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Green Kashmir

Skilled Kashmir

Investment opportunities
In Azad Jammu & Kashmir

Department of Industries & Commerce Azad Government of the State of Jammu and Kashmir

Invest your Saving

Serve your Nation

CONTENTS
S. No. Contents
Message of Prime Minister GoAJK Map / Accessibility of AJ&K Introduction 1 Industrial Sector Industries Established in AJK Existing Industrial Estates / Infrastructure Available plots & Mode of Payment Industrial Policy & Incentives Proposed New Industrial Estates Investment potential / Opportunities Procedure / Contact No. 2 3 Handicrafts Mineral Resources Regulatory Regime Procedure for grant of mining concessions Incentives Investment Opportunities in Mineral Sector 4 5 Tourism Hydro Power Generation Approved project of Hydro Power Power policy Potential Projects for investments Technical and Financial Parameters Project Profile

Page No.
03 04 5 6 7 7 8 8 9 9 10 21-27 28 28 28 29 32-37 38-41 42 42 44 46 47-49 50

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MESSAGE OF THE PRIME MINISTER OF AZAD JAMMU & KASHMIR SARDAR ATTIQUE AHMED KHAN.

Azad Jammu and Kashmir is rich in water and mineral resources and nature has been generous in bestowing scenic beauty to this part of the world. Present regime of Azad Jammu And Kashmir has granted a number of incentives to the investors for promotion of Industrial activities in the State. The State of Azad Jammu and Kashmir offers great opportunity to the investors, including five lac overseas Kashmiri nationals possessing dual nationality to invest in industrialization, Hydel power generation, Mineral exploitation, Kashmiri Handicrafts and Tourism industry. Let me assure the intending investors that they will get required assistance from the Government of the state and every step will be taken to guarantee the protection of their capital investment. Human resource development is on high priority of the Govt. and we hope that expertise of skilled manpower will not be in short supply for any activity that investors choose to under take. Reconstruction activity in the earthquake hit area is about to commence and the same offers a great opportunity for investment in the construction related industry. We invite the investors to seize this opportunity and hope that this message is well taken.

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Accessibility to

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INTRODUCTION Azad Jammu and Kashmir is the liberated part of the State of Jammu and Kashmir. It lies between longitude 73o - 75o and latitude of 33o 36o and comprises of 5,134 sq. miles or 13,297 sq. kms. The topography is mainly hilly and mountainous with valleys and plains in some places. The area is full of natural beauty, with thick lush green forests, precious minerals, fast flowing rivers and winding streams. The main rivers are Jehlum, Neelum and Poonch. Climatically Azad Kashmir enjoys a considerable measure of variety. The North and North western mountains and extremely cold in winter while the summer months from April to September are very pleasant. The regions of Mirpur, Kotli and Bhimber are extremely hot in summer while cold and dry in winter season. The rains are of the monsoon type, the average rainfall is approximately 1300mm annually. The population of Azad Kashmir is 3.5 million and out of total population 88% are living in rural areas while 12% are settled in urban areas. The literacy rate is above 60%. The average per capita income has been estimated to range from 500 to 600 US$. GOVERNMENT Azad Jammu & Kashmir has a parliamentary form of Government. The president of Azad Jammu and Kashmir is the constitutional Head of the State while the Prime Minister supported by a council of Ministers, is the chief Executive. Azad Jammu & Kashmir has its own Supreme Court and a High Court besides Legislative Assembly comprising 41 directly and 8 indirectly elected members. ADMINISTRATION Capital of Azad Jammu & Jammu and Kashmir is situated at Muzaffarabad, while Azad Jammu & Kashmir is divided into three divisions i.e. Muzaffarabad, Poonch & Mirpur and ten (10) administrative districts. The Muzaffarabad Division comprises the district Muzaffarabad, Neelum & Hattian Bala, Poonch Division, Poonch , Bagh, Sudhnoti and Haveeli, whereas Mirpur Division comprises the districts of Mirpur, Kotli and Bhimber.

INDUSTRIAL SECTOR At the time of independence in 1947, the economy of Azad Jammu & Kashmir was on subsistence level. It was early 70s, when economic development of the area started. Despite financial constraints, efforts were made in developing infrastructure for the rapid development of the area. The State of Azad Jammu & Kashmir by virtue of its topography, meteorology, hydrology and administrative set up provides adequate opportunities of investment in various sectors. The Govt. of Azad Jammu and Kashmir is encouraging investment in the following sectors. i. Medium and large Industries. ii. Kashmiri Handicrafts. iii. Mineral Resources. iv. Hydropower Generation. v. Tourism.

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MEDIUM AND LARGE INDUSTRIES: Owing to close proximity to the market of Pakistan district Mirpur and Bhimber are most suitable locations for establishment of Medium and large scale industries. However some opportunities for small & medium Industries are also available in Northern areas (Poonch & Muzaffarabad) of AJ&K. DETAIL OF INDUSTRIES ESTABLISHED IN AJK. There are various types of small, medium & large scale Industrial Units which have been established in AJ&K during last few decades and majority of these are still operational inspite of national & international economic crises. DETAIL OF ESTABLISHED INDUSTRIES IN AJ&K S.#
1.

3. 5. 7. 9. 11. 13. 15. 17. 19. 21. 23. 25. 27. 29. 31. 33. 35. 37. 39. 41. 43. 45.

