Punjab cancels 125 industrial plots

Decision comes as owners fail to either start work on projects or clear land dues

ISLAMABAD:

The government of Punjab has cancelled around 125 industrial plots that had been allotted in the country’s largest industrial estate for establishment factories but remained vacant. This has created resentment among big tycoons who claim that start of the work on projects was delayed due to failure of authorities to provide utility services.

The cancelled plots are expected to be allocated to Chinese investors, which has sparked concerns among the industrialists.

The decision to cancel the plots in the M-3 Industrial City -Faisalabad was taken by the board of Faisalabad Industrial Estate Development and Management Company (FIEDMC) last month, according to the documents and officials having knowledge of the development.

The management said that the plots were cancelled because either the owners could not start construction work or they did not make the due payments on account of the cost of land.

The management had initially prepared a list of 145 plots spanning over 734 acres of land. The subsidised value of the land was Rs5 billion while the actual market prices are far higher than the subsidised rates.

However, the details revealed that the owners had already made cumulative payments of Rs4 billion and linked the beginning of the construction work with the provision of utilities.

The Pakistan Atomic Energy Commission and Sitara Textile Industries are also among the affected parties.

Leading businessmen of the country had acquired land in Pakistan’s largest industrial estate in hopes of having all facilities under one roof but the government failed to provide adequate gas and its provision is pending till today.

Against an estimated requirement of 110 mmcfd of gas per day, the government provided only 25 mmcfd, said an industrialist whose plot has been cancelled. Similarly, the allotments were also cancelled in a few cases where civic infrastructure was not fully available.

“The decision of cancellation was made by the board of directors in the best interest of the project and to give an opportunity to the actual local and foreign entrepreneurs and to attract foreign direct investment,” said FIEDMC Chief Executive Officer Rana Mohammad Yousaf.

He said that around 61 plots were cancelled because construction work had not begun on them despite the fact that allotments were given more than five years ago.

The low population of industrial zones has remained a concern for the government which is largely due to lack of facilities that hamper production activities. The highly expensive industrial land cannot be used for real estate purposes hence these plots cannot be sold to third parties under the FIEDMC by laws. They are only meant for establishment factories.

The chief executive of the FIEDMC said that “about 86 units have kick started production and nearly 106 units are under construction in the M-3 Industrial City.” He added that owners of these units had purchased plots much later than those businessmen whose lands have been cancelled.

He said that there was no shortage of energy as 25 mmcfd gas was available and 15 mmcfd more gas would be available shortly. The chief executive officer said that no electricity connection was pending and 152 megawatts of energy was available against actual consumption of about 25 MW.

Yousaf added that holding of a plot for more than five years was a major impediment in the colonisation of M-3 Industrial City, as these plots were obtained at highly subsidised rates. However, he also referred to a few cases where the plots were canceled after two years of the allotment.

The chief executive said that about 125 plots have been cancelled and no order has been withdrawn so far.

On the other hand, the affected industrialists stated that their plots had been annulled without following the due process, which includes penalties on non-utilisation of the land and giving an opportunity of a hearing.

Yousaf said that FIEDMC management had written to the owners and requested them to begin construction work and clear the dues.

Prime Minister Imran Khan has started paying attention to implementation of the second phase of the China-Pakistan Economic Corridor (CPEC). Operationalisation of at least four special economic zones under CPEC is part of the government’s plan to revive the mega project.

Pakistan and China have recently signed the Industrial Framework Agreement aimed at facilitating Beijing’s investors to set up their factories in Pakistan, giving them preferential treatment in provision of utility services and resolution of their issues.

However, despite numerous meetings chaired by the prime minister, the issue of provision of utilities remains unresolved, which is also the root cause of cancellation of over 125 plots.

The FIEDMC is also responsible for Allama Iqbal SEZ of the CPEC, which is at the initial stage of construction.

The industrialists urged that the government to allot land to the Chinese investors in the Allama Iqbal Industrial City instead of cancelling the allotments of local investors that has created serious resentment.

Yousaf said that construction of a gas pipeline was in process which will supply gas to the Allama Iqbal Industrial City while the electricity connection was given last month.

Published in The Express Tribune, February 27^th, 2022.

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