical industries- Marble Processing- Electric & Electronics- Oil Blending & Lubrication- Packaging 

Roads (HITE & WITE) Water Supply (HITE & WITE) 

Power Supply (Hite, GIA, WITE) Gas Supply (HITE) 

Telecommunications Facilities Banking Facilites 

Lieda, Hub Industrial Estate, Hub  TEL: (0853)-303320,303361/62 

FAX: (0853)-303320 EMAIL: [email protected] 

HUB Industrial & Trading Estate (LIEDA)

LOCATION18 kilometers from Karachi s.i.t.e, 11 kilometer from northern by- pass road and two kilometer to the north of r.c.d highway at hub.

AREATotal area of this industrial estate is 1189 acres. Out of which 700acres of land have been developed into the following categories.

Industrial: 646 Acres Commercial: 7 Acres

Residential/ amenities: 47 Acres

INFRASTRUCTURE / FACILITIES AVAILABLE

WATERLasbella canal runs this industrial Estate. 20 million gallon capacity eaterReservoir with sedimentation and over- head tank and a pump house are main components of the water supply A huge outfall drain constructed across the Industrial estate with sewerage station to cater for the sewer disposal needs. ELECTICITYK.E.S.C is supplying bulk electric load. Presently 12 MPGA watt distributed onVarious electric feeders and internal distributed is done by the Authority.

TELECOMMUNICATIONA.NW.D digital telephone Exchange at hub provides telephone and fax facilities.

NATURAL GAS Natural gas is available within the estate. Sui southern gas company limited is the Authority responsible to process application for Gas connection.

SEWERAGESewerage network is available within the estate and managed by this Authority.

RATES

1. PREMIUM

Category Of

Plots                            

Installments

 (Per Sq

Mete)                             

Lump Sum  (Per Sq Meter)

Industrial                                          

Rs.400.00     

Rs.300.00

Commercial / Residential - Rs.250.00

Residential - Rs.150.00

2. ANNUAL GROUND RENT: Rs 2/- per SQ.M per annum

PROCEDURE OF ALLOTMENT

Apply On Prescribed application form as per given perfoma at Annex______. Pre requisite documents as stated in the application form must be enclosed.

Land Shall be allotted as per selection of site by the applicant from the area available.

MODE OF PAYMENT

In case the applicant opt to pay the premium in installments then 50 % of total premium is payables down payment along with application and the remaining amount of premium is payable within two (2) years in quarterly installments.

In case of lump sum payment, the payment of full premium must be enclosed along-with application.

All payment should be made through pay order / demand draft drawn in favour of THE MANAGING DIRECTOR, LASBELA INDUSTRIAL ESTATES EVELOPMENT AUTHORITY.

Lump sum is 25 % less the payment is installment.

Export Processing Zone Authority

ColumnFor the record

ProfileSyed Sajid Ali

Polotics & PolocyNational Database and Registration Authority

Science & TechnologyComputer scents

Visas for high techSpecial Report

Export Processing Zone Authority

Regional export processing zones flourishing while KEPZ struggling for survival

By AMANULLAH BASHARMar 27 - Apr 02, 2000

The Export Processing Zones Authority (EPZA) was established in Pakistan through Ordinance IV of 1980 with the mandate to plan, develop and operate Export Processing Zones in Pakistan. EPZA is an organization under the Ministry of Industries run by a Board of Directors.

The Karachi Export Processing Zone (KEPZ) is the first project of EPZA, which was set up in 1981. The objective for the establishment of KEPZ was primarily to boost industrialization and augment country's export by creating facilities for investors to enable them to set up export oriented units which would, as a consequence, create job opportunities, bring in new technology and know-how and attract foreign investment.

What is EPZ ?

An Export processing zone is a specialized industrial bonded estate where special facilities and incentives are provided to produce goods under one window operation, mainly for export abroad. Thus EPZ is a district physical area where Customs Tariff is not applied and hence bonded to distinguish from the rest of Tariff area Controls by the Customs under especially drafted EPZ Customs Rules.

KEPZ

Currently, the foreign exchange earnings of the Karachi Export Processing Zone (KEPZ) are estimated at $75-80 million as compared to $1 billion per annum by Bangladesh Zone.

Despite the fact that KEPZ has an edge over Bangladesh due to availability of the basic raw material within the country i.e. cotton and cotton yarn the inconsistent economic policies and the poor management altogether have left KEPZ far behind of Bangladesh zones in exports. It may be mentioned that Bangladesh zones have to rely on imported raw material, which generally supplied from Pakistan.