Nature of Industry Auto Parts /Engineering Workshops Arms Manufacturing (Small) Block Factories Cosmetic Cement Factory (Mill) Chip / Fiber Board Industry Electronic Products / Wire Flour Mills Filling Stations (Petroleum) Hydropower generation L.P.G Filling plants Motor Cycle Marble Factories Melamine Industry Poly Propylene Plastic Industry Polyester Yarn Paper Mills Resin Industry Shoe Factories Steel re-rolling & furnaces Scooter/ Rickshaw (VESPA) Textile/ Weaving

Nos. 10

S.#
2.

Nature of Industry Abrasive Paper

Nos. 01

43 10 03 01 03 07 10 110 01 01 02 56 02 07 03 02 04 01 02 08 01 12

4. 6. 8. 10. 12. 14. 16. 18. 20. 22. 24. 26. 28. 30. 32. 34. 36. 38. 40. 42. 44. 46.

Beverages Cigarette Factories Crush Machines CNG Stations Diesel Engine Assembling Foam Industries Food Items (Bakeries / Spices etc.) Ghee Mills Ice Factories Mineral Water Match Factories Main Hotels Miscellaneous Pharmaceutical Industry PVC Pipe Poultry Forms Printing Press RCC Pipe Industries Steel Works Sugar Mills Soap & detergent Factories Wood Works & Furniture

03 16 104 04 02 09 105 03 12 05 02 92 47 07 02 775 35 32 166 01 06 216

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EXISTING INDUSTRIAL ESTATES / INFRASTRUCTUR To accelerate the pace of development through industrialization, the Department of Industries of Azad Jammu and Kashmir has established six Industrial Estates in various districts of Azad Jammu and Kashmir providing basic infrastructure like roads, water supply, sewerage system, telephone and electricity etc.

Detail of Industrial Estates with graded plots & price per Kanal is as under: S.# Name of Industrial Estates New Industrial Area Mirpur Small Industrial Estate Bhimber Mini Industrial Estate Mirpur Mini Indsutrial Estate M.Z.D Mini Industrial Estate Kotli Mini Industrial Estate Rawalakot
Price of plot per kanal In Rs.

100 50 25Kanal 08 04Kanal 02Kanal 01Kanal Kanal Kanal Kanal

1.

85000

10

20

32

20

35

42

118

2.

67000

25

29

64

3.

100000

34

92

111

4.

94800

13

42

5.

126900

53

6.

113220

17

43

MODE OF PAYMENT 1. 25% down payment and remaining 75% to be paid in 5 installments in 5 years for New Industrial Area Mirpur. 2. 20% down payment and remaining 80% to be paid in 20 installments in 20 years for all other Industrial Estates.

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INDUSTRIAL POLICY AVAILABLE INCENTIVES AND FACILITATION i. Industrial Policy Govt. of Azad Jammu and Kashmir has adopted the policy of Govt. of Pakistan. The detail of Investment Policy & Incentives attached as (Annexure I). Accordingly except the following all type of industries are allowed to be established in Azad Kashmir. a) Arms and Ammunition. b) Security printing. c) Explosive material. d) Radioactive material. SPECIAL INCENTIVES FOR INDUSTRIALIZATION IN AJK. a) Exemption of Industrial products from payment of Sales Tax for a period of five years from the date of production. b) Conducive environment for investors including foreigners in free and fair atmosphere under protection of Economic Reform Act 1992. c) No foreign industrial or commercial enterprise established or owned in any form by a foreigner or Pakistani investor shall be compulsorily taken over by the government [Ref: Protection of Economic Reforms Act 1992.] d) Free transaction of principal amount and profits without the prior permission of the Government for foreign investors. e) Exemption for Octroi and Local Taxes for five years from the date of commencement of production. f) Industrial plots are allotted in the Industrial Estate of Mirpur, Bhimber, Muzaffarabad, Kotli and Rawalakot on easy installments to be recovered in a period of 20 years without profit, while in new industrial area in 5 years. g) Provision of loan facilities in local as well as foreign exchange from the national banks, financial institutions & loan giving agencies for industries being set up in Azad Kashmir. h) To provide local, cheep and skilled Labour Force for Industrialization under the management of AJKTEVTA more than 170 Vocational Training Institutes, Industrial Training Centers & Skill Development Centers (for Males & Females) including a Poly Technique Institute are functional.. i) Establishment of Dry Port at Mirpur (In Process) iii. FINANCING FACILITIES a) Allied Bank Limited of Pakistan (ABL). b) Agricultural Development Bank of Pakistan (ADBP). c) Muslim Commercial Bank (MCB). d) Bank of Azad Jammu & Kashmir e) National Bank of Pakistan (NBP). f) Habib Bank Limited of Pakistan (HBL) g) United Bank Limited of Pakistan (UBL). PROPOSED NEW INDUSTRIAL ESTATES / INFRASTRUCTURE.

ii.

1) INDUSTRIAL ESTATE DUDYAL

Land measuring 50 Acres has been acquired and development is in process.

2) MIAN MUHAMMAD BUX INDUSTRIAL ESTATE MIRPUR

Working on acquisition of land measuring almost 625 Acres is in process.

