K-P’s plan to set up two new sugar mills in DI Khan scuppered

PHC rules govt failed to follow its own rules, laws for setting up new mills

PESHAWAR: Plans by the provincial government to set up two new sugar mills in Dera Ismail Khan have hit a roadblock after a court halted the process.

The Peshawar High Court (PHC) has declared the notification for the new mills as ‘without lawful authority.’

“There is not enough raw material available,” the court wrote in its 36-page judgment. “In case of new mills, the production of existing four mills in DI Khan division will be affected and will even lead to their closure.”

The judgment, by a division bench comprising Justice Waqar Ahmad Seth and Justice Mussarat Hilali, came after a writ petition was filed by the owners of Chashma Sugar Mill, Al-Moiz Industries Limited and Tandianwala Sugar Mill Limited in 2016.

They had challenged a notification for setting up the mills which had been issued by the provincial government in 2015, which according to the government would provide hundreds of new direct and indirect job opportunities apart from boosting the revenues generated for the province.

It listed the provincial secretary for industry, industries and commerce director, K-P Economic Zone Development and Management Company chief executive, DI Khan division commissioner, the Agriculture secretary and the provincial government through the chief secretary.

The mill owners contended that no-objection certificates (NoC) issued for new mills were unlawful, adding that the creation of any new mill in the area would deprive other mills in the area of their right, essentially killing them.

In its judgment, the court noted the Khyber-Pakhtunkhwa (K-P) government had failed to complete requisite formalities listed under the K-P Sugar Factories Act, 1950 and the ‘Distance restriction policy of 2005’ which stipulates that two sugar mills must be at least 35 kilometres apart. At the moment, there are four sugar mills operating in DI Khan with a capacity of 3.5 to 4 million tonnes per annum. It is estimated that production is almost wholly dependent on locally grown sugarcane which grows over 150,000 acres of land.

With the sugar industry in DI Khan almost wholly dependent on locally produced crop, alternative sources such as sugar beet are alien to the area, the sugar mill owners contended that not enough sugarcane is produced in the area to support six mills.

“Before the issuance of the NoC for new sugar mills, the concerned government departments must have investigated, to see if there is enough raw material available,’’ notes the judgment “But they (government departments) did not perform their duties.”

The government had argued that enough sugarcane was being produced in the region, while farmers from Punjab will also be given incentives to bring their produce over to DI Khan. However, the court was told that mills in Punjab already operate at 70 per cent capacity.

No NoC taken from EPA

Apart from failing to follow procedures under the law, the court noted that the government had also failed to secure clearance from the province’s apex environmental body.

The court declared that while issuing the NoC for the sugar mills, the government officials failed to fulfil mandatory requirements listed under Section 13 of the K-P Environmental Protection Act 2014, and no prior permission was sought from the Environment Protection Agency (EPA) .

Published in The Express Tribune, January 29^th, 2018.