Whatever the reasons may be, the huge difference of performance between the two zones established almost simultaneously in Bangladesh and Pakistan is an undeniable story of success and failure of the economic policies and management of the two countries respectively.

According to Pervaiz A. Sankhla, the General Manager for Investment Promotion, the KEPZ has been planned on 500 acres of land, out of which 200 acres have been developed. Additional 100 acres is being considered for development on BOT basis as phase-II programme. Rest of 200 acres have been earmarked by the Government of Sindh for KEPZ for future expansion programme. The 200 acres of land developed for industrialization has full infrastructure facilities providing all necessary utility services like electricity, gas, water and telephone etc.

The pace of development at KEPZ is reflected in the fact that out of 330 industrial plots, around 150 units were established, however discouraged due to frequent changes in policies, non availability of textile quota for KEPZ units most of the textile units wounded up their operations. At present only 60 units mostly in garment sector are in operation. It is unfortunate that the KEPZ not only failed to attract foreign investors but was also unable to retain those who had come to invest in the early stage. At present only one unit with pure foreign investment is working in the zone while remaining units are owned by non resident Pakistanis in collaboration with local participants. There are some 70 plots for Commercial Sector (Warehousing and Trading) and 33 plots for Financial Sector.

When his attention was drawn towards the reports that the federal government has recently asked the provincial government of Punjab to provide 200 acres of land to Faisalabad Chamber of Commerce for establishment of yet another zone at Faisalabad, Pervaiz Sankhla did not agree with the idea of establishing another zone in Pakistan unless the Karachi Zone was made fully operational.

It may be mentioned that the present government has approved establishment of an export-processing zone in Faisalabad recently.

The government has directed the Provincial Government of Punjab to provide a suitable place of land with in a month so that development work could be started.

The Export Processing Zone Authority has signed a memorandum of understanding with the Faisalabad Chamber of Commerce and Industry about one and half years ago. The proposed EPZ, a joint venture of the EPZA and the FCCI would be set up in the surroundings of Faisalabad, which would comprise 200 acres of land. The FCCI had already created a Trust to expedite the EPZ affairs. However it could not show any progress due to non-provision of suitable land for the project. To resolve the delayed issue of EPZ, the FCCI invited the Chief Executive Gen. Pervez Musharaf who during his recent visit to Faisalabad held a meeting with the FCCI executive body and approved the establishment of the zone.

The Punjab Government would only provide land for setting up of the zone while finance for the development works would be generated by the business community and the FCCI without involving the national exchequer.

Proposal for incentives

Pervaiz Sankhla, while spelling out the factors which proved counter productive and created hurdles in the growth of KEPZ regretted that the concept of export processing zone was never acknowledged as a project of national importance. The successive governments gave priorities to the issues and projects on political considerations. They gave priority even to a small bridge over the Zone because of political gains. Apart from a few exceptions, the appointments at the Chairman level were also made in a casual way without considering the technical, financial and managerial skill of the man. Now there is a trend of hiring people from the private sector. It is a good sign however people coming from the private sector have their own priorities. They have to lookafter their own priorities and have a little time to spare for the zone.

PAGE endorses the views of Sankhla because not only the Export Processing Zone but other public sector organizations where the people hired by the government for high slot are hardly available even during the office hours because their preoccupations somewhere else. It is strongly suggested that only

those people should bring in the higher places who gives an undertaking to take the responsibility as a full time job and not as a part time activity.

When PAGE invited his attention towards the reports appearing in the press regarding alleged misuse of the duty exemption facilities available in the zone by certain elements and certain other irregularities Sankhla shifted the responsibility on the Customs Authorities which he called as the custodians of the non-tariff area moreover he said that black sheep are everywhere.

Pervaiz Sankhla who is associated with EPZA from day one, narrating the story of success of other zones in the region especially in Bangladesh, Sri Lanka, Thailand, Malaysia and Indonesia said that the capital outflow first from Japan and Korea find a secure place in these countries because of their consistent policies and incentives provided by their respective governments. The multi-dimensional effects of the development of these Export Processing Zones not only enhanced the export earnings of these countries but gave stability to the per capita income of their people taking it from $300 to a level of $2000 within a couple of years.