3) RECONSTRUCTION OPPORTUNITY ZONE (ROZ) AT MZD & RAWALAKOT

Land area measuring almost 125 Acres each at Brarkot Muzaffarabad & Rawalakot is identified; where as PC-II for establishment of Project Management Unit has already been submitted to P&DD GoAJK. 4) ESTABLISHMENT OF EXPORT PROCESSING ZONE AT MIRPUR. (In Process)
5) ESTABLISHMENT OF DRY PORT AT MIRPUR (A.K).

Land measuring 12.58 Acres has been reserved for establishment of Dry Port at Mirpur.
6) SUPPLY OF OF SUI-GAS TO INDUSTRIAL UNITS IN AJ&K.

In process with SNGPL & MoP GoP

7) PROVISION OF BASIC SERVICES IN NEW INDUSTRIAL AREA MIRPUR (PHASE II).

Estimation of Internal Roads, Water Supply, Sewerage System & Electricity etc. is in process.
8) ESTABLISHMENT OF DRY PORT AT MIRPUR.

Land measuring 12.5 Acrs has been reserved, after legal proceeding / notification from Govt. of Pakistan infrastructural development of Dry Port at Mirpur will be started. DEMAND BASED INVESTMENT POTENTIAL & OPPERTUNITIES Keeping in view the potential & requirement of AJ&K, there are so many opportunities of investment in various Industries like food, ready made garments, furniture, plastic products, Hydro power generation, Tourism and Mineral based industries are available in the area. LIST OF POTENTIAL PROJECTS FOR AZAD KASHMIR S.# Name of Projects S.# Name of Projects
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14 15 16 Herbal Medicines Furniture industry Ceramic tableware Polythene bags (shopping bags) Mineral Based Industry Capacitor manufacturing projects Wooden crates making units Agricultural implements/ tools plants Tooth picks producing Poultry forming Cement Industries Batten Board plants Potato chips plants Pharmaceutical Industries Transport & Rubber Tyre factories Mineral water / Beverages 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31 32 Hydro Power Generation Chip / Fiber board-manufacturing P.V.C & RCC Pipe manufacturing Filling stations Fruit / vegetable preservation and spices grinding Hotels & Motels Steel furniture, grills rates etc Machinery spare parts manufacturing Bolts and nuts plants Flush Door making units Calcium carbide producing units Solar Panels & Products Marble chips & powder making units Pre Fabricated Building Structure Tourism & Silk Reeling Electronic products / wires

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PROCEDURE FOR ALLOTMENT OF INDUSTRIAL PLOTS Following documents should be enclosed with applications. Two copies of feasibility reports of proposed project with dully filled Forms B & C (Annexure II). Certificate of Financial Soundness regarding applicant from the Bank. In case of a company, name of Shareholders/ Directors and other related details. NOC from Environmental Protection Agency of AJ&K Govt. In case of a foreigner a copy of Registration Certificate from the Registrar of Companies GoAJK. Single line plan of covered area required for proposed Industrial set up.

FOR FURTHER DETAILS PLEASE CONTACT Director Industries, Commerce & Labour GoAJ&K Muzaffarabad. Phone No. 05822-920528 Fax No. 05822-920636 Joint Director Labour Muzaffarabad Phone No. 05822-920721 Joint Director Industries Mirpur. Phone No. 05827-921589 Fax No. 05827-921588 Deputy Director Industries Muzaffarabad. Phone No. 05822-920929 Project Manager New Industrial Area Mirpur. Phone No. 05827-922191 Assistant Director Industrial Estate Bhimber. Phone No. 05828-920222 Industrial Development Officer Muzaffarabad. Phone No. 05822-920801 Industrial Development Officer Kotli. Phone No. 05826-920483 Industrial Development Officer Rawalakot Phone No. 0334-5061432

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Annexure I Investment Policy and Incentives The government is making all efforts to facilitate and encourage foreign investors and has formulated a business friendly and liberal Investment Policy. The Government has been pursuing a liberal and market oriented policy that provides equal investment opportunities to both domestic and foreign investors. All sectors of the economy are open to Foreign Direct Investment (FDI) with up to 100% equity. No sanctions are required from the Government. Most important initiative of the Government was to further open up Service Sector by allowing 100% foreign equity along with 100% repatriation facility. Also the minimum threshold for foreign equity has been reduced to $0.15 million from $0.30 million. In order to promote investments in the Productive Sectors and to boost the indigenous industry, the tariff structure has been revised and a modest custom duty of 5% is now levied on the import of plant, machinery and equipment (PME) not manufactured locally. A policy for Corporate Agriculture Farming (CAF) is being prepared with the objective of enhancing productivity and to make use of wastelands. To facilitate investors and investment on a fast track basis Presidents Investment Initiative was launched in September 2005, with the Minister of State / Chairman BOI as its Chief Coordinator. The President and the Prime Minister of Pakistan personally chair regular meetings to take stock of progress on the projects. I. KEY FEATURES OF INVESTMENT POLICY a) Equal Opportunities Investment policy is liberal and business friendly as it has been designed in consultation with businessmen, investors and representative forums as well as the Multinational Companies (MNCs) and other stake holders. Equal investment opportunities for both domestic and foreign investors. b) No Government sanction required All economic sectors open for FDI. No Government sanction is required for setting up any industry except for the following sensitive industrial units: Arms and ammunitions High Explosives. Radioactive substances Security Printing, Currency and Mint. There is no requirement for obtaining No Objection Certificate (NOC) form the AJK government for locating the project anywhere in the country except in areas that are notified as sensitive / security zones. (C) Foreign Equity 100% foreign equity allowed in all sectors. Minimum foreign equity for non-manufacturing including service sector has been reduced from $ 0.3 million to $ 0.15 million. In Agriculture, infrastructure and social sectors, it is $ 0.3 million.

