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Federal ' B' Association Of Trade & Industry

ST-7 , Block-22,
Federal 'B' Industrial Area, Karach-75950

Tel # (92-21) 6340362,6360193,6806962

Fax # (92-21)-6360203

Mr.M. Siddique (Secretary)
Cell # 03062553947


H-16 SITE Karachi. Tel: 2562883-2560705-2581025 Fax: 2560704

E-mail: -

With a view to promote industry in a manner calculated to be most attractive to the industrialists, the Government of
Sindh established Sindh Industrial Trading Esates Liminted as a Government guaranteed company in November 1947 on
the pattern of the Trading Estates in the United Kingdom. The main object was to establish planned industrial areas, where
prospective industrialists could obtain all the facilities, such as land, roads, railway, water supply, electricity, gas,
telephone, godowns, sanitation, drainage, labour colonies and other necessary public amenities, These facilities were
calculated to offer attraction oit the intending industrialists and were to result in a saving of initial capital investment on
land besides difficulties in obtaining the required facilities at one place.

SITE Limited has been established on NO PROFIT & NO LOSS basis and all the income and revenue is utilized exclusively
for the development of industrial areas. All the policies and procedure are farmed by the SITE Board of Directors who is the
Supreme Authority to run the business of SITE Limited. This procedure has been adopted since the Government feels that
an organization dealing solely with trade and commence should be run in commercial manner, thereby enabling quick
action to be taken and eliminating the delay usually associated with Government way of working. At present SITE Board is
comprised of fifteen (15) Directors.

Site has seven Industrial Estates viz Sindh Industrial Estates at Karachi. SITE Super Highway Karachi Ph-O & Ph-II,
Nooriabad, Kotri, Hyderabad. Tando Adam & Sukkur in the province of Sindh .
The Company functions under a Memorandum and Articles of Association. Wherein the objectives of the
Company have been laid down.

There is a General Body consisting of 60 members, of which 35 are government officials and 25 are non-
governmental members.

The Board of Directors consists of the following :-

Additional Chief Secretary (Dev) Chairman
Secretary Industries
Secretary, Excise & Taxation.
Managing Director, Suite Southern Gas Co. Ltd.
Managing Director, K.E.S.C.
Managing Director, KW&SB
Chairman, Electricity Board, Hyderabad.
Managing Director, SITE Limited
Chairman, SITE Association, Karachi,
Tow Tenant Directors for SITE Karachi.
One Tenant Director from SITE Super Highway Karachi.
One Tenant Director from SITE Nooriabad.
One Tenant Director from SITE Hyderabad / Kotri.
One Tenant Director from SITES Sukker.
To develop industrial areas all over the province wherein all necessary facilities like water, gas, electricity, sewerage,
roads are available
To manage such industrial areas through development and repair & maintenance.

To coordinate with different government and non-governmental organizations for the provision of different facilities.

To deal with all land management issues pertaining to the plots in various industrial areas.
Industrial Areas Under SITE Limited
Name of Estate Land Available
SITE NOORIABAD Yes More Land is acquired
SITE NAWABSHAH (SITE as Executing Agency) Yes
Source of Income
• Premium (per acre)
• License Fee
• Transfer Fee
• Conversion Fee
• Sub-Division Fee
• Amalgamation Fee
• Sub-Letting Fee
• Additional Trade Fee
• Change in Trade Fee
• Change in Constitution (per acre)
• Reglarization Fee
• Sub-Lease Fee
• Lease Execution Fee
• Non-Utilization Fee
• Drawing Fee (Sq. ft)
• Penalty for Un-Authorized
• Water Charges
• Development Charges
• Road Cut Charges
• Water Meter Testing Charges

• Fire Charges

Korangi Association of Trade & Industry:

1st Floor, Aiwan-e-Sanat, Plot # St. 4/2,

Sector 23, Korangi Industrial Area,
Karachi-74900 Pakistan.

Ph: (92-21) 5061211-3

Fax: (92-21) 5061215



KARACHI – 75850

Tel: +92-21-6951695, 6950995 (World Call) 7689163

Fax: +92-21-6908269


NKATI stands for North Karachi Association of Trade & Industry, which is a registered trade body
representing the commercial industrial and service units located in North Karachi Industrial Area
(NKIA). NKIA is the largest Industrial Area in terms of small and medium enterprises (SMEs). It came
into existence in 1974. Initially there were plots of poultry farms which were converted into industrial
plots that is why the net work of the roads of NKIA basically comprises of small streets as well as
connected roads. It is scattered and spread over an area of 725 acres.

The maintenance of this Area was the responsibility of KDA but it was neglected. Consequently, the
Area suffered from lack of infrastructure facilities and the process of dilapidation started. For these
ostensible reasons, a few individuals initially formed an Association which was not registered and as
such it could not provide satisfactory services. Ultimately, the owners of the factories already
established in the Area felt the need of having a representative body that could look after the
problems of the industrialists of the Area.

