Alteration in auto policy not possible: minister

The dissolved sub-committee of Economic Co-ordination Committee (ECC) of the Cabinet headed by Minister for Water and Power, Khawaja Asif on Thursday disrupted the new business plans of M/s Pak Suzuki Motors and M/s Faw Motors as greenfield and brownfield by insisting that alteration in Auto Policy 2016-21 is not possible, well informed sources told Business Recorder.
However, the hopes of M/s Dewan Daehan Motors have been kept alive on the plea that the company which remained functional for just a few months has a chance of revival in accordance with existing auto policy, the sources added. The three companies spent around half an hour on presentations to the meeting attended by Chairman Board of Investment (BoI) Dr Miftah Ismail, Secretary BoI, Azhar Ali Chaudhry, Senior Joint Secretary, Arif Ibrahim, outgoing Chief Executive Officer (CEO), EDB, Tariq Ejaz Chaudhary and officials from Federal of Revenue.
The representatives of M/s Suzuki which indicated its intent to invest $460 million in Pakistan also presented support letters from Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Senate Standing Committee on Industries and Production and PAAPAM.
"It's not my mandate to amend the auto policy. The role of the auto committee was limited only to formulation of Auto Policy 2016-21. The companies that intend to invest in auto sector and want some kind of alteration in the policy should approach the Ministry of Industries and Production. I do not even know why car assemblers have been invited for the meeting," the sources quoted Khawaja Asif as saying.
Minister for Water and Power, sources said, argued that Finance Minister, Ishaq Dar, who is the Chairman of ECC and Board of Investment and Ministry of Industries and Production can alter the policy. Khawaja Asif, sources said, asked M/s Dewan Daehan Motors to approach Ministry of Industries and EDB which can take the view that a plant that manufactured only 800 cars and has been closed since 2011 can be awarded the status of brownfield adding that there is no need to alter the policy but it is an implementation issue. Both Ministry of Industries and EDB take this view to resolve Dewan's case.
Ministry of Industries and Production has already made it clear to the aspirant auto makers that their cases do not fall under the category of new investors which have been offered incentives in auto policy.
Chairman BoI, sources said, sought details of business plan of $460 million from the representative of Pak Suzuki, Sheikh Shafiq, who revealed that $250 million will be contributed by Pak Suzuki as investment: $210 million will be FDI, adding that 0.1 million cars of new models will be manufactured in the new plant.
The representative of M/s Faw Motors took the plea that the company's investment plan falls under clause 4.1 of the Auto Policy. The meeting asked the representative of Faw Motors that if the company thinks so then it must approach BoI. Since Faw is already established then why should the government extend fiscal incentives to it retrospectively, the sources added.
According to sources, the case of M/s Pak Suzuki needs amendment in existing policy and asked the company to submit its case to the BoI which can take it to the ECC. A high-level official on condition of anonymity toldBusiness Recorder that M/s Kia Motors, M/s Hyundai Motors and M/s Renault have already expressed willingness to invest in Pakistan under the new policy. M/s Kia and M/s Hyundai have purchased land in Lahore and Faisalabad. "We think the new auto policy is successful with respect to attracting new investment in the auto sector, then we should not offer fiscal incentives to those existing companies which have already made huge profits," he stated.