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II. TARIFF & TAXINCENTIVES 5% customs duty on import of plant and machinery, not manufactured locally. 0% Sales Tax on import of machinery. 0% duty on import of raw material for export industry. 0% duty on import of agriculture machinery. Tax relief in shape of Initial Depreciation Allowance (IDA) has been provided @ 50% of the cost of machinery across the board. Tax relief has also been provided for expansion and Balancing, Modernization & Replacement (BMR), in existing industries. III. FISCAL INCENTIVES Initial Depreciation Allowance Initial Depreciation Allowance at the rate of 50% is permissible on an eligible depreciable asset placed into service in Pakistan for the first time in a tax year. For the purpose of such allowance, eligible depreciable asset means plant and machinery excluding the following: Any road transport vehicle unless the vehicle is playing for hire. Any furniture, including fittings any plant or machinery that is acquired second hand or Any plant or machinery in relation to which a deduction has been allowed under another section of this Ordinance for the entire cost of the asset in the tax year in which the asset is required. AMORTIZATION Amortization of recommencement expenses allowed at the rate of 20% annually. Amortization of intangible assets allowed over a period of ten years. Corporate Tax Rates Financial Year (2006-07) Public Companies 35% Private Companies 35% Banking Companies 35% IV. EXCHANGE CONTROL Remittance of Royalty, Technical & Franchise Fee, Capital, Profits, and Dividends allowed. No. restriction on payment of Royalty and Technical fee. The entrepreneurs are allowed to pay an initial lump sum upto $ 100,000 and subsequently maximum @ 5% of net sales initially for 5 years. The facility for obtaining foreign private loans is available to all foreign investors, for financing the cost of imported plant and machinery required for setting up the project. These loans do not involve any guarantee by the Government of Pakistan. However, loan agreements should be registered / cleared by the State Bank of Pakistan. Foreign controlled manufacturing concerns will be treated at par with other local companies for obtaining financial facilities for their working capital requirements. Foreign Controlled companies are allowed domestic borrowing to meet their working capital requirements.

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The payments on account of royalties and technical fees to foreign companies are taxable @ 15%. No compulsion for a limited company to offer share to the public irrespective of the size of capital or total value of assets.

V. EXPATRIATE FACILITATION SERVICES Foreign nationals (investors, executives, expatriate employees) having CBRs pass Booklet are allowed duty-free import of food stuffs and other consumable items equivalent to US$ 1000 per year per person in Pakistan. However, import exceeding the above duty free limit of US$ 1000 will be allowed on payment of normal import duties. Various communities of foreign investors and their employees are allowed to establish Exclusive Clubs with recreation facilities. One Airport Entry Pass for protocol purpose will be issued to foreign and ocal investors / companies, provided the equity investment is at least US$ 10 million. The BOI extends a courtesy service covering reception in Pakistan, Hotel bookings, accommodation, transport bookings, and assisting with the business itinerary, etc. for foreign investors visiting Pakistan. Improvements have been made pertaining to the procedures for work visas, business visas, and opening of branch / liaison office by foreign companies. VI. LEGAL PROTECTION TO INVESTMENT Foreign investment is fully protected by following Acts: Foreign Private Investment (Promotion & Protection) Act, 1976. Protection of Economic Reforms Act, 1992.

VII. MISCELLANEOUS Industry Status has been given to Tourism, IT and Housing & Construction Network of Export Processing Zones. Measures have been taken in areas like domestic borrowing facility to foreign controlled companies, transfer of technology, immigration procedures, labour laws, incorporation of companies, etc, improvement in quality of life.

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(Annexure II) FORM B DIRECTORATE OF INDUSTRIES, AZAD GOVERNMENT OF THE STATE OF JAMMU & KASHMIR, MUZAFFARABAD

CONFIDENTIAL
FOR OFFICIAL USE ONLY Name of Industry ________________________________________ Group _________________________________________________ Serial No. ______________________________________________
Notes:i. False or incorrect information supplied in this application may lead to its summary rejection. ii. Complete answer to all the questions listed below should be given. If the space is not enough to answer a question, a separate sheet or sheets may be attached. TO BE FILLED BY THE APPLICANT, IF NECESSARY STATE DETAIL ON A SEPARATE SHEET.

To be filled in by the Estate Officer GENERAL INFORMATION. after 1. (a) Size of the plot of land applied for _________________________ verification (b) Covered area of building required for the installation of machinery and of each equipment storage & materials, office, etc. __________________ item. 2. Name and address of the Industrial Unit/ proposed Industrial unit _____________________________________________________________ 3. Business address of the applicant _____________________________ __________________________________________________________ Telephone No. ______________________________________________ 4. Fax No. ___________________________________________________ 5. E-Mail address _____________________________________________ Manufacturing Information. State Kind of products to be manufactured. Product Type Size

Raw material mainly used

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2. Quantity of the products above you can manufacture with full capacity in one shift operation. Products Type Yearly Quantity Daily Monthly