When asked what steps are needed to make KEPZ a prosperous and successful venture, he categorically said that we have to be competitive with other zones, we would have to offer similar incentives offered by other zones. The availability of raw material in plenty and more skilled workers Pakistan still has an edge over other zones in the region especially in Bangladesh or Sri Lanka. He specially mentioned that we in Pakistan are charging cost of land while it is being given cost free in other zones. They are offering pre-built standard premises to house the units at competitive rental basis. We also need follow suit. Another important factor Pervaiz mentioned was the availability of textile quota to BD zone, which is 13 time higher than what it is available in Pakistan. The investors in KEPZ could get the textile quota for a long period of time due to internal conflicts and personal differences of the people responsible for distributing textile quota, which also hampered growth at KEPZ. We failed to negotiate with the US for proper availability of textile quota for our zone investors, he regretted.

Pervaiz recalled that EPZA had moved a working paper to the previous government. That paper which includes the required incentives for moving the wheel at a faster speed at the zone be considered by the relevant committee appointed by the previous government. He said that the committee was reviewing the proposals on Oct 12, 1999, which happened to be the last day of that government.

Pervaiz on the request of PAGE provided those proposals which he believes can push the affairs at KEPZ much effectively.

Following proposals were made to make incentive package of EPZs in Pakistan comparable with the facilities being offered by other zones in the region.

Proposals for income tax

The objective behind these proposals is to bring investors of EPZ in the net of Taxpayers in line with the requirements of international donor agencies. What we propose is to make it a presumptive income tax and ensure its collection under one window concept.

a) Income Tax exemption for 15 years from the date of production.

b) After expiry of 15 years exemption period Income Tax @0.5% of export as applicable in Tariff Area be applicable to EPZ units for 1 5 years.

c) Existing investors who have completed 15 years of production to immediately start paying Income-Tax @0.5% of Export value and those who have not yet completed 15 years would enjoy this exemption for remaining number of years, before starting payment of Income-Tax.

d) It be mandatory for exporters of EPZs to deposit income tax through 'challan' in the Zone Bank at the time of export as under one Window concept EPZA will itself supervise collection of the income tax on behalf of the Income Tax Department.

A success story of Bangladesh and Sri Lanka Export Processing Zones

BANGLADESH

Bangladesh which was over all regarded as a poor country in the back drop of low capital formation and limited technical know how, created Export Processing Zones Authority in the year 1980 to mitigate imbalance between industry and agriculture. The first Export Processing Zone was established in port city of Chittagong on an area of 453 acres. Dhaka Export Processing Zone was the next to come up over an area of 355 acres, which is now being expanded. Third zone at Mongla is being developed on Southern Port of Bangladesh. Two more Export Processing Zones, one at Comilla and the other at Ishurdi are in implementation stage.

The Board of Governors felt in the early 80's that the objective behind this concept is not being achieved therefore, an in-depth study was conducted on causes of failure of Export Processing Zones in Bangladesh. After identifying the areas of amendment, legal frame work was prepared by eminent lawyers who adopted legal frame work of successful Export Processing Zones of the region i.e. Singapore, Indonesia, South Korea, Malaysia, Philippine, Thailand, Hongkong, Taiwan and Sri Lanka.

A lucrative and liberal incentive package for Export Processing Zones was approved by the Government explaining that foreign investors bringing capital to the country need full guarantees in all respect. The modest approach was adopted by the concerned departments for vigorous implementation of the policy, which included promotional efforts at the highest level, by the person with sufficient state Authority, knowledge and legal backup support.

As a result Chittagong Export Processing Zone become the Hub of industrial activity. After 16 years of its establishment i.e. 1999, it had 87 industries in operation, which employed 51,000 Bangladesh workers. In the Dhaka EPZ which started in the year 1994 there are 37 industries in operation employing 26000 workers. In the year ended June 1998 exports from Chiattgong and Dhaka Export Processing Zones were to the tune of US$450 million and $ 185 million respectively.

Cumulative exports from these two zones amount to US$2153.41 million. Capital investment in Chittagong EPZs is US$244.610 million and in Dhaka EPZ is $988.193 million. Bangladesh Export Processing Zones Authority has also signed agreement with South Korea to setup the South Korean country zone on 1000 hectares of land in the city of Chittagong.

SRI LANKA

Faced with unemployment of 1.2 million in early 70's Sri Lanka shifted emphasize from subsidizing consumption to promote production. The Government as per other Asian countries recognized foreign investment as important element in development process. The Greater Colombo Economic Commission (GCEC) was set up in 1978 to encourage and promote foreign investment, increase employment opportunities, increase export earnings and diversify industrial base. GCEC's first project was setting up of an EPZ at Katunayke whose development was carried out with the assistance of team of consultants from Shannon Free Airport Development Company. Ireland and UNIDO. 2nd Zone was planned at Biyangama. GCEC sanctioned first project in 1978; however, first company to enter the Zone was multinational US company Motorola.

