CPEC-related transport companies come under the spotlight

The government is planning to revise regulatory regime for national/international companies engaged in cross-border transportation of goods to ensure harmonised and smooth operations of foreign companies under China Pakistan Economic Corridor (CPEC) project.
Sources told Business Recorder here on Sunday that it is anticipated that with the operationalization of the CPEC project, the TIR Convention, various bilateral/ multilaterals transit and transport agreements with the regional countries and under more strengthened trade ties with regional/ international community, a sizeable number of foreign companies will be coming to Pakistan in the near future. This warrants further refinement of current regulatory regime regarding transport sector companies for their harmonised and smooth operations.
In this regard, the Ministry of Communications has drafted criteria/procedure for enrolment of national /international transport companies with Ministry of Communications for international road transport operations.
According to prevailing practices, all types of companies including transport companies are either registered with Securities and Exchange Commission of Pakistan (SECP) or with any of the Provincial Administration while Ministry of Communications issues the Transport Permits for cross border goods transport. In order to discuss criteria / procedures for Registration of International Transporters, an Inter-Ministerial Meeting will be held at the Ministry of Communications on December 13. According to prevailing practices, all types of companies including transport companies are either registered with SECP or with any of the Provincial Administration.
As per the SECP Policy, any three or more persons associated for lawful purpose may, by subscribing their names to the Memorandum of Association and complying with the requirement of the Companies Ordinance form a Public Company and any two or more persons so associated may, in like manner, form a private company. If only one member forms a private company, it is called a single member private company. Foreign subscribers/ directors/ shareholders are required to submit the undertaking for company incorporation and subsequent filing of returns.
However, as per the mandate under rules of Business, Ministry of Communications issues Transport Permits to eligible Transport Companies for undertaking cross border road transport operations under International Roads Transport Agreements. It is anticipated that with the operationalization of CPEC project, TIR, various bilateral/ multilaterals transit and transport agreements with the regional countries and under more strengthened trade ties with regional/ international community, a sizeable number of foreign companies will be coming to Pakistan in near future. This requires changes in present regulatory regime regarding transport sector companies for their harmonised and smooth operations.
In this backdrop, Ministry of Communications intends to introduce refinement in the process of enrolment of Transport Companies with Ministry of Communications for international road transport operations.
As per draft criteria for enrolment of National / International transport companies with Ministry of Communications for International Road Transport operational: The number of National or Foreign Company intending to carryout cross border road transport operations will be allowed to operate without the enrolment/ approval of Ministry of Communications.
For approval from Ministry of Communications, following will be the pre-requisites:
Firstly, the Transport Company should be registered under the Companies Ordinance with Securities and Exchange Commission of Pakistan(SECP).
Secondly, the Company should be a private Limited Company.
Thirdly, the Company should have a valid NTN/ Income Tax/Sales Tax Registration.
Fourthly, the Company must have a minimum number of vehicles registered in the name of the Company (in case of Foreign Company, 10 Vehicles and in case of Local Transport Company, 5 Vehicles).
Fifthly, a foreign Company intending to carryout cross border goods transport operations must have joint venture with local partner and maximum foreign equity is 70%.
Sixthly, the Foreign Transport Company will not be granted approval unless it has at least two Nationals of Pakistan as the members of its Board of Directors.
Moreover, a transport company seeking approval for cross border goods transport operations shall submit attested documents including valid registration and vehicle fitness certificate (issued/validated by NH & MP) with the application. The company will be enrolled/approval for international Transport Operations upon fulfilling the above requirements and satisfactory security clearance for a period of five years. The companies would be required to submit on undertaking on judicial paper to the effect that they will operate the transport in accordance with the rules/ regulations of Government in case of any loss or damage incurred in Pakistan or abroad due to a deficiency in the documents or any other mal-practice will be solely their responsibility, sources added.