BOI awards SEZ status to Allama Iqbal Industrial City!

With the success of several industrial estates, FIEDMC has now officially bagged an SEZ status for its top-of-the-line Allama Iqbal Industrial Estate. This milestone was achieved last week when the Board of Investors reconsidered their application and decided to further its development.

SEZ status

On the 13th of August, the Approval Committee of the Board of Investment sanctioned a ‘Special Economic Zone’ status for the Allama Iqbal Industrial City (AIIC), Faisalabad; thereby, referring the applications of JW SEZ and Dhabeji SEZ for consideration of the Board of Approvals, chaired by the Prime Minister.

Post-Approval

Sources say that the committee reconsidered FIEDMC’s zone application of AIIC and approved the SEZ status – that is, subject to completion of important formalities. The approval committee also gave a go-ahead to the constitution of SEZ committees of AIIC, Bostan and Hub. This further allowed sales of plots in the respective zones as soon as the notification was issued.

Plans dictate that the committees will now be tasked to administer and enforce SEZ benefits and rules to its investors; especially now that it has an SEZ status. They will also provide facilitation between the SEZ, its enterprises and the government. The ‘Draft Sole Enterprise SEZ Regulations’ and ‘Draft Sale of Plot Regulations’ were referred to the board of approvals for a final nod.

As per the documents, the ‘Draft Sole Enterprise SEZ Regulations’ will explain procedural guidelines and propose parameters; this will be in addition to the zone approvals criteria provided in the SEZ Act. It will also safeguard the socio-economic interest of the country and provide passage to serious investors for the establishment of single-unit SEZs.

Likewise, the ‘Draft Sale of Plot Regulations’ aims at providing the Standard Operating Procedures (SOP) to safeguard the interest of the zone enterprises. Furthermore, they will also consider applications by the SEZ Committee for admitting or otherwise into a Special Economic Zone (SEZ), and subsequent sale, lease or sub-lease of plots.

Comments by the Attendees

Presiding over the meeting, BOI Chairman Arif R Bokhari announced significant progress on the development and colonization of SEZs during the last few months. “The teamwork by the federal and provincial government, particularly the efforts of the project management unit for Industrial Cooperation (CPEC-ICDP) of BOI, was helping us to remove the hurdles that are hindering the progress”.

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The chairman vowed that BOI will fully cooperate and ensure efficient policy formulations at the highest level. Furthermore, Bokhari believes that industrialization of Pakistan was the top agenda of the Prime Minister; thus, promised to make all-out efforts in order to see this vision come to life. He believes that expediting the population of Special Economic Zones in the country is key to success. Similarly, timely allotment of SEZ status to industrial estates will also expedite the process.

BOI Secretary, Fareena Mazhar, also briefed the committee. “The first private SEZ was recommended for consideration to the board of approval. We believe that this will lead to a healthy competition between the public and private zones”.

History of Special Economic Zones in Pakistan

The influx of CPEC brought in a new wave of industrialization in Pakistan. Since CPEC’s inception, China planned for Pakistan to benefit from its policy of ‘Industrial Relocation’. This was translated in CPEC phase II, whereafter Public-Private Partnership Authority (PPPA) encouraged local industries and businesses to support this initiative. Construction of Special Economic Zones was a part of its this phase.

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Currently, CPEC has announced 9 Special Economic Zones in Pakistan. Out of these, Allama Iqbal Industrial City – officially under FIEDMC – has already been inaugurated by the Prime Minister Imran Khan, in January 2020. This SEZ covers over 3000 acres of land in Faisalabad.

This state-of-the-art mega project is one of the first SEZs, bearing fruit to the success story of Public Private Partnership. It is currently operating out of one of CPEC’s nine zones. The business community of Punjab is led by FIEDMC. They have also taken lead over similar initiatives planned in Rashakai and Dhabeji in KP and Sindh respectively.

What Is a Special Economic Zone (SEZ)?

A Special Economic Zone is an industrial area subject to unique economic regulations that differ from regulations in other regions of the country. The Special Economic Zone regulations tend to be conducive to foreign direct investment (FDI).

Conducting business in an SEZ typically implies that companies will receive tax incentives and the opportunity to pay lower tariffs. This helps businesses to develop products and services on a lower cost making these competitive.

The primary aim of Special Economic Zones is to facilitate rapid economic growth and create job opportunities. They can do so by leveraging tax incentives to attract foreign investment and spark technological advancement in the nation.

Pakistan legislated its SEZ Act and Rules in the end of 2012. However, in 2016 they further improved the concessions through the SEZ Amended Act 2016. Henceforth, businesses from SEZ to can sell to the local markets without duties.


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