Auto industry urges govt to reconsider EDB’s closure

Claims move will harm the sector rather than advancing it


Our Correspondent July 07, 2017
Newly assembled vehicles are seen at a stockyard of the automobile plant. PHOTO: REUTERS

KARACHI: Auto parts manufacturers have warned the government that the growth of engineering sector will throttle if the government dismantles the Engineering Development Board (EDB).

“The dismantling of EDB will dampen the confidence of investors who are coming to Pakistan to invest in the auto sector,” Pakistan Association of Automotive Parts & Accessories Manufacturers Chairman Mashood Ali Khan said while talking to reporters on Thursday.

Auto industry fears the government may permanently close down the EDB, an independent body created in 1995 under Ministry of Industries to strengthen the engineering sector, on alleged corruption charges and slow approvals for investment plans of new entrants.

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The Express Tribune had earlier reported in the first week of June that Prime Minister Nawaz Sharif had given approval for disbanding the EDB with immediate effect. In a high-level meeting held in May, the premier was informed that the EDB was not performing its duties effectively.

However, Pakistan Association of Automobile Parts and Accessories Manufacturers (Paapam) officials firmly defended the EDB and claimed that it has been instrumental in developing the country’s engineering sector since its inception.

“The EDB is one of the most transparent government departments where bribes do not work,” former Paapam chairman Aamir Allawala said.

Allawala said that the EDB has been deliberately weakened since 2010 by hiring ineffective CEOs, or leaving the post vacant for long periods.

Paapam officials fear the dismantling of the EDB will permanently hurt the interests of the auto industry as the organisation has been instrumental in providing critical input to the government while it negotiates Free Trade Agreement (FTAs) with different countries.

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However, detractors state that the EDB has been harmful for industry’s interests rather than promoting them.

According to officials, the EDB was required to implement the new auto policy 2016-21. However, it caused hurdles in the way of potential new entrants who had already done 80% to 90% work and imported machinery for setting up manufacturing plants in Pakistan.

“In the name of industrial development, the EDB actually played a role in curtailing industrialisation by imposing restrictions on import of several products, parts and raw materials,” Founder of PRIME Institute - an independent think tank based in Islamabad - Ali Salman recently wrote in an article.

Published in The Express Tribune, July 7th, 2017.

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