ISLAMABAD: Engineering Development Board (EDB) claims that it is inching towards an agreement with the local auto industry on a 10 year Auto Industry Development Plan 2012-22 especially on Complete Built Unit (CBU) duty rates - a threat to an industry long prolonged well informed sources told Business Recorder.
This was the outcome of two separate meetings held in which EDB officials, auto industry and Secretary Industries, Aziz Ahmad Bilour participated.
However, confirmed reports suggest that Chairman Pakistan Automotive Parts and Accessories Manufacturers (Paapam), Syed Nabeel Hashmi did not attend the meeting in protest against the proposed CBU proposals.
The unresolved issues which came under discussion were: (i) rate of duty on CBU cars; (ii) rate of duty on CKD both localised and non-localised cars; (iii) rate of duty on CKD on localised parts of motorcycles; and (iv) equalising rate of CKD of localised and non-localised in the fifth year for all vehicles.
The sources said points on which a consensus was achieved between the EDB and auto industry are: (i) CBU rate of 50 per cent on motorcycles; (ii) CKD rate on tractors, trucks and buses; (iii) enhancing CBU duty on tractors to 10 per cent.
“EDB and PAMA have come close to an agreement on AIDP 2012-22. PAMA will send its recommendations by Monday (today) to EDB. Both sides will continue to remain in contact before the final meeting expected to be held Thursday,” said an official on condition of anonymity.
He said that CBU rate is expected to be 45 per cent and will be brought to 4 per cent in the next five years. CKD rate will be fixed at 25 per cent against PAMA’s demand of 30 per cent and EDB proposal of 20 per cent.
When the issue of Chairman Paapam’s absence from the meeting on the basis of ‘disagreement’ was raised with Chief Executive Officer (CEO), Aitzaz Niazi, he rejected the speculation. However, authentic reports reveal that Nabeel Hashmi and Aitzaz Niazi exchanged hot words at a recent meeting which was held in the EDB to discuss draft AIDP 2012-17.
“Nabeel Hashmi is not angry at all. He was busy on Friday and therefore EDB requested another representative of Paapam to attend the meeting,” Niazi clarified. However, when this same question was asked from Nabeel Hashmi, he did not deny the information and said “you are well informed”. When asked if reports that he had sought time from the senior Minister for Industries, Ch. Pervez Elahi, he replied no.
“I’m taking all possible steps that are necessary in the interest of our industry. We will support only those policies that ensure manufacturing in Pakistan and not imports,” Hashmi added.
PAAPAM is criticising EDB for supporting only “briefcase’ companies whereas EDB is accusing car assemblers of making unreasonable profits from advance full payments.
Official documents reveal that there is general consensus on the new investment policy except for timeframe of five years.
Local auto industry wants similar incentives for revival of closed units, but EDB maintains that it will review the proposal on case to case basis. When contacted, CEO, Indus Motors, Pervez Ghias told Business Recorder that PAMA and PAAPAM are holding a meeting to consider EDB’s proposals on Friday as there is a very little difference between EDB and auto industry.—MUSHTAQ GHUMMAN
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