In order to achieve this objective, some of the conscientious industrialists of the Area came to rescue.
After considerable struggle, an Association by the name of North Karachi Trade & Industry (NKT&IA)
came into being in 1991. Capt. A Moiz Khan was its Founder and Convener. Other founder members
were: Mr. Sadiq Muhammad, Mr. S.Azim Ali, Mr. Noor Ahmed Khan and Mr. S. Iqtida Ali. The
Association was registered with the Government of Sindh and it continued to arch ahead till 1994
when fresh elections were held and it was then registered with joint Registrar of Companies Under
section 32 of the Companies Ordinance 1984 (XI VII of 1984). The following industrialists formed the
first Managing Committee:

1 Capt A. Moiz Khan (Chairman)

2 Mr. Iftikhar Ahmed Malik Chairman)
3 Mr. Noor Ahmed Khan Chairman)
4 Mr. Aslam Chughtai (Member)
5 Shaikh Jaffar Bhai (Member)
6 Mr. S. Azim Ali (Member)
7 Mr. Zahir Alam (Member)
8 Mr. Nazir Ahmed Khan (Member)
9 Mr. Sadiq Muhammad (Member)
10 Mr. S. Iqtida Ali (Member)
11 Mr. M. Amin (Member)
12 Mr. Akhlaq Ahmed (Member)
13 Mr. Liaquat (Member)

This Committee, under the Chairmanship of Capt. A Moiz Khan actively performed till 1994 and
remained in force for 3 years. Subsequently, during the same year, the Association was licensed and
registered with Director of Trade Organization (DTO) Ministry of Commerce, Islamabad, under section
3 of the Trade Organization Ordinance 1961) with the amended name of North Karachi Association of
Trade & Industry (NKATI) and thus it became a fully representative body and simultaneously got
affiliated with Karachi Chamber of Commerce & Industry.

A special credit goes to the team-mates of Capt. A Moiz Khan who enthusiastically worked for
establishing this Association and brought it in operation for betterment of Industrial units of the
Industrial Area. Bravo!

The very first elections of the Association were held in 1994 governed by Memorandum & Article of
Association approved by the Government of Pakistan. The first Chairman elected was Capt. A Moiz
Khan who continued as Chairman for a period of 3 years from 1994-95 to 1997-98 and the very first
Managing Committee elected was as follows:-

1 Capt A. Moiz Khan (Chairman)

2 Mr. Noor Ahmed Khan (Senior Vice Chairman)
3 Mr. Iftikhar Ahmed Malik (Vice Chairman)
4 Mr. Aslam Chughtai (Member)
5 Mr. Sadiq Muhammad (Member)
6 Mr. S. Iqtida Ali (Member)
7 Mr. S. Azim Ali (Member)
8 Mr. Muhammad Shafi (Member)
9 Mr. Abdus Salam Sattar (Member)
10 Mr. Zia Ahmed Khan (Member)
11 Mr. Ashraf Lodhi (Member)
12 Mr. Faraz Mirza (Member)
13 Lt. Col. (R) Amir Mohd Malik (Member)

In accordance with the election rules laid down in the Memorandum & Articles of Association 1/3 rd of
the total strength of Managing Committee Members retired every year and new members elected
through democratic process of annual elections. The Managing Committee members also elected new
office bearers comprising Chairman, Senior Vice Chairman and Vice Chairman respectively amongst
themselves. This process of Annual Elections continued until such time the new Trade Ordinance No.
LXX1 of 2007 was promulgated by President of Pakistan and new Trade organizations Rules 2007
dated 7th June 2007 were framed under which fresh Applications were invited for grant of new License.
The Association completed all the formalities successfully and new License No. 28 was granted under
section 3(2)d of the Trade organizations Ordinance 2007 by the Ministry of Commerce, Government of
Pakistan, Islamabad. Presently Capt. A. Moiz Khan is the Founder Chairman and Patron-in-Chief of
NKATI. The elected members of Managing Committee for the year 2007-2008 are as follows:

1 Mr. Noor Ahmed Khan (Chairman)

2 Mr. S Iqtida Ali (Senior Vice Chairman)
3 Khurram Rasheed (Vice Chairman)
4 Mr. Faraz Mirza (Member)
5 Mr. M Younus Khamisani (Member)
6 Mr. M. Aslam Chughtai (Member)
7 Mr. Muhammad Tariq Murtaza (Member)
8 Mr. Muhammad Aamir Ansari (Member)
9 Mr. Rana Muhammad Yaseen (Member)
10 Mr. Badaruddin Siddiqui (Member)
11 Mr. Sadiq Muhammad (Member)
12 Mr. Naseem Akhtar (Member)
13 Syed Tariq Rashid (Member)

Mr. Murtaza Hasan is the Secretary General of the Association.

The elections for the year 2008-2009 shall be held in accordance with Election Rules and procedure as
given in Rules 16 to 21 of the Trade Organizations Rules 2007 during the period from1st October to
30th November 2008 and newly elected office bearers shall assume charge of offices w.e.f. 1st
December 2008.
Role of Associations

All Industrialist Associations including North Karachi Association have specific infrastructural problems
in their respective Industrial Zones and have assumed greater importance and significance in view of
WTO regime having been effective from 1st January 2005.

NKATI has been striving hard since its inception in 1974 to improve the infrastructure of the Area to
meet the conditionalities of WTO on self-help basis. It is now being assisted by the City District
Government Karachi (CDGK) under Tameer-e-Karachi Programmed. It is doing commendable work for
the development and rehabilitation of infrastructure of NKIA which include revamping of sewerage and
water systems and construction of roads etc. Also to facilitate the Industrial sector for the
improvement of dilapidated infrastructure through the concept of private public partnership a
development management company has come into being with the blessings of President of Pakistan
and the Sindh Government which is known as North Karachi Industrial and Development &
Management Company (NKI-DMC). It has been assigned the task of rehabilitating and up grading the
existing infrastructure and identifying the projects for future needs in the industrial zone.