3. Do you plan to work in

One shift operation Two shift operation Three shift operation

4. State average quantity of products you can to manufacture. Product Type Sales process Quantity exfactory per unit

C. MARKETING. a) Do you intend to export your products. Yes/No _________________________________________________________ _________________________________________________________ Describe organization of marketing your products. _________________________________________________________ _________________________________________________________ D. PRODUCTION REQUIREMENTS. 1. Capital requirements: a) Local currency Rs. ______________ b) ForeignExchange Rs. _____________ Total Cost. a) Fixed Capital Rs. _____________ a) Land Rs. _____________ b) Building (Factory and office building including installations of water and Electricity) size of built up area ___________Sq. Ft. c) Equipment, furniture and fixtures: Machinery, total value Rs. _______________ (give details in attachment A) Tools and dies, total value Rs. _______________ Furniture and Fixtures, total value: Rs. _______________ Transportation equipment, total value: Rs. _______________ (number of vehicle _____________) Total value of equipment, furniture and fixtures: Rs. ___________ Total fixed capital: Rs. ___________

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b) Working capital. 2. Annual requirements of materials and supplies: a. Direct materials: Annual Cost. Total value of direct materials: (give details in attachment B) Rs. ___________ b. Indirect materials. Electric power: (connected load in k.w _________400_____) Rs. ___________ Fuel (monthly consumption ___________ Gallons) Rs. ______ Water (daily consumption ______________Gallons) Rs. ___________ Loan Requirements Local Currency: Rs. _______________ Foreign Exchange Rs. _______________ Own Contribution:Rs. _______________ Total Rs. _______________ c. Packaging materials (monthly quantity) Rs. ___________ Office Supplies Rs. ___________ Materials for maintenances (equipment and machinery) Rs. ___________ Lubricants etc. Rs. ___________ Total value of materials and supplies. Rs. ___________ 3. Labour Requirment Qualification `Nos. Monthly wages per person (average) Total labour cost per month

Manager Office Staff Skilled workers Semi-skilled workers Un-skilled workers Peons Watchman Total: 4. Annual Cost and sales revenues. a) Annual Cost. Material and supplies Labour Depreciation Cost Rs. ________________ Rs. ________________ Rs. ________________ Rs. ________________

Taxes, Interest, Insurances and other administration costs: Rs. ____ Total annual cost: Rs. ___________

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b) Annual Sales Revenues: Products Annual qty. Average sales price per unit Annual Turnover (In Rs.)

Total: Sales Expenses (including commission) Total sales revenues: Rs. ___________ Rs. ___________

5. Give cost of production per unit showing cost of raw materials labour charges, other charges and its ex-factory selling prices. Use for the calculation as separate sheet. E. FNANCIAL INFORMATION. 1. Organizational structure of the firm. i. If proprietary concern, give the name and address of the proprietor ___ _________________________________________________________ _________________________________________________________ _________________________________________________________ ii. If partnership concern, give name and address of the partners and enclose photo static or attach copies of partnership deed and certificates issued by the Registrar of Firms GoAJK. _________________________________________________________ _________________________________________________________ iii. If cooperative society, given names and address of Directors and principal, shareholders, number of shares held and paid up value.__________________________________ _________________________________________________________ _________________________________________________________ _________________________________________________________ iv. If Private or Public Ltd. company, give names and addresses of Directors, number of shares held by each and their total value. Also enclose a copy of Memorandum and Articles of Association:_________________________________________________________ _________________________________________________________ _________________________________________________________ _________________________________________________________ 2. Give names and address of two respectable persons, who should not by your relatives for reference. i) ____________________________________________________ ____________________________________________________

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___________________________________________________ ____________________________________________________ ____________________________________________________ OTHER INFORMATION. 1. Does applicant require assistance in the selection, layout and installation of machinery and equipment, and in the estimation of production costs etc. please specify? 2. In the case that the applicant does not have any previous experience in the line of manufacture he wishes to take up, in what way does he intend to acquire cater for the acquired skills. ____________________________________________________ ____________________________________________________ Does the applicant desire to get certain semi-finished product supplied to him for further processing in his plant. If yes, state nature of such goods and the estimated quantities required for the years of operation? Does the applicant wish to have any process, like electroplating, tanning etc; done by some one else in the Estate if yes please specify. _________________________________________________________ Would the applicant agree to cooperate with the Estate Management in the endeavour to improve the quantity of his goods, improve production results and better working conditions in general. It is hereby declared that particulars given in this application are true and loan applied and plot allotted for, will be utilized solely for the object mentioned above and will not be utilized for any other purpose. Further, it is hereby agreed to abide by the terms and conditions of loan laid down by the Bank granting loan. Signature of field Officer. Designation: ________________________ Signature/Name of applicant. (in block letters) Designation ______________ ii)

F.

3.

4.

Station____________________Dated ___________________________ (a) Recommendation of the Director Industries ____________________________________________________________ ___________________________________________________ Signature_________________ (b) Final orders of the sanctioning authority/Committee. ____________________________________________________________ __________________________________________________

Signature

i)________________ ii)________________iii) __________

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(Annexure III) FORM C DIRECTORATE OF INDUSTRIES, AZAD GOVERNMENT OF THE STATE OF JAMMU & KASHMIR, MUZAFFARABAD APPLICATION FOR THE ALLOTMENT OF PLOT IN INDUSTRIAL STATES
MIRPUR, NEW INDUSTRIAL AREA MIRPUR,BHIMBER,KOTLI,RAWALAKOT, MUZAFFARABAD ( Please Tick your choice)

