ISLAMABAD: Federal Board of Revenue (FBR) is reportedly working on a new policy to restrict the import of raw materials for steel production in FATA/ PATA to the extent of local consumption with all imports in these areas to require a consumption certificate and an upfront payment via pay order, sources in Board of Investment (BoI) told Business Recorder.
This development was shared with high level committee headed by Minister Privatisation/ Investment, Abdul Aleem Khan, constituted after a very strong worded letter by the Chinese company, M/s Century Steels Mills to Prime Minister Shehbaz Sharif.
The Committee discussed all the issues raised by the Chinese company in its letter to the Prime Minister.
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The company argued that plot purchase agreement could not be signed with KP Economic Zones Management & Development Company (KPEZDMC) despite various exchanges and meetings whereas the maintenance of staff and expenses has caused losses to the tune of $7.5 million over the last 5 years.
The representative from KPEZDMC informed the committee that the approved land price per acre in the Rashakai Special Economic Zone (RSEZ), as determined by Rashakai SEZ Development &Operations Company (RSEZDOC), is $150,000. This price has been officially endorsed by the provincial government and the Board of Approvals (BoA).
However, RSEZDOC recently submitted a plot purchase agreement to KPEZDMC reflecting a reduced price $ 120,000 per acre, which deviates from the approved rate. In response, KPEZDMC issued a formal communication to RSEZDOC, highlighting this discrepancy and requesting rectification.
KPEZDMC further emphasised that any adjustments to the price must be approved collectively by the four key stakeholders- China Road & Bridge Corporation (CRBC), KPEZDMC, KP SEZ Authority (KPSEZA), and BOI - before proceeding with the signing of the agreement. Additionally, the CEO of Century Steel proposed that the USD 7.5 million operational losses incurred by the company over the years be adjusted against the land cost; KPEZDMC indicated no objection to this adjustment provided it is agreed upon by CRBC.
However, the finalisation of this proposal, including the revised pricing, requires consensus and formal approval from all four stakeholders, including BoI.
The meeting decided that CRBC would urgently submit the case of the mutually agreed land cost with M/s Century Steel to BOI through proper channel for further action and BOI was tasked to endorse the price mutually agreed upon by CRBC and M/s Century Steel, subject to receiving a formal commitment from CRBC confirming the agreed terms.
Copyright Business Recorder, 2024
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