The existing Associations are now being governed by the Director General, Trade organizations
Islamabad under the new Trade Organizations, Ministry of Commerce Government of Pakistan
Islamabad under the new Trade Organizations Ordinance 2007. It means the working and
performance of Industrial Associations would be monitored more closely and there are no chance for
any Industrial Association to grant fake or bogus membership to anyone which were common
complaints in the past. Against this backdrop, the role of our Association has become more prominent
and effective and it is now viable and vibrant in the real sense of the term. The Association’s member
organizations are actively engaged in boosting exports and earning substantial foreign exchange for
the country.

Although the Association is affiliated with KCCI but it has to play its own distinct and positive role
independently. It directly deals with federal and provisional governments to safeguard the interests of
its member organizations and has the authority to authenticate sales tax documents and other related
documents to facilitate refund claims and connections of power and gas etc. It also assists
Government Departments, both federal and provincial, in recovering dues of excise, sales tax and all
other levies that are outstanding or imposed from time to time. It promotes, foster, encourage,
protect and advance the interest of members engaged in trade, commerce, industries and
manufacturing. Also take up, discuss and make known the views of the Association on questions and
matters concerned with or affecting the interests of such members to federal and provincial

The representatives of the Association also hold meetings with the President, Prime Minister, Ministers
of federal and provincial governments for the resolution of economic, civic and law and order related
problems of the industrialists of the area. In a nutshell the Association has a pivotal role in the
economic and industrial development of the country and this fact is acknowledged and admitted on all

Types Of Industries

More then 2500 small and medium enterprises (SMEs) are operating in NKIA About 90 per cent of
them are export oriented units. Major units are: textile and textile made-ups, leathers, Flour mills,
Pharmaceuticals, cardboards, foods and beverages, light engineering, Soap, Dyeing & Bleaching, Ice
manufacturing, Chemicals, Packaging, Marbles, Matches, Pottery, Printing etc.

Contribution To National Economy

They are contributing a big share to the national economy by paying duties and taxes apart from
earning substantial foreign exchange for the country. It is on record that several (SMEs) of the Area
have won Export Trophies of FPCCI. This Industrial Area provides employment to thousands of work
force of which women living in the adjacent localities form the major part. The contribution to the
national ex-chequer is as follows.

 Income tax about Rs.3.5 billion per annum

 Duties and Taxes about Rs.5.5 billion per annum

 Total taxes about 9 billion per annum

The Association provides a collective platform to voice the grievances and bring into focus the
problems faced by the industrialists of the Area for resolution by the concerned authorities. It also
tries to secure to them from the authorities concerned all amenities, particularly in relation to:

(a). Regular and adequate supply of water, electricity and gas.

(b). Proper and adequate arrangements for transport of employees and /or labourers having their
place of work in North Karachi and in particular those employed by the members of the

(c). Proper and adequate means of sanitation, drains, sewers and disposals of effluent.

(d). Proper and adequate measures for safely and security and policing of North Karachi.

(e). Establishment of posts & telegraphs and telephone service sufficient for the needs of the
members of the Association.



+92-21-5026975, +92-21-5026964, +92-21-


Fax: +92-21-5021626



To facilitate member companies by assisting in dealings with

Government and other autonomous bodies.
To strive for result-oriented and growth-accelerating
environment, which entail member's business better
opportunity to flourish.
To promote industrial activities in the area and to contribute
positively to the economic well being of the country by way of
enhancing industrial production.
Landhi Association of Trade & Industry (LATI) was established in
1967 but became dormant. It was revived in 1987 by Mr. Dawood
Usman Jakhura under the guidance of Mr. Bashir Ali Mohammed our
Patron in-Chief.

Jurisdiction begins from Mohd. Farooqe Textile Mill located at 8000

road Korangi to Port Qasim including Export Processing Zone and all
industries located at National Highway to Khagar Phtak.

Mr. Bashir H. Ali Muhammad (Sitara-e-Imtiaz)

Professional Qualification

Fellow of the Chartered Institute of Management Accountants

(CIMA). United Kingdom

Current Professional Positions

Chairman, Gul Ahmed Textile Mills Limited.

Director, Gul Ahmed Energy Limited.
Director, Habib Metropolitan Bank Limited.
Director, Pakistan Business Council
Director, Arwen Tech (Private) Limited.

Honorary Government Advisory & Other Positions

2006 - Member National Strategy on Textiles

2003 - Founder Trustee fellowship fund for Pakistan

2002 - Chairman, Pakistan Britain Advisory Group

2002 - Member, Export Promotion Board, Government of Pakistan.

1999-2002 Member , Economic Advisory Board, Ministry of Finance and Economic

Affairs, Islamabad.

1981-2000 Chairman, Pakistan Swiss Trade and Industry Committee.

1989-90 Chairman, All Pakistan Textile, Mills Association

1982-85 Vice Chairman All Pakistan Textile Mills Association

Business Activities Textiles

Activities start from the spinning of cotton and man made fibers and extend to weaving,
processing and finishing of all types of cotton and blended fabrics, bed linen home
furnishings, garment manufacturing and specialized textiles with its own retail outlets.


The group has been a pioneer in the field of power generation. The textile mill runs on self
generation with an installed capacity Of 30 MW. Gul Ahmed Energy operates a power
plant of 136 MW Capacity with a project cost of US$ 140 million located at Korangi,
Karachi. The sponsor of this project included IFC USA and Tomen Corporation Japan. The
project has been in commercial operation since November 1997. The group has major
interests also in chemicals and information technology.



is an autonomous body under the industires commerce and mine ral resources department,
Government of Balochistan, and was established in the year 1984.