1. Name of the applicant with complete address_______________________ ____________________________________________________________ 2. Does the applicant own any Industrial Unit? (Please Tick) Yes / No. If yes please state:i) Name and location____________________________________ ii) Annual production in the last calendar years. S.# Name of the products manufactured Unit Capacity Value

Total:

iii)

VALUE OF ANNUAL PRODUCTION DURING LAST 3 YEARS: S.# Year Value of annual production

1. 2. 3. iv) Is the applicant used its manufacturing facilities to their full capacity in the past four years? Yes / No If No. Tick. a) Shortage of raw material. b) Insufficient marketing c) Other reasons (specify). Average No. of daily workers employed in the last year.________ If the land and building of the manufacturing plant are taken on rent, give monthly rent paid Rs. __________________ Area of the existing unit:a) Grass area sq. ft. ___________________ b) Covered area sq. ft. _________________ Connected power at present per year KW _________________

v) vi) vii)

viii)

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3. Name of the Industry the applicant wishes to establishment on the estate. ____________________________________________________________ __EXPECTED ANNUAL PRODUCTION CAPACITY: S.# Name of the products to be Unit Quantity Value manufactured

Total: 4. What proportion of the expected production is estimated to be exported. ____________________________________________________________ Size of the plot applied for: 20,000 Sq. ft. (Plot - A) Tick One: 10,000 Sq. ft. (Plot - B) 5,000 Sq. ft. (Plot-C) Or, if more than 20,000 Sq. ft. specify the requirement: ______________ 5. I). Ground area of building required for the installation of machinery & equipment storage of materials, office etc. Sq.ft._____________________ II). Of Which covered area will be, ________________ Sq ft. 6. ESTIMATED COST OF NEW INVESTMENT ON THE ESTATE:Particulars Pak Currency Foreign Currency

Total: 7. Of the total investment under (7) how much can applicant contribute from his own resources (not borrowed funds) (a) in Pak Currency___________________________________________ (b) In Foreign Currency: ______________________________________ 8. S.# Description Unit Value Description Qty. Value

9. Number of the workers to be employed ____________________________ 10. Do you propose to ran more than one shift, If your factory on the Estate. If so, state the number of shifts per day ______________________________ 11. Existing water consumption per shift (in gallons) _____________________ ii. Water consumption estimating per shift on the estate (in gallons)__________________________________ 12. Connected motor load in the existing concern (in K.W.)_________________ ii. Estimated power connection required on the estate (in K.W. ____

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Signature of the Applicant

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Investment Opportunities
in Handicrafts Sector of Azad Jammu & Kashmir

BACKGROUND The tradition of Kashmiri crafts can be traced back from the era of prerecorded history. It has maintained itself and flourished despite the rise & fall of various civilizations. The craft tradition got major boost in the 14th century, when Mir Syed Ali Hamdani visited Kashmir along with several hundred craftsmen, Artisans and experts. This event revolutionized the religious life of Kashmiris and also infused the ideas of productive economy in Kashmir. These Arts and crafts received the state patron-ship during the era of Zain-ul-Abidin. Till the recent time, in AJK development and promotion of Kashmir handicrafts has been of the major endeavors of the government, with a view to promote productivity of the crafts sector, employment generation and diversification of markets.

INCENTIVES Investment opportunities are available in almost all traditional Handicrafts. Raw-material available Trained skilled force available Huge demand of Kashmiri Handicrafts in domestic & international market. A relatively low marketing cost is involved in this business because Kashmiri crafts are known world-wide since centuries. A reasonable profit margin is available in both manufacturing and marketing of Kashmiri crafts. Plots could be allotted to investors in the Industrial Estates. Technical advisory is available for project preparation & feasibility studies.

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POTENTIAL AREAS & HANDICRAFTS DEVELOPMENT PROJECTS 1. WALNUT WOOD CARVING Azad Kashmir, with its dense forests and wide variety of Walnut trees, has a rich tradition of wood carving and architecture. The strong, rich, dark and grainy wood of the walnut tree, (Juglans regia), known as dun in Azad kashmir, was considered ideal for this carved work. The fame of kashmiri wood crafts and wood carving rests on the use of Walnut Wood as raw material. The walnut plants grow at an altitude of 5500 to 7500 feet above the sea level. Due to its durability and natural colour, it is regarded as most suitable both for carving and wood work. The carving is done skillfully in a variety like Padri-where it is not deep, see through, undercut and deep carving with indigenous tools. A variety of articles both decorative and utilitarian, ranging from smaller items like bowls, trays, cigarette boxes, wall panels, writing desks, table lamps to screens, bed steads, wine bars, chest of drawers, side boards and furnitures etc. are crafted to meet contemporary demands. The important traditional designs are lotus, Dragon, Darbar, Rezkar, Poshkaar. Potential Investment Handicrafts/SMEs Walnut wood Carving Potential Investment Areas Muzaffarabad Authmuqam Unit cost per project 3.000 million

24 2. WOOD INDUSTRY & JOINERY WORKS Potential Investment Handicrafts/SMEs Wood industry & joinery works Potential Investment Areas Neelum Valley Jehlum Valley Muzaffarabad Unit cost per project 10.000 million