During earlier phases of development of Sri Lanka EPZs, Katunayake made significant contribution towards relieving the unemployment problem and 32,500 persons got employed in

that phase. Number of foreign multinationals considered Sri Lanka as conducive place for investment thus encouraged with the experience Sri Lanka Government extended application of tax exemptions to all over the country. Now foreign investment inside EPZs and domestic industries is administered by one Authority and is in 3rd Phase of expansion. Among other facilities it has bus terminal, dry port, port cargo handling. The 2nd Zone at Biyagama is over 180 hectares adjacent to a river, the 3rd Zone at Koggala is over 91 hectares. The latest figures of 3 Sri Lankan EPZs are as follows:

EPZ Year founded

Area in hectares Workers

Employment of

Katunayake 1978 190 56,000

Biyagama 1986 180 22,485

Kogala 1991 80 5,000

The 15-year history of export earnings of EPZs (1978-93) shows that EPZs earned $3.3 billion or 62% of Srilanka's total $5.3 billion.

Srilanka implemented a policy to emphasize on garment, agriculture infrastructure and recreation projects assisting not only foreign but local investors in promoting export oriented industries with the result that entire country is now Investment Promotion Zone providing development and employment at the same time.

Proposals of income tax

a) incometax exemption for 15 years from the date of production.

b) after expiry of 15 years exemption period income tax @0.5% of export as applicable in tariff area shall be applicable to EPZ units for 15 years.

c) exising investors who have completed 15 years of production shall immediately start paying income tax @0.5% of export value and those who have not yet completed 15 years would enjoy exemption for remaining number of years before starting payment of income tax.

d) it would be mandatory for exporters of epzs to deposit income tax through challan in the zone bank at the time of export. Under one window concept EPZA will itself supervise collection of income tax on behalf of income tax department.

The original proposal of EPZA for a Tax Holiday of 15 years from the date of production is adopted in the amended version. But it is further proposed that on expiry of this tax holiday the rate of Income Tax applicable to the exporters of tariff area i e. 0.5% of the export will be deposited with the relevant Tax Authorities in order to provide one window service to the investors.

Central Board of Revenue did not agree with our original proposal of 15 years tax holiday quoting the commitments of Pakistan with the international agencies under which such tax exemptions were allowed to laps. They observed that proposed concession would result in substantial revenue loss. They have also quoted the investment policy of 1997 by which NIZs, Free Industrial Zones, Free Trade Zone, EPUs and estates for Small and Medium Industries will enjoy identical and liberal concession.

Sankhla pointed out that scheme of National Industrial Zones which is reflection of EPZs scheme is still at its inception stage and not a single National Industrial Zone has come on the ground so far, whereas Karachi Export Processing Zone (KEPZ) is operational since 1983-84. Three (03) more zones stand notified where development work is in progress. The matter regarding setting up of more zones in the country is under process. Withdraw of Tax holiday from EPZ scheme at this point of time has resulted in creating credibility gap and has given a serious set back to the investment in EPZs of Pakistan.

EPZs/FTZs of neighbouring countries who are in direct competition with EPZs of Pakistan are offering this incentive e.g. Sri Lanka and U.A E offer 15 years Tax Holiday from the date of production, Bangladesh 10 years and Turkey offer NO TAX FOR EVER.

In this era of cutthroat competition we have to be atleast comparable to attract foreign investment if not better. The apprehended revenue losses could be set aside by inflow of increased foreign investment, employment generation, foreign exchange earnings, transfer of Technology/ Managerial skills and increased quantum of exports.

It is therefore proposed to allow 15 years Tax Holiday from the date of coming into production. After expiry of tax holiday the rate applicable to exporters in Tariff Area i.e. 0.5% of export may be deposited with relevant Income Tax Authorities.

As a result of above arrangements, the new investors would avail this exemption for 15 years from the date of production, the existing investors of KEPZ who have completed 15 years of their production would start paying Income Tax and who have not completed 15 years would enjoy exemption for number of years in balance In EPZs all goods meant for export can leave the zone only if they are supported with a No Objection Certificate (NOC) issued by EPZA Payment of Income Tax can be made mandatory before issuance of any NOC for export to be supervised by EPZA on behalf of Income-Tax Department. Such collection of Income Tax will be against a challan to deposit in the relevant head of income Tax Department

Such exemption would logically be available to all kinds of Enterprises established in EPZs regardless of the fact whether they are Factories, Mills, Off Shore Banks, Insurance Companies, Clearing and Forwarding Agencies, Trading Firms or Warehouses etc.

