By Fida Hussain
ISLAMABAD: The Ministry of Industries, Production and Special Initiatives has decided to give the final touches to the draft auto policy in order to bring it before the Economic Coordination Committee (ECC) in its next meeting for final approval, a senior government official told Daily Times on Friday.
The new auto policy, which is named as the Auto Industry Development Programme (AIDP), was returned by the ECC in its meeting in October, this year. The industries ministry and the Engineering Development Board (EDB) were directed by the ECC to carry out more work on the draft policy and include more comments of the stakeholders in the draft policy.
The EDB is finalising the process of consultation on the policy and in this connection, the last workshop of its kind is scheduled to be held next week, in order to send the policy to the parent ministry and its subsequent submission to the ECC, which is the apex body to give final approval to the policy for implementation.
The workshop, which will be organised by EDB, is expected to be attended by heads and representatives of car, motorcycle, tractor and truck assembly units. Chairmen, PAPAM, PAMA, BOI, CBR, Convener Refrigerators and A/C Manufacturing Group, VCs of NED, LUMS, and other leading economists. Deputy chairman Planning Commission, federal secretaries of concerned ministries and provincial transport secretaries will also be present in the workshop, which will be inaugurated by Jahangir Khan Tareen, Minister for Industries, and Production. The workshop will be opened on Dec 12.
In the draft policy, the EDB has supported the high tariff on the import of CBU cars and the board asked the government not to lower, at least, the present duty on CBU cars’ import.
The board said that these steps would encourage investment in the auto sector, components manufacturing, job creation and exports. The AIDP also put some conditions on new entrants in the automobile sector. The companies, which are producing more that 500,000 units of cars/LCV’s annually in countries other than Pakistan will be allowed to enter into the local market.
The new entrants will be allowed to import 100 percent CKD kit/ components, at leviable customs duty applicable to the import of components not manufactured locally, for a period of three years from the start of assembly/manufacturing.
The EDB has been working since early this year on AIDP to maintain its recent rapid growth and its integration with the international markets. The pre-announced five year tariff plan for the Completed Knock Down (CKD) and Complete Built Units (CBUs) of all vehicle categories, capacity expansions through investment in critical infrastructure, technology development, Human Resource Development are a few highlights of AIDP.
The programme projects doubling the auto sector contribution to GDP from 2.8 percent to 5.6 percent in 2011-12 and its turnover to Rs 600 billion in the next five years while achieving an export level of $350 million for components and, $300 million for CBU's.
An insider in the auto industry accused that there was no consistency in the government policy. The AIDP was submitted to the ECC in October immediately after it was placed on the official website of the EDB. The stakeholders were asked to give their input to improve the policy, still it was sent to the ECC for ratification. The ECC in its last meeting allowed sales tax free import of buses and taxis and this issue could come for discussion with government in the workshop, he added.