Cabinet decision: Industries Division to frame Pakistan's EV policy

Committee formed to finalise draft of policy within 60 days

ISLAMABAD: The tussle between the Industries and Production Division and the Ministry of Climate Change has landed in the cabinet, which has handed over the role of formulating the national electric vehicle (EV) policy to the former.

Following a disagreement between the two ministries, the cabinet had formed a committee to finalise the EV policy, which comprised adviser to the PM on commerce as the convener and minister for science and technology, adviser to the PM on climate change and special assistant to the PM on petroleum as members. The committee had been tasked to finalise the policy draft within 60 days.

However, the Industries and Production Division would thereafter submit the draft to the cabinet for approval.

Earlier, the Ministry of Climate Change had sent a summary on EV policy to the cabinet, but the role has now been transferred to the Industries and Production Division.

The Industries Division informed the cabinet that the Rules of Business 1972, framed under Articles 90 and 99 of the Constitution of Pakistan, provided mechanism for a smooth and lawful inter-ministerial/division work in the federal government.

Under Rule 15(2) of Schedule 11 of the Rules of Business 1972, the subject of formulation of industrial policy has been allocated to the Industries and Production Division.

The Industries Division has already framed different industrial polices in the past and the Automotive Industry Development Policy (AIDP) 2016-21 is an example in this regard.

In breach of that, the Ministry of Climate Change sent a proposal “for the formulation of EV policy’ and approval of the prime minister was conveyed to it. Subsequently, the Industries Division took up the matter with the Cabinet Division for clarification in accordance with the Rules of Business.

The Cabinet Division conveyed its opinion that the allocated business for the Ministry of Climate Change did not relate to the formulation of any industry-related policy.

Though the Rules of Business are silent on the EV policy as a subject, it is more akin to the functions assigned to the Industries Division under the industrial policy. Hence, the viewpoint of the Industries Division is endorsed, said the Cabinet Division.

The Industries Division held several meetings with different associations and stakeholders including the climate change ministry, Pakistan Association of Automotive Parts and Accessories Manufacturers (Paapam), Pakistan Automotive Manufacturers Association (Pama) and Auto Industry Development Committee (AIDC) to avoid confusion.

Earlier, Pama had expressed its apprehension, both in writing and discussions during different meetings, with the suggestion that the task of EV policy formulation should be transferred to the Industries Division.

However, the climate change ministry took the summary to the cabinet for approval of the EV policy without consultation with the Industries Division.

In the said cabinet meeting, the commerce adviser was not present to give his viewpoint on the summary. Realising the shortcomings in the summary, the cabinet approved the draft policy with certain conditions.

Besides, the Industries Division office sent a letter to the Ministry of Climate Change with the request to transfer the policy formulation work to the Industries Division in accordance with the Cabinet Division’s advice and Rules of Business.

During discussions, the Ministry of Climate Change presented its point of view, arguing that in most of the countries the EV policy was framed by the Ministry of Environment.

In line with that and in the absence of any initiative by the Industries Division, the Ministry of Climate Change drafted the national EV policy, in consultation with all the stakeholders, including the Industries Division, which was approved by the cabinet.

It was requested that since a lot of work had already been done, the matter should remain within the domain of the Climate Change Division.

The Industries Division was of the view that except for the change that EV was battery-powered, the rest was the same as a normal car. “This justifies that the EV policy should stay with the Industries Division.”

Cabinet members were of the view that it was a cross-cutting subject involving several divisions. However, since the subject carried closer relevance to the functions of Industries Division, the lead role should be played by that division.

Meanwhile, Pak Suzuki Motor Company and Honda Atlas Cars have sought some incentives for hybrid cars for the electric and hybrid vehicle policy 2020-25.

In separate letters sent to the Engineering Development Board (EDB), both existing auto players have proposed some tariff schedules under the new electric and hybrid vehicle policy. They said incentives should be the same for hybrid and electric vehicles.

In the wake of coronavirus outbreak that led to the closure of auto industry in Pakistan, Pak Suzuki Motor has also proposed to the government to delay electric and hybrid vehicle policy for one year. Pak Suzuki Motor CEO Masafumi Harano and Honda Atlas Cars VP Maqsoodur Rehman have proposed 25% tariff for both the new entrants under AIDP and the existing players under normal category for localised/body parts.

Published in The Express Tribune, April 3^rd, 2020.

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