25
3. KASHMIRI CARPETS Azad Kashmir has a place in the export trade of hand knotted woolen carpets in the world markets. They have received a tremendous fill up during all these years with the products and consumers encouragement. Kashmiri Carpets are made in wool and silk, most of them are woven on the cotton warp while some silk carpets have silken warp as well. The raw material inputs are chiefly cotton, wool and silk yarn dyed in the desired shade through a process exclusively traditional. The loom used in Kashmiri carpet weaving is composed of two horizontal wooden beams between which the warp threads are stretched, one beam in front of the weaver and the second behind the first. The difference between a carpet and other hand-loom textiles lies in the fact that short lengths of thread or yarn are tied to warp chains to form the pile of the carpets. These are commonly called knots, though it is a loop rather then an actual knot. Very simple tools are used to make carpets in Kashmir. Theses include a blade to make the initial cut once the has been knotted, a wood or metal comb to push knots and weft tightly together, and a pair of short scissors to cut the carpet to an even form once it is finished. Kashmiir carpet is a craze, a connoisseurs delight, a cherished acquisition and, above all, an intimate friend. It gives years of wears and yet provides an aura of elegance. It floor homes and yet adorns the dcor. Potential Investment Handicrafts/SMEs Carpet Weaving Potential Investment Areas Muzaffarabad Darbang Danna Sudhnuti Unit cost per project 3.000 million

26
4. KASHMIRI SHAWLS About Kashmiri Shawls, it is said that of all sub-continent textiles none excel in beauty, colour, texture and design of the famous Kashmiri Shawl. Kashmiri Shawls have been renowned since centuries and were favorite of French Queen, Marie Antoinette. With a long tradition of artistic excellence, the shawl is the most admired hand-made fabric of Kashmir. Shawls are produced by two techniques, loom woven or kani shawls and the needle embroidered or Sozni Shawls. The basic fabric is of three types-Shah-Tush, Pashmina and Raffle. ShahTush (King of wool) the shawl that passes through a ring and is also known as Ring Shawl. It comes from a reare Tibetan antelope living at a height of over 14000 ft in the wilds of the Himalayas. Soft yet war, legend goes to say that it can hatch a pigeons egg. Pashmina known all over the world as cashmere wool. It comes a special goat (Capra hircus) which lives at an altitude of 12000 to 1400 ft. Potential Investment Handicrafts/SMEs Traditional Kashmiri Shawl-Bafi Shah-Tush Pashmina Raffle & others Potential Investment Areas Muzaffarabad Dhirkot Bagh Rawalakot Unit cost per project 2.500 million

27
5. NUMDAH/GABBA

A Numda is a piece of pressed felt made either out of wool and cotton or entirely of wool. Wool and cotton or unspun wool is evenly spread over a mat and then rolled and pressed underfoot for felting the felted piece is then milled, washed and dried. Plain as well as embroidered Numdahs can be seen in the entire area of Azad Jammu & Kashir. The Numdah Makes a warm, colorful and inexpensive floor covering and is also used as a mattress, where the climate is colder. Originally, the plain Numdah rug came from Yarkand and was then embroidered in Kashmir. The Numdah sizes range from 2x3, 3x4, 4x6, to 6x9 feet and 3x4, 5x6 dia in round shape. The quality depends upon percentage of wool in the felt. Popularly made quality is made 32% wool, 50% wool and 100% wool. Designs are generally styled depicting flowers and leaves, animal figures, folk life scenic views. Gabba, a Common mans carpet, is made of used lois or blankets which are washed, milled and dyed in various colors. Gabba making is a house hold craft is which family members, especially girls and women, help the embroiderers in stitching together pieces of used lois and giving them a backing of a waste cotton cloth, washing and dying is done indigenously. There are two types of gabbas-embroidered and appliqud. Bold and vivid emproidery is done mostly in woolen yarn. In some cheaper types of gabbas, a cotton yarn is used instead. In the appliqud type, pieces of dyed blankets are joined together and interspread with embroidery. Gabbas look very gay with bright flashes of designs on a dark, somber background. Potential Investment Handicrafts/SMEs Woolen Products Plain Numda Embroidered Numda Gubba Chain stitch Potential Investment Areas Muzaffarabad Unit cost per project 2.000 million

28
6. PAPIER MACHIE A French term so commonly adopted in the East as well as West and meaning Mashed Paper. Papier Machie is one of the most popular of crafts practiced in Azad Jammu & Kashmir today. The first Papier Machie object produced in Kashmir were Kalamdans, long horizontal cases for holding pens, brushed and ink-pots, giving it the original local name of the crafts, Kari-Kalamdani, pen case work. The techniques involved in Papier Machie production are divided into two distinct categories. The first is Sakhtasazi, making the object, the second is Naqashi, painting the surface.

Potential Investment Handicrafts/SMEs Papier Machie

Potential Investment Areas Muzaffarabad

Unit cost per project 15.000

29

Mineral Potential of Azad Jammu & Kashmir.

Minerals play vital role in economic development. Azad Kashmir has great mineral potential. To get the most significant benefits of mineral wealth of AJ&K. Government of Azad Jammu & Kashmir has established a separate Department of Mineral Resources. The department has issued No. of Exploration permits & Mining Leases of different minerals. With the result different minerals have been discovered. Mostly at present prospection work is being carried out. However, Precious (Ruby) & Semi Precious stones (Tourmaline etc.), Coal, Marble, Bentonite and Dolomite are being mined on small scale . The available geological information provides ample evidence that Azad Kashmir could be blessed with large mineral deposits. Presently mining sector in Azad Kashmir is, however, confined to small scale and contribute less than one percent of GDP. Mineral potential can be well utilized for sustainable socioeconomic development of local population in mineral bearing areas.

