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Reviving sick units in KP

Peshawar:Khyber Pakhtunkhwa has embarked upon a plan to commercialise a portion of the industrial zones in order to revive sick manufacturing units.
The money coming from commercialisation will help industrialists in reviving their businesses and resolving the cash flows problem. Commercial banks’ lending in the province has not been adequate enough to keep industries afloat in hard times.
As per the proposed plan, industrialists will only get 40pc of the proceeds of commercialisation, while 60pc will go to the provincial exchequer. It is estimated to generate Rs6bn for the provincial government.
An industrialist from Peshawar said the government’s proposed plan will hopefully not focus on selling the industrial plots to raise money. He said the Hayatabad Industrial Zone (HIE) needs the government’s attention in reviving industrial operations, especially for exports to Afghanistan.
As per the proposed plan of the Khyber Pakhtunkhwa Economic Zones Development and Management Company (KPEZDMC), hospitals of good repute will be set up to attract health tourism from Afghanistan.
The commercial hub will host banks, insurance, leasing companies, eateries, showrooms, residential apartments, shopping malls, educational and vocational institutes, and, importantly, software houses and start up incubators.
The CEO of the KEZDMC, Mohsin M. Syed is optimistic that the proposed plan will revive industrial operations in these zones. As a pilot project, the concept of commercialisation will first be adopted by the HIE
In Pakistan, this concept has already been adopted and implemented in the Korangi Creek Industrial Park, Karachi.
The provincial government will get funds for the maintenance and rehabilitation of the industrial estate instead of allocating funds from its own kitty.
Industrialists are allowed to commercialise some portions of their properties and will get requisite funds to resume their stalled industrial operations.
Unfortunately, most of the industrial zones in KP fail to offer a range of common facilities and support services such as financial services, training, technical guidance, information services, joint research facilities and business support services to satisfy the corporate and technological needs of its tenants.
It is time to upgrade the existing zones, or develop new ones, according to a comprehensive plan with provision for roads, transport and public utilities.
Currently, there are 17 industrial estates in KP with no funds allocated to upgrade or revive their required facilities and dilapidating infrastructure.
The industrial estates are in a state of disarray. In all, 646 industrial units have shut down in the four industrial estates of Hayatabad (Peshawar), Gadoon Amazai, Hattar and Nowshehra. The rest of the 231 units are struggling in an unfavourable business environment. And 247 out of 449 units in nine other industrial estates in the province have also closed down.
The CEO of the KEZDMC, Mohsin M Syed is optimistic that the proposed plan will revive industrial operations in these zones. As a pilot project, the concept of commercialisation will first be adopted by the HIE.
Approximately, 60pc of the total land in HIE is not being utilised for the purpose it was meant for. The premises of closed or sick units are being used for residential purposes.
The CEO of the company Mr Syed said under the proposed plan a plot owner can only sell up to 20pc of each plot for commercial purposes. There will be no selling of the entire industrial plot, he clarified.
The HIE is spread over 868 acres of land. There are about 324 units out of which only 212 are operational. Moreover, 62 units are under construction, while plots for seven others have been allotted. However, 43 units closed down operations in the area. The zone mainly housed pharmaceutical factories, packing material, etc.
The industrial estate occupancy at the moment stands at 29pc, an official of the company said.
The rest were occupied by the property dealers. No electricity is available for new industrial units because the grid from where the estate gets electricity also supplies power to the tribal areas and cannot ensure smooth transmission to both.



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