This institution was established with the sole aim of speeding up the industrialization at district
Lasbela particularly and Balochistan in general. Ther is a board of director constituted to run the
affairs of LIEDA.

Textile Sector
- Cotton Yarn Spainning
- Polyester Yarn Spinning
- Textile Weaving
- Poleyster Fiber

Engineering Sector
- Automobile Engineering
- Precision Casting
- Misc: Light Engineering

Other Sectors
- Pharmaceutical Units
- Food & Confectionery
- Chemical industries
- Marble Processing
- Electric & Electronics
- Oil Blending & Lubrication
- Packaging

Roads (HITE & WITE)

Water Supply (HITE & WITE)
Power Supply (Hite, GIA, WITE)
Gas Supply (HITE)
Telecommunications Facilities
Banking Facilites

Lieda, Hub Industrial Estate, Hub

TEL: (0853)-303320,303361/62
FAX: (0853)-303320
HUB Industrial & Trading Estate (LIEDA)

18 kilometers from Karachi s.i.t.e, 11 kilometer from northern by- pass road and two
kilometer to the north of r.c.d highway at hub.

Total area of this industrial estate is 1189 acres. Out of which 700acres of land have been
developed into the following categories.

• Industrial: 646 Acres

• Commercial: 7 Acres
• Residential/ amenities: 47 Acres


Lasbella canal runs this industrial Estate. 20 million gallon capacity eater
Reservoir with sedimentation and over- head tank and a pump house are main components
of the water supply A huge outfall drain constructed across the
Industrial estate with sewerage station to cater for the sewer disposal needs.

K.E.S.C is supplying bulk electric load. Presently 12 MPGA watt distributed on
Various electric feeders and internal distributed is done by the Authority.

A.NW.D digital telephone Exchange at hub provides telephone and fax facilities.

Natural gas is available within the estate. Sui southern gas company limited is the Authority
responsible to process application for Gas connection.

Sewerage network is available within the estate and managed by this Authority.


Category Of Installments Lump Sum (Per Sq Meter)

(Per Sq Mete)
Industrial Rs.300.00
Commercial / Residential - Rs.250.00
Residential - Rs.150.00

2. ANNUAL GROUND RENT: Rs 2/- per SQ.M per annum


• Apply On Prescribed application form as per given perfoma at

• Pre requisite documents as stated in the application form must be
• Land Shall be allotted as per selection of site by the applicant from the
area available.


• In case the applicant opt to pay the premium in installments then 50 % of

total premium is payables down payment along with application and the
remaining amount of premium is payable within two (2) years in quarterly
• In case of lump sum payment, the payment of full premium must be
enclosed along-with application.
• All payment should be made through pay order / demand draft drawn in

• Lump sum is 25 % less the payment is installment.

For the record
Processing Syed Sajid Ali
Polotics & Polocy
Zone National Database and Registration Authority
Science & Technology
Authority Computer scents
Visas for high tech
Special Report
Export Processing Zone Authority

Regional export processing zones flourishing while KEPZ struggling for survival

Mar 27 - Apr 02, 2000

The Export Processing Zones Authority (EPZA) was established in Pakistan through Ordinance IV of
1980 with the mandate to plan, develop and operate Export Processing Zones in Pakistan. EPZA is an
organization under the Ministry of Industries run by a Board of Directors.

The Karachi Export Processing Zone (KEPZ) is the first project of EPZA, which was set up in 1981. The
objective for the establishment of KEPZ was primarily to boost industrialization and augment country's
export by creating facilities for investors to enable them to set up export oriented units which would, as a
consequence, create job opportunities, bring in new technology and know-how and attract foreign

What is EPZ ?

An Export processing zone is a specialized industrial bonded estate where special facilities and incentives
are provided to produce goods under one window operation, mainly for export abroad. Thus EPZ is a
district physical area where Customs Tariff is not applied and hence bonded to distinguish from the rest of
Tariff area Controls by the Customs under especially drafted EPZ Customs Rules.


Currently, the foreign exchange earnings of the Karachi Export Processing Zone (KEPZ) are estimated at
$75-80 million as compared to $1 billion per annum by Bangladesh Zone.

Despite the fact that KEPZ has an edge over Bangladesh due to availability of the basic raw material
within the country i.e. cotton and cotton yarn the inconsistent economic policies and the poor
management altogether have left KEPZ far behind of Bangladesh zones in exports. It may be mentioned
that Bangladesh zones have to rely on imported raw material, which generally supplied from Pakistan.

Whatever the reasons may be, the huge difference of performance between the two zones established
almost simultaneously in Bangladesh and Pakistan is an undeniable story of success and failure of the
economic policies and management of the two countries respectively.
According to Pervaiz A. Sankhla, the General Manager for Investment Promotion, the KEPZ has been
planned on 500 acres of land, out of which 200 acres have been developed. Additional 100 acres is being
considered for development on BOT basis as phase-II programme. Rest of 200 acres have been
earmarked by the Government of Sindh for KEPZ for future expansion programme. The 200 acres of land
developed for industrialization has full infrastructure facilities providing all necessary utility services like
electricity, gas, water and telephone etc.

