Non-availability of complete supply chain: Export, construction sectors facing problems in resuming operations

The export oriented and construction related sectors are finding it difficult to resume their operations with full capacity due to non-availability of complete supply chain.

Talking to Business Recorder industrialists including surgical, textile and brick kiln said that unless complete supply chain is not put in place, industrial units are unlikely to start their operations any time soon.

They said that major issue at present is ban on public transport due to which labourers are unable to reach factories. At the same time, the government is asking for operation with minimum workforce which makes it a challenge.

On average, medium to large scale industrial units need 50-300 workforce and in some cases up to 1000 workers but the local administrations had issued orders to operate with 20 persons which is not possible to resume operations. They further said that most of the raw materials are not available due to suspension of supply chain.

According to the standard operating procedures (SOPs) issued by Punjab government, the premises or the units, as the case may be, will be staffed with trained clinical staff/doctor. The premises will be disinfected invariably at the start of every shift and equipped with sanitizers, soaps, masks, towel tissues and temperature thermal scanners. These measures will further increase their input cost at a time when they are expected to work under capacity.

Further raw materials, dissembled parts of machinery, and any other material required to be processed by an industrial unit for a finished product will only be allowed to enter the industrial unit or premises after the vehicle is completely sanitized and disinfected at the entry points. Such practices are difficult to adhere to, are time consuming and require additional resources.

Fazal Jilani, former president surgical association, told Business Recorder that in collaboration with the local administration, SOPs are being finalized and industry would be reopened phase-wise in the next two to three days.

"Punjab government has allowed industrial units to reopen under certain SOPs, but it is difficult to open it at once," said Jilani, adding a meeting in this regard was held with the local administration and a plan would be chalked out to re-open industry in the next few days.

Farooq Ahmed Bosal, a senior office bearer of Brick Kiln Association said, "We welcome government decision but Brick Kiln will start work after our labourers return from their native towns."

"Following lockdown most of our labour has gone back to their native towns and they will be able to return after the government lifts the ban on public transport," he said, adding that most of the labour belongs to Khyber Pakhtunkhawa and rural areas of Punjab.

According to a survey conducted by Business Recorder, the owners of hardware, marble tiles, construction material, dry-clean and laundry books & stationary shops, barber shops and nurseries have opened their businesses following the announcement of the government, exempting them from the ongoing lockdown in the country. However, stationary shops in Blue Area were shut by the police, as the government yet to issue notification.

However, they did not take any measures for the implementation of SOPs devised by the administration for shops to control spread of coronavirus.

The SOPs issued by the government clearly state that every shop owner will ensure provision of masks and sanitizers to its staff and clients. The salesman will keep distance of six feet. And customers will keep distance of two feet from the counter. The clients will also keep six feet distance between them in and outside the shops. Queues will be made with six feet distance between each client.

An official source said that the major beneficiary of the Tax Laws (Amendment) Ordinance, 2020, would be developers and builders, who would not be asked any question about their source of investment in projects starting up to December 31, 2020 and completed by December 31, 2022.

Sources told Business Recorder that the individual sellers of lands and plots would not have any tax benefit in case they sell their land to the developers or builders for the construction projects.

However, the government would not ask source of investment or construction on these lands/plots owned by individuals. The source of land acquired would be queried by the tax department but not the source of funds for construction under the Tax Laws (Amendment) Ordinance, 2020.

The draft Tax Laws (Amendment) Ordinance, 2020 to implement the tax incentives package for the construction industry would allow the developers and builders to pay fixed tax in square feet according to the area prescribed by the Federal Board of Revenue (FBR).

In other words, developers and builders would pass on the fixed tax to the buyers and will not pay anything out of actual profit earned on sale of property, sources added.

Under the draft law, the provisions of Section 111 (un-explained assets or income) of the Income Tax Ordinance, 2001, shall not apply to any shareholder or partner of a builder or developer in respect of any amount invested as capital in a builder or developer or land possessed or acquired by the builder or developer, or its partner in case of a limited liability partnership or in association of persons, if the amount is invested as capital or the land is transferred on or before December 31, 2020 in the manner as prescribed and is utilized in a construction or development project in the specified manner; provided the exemption from the provisions of Section 111 will also be available to the first purchaser of newly-constructed buildings of a project if the purchase in the manner as prescribed.