Due to non-availability of the required infrastructure including natural gas and paucity of funds, the voluntary winding up of the Pakistan Textile City Limited (PTCL) has been started. This was revealed in the National Assembly Standing Committee on Textile Industry which met in the chairmanship of Khawaja Ghulam Rasool Koreja here on Tuesday.
The committee was given briefing on the closure of the Pakistan Textile City Project, Karachi, along with the policy to sell out its land and Plastics Technology Centre (PTC).
The committee expressed its reservations over the closure of Pakistan Textile City Project, Karachi, and observed that due to mismanagement and corruption, the debt of textile city is exceeding to Rs 2.4 billion. The committee directed the ministry to sell out 250 acres of its land for payment of its outstanding debt and efforts should be made to make it operational by involving Chinese/foreign companies for its betterment.
The committee was informed that the company owes a debt of Rs 2.4 billion to the National Bank of Pakistan, out of which Rs 1.3 billion were spent on the purchase of land at Port Qasim and Rs 1 billion have so for been incurred as interest on loan. On the daily basis the markup payable is Rs 700,000 approximately. These challenges could be easily handled by selling 200 acres of land to K-Electric, for setting up a coal-fired power plant. The land could not be sold so far as the purpose to establish coal-fired power plant is not covered by the objectives of the PTCL declared in its memorandum of association. A summary was, therefore, submitted to the Prime Minister for placing the case before the ECC for approval.
However, the Finance Division conveyed in principle approval of the Prime Minister, dated March 17, 2016, for winding up of Pakistan Textile City Limited after a due process. The Prime Minister constituted a committee to furnish its recommendations for further appropriate steps.
The Prime Minister's Office conveyed the orders of the PM according to which the recommendations of the committee have been approved in principle. Accordingly, the Finance Division shall immediately take the lead for voluntary winding up of the company, after meeting all necessary prerequisites.
The sixty-fifth meeting of the Board of Directors of Pakistan Textile City Limited ("Textile City") was held on November 17, 2016. It was resolved that due to non-availability of required infrastructure, including natural gas, and financial resources, the company is unable to continue its existence and as decided by the committee of winding up formed earlier by the federal government, the process of voluntary winding up be started as laid down in the Companies Ordinance 1984.
The meeting further resolved that the general meeting of the shareholders be convened after completion of all formalities and the chairman was authorised to fix the date of general meeting of shareholders of the company for this purpose. As such the voluntary winding up of the Pakistan Textile city Limited is in process under the Companies Ordinance 2016 (previously called Companies Ordinance 1984).
The secretary ministry of textile industry presented the report on the performance of Plastic Technology Centre (PTC). He was of the view that unfortunately, the PTC was in terrible condition and needs to be focused. The committee was of unanimous view that new campus of National the Textile University should be established at the PTC in order to make it profitable organisation.
The committee was informed that the PTC, Karachi, is undergoing financial crisis and for the last six months, no salary or recurring expenditure has been paid to the centre. Its monthly operating expenses are Rs 1,754,437. Moreover, the annual estimated expenses of PTC are Rs 21.05 million. It is also pertinent to mention here that Plastic Technology Centre is not receiving any regular budget from the Finance Division. The matter was discussed by the secretary ministry of textile industry with the secretary finance.
The ministry of textile industry requested the finance ministry that an amount of Rs 21.05 million may be allocated to clear the earlier liabilities on account of salaries, miscellaneous expenses and to cater for expenses in the current financial year during which other options will be explored to run the centre.
The ministry of textile industry has proposed to move a summary to the Prime Minister for reshaping/ merging the PTC, SFDAC and PKGTI. Following three options are in the pipeline for consideration including: making these ailing organisations part of National Textile University as campus; declaring them a new textile university and winding up their status under Section 42 of the Companies Ordinance; and converting them into an attached department of ministry of textile industry. However, the ministry is recommending option number 01 for consideration of the Prime Minister.