Regulatory Regime - Laws enforced in AJ&K

Regulation of Mines & Oil Fields and Mineral Development Federal Control Act, 1948. Azad Jammu & Kashmir Mines Act, 1977. Azad Jammu & Kashmir Mining Concession Rules, 2002. Azad Jammu & Kashmir Minor Mineral Rules, 1994. Consolidated Mines Rules, 2007. AJ &K Regulation of Coal Mines, 2007. AJ&K Regulation of Metaliferous Mines, 2007.

Procedure for grant of mining concessions (Major Minerals)

Applications are received on prescribed proforma alongwith application fee, proof of financial capabilities of the applicant and 10 copies of the Topographic map of the area. Initially exploration permits are issued for one year and exploration licences for 1-3 years. Exploration licences/exploration permits are converted into mining leases / mining permits on submission of exploration report by the licence holders. Conversion fee for exploration licences into mining leases is Rs. 25000/- and for exploration permits into mining permits is Rs. 5000/Mining leases may be granted upto 30 years and mining permits upto 10 years. Exploration Licenses/Mining Permits/mining leases are granted with prior approval of Mines Committee / Mines Sub-Committee.

30

Incentives Available to Mineral Projects -Under National Mineral Policy. Rate of Corporate Tax. o 30% for public sector companies o 35% for private or non-resident mining companies. Minimum Corporate Tax. o A minimum amount of corporate tax is payable annually at the rate of 0.5% of the declared turnover. Withholding Taxes. o Withholding tax levied on dividends paid from mining profits to nonresident corporate share holders will be set at 7.5% but adjustable against final tax liability. Non-Resident Contractors: o The rate of withholding tax on non-resident contractors engaged in mining operation will be 6% of the gross payments made to them. This will represent their full final tax liability. Interest: o Interest paid to non-residents in respect of availed approved loans is exempt from withholding tax. Sales Tax: o No sales tax will be levied on minerals which are exported. Zakat:o Non-Muslims and non-resident share holders of a company are exempt from the requirement to pay zakat on dividends. Import of Mining Machinery: o Special concessions are given on imports of mining machinery and equipment. Royalty:- in lieu of local levies etc. Protection from expropriation: The Protection of Economic Reforms Act 1992, provides that no foreign industrial or commercial enterprise established or owned in any form by a foreign or Pakistani investors shall be compulsorily acquired or taken over by the Govt. the mining sector will equally have this protection.

31 (Form No. M-1) 1000F Govt. Press Mabad

Application For
A PROSPECTING LICENCE / MINING LEASE, PRESECRIBED UNDER THE AZAD JAMMU & KASHMIR MINING CONCESSION RULES, 2002
1) Name (s) of applicant (s) in Full ________________________________________________________________________________

2)

If application is by an individual:a) Address _________________________________________________________________________________________________ b) Nationality _______________________________________________________________________________________________ c) Occupation _______________________________________________________________________________________________ d) Capital available (enclose Book Certificate showing latest credit balance and other documentary proof) ____________________________________________________________________________________________________________ ____________________________________________________________________________________________________________

3)

If application is by partnership or firm:a) Principal place of business ___________________________________________________________________________________ b) If principal place of business is outside Azad Kashmir/ Pakistan name and address of duly authorized agent in Azad Kashmir Pakistan ___________________________________________________________________________________________________________

c) Capital available (enclose book certificate showing latest credit balance and other document proof) ______________________________________________________________________________________________________________________ ______________________________________________________________________________________________________________________ d) Main business of application (s) (enclose a certificate copy or partnership deed and registration certificate issued by registrar of Firms). ______________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________ Name of Partners (1) (2) (3) (4) (5) (6) 4) Nationality Share & amount contributed

__________________________________________________________________________ __________________________________________________________________________ _________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________

If application is by a company:a) Principal place of business ______________________________________________________________________________________________________________________ b) If Principal place is outside Azad Kashmir/ Pakistan name and address of duly authorized agent Azad Kashmir / Pakistan ______________________________________________________________________________________________ c) Nature of business ____________________________________________________________________________________________________ d) Authorized subscribed and paid up Capital (enclose Book Certificates showing latest credit balance and certified copies of Memorandum of Association and Certificate of incorporation)

32
e) Name of Districts f) Name of Principal Nationality Nationality Amount of shares hold

5) 6) 7) 8)

9)

Share holders By share holders State mineral or group of minerals for which prospecting license or mining lease is required ________________________________________________________________________________________________________________________________ State whether a prospecting license or a mining lease is required ____________________________________________________________________________ Period for which license is required ____________________________________________________________________________________________________ Situation and size of the area for which application is made (the name of village, Khasra Numbers, Tehsil and district, appropriate Revenue record, sketch of the area and topographic map 1 to a mile with geographic bearing must accompany) _____________________________________________________________________________ Brief particulars of previous experience in mining giving details of prospecting licenses or mining leases or both already held or applied for in or outside Azad Kashmir / Pakistan______________________________________________________________________________________________________________________________ Name and qualification of technical experts or advisers who have prepared or certified the Exploitation Scheme and will be available for supervision (enclose two of copies of the Exploitation Scheme prepared or certified by Expert) ________________________________________________________________________________ State amount of capital for operations under the license or lease applied for:a) at present available ______________________________________________