The pace of development at KEPZ is reflected in the fact that out of 330 industrial plots, around 150 units
were established, however discouraged due to frequent changes in policies, non availability of textile
quota for KEPZ units most of the textile units wounded up their operations. At present only 60 units mostly
in garment sector are in operation. It is unfortunate that the KEPZ not only failed to attract foreign
investors but was also unable to retain those who had come to invest in the early stage. At present only
one unit with pure foreign investment is working in the zone while remaining units are owned by non
resident Pakistanis in collaboration with local participants. There are some 70 plots for Commercial Sector
(Warehousing and Trading) and 33 plots for Financial Sector.

When his attention was drawn towards the reports that the federal government has recently asked the
provincial government of Punjab to provide 200 acres of land to Faisalabad Chamber of Commerce for
establishment of yet another zone at Faisalabad, Pervaiz Sankhla did not agree with the idea of
establishing another zone in Pakistan unless the Karachi Zone was made fully operational.

It may be mentioned that the present government has approved establishment of an export-processing
zone in Faisalabad recently.

The government has directed the Provincial Government of Punjab to provide a suitable place of land with
in a month so that development work could be started.

The Export Processing Zone Authority has signed a memorandum of understanding with the Faisalabad
Chamber of Commerce and Industry about one and half years ago. The proposed EPZ, a joint venture of
the EPZA and the FCCI would be set up in the surroundings of Faisalabad, which would comprise 200
acres of land. The FCCI had already created a Trust to expedite the EPZ affairs. However it could not
show any progress due to non-provision of suitable land for the project. To resolve the delayed issue of
EPZ, the FCCI invited the Chief Executive Gen. Pervez Musharaf who during his recent visit to
Faisalabad held a meeting with the FCCI executive body and approved the establishment of the zone.

The Punjab Government would only provide land for setting up of the zone while finance for the
development works would be generated by the business community and the FCCI without involving the
national exchequer.

Proposal for incentives

Pervaiz Sankhla, while spelling out the factors which proved counter productive and created hurdles in
the growth of KEPZ regretted that the concept of export processing zone was never acknowledged as a
project of national importance. The successive governments gave priorities to the issues and projects on
political considerations. They gave priority even to a small bridge over the Zone because of political gains.
Apart from a few exceptions, the appointments at the Chairman level were also made in a casual way
without considering the technical, financial and managerial skill of the man. Now there is a trend of hiring
people from the private sector. It is a good sign however people coming from the private sector have their
own priorities. They have to lookafter their own priorities and have a little time to spare for the zone.

PAGE endorses the views of Sankhla because not only the Export Processing Zone but other public
sector organizations where the people hired by the government for high slot are hardly available even
during the office hours because their preoccupations somewhere else. It is strongly suggested that only
those people should bring in the higher places who gives an undertaking to take the responsibility as a full
time job and not as a part time activity.

When PAGE invited his attention towards the reports appearing in the press regarding alleged misuse of
the duty exemption facilities available in the zone by certain elements and certain other irregularities
Sankhla shifted the responsibility on the Customs Authorities which he called as the custodians of the
non-tariff area moreover he said that black sheep are everywhere.

Pervaiz Sankhla who is associated with EPZA from day one, narrating the story of success of other zones
in the region especially in Bangladesh, Sri Lanka, Thailand, Malaysia and Indonesia said that the capital
outflow first from Japan and Korea find a secure place in these countries because of their consistent
policies and incentives provided by their respective governments. The multi-dimensional effects of the
development of these Export Processing Zones not only enhanced the export earnings of these countries
but gave stability to the per capita income of their people taking it from $300 to a level of $2000 within a
couple of years.

When asked what steps are needed to make KEPZ a prosperous and successful venture, he categorically
said that we have to be competitive with other zones, we would have to offer similar incentives offered by
other zones. The availability of raw material in plenty and more skilled workers Pakistan still has an edge
over other zones in the region especially in Bangladesh or Sri Lanka. He specially mentioned that we in
Pakistan are charging cost of land while it is being given cost free in other zones. They are offering pre-
built standard premises to house the units at competitive rental basis. We also need follow suit. Another
important factor Pervaiz mentioned was the availability of textile quota to BD zone, which is 13 time
higher than what it is available in Pakistan. The investors in KEPZ could get the textile quota for a long
period of time due to internal conflicts and personal differences of the people responsible for distributing
textile quota, which also hampered growth at KEPZ. We failed to negotiate with the US for proper
availability of textile quota for our zone investors, he regretted.

Pervaiz recalled that EPZA had moved a working paper to the previous government. That paper which
includes the required incentives for moving the wheel at a faster speed at the zone be considered by the
relevant committee appointed by the previous government. He said that the committee was reviewing the
proposals on Oct 12, 1999, which happened to be the last day of that government.

Pervaiz on the request of PAGE provided those proposals which he believes can push the affairs at KEPZ
much effectively.

Following proposals were made to make incentive package of EPZs in Pakistan comparable with the
facilities being offered by other zones in the region.

Proposals for income tax

The objective behind these proposals is to bring investors of EPZ in the net of Taxpayers in line with the
requirements of international donor agencies. What we propose is to make it a presumptive income tax
and ensure its collection under one window concept.

a) Income Tax exemption for 15 years from the date of production.

b) After expiry of 15 years exemption period Income Tax @0.5% of export as applicable in Tariff Area be
applicable to EPZ units for 1 5 years.

c) Existing investors who have completed 15 years of production to immediately start paying Income-Tax
@0.5% of Export value and those who have not yet completed 15 years would enjoy this exemption for
remaining number of years, before starting payment of Income-Tax.
d) It be mandatory for exporters of EPZs to deposit income tax through 'challan' in the Zone Bank at the
time of export as under one Window concept EPZA will itself supervise collection of the income tax on
behalf of the Income Tax Department.

