Industrial and economic zones: incentive-laden package approved by ECC

[Naveed Yaseen]

ARIF RANA
ISLAMABAD (October 15 2008): The Economic Co-ordination Committee (ECC) of the Cabinet which met here on Tuesday with Prime Minister Syed Yusuf Raza Gilani in the chair, approved an incentive-laden national policy to attract investment for existing and upcoming industrial and economic zones.

Sources said the Board of Investment (BoI) had submitted the summary to the ECC for grant of a lucrative package to attract investment for Gwadar Export Processing Zone (GEPZ) and other existing and upcoming economic and industrial zones. The policy offers 10-year tax holiday for the zones.

Sources said tax holiday in the case of GEPZ will be applicable to investors from the date of start of commercial operation of the project, permission for export of production from the zone to tariff area of the country up to 80 percent on payment of normal duties.

The package also offers normal incentives for all kinds of exports from the zones as available to projects established anywhere in Pakistan. As an incentive, the plots in the zones will be provided to investors on lease (as per existing procedure) at a reasonable rate to be determined in consultation with the respective provincial government.

The package also includes zero rated sales tax on supply of construction materials to investors or development of zones' infrastructure. It also includes exemption from stamp duty and exemption from import policy orders issued from time to time.

The committee deferred gas load management plan for 2008-09 winter season and constituted a 5-member committee headed by MNA Hina Rabbani Khar, to revisit the whole scheme to make it more doable. The members of the committee were petroleum secretary, textile secretary, industries secretary and water and power secretary. The committee will submit revised gas load management plan to the ECC in next meeting.

The Ministry of Petroleum and Natural Resources (MP&NR) presented gas load shedding plan to the committee for approval. The Economic Monitoring Committee (EMC) had approved the plan last month.

The officials of the Petroleum Ministry informed the ECC that this year the gap in gas demand and supply will be more than last year and it has to introduce one weekly off of gas for the industrial sector. They also informed the committee that a rotational formula would be implemented for different industrial sectors for one-day weekly gas holiday.

According to the official statistics, only 2,567-mmcfd gas will be available for different consumers' categories during upcoming winter season when consumption will go all time high with additional demand of domestic sector. It shows a gap of 1000-mmcfd gas in demand and supply during winter season.

The ECC was also informed about the progress of liquefied natural gas (LNG) import project. The LNG import project is being seen as an important move to have an alternative sources to minimise the gap in gas demand and supply in future. The ECC was informed about sugar, wheat and fertiliser availability and their price trend for future.

The committee also approved a summary of the Water and Power Ministry for early resolution of issues confronted with Karachi Electric Supply Company (KESC). It directed the concerned authorities to sort out payment and other issues to help KESC overcome its financial crisis and perform better to ensure more supply of electricity to its consumers.

The officials of the Finance Ministry informed the ECC that the price of sugar and the wheat stock position were stable in the open market. The committee on the issue of subsidy decided to provide a Rs 22 billion subsidy for DAP and urea at affordable rates. The committee was also given a presentation on kitchen items. It was informed that the prices of the most of kitchen items including cooking oil/ghee were showing downward trend.

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