Income tax exemption allowed to foreign nationals withdrawn from 30-06 1997 may be restored for a period of 5 years from the date of joining a unit in EPZ.

Central Board of Revenue did not agree with the proposal on the ground that it would result in substantial revenue loss.

It may be mentioned that Pakistan has entered into bilateral agreements with number of countries by virtue of which employees from those countries would automatically stand exempted from payment of Income Tax if they pay the tax in their own country. The only class of employee who will benefit from this incentives are those who come from a country with which we do not have bilateral agreement. Withdrawal of this incentives would result in stoppage of transfer of managerial skills, which was one of the very objectives of establishing EPZs. Moreover this would cast a positive impact on the prospective investors while comparing the incentive package of other zones in the region. Therefore the apprehensions of CBR that such concession would result in substantial revenue loss is not true. The proposal to keep this incentive alive may be reconsidered against transfer of Managerial skills. It may be termed as cost of Human Resource Development.

The facility of export of goods through land route may be extended to EPZ.

Central Board of Revenue and Ministry of Commerce did not support the proposal considering it prone to misuse land route is the major incentive for potential investors in the proposed zones at Risalpur, Quetta,

Rawalpindi etc. and establishment of these zones shall not be feasible if the land route is denied to export from EPZs. Attention of CBR and Ministry of Commerce is drawn to the recently signed agreement by Customs syndicate with NATCO for transit Trade through K.K Highway to Central Asia and China. If the goods from other foreign countries are allowed transit facilities through Pakistan the same treatment should be given to the goods from EPZ. Similar agreement can be signed with N.L.C to transport goods from EPZ to neighbouring countries and Central Asian States to overcome apprehension of pilferage if any. We strongly suggest that investors of EPZ should use the same protocol as is available to other EPZs of the region by using our land routes. Once the goods reach inside the port area the chances of smuggling would recede substantially. Moreover adequate arrangements be made by Customs to counter act chances of smuggling.

The entire world is looking towards Pakistan which has the shortest land route to Central Asia. But we are denying this route to Export Processing Zones only due to anticipatory chances of pilferage. Now such apprehensions are loosing their momentum as a result of World Trade Order (WTO) of which Pakistan is a signatory and which calls for reduction in import duties to curb smuggling. Therefore this facility may not be denied on illusionary assumptions.

Let EPZs of Pakistan work as "Cargo Village" for manufacturers of other countries who are looking for the market of Central Asia. It would open new vistas of investment in EPZs of Pakistan. We may not over look India who has allowed its EPZs inbond export to Nepal and Bhutan via land route. Moreover the completion of Motorway in Pakistan is going to play a major role in promoting Warehousing / Trading in EPZs. We therefore insist that land route is also allowed to EPZs at par with others in Tariff Area. CBR could not envisage that EPZ investors could send their goods to Dubai enroute to Central Asia via land route in Pakistan. They have to pay the additional cost of freight. Let them directly use the land route to become competitive.

Value added portion of goods manufactured in the zone may not be taxed when sent to tariff area.

Central Board of Revenue did not favour the proposal on the ground that it will introduce distortion in the tariff regime.

We would like to draw the attention of CBR to the recently announced "No duty no draw back" rules for exporters in tariff area notified vide SRO844 (1/98) dated 24-07-1998 which clearly envisage that value added portion in finished goods cleared for home consumption shall not be taxed. Availability of this incentive to the exporters outside EPZs (who may not be the manufacturers) has put the manufacturers/exporters of EPZs at a disadvantageous position and calls for a concurrent policy for bonding manufacturing at par with the EPZ otherwise no body will be interested for investment in EPZ when this facility is available in Tariff Area.

It may not be out of place to mention that according to the KYOTO Convention of the Customs Co-operation Council (of which Pakistan is a signatory) this facility needs to be extended to manufacturers in EPZs. It says.

"Amount of the import duties/taxes chargeable on goods taken

Into home use after processing in a Free Zone may be limited to the amount of any exemption from or repayment of internal duties or import duties and taxes granted when those goods were introduced into the Free Zone".