A success story of Bangladesh and Sri Lanka Export Processing Zones


Bangladesh which was over all regarded as a poor country in the back drop of low capital formation and
limited technical know how, created Export Processing Zones Authority in the year 1980 to mitigate
imbalance between industry and agriculture. The first Export Processing Zone was established in port city
of Chittagong on an area of 453 acres. Dhaka Export Processing Zone was the next to come up over an
area of 355 acres, which is now being expanded. Third zone at Mongla is being developed on Southern
Port of Bangladesh. Two more Export Processing Zones, one at Comilla and the other at Ishurdi are in
implementation stage.

The Board of Governors felt in the early 80's that the objective behind this concept is not being achieved
therefore, an in-depth study was conducted on causes of failure of Export Processing Zones in
Bangladesh. After identifying the areas of amendment, legal frame work was prepared by eminent
lawyers who adopted legal frame work of successful Export Processing Zones of the region i.e.
Singapore, Indonesia, South Korea, Malaysia, Philippine, Thailand, Hongkong, Taiwan and Sri Lanka.

A lucrative and liberal incentive package for Export Processing Zones was approved by the Government
explaining that foreign investors bringing capital to the country need full guarantees in all respect. The
modest approach was adopted by the concerned departments for vigorous implementation of the policy,
which included promotional efforts at the highest level, by the person with sufficient state Authority,
knowledge and legal backup support.

As a result Chittagong Export Processing Zone become the Hub of industrial activity. After 16 years of its
establishment i.e. 1999, it had 87 industries in operation, which employed 51,000 Bangladesh workers. In
the Dhaka EPZ which started in the year 1994 there are 37 industries in operation employing 26000
workers. In the year ended June 1998 exports from Chiattgong and Dhaka Export Processing Zones were
to the tune of US$450 million and $ 185 million respectively.

Cumulative exports from these two zones amount to US$2153.41 million. Capital investment in
Chittagong EPZs is US$244.610 million and in Dhaka EPZ is $988.193 million. Bangladesh Export
Processing Zones Authority has also signed agreement with South Korea to setup the South Korean
country zone on 1000 hectares of land in the city of Chittagong.


Faced with unemployment of 1.2 million in early 70's Sri Lanka shifted emphasize from subsidizing
consumption to promote production. The Government as per other Asian countries recognized foreign
investment as important element in development process. The Greater Colombo Economic Commission
(GCEC) was set up in 1978 to encourage and promote foreign investment, increase employment
opportunities, increase export earnings and diversify industrial base. GCEC's first project was setting up
of an EPZ at Katunayke whose development was carried out with the assistance of team of consultants
from Shannon Free Airport Development Company. Ireland and UNIDO. 2nd Zone was planned at
Biyangama. GCEC sanctioned first project in 1978; however, first company to enter the Zone was
multinational US company Motorola.

During earlier phases of development of Sri Lanka EPZs, Katunayake made significant contribution
towards relieving the unemployment problem and 32,500 persons got employed in that phase. Number of
foreign multinationals considered Sri Lanka as conducive place for investment thus encouraged with the
experience Sri Lanka Government extended application of tax exemptions to all over the country. Now
foreign investment inside EPZs and domestic industries is administered by one Authority and is in 3rd
Phase of expansion. Among other facilities it has bus terminal, dry port, port cargo handling. The 2nd
Zone at Biyagama is over 180 hectares adjacent to a river, the 3rd Zone at Koggala is over 91 hectares.
The latest figures of 3 Sri Lankan EPZs are as follows:

EPZ Year Area in hectares Employment of

founded Workers
Katunayake 1978 190 56,000
Biyagama 1986 180 22,485
Kogala 1991 80 5,000

The 15-year history of export earnings of EPZs (1978-93) shows that EPZs earned $3.3 billion or 62% of
Srilanka's total $5.3 billion.

Srilanka implemented a policy to emphasize on garment, agriculture infrastructure and recreation projects
assisting not only foreign but local investors in promoting export oriented industries with the result that
entire country is now Investment Promotion Zone providing development and employment at the same

Proposals of income tax

a) incometax exemption for 15 years from the date of production.

b) after expiry of 15 years exemption period income tax @0.5% of export as applicable in tariff area shall
be applicable to EPZ units for 15 years.

c) exising investors who have completed 15 years of production shall immediately start paying income tax
@0.5% of export value and those who have not yet completed 15 years would enjoy exemption for
remaining number of years before starting payment of income tax.

d) it would be mandatory for exporters of epzs to deposit income tax through challan in the zone bank at
the time of export. Under one window concept EPZA will itself supervise collection of income tax on
behalf of income tax department.

The original proposal of EPZA for a Tax Holiday of 15 years from the date of production is adopted in the
amended version. But it is further proposed that on expiry of this tax holiday the rate of Income Tax
applicable to the exporters of tariff area i e. 0.5% of the export will be deposited with the relevant Tax
Authorities in order to provide one window service to the investors.

Central Board of Revenue did not agree with our original proposal of 15 years tax holiday quoting the
commitments of Pakistan with the international agencies under which such tax exemptions were allowed
to laps. They observed that proposed concession would result in substantial revenue loss. They have also
quoted the investment policy of 1997 by which NIZs, Free Industrial Zones, Free Trade Zone, EPUs and
estates for Small and Medium Industries will enjoy identical and liberal concession.

