Japanese ambassador to Pakistan Takashi Kurai has reportedly approached Prime Minister Nawaz Sharif to seek status of new entrant for M/s Pak Suzuki which intends to invest $ 460 million for new plant, well-informed sources told Business Recorder. The ambassador recently met Prime Minister Nawaz Sharif and discussed prospects of M/s Suzuki's investment of $ 460 million in Pakistan as a new entrant.
The sources said Prime Minister's Office has sought comments from Ministry of Industries and Production on the proposal. M/s Pak Suzuki IS hopeful of a positive response from the power corridors. The government ie Board of Investment and Ministry of Industries and Production, are in discussion with M/s Suzuki, M/s Dewan Motors and M/s Faw after they submitted their investment plans , each hoping that their plans would be treated as new entrants as per the Auto Policy announced last year.
The Auto Policy 2016-21, which was prepared without properly taking the industry on board, was meant to break the 'monopoly' of three existing players which, according to officials, were not ready to hear the government's instructions.
Ministry of Industries and Production, sources said, has already rejected their investment plans, saying that they do not fulfil the requirements of new entrants.
According to the Auto Policy revival of existing assembly and/ or manufacturing facilities, that is non operational or closed on or before July 01, 2013 and the make is not in production since that date and the revival is undertaken either independently by original owners or new investors or under a joint venture agreement with foreign principal or by foreign principal independently through purchase of plant will be treated as new entrants.
The closed plant of M/s Dewan could have fulfilled the approved criteria if the plant had not been made operational for just six months to process the available stock.
"The six months operations has ousted M/s Dewan from the category of closed units," said an official.
According to sources, Ministry of Industries and Production acknowledged that there are certain gaps in the Auto Policy 2016-21 announced last year but the Ministry cannot touch this issue in the presence of Board of Investment (BoI) in the driving seat.
There are also rumours that the government has sought a report from Pakistan's ambassador to Japan on Suzuki's proposed investment in Pakistan.
The three companies are also in contact with all the concerned public sector stakeholders ie Finance Minister, Senator Ishaq Dar, Chairman Board of Investment, Dr Miftah Ismail and top officials of Ministry of Industries and Production. However, the companies are said to be not receiving encouraging response.
When Chairman BoI, Dr Miftah Ismail was approached for his comments on investment proposal of Suzuki, Dewan and Faw, he said that the government intends to accommodate them but it was still unclear how it can be done. According to him, a meeting will be held this week with the interested auto sector companies to discuss their business plans in detail prior to approaching other stakeholders.
"All three companies were asked to send in the business plans. They will give a presentation thereafter," said an official. A couple of months ago, M/s Suzuki's representatives met with Finance Minister Senator Ishaq Dar in his office and briefed him about the business plan. The Finance Minister had asked the company to submit a detailed business plan to the government.
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