This facility is available to the units in EPZs of India, Phillipine, Malaysia and Taiwan. This facility is also available to the goods manufactured in manufacturing bonds. The unit in the zone deserves better treatment than the manufacturers abroad because these units provide employment opportunities in the domestic labour market besides adding to the industrial growth in the country. They also deserve better treatment vis-a-vis the manufacturing in bond in Tariff area because the foreign exchange invested in

these units is not a liability on the State Bank of Pakistan and does not effect our borrowing limits and credit ceilings. They also need an equal treatment with manufacturers in Tariff Area who sell their products in local Market.

It has to be well understood that any product manufactured in EPZs consume local labour and utilities of Pakistan. It is the case with any product manufactured in Tariff Area. The only difference being that in case of EPZ raw material has been imported Duty Free whereas in Tariff Area it is Duty Paid and the end user has to pay the duty to the extent of imported items. Used. The discrimination in case of EPZ manufacturers may therefore be removed.

Export Processing Zones exporters/manufacturers may be exempted from payment of general sale tax and excise duty levied on utilities.

The concept of enclave manufacturing is based on duty and tax-free availability of inputs in order to make the manufacturers competitive in the international market. The Government has recently levied General Sales Tax and Excise duty on the bills of utilities in the country. This would not only make the exports incompetitive but would also negate the basic scheme of Export Processing Zone. Moreover General Sales Tax and Excise duties are refundable to the exporter of Tariff Area when the goods are exported; whereas no such scheme of refund is available to the investors of EPZs. It is therefore necessary to exempt investors of Export Processing Zones from payment of General Sales Tax and Excise duty.

EPZ investors' council

Sheikh Javaid, Chairman of EPZ Investorsí Council while giving his views for making the export processing zone a success in Pakistan said that instead of diverting its attention towards establishment of other zones in Pakistan, the government should focus its attention to bring KEPZ a blooming project. He said that the government had earmarked 500 acres of land for KEPZ some 20 years ago. Unfortunately our economic managers failed to deliver the goods and even today after two decades there are hardly 60 units are operating in the zone. The primary objective to promote exports provide jobs to our people and transfer of technology is still a dream. Sheikh Javaid said that instead of going for new zones in the up country, we should cash on the strategic situation available in Guwadur where the most beautiful location is available near the blue waters of Guwadur port. Sheikh Javaid, who has visited the Guwadur port many times, is the great advocate of developing an export-processing zone at Guwadur, which is attractive to the investors due to its close affinity to the Middle East as well as to the Central Asian States. Surrounded by sea from two sides and guarded by huge mountains, the Guwadur zone would be a unique place due to its natural beauty, he observed.

He agreed that similar incentives in other zones in the region should also be given at KEPZ to make it attractive for foreign investment. Sheikh Javaid said that besides providing incentives there is an acute need for face lifting in and around the zone. The dilapidated conditions of the road approaching to the KEPZ are highly repulsive to the sight. The road leading to zone should be constructed, bushes on both sides of the road which present a haunted look needed trimming. The uncompleted and neglected structures of gymkhana and mosques for many years also need early completion. While appreciating the government steps to bring professionals from the private sector into public sector organizations, he suggested that by making amendments in the rules, the board of directors of KEPZ be expanded by including people from the private sector with an assignment to monitor pace of growth at the zone, he observed.

Mr. Kamran Y. MirzaChairmanPhone: (092-21) 5082003 & 4Email: [email protected]

Mr. Zahoor AhmedGeneral Manager (Facilities)Phone: (092-21) 5082011Email: [email protected]

Mr. Abdul Razaq Fathani Director (Finance)Phone: (092-21)5081109E-mail: [email protected]

Ms. Shahida QaiserGeneral Manager (Investment Promotion)Phone: (092-21) 5082023Email: [email protected]

Mr. Capt (Retd) Syed Waqar HussainSecretary Phone: (092-21) 5082008Email: [email protected]

  Mr. Mumtaz Ahmed MemonDeputy General Manager (Engineering)Phone: (92-21) 5082019Email: [email protected]

Mr. Shahid Ikram HashmiGeneral Manager (Engineering)Phone: (092-21) 5082017Email: [email protected]

Mr. M. Ashraf Wahla(Consultant) Regional Office LahorePhone: (092-42) 6310671Fax: (092-42) 63106701Email: [email protected]

Bilal IslamNetwork Administrator (IT Department)Phone: (092-21) 5080814Email: [email protected]

  Mr. Mushtaque Hussain LaghariDeputy General Manager (Electrica)Phone: (092-42) 5082020Email: [email protected]

      For General InformationUAN: 111-777-222Email: [email protected]