Sankhla pointed out that scheme of National Industrial Zones which is reflection of EPZs scheme is still at
its inception stage and not a single National Industrial Zone has come on the ground so far, whereas
Karachi Export Processing Zone (KEPZ) is operational since 1983-84. Three (03) more zones stand
notified where development work is in progress. The matter regarding setting up of more zones in the
country is under process. Withdraw of Tax holiday from EPZ scheme at this point of time has resulted in
creating credibility gap and has given a serious set back to the investment in EPZs of Pakistan.
EPZs/FTZs of neighbouring countries who are in direct competition with EPZs of Pakistan are offering this
incentive e.g. Sri Lanka and U.A E offer 15 years Tax Holiday from the date of production, Bangladesh 10
years and Turkey offer NO TAX FOR EVER.

In this era of cutthroat competition we have to be atleast comparable to attract foreign investment if not
better. The apprehended revenue losses could be set aside by inflow of increased foreign investment,
employment generation, foreign exchange earnings, transfer of Technology/ Managerial skills and
increased quantum of exports.

It is therefore proposed to allow 15 years Tax Holiday from the date of coming into production. After
expiry of tax holiday the rate applicable to exporters in Tariff Area i.e. 0.5% of export may be deposited
with relevant Income Tax Authorities.

As a result of above arrangements, the new investors would avail this exemption for 15 years from the
date of production, the existing investors of KEPZ who have completed 15 years of their production would
start paying Income Tax and who have not completed 15 years would enjoy exemption for number of
years in balance In EPZs all goods meant for export can leave the zone only if they are supported with a
No Objection Certificate (NOC) issued by EPZA Payment of Income Tax can be made mandatory before
issuance of any NOC for export to be supervised by EPZA on behalf of Income-Tax Department. Such
collection of Income Tax will be against a challan to deposit in the relevant head of income Tax

Such exemption would logically be available to all kinds of Enterprises established in EPZs regardless of
the fact whether they are Factories, Mills, Off Shore Banks, Insurance Companies, Clearing and
Forwarding Agencies, Trading Firms or Warehouses etc.

Income tax exemption allowed to foreign nationals withdrawn from 30-06 1997 may be restored for a
period of 5 years from the date of joining a unit in EPZ.

Central Board of Revenue did not agree with the proposal on the ground that it would result in substantial
revenue loss.

It may be mentioned that Pakistan has entered into bilateral agreements with number of countries by
virtue of which employees from those countries would automatically stand exempted from payment of
Income Tax if they pay the tax in their own country. The only class of employee who will benefit from this
incentives are those who come from a country with which we do not have bilateral agreement. Withdrawal
of this incentives would result in stoppage of transfer of managerial skills, which was one of the very
objectives of establishing EPZs. Moreover this would cast a positive impact on the prospective investors
while comparing the incentive package of other zones in the region. Therefore the apprehensions of CBR
that such concession would result in substantial revenue loss is not true. The proposal to keep this
incentive alive may be reconsidered against transfer of Managerial skills. It may be termed as cost of
Human Resource Development.

The facility of export of goods through land route may be extended to EPZ.

Central Board of Revenue and Ministry of Commerce did not support the proposal considering it prone to
misuse land route is the major incentive for potential investors in the proposed zones at Risalpur, Quetta,
Rawalpindi etc. and establishment of these zones shall not be feasible if the land route is denied to export
from EPZs. Attention of CBR and Ministry of Commerce is drawn to the recently signed agreement by
Customs syndicate with NATCO for transit Trade through K.K Highway to Central Asia and China. If the
goods from other foreign countries are allowed transit facilities through Pakistan the same treatment
should be given to the goods from EPZ. Similar agreement can be signed with N.L.C to transport goods
from EPZ to neighbouring countries and Central Asian States to overcome apprehension of pilferage if
any. We strongly suggest that investors of EPZ should use the same protocol as is available to other
EPZs of the region by using our land routes. Once the goods reach inside the port area the chances of
smuggling would recede substantially. Moreover adequate arrangements be made by Customs to counter
act chances of smuggling.

The entire world is looking towards Pakistan which has the shortest land route to Central Asia. But we are
denying this route to Export Processing Zones only due to anticipatory chances of pilferage. Now such
apprehensions are loosing their momentum as a result of World Trade Order (WTO) of which Pakistan is
a signatory and which calls for reduction in import duties to curb smuggling. Therefore this facility may not
be denied on illusionary assumptions.

Let EPZs of Pakistan work as "Cargo Village" for manufacturers of other countries who are looking for the
market of Central Asia. It would open new vistas of investment in EPZs of Pakistan. We may not over look
India who has allowed its EPZs inbond export to Nepal and Bhutan via land route. Moreover the
completion of Motorway in Pakistan is going to play a major role in promoting Warehousing / Trading in
EPZs. We therefore insist that land route is also allowed to EPZs at par with others in Tariff Area. CBR
could not envisage that EPZ investors could send their goods to Dubai enroute to Central Asia via land
route in Pakistan. They have to pay the additional cost of freight. Let them directly use the land route to
become competitive.

Value added portion of goods manufactured in the zone may not be taxed when sent to tariff area.

Central Board of Revenue did not favour the proposal on the ground that it will introduce distortion in the
tariff regime.

We would like to draw the attention of CBR to the recently announced "No duty no draw back" rules for
exporters in tariff area notified vide SRO844 (1/98) dated 24-07-1998 which clearly envisage that value
added portion in finished goods cleared for home consumption shall not be taxed. Availability of this
incentive to the exporters outside EPZs (who may not be the manufacturers) has put the
manufacturers/exporters of EPZs at a disadvantageous position and calls for a concurrent policy for
bonding manufacturing at par with the EPZ otherwise no body will be interested for investment in EPZ
when this facility is available in Tariff Area.

It may not be out of place to mention that according to the KYOTO Convention of the Customs Co-
operation Council (of which Pakistan is a signatory) this facility needs to be extended to manufacturers in
EPZs. It says.

"Amount of the import duties/taxes chargeable on goods taken

Into home use after processing in a Free Zone may be limited to the amount of any exemption from or
repayment of internal duties or import duties and taxes granted when those goods were introduced into
the Free Zone".

This facility is available to the units in EPZs of India, Phillipine, Malaysia and Taiwan. This facility is also
available to the goods manufactured in manufacturing bonds. The unit in the zone deserves better
treatment than the manufacturers abroad because these units provide employment opportunities in the
domestic labour market besides adding to the industrial growth in the country. They also deserve better
treatment vis-a-vis the manufacturing in bond in Tariff area because the foreign exchange invested in
these units is not a liability on the State Bank of Pakistan and does not effect our borrowing limits and
credit ceilings. They also need an equal treatment with manufacturers in Tariff Area who sell their
products in local Market.

It has to be well understood that any product manufactured in EPZs consume local labour and utilities of
Pakistan. It is the case with any product manufactured in Tariff Area. The only difference being that in
case of EPZ raw material has been imported Duty Free whereas in Tariff Area it is Duty Paid and the end
user has to pay the duty to the extent of imported items. Used. The discrimination in case of EPZ
manufacturers may therefore be removed.

Export Processing Zones exporters/manufacturers may be exempted from payment of general sale tax
and excise duty levied on utilities.

The concept of enclave manufacturing is based on duty and tax-free availability of inputs in order to make
the manufacturers competitive in the international market. The Government has recently levied General
Sales Tax and Excise duty on the bills of utilities in the country. This would not only make the exports
incompetitive but would also negate the basic scheme of Export Processing Zone. Moreover General
Sales Tax and Excise duties are refundable to the exporter of Tariff Area when the goods are exported;
whereas no such scheme of refund is available to the investors of EPZs. It is therefore necessary to
exempt investors of Export Processing Zones from payment of General Sales Tax and Excise duty.

EPZ investors' council

Sheikh Javaid, Chairman of EPZ Investorsí Council while giving his views for making the export
processing zone a success in Pakistan said that instead of diverting its attention towards establishment of
other zones in Pakistan, the government should focus its attention to bring KEPZ a blooming project. He
said that the government had earmarked 500 acres of land for KEPZ some 20 years ago. Unfortunately
our economic managers failed to deliver the goods and even today after two decades there are hardly 60
units are operating in the zone. The primary objective to promote exports provide jobs to our people and
transfer of technology is still a dream. Sheikh Javaid said that instead of going for new zones in the up
country, we should cash on the strategic situation available in Guwadur where the most beautiful location
is available near the blue waters of Guwadur port. Sheikh Javaid, who has visited the Guwadur port many
times, is the great advocate of developing an export-processing zone at Guwadur, which is attractive to
the investors due to its close affinity to the Middle East as well as to the Central Asian States. Surrounded
by sea from two sides and guarded by huge mountains, the Guwadur zone would be a unique place due
to its natural beauty, he observed.

He agreed that similar incentives in other zones in the region should also be given at KEPZ to make it
attractive for foreign investment. Sheikh Javaid said that besides providing incentives there is an acute
need for face lifting in and around the zone. The dilapidated conditions of the road approaching to the
KEPZ are highly repulsive to the sight. The road leading to zone should be constructed, bushes on both
sides of the road which present a haunted look needed trimming. The uncompleted and neglected
structures of gymkhana and mosques for many years also need early completion. While appreciating the
government steps to bring professionals from the private sector into public sector organizations, he
suggested that by making amendments in the rules, the board of directors of KEPZ be expanded by
including people from the private sector with an assignment to monitor pace of growth at the zone, he

Mr. Kamran Y. Mirza Mr. Zahoor Ahmed

Chairman General Manager (Facilities)
Phone: (092-21) 5082003 & 4 Phone: (092-21) 5082011
Email: Email:

Mr. Abdul Razaq Fathani Ms. Shahida Qaiser

Director (Finance) General Manager (Investment
Phone: (092-21)5081109 Promotion)
E-mail: Phone: (092-21) 5082023
Mr. Capt (Retd) Syed Waqar Mr. Mumtaz Ahmed Memon
Hussain Deputy General Manager (Engineering)
Secretary Phone: (92-21) 5082019
Phone: (092-21) 5082008 Email:

Mr. Shahid Ikram Hashmi Mr. M. Ashraf Wahla

General Manager (Engineering) (Consultant) Regional Office Lahore
Phone: (092-21) 5082017 Phone: (092-42) 6310671
Email: Fax: (092-42) 63106701

Bilal Islam Mr. Mushtaque Hussain Laghari

Network Administrator (IT Deputy General Manager (Electrica)
Department) Phone: (092-42) 5082020
Phone: (092-21) 5080814 Email:
For General Information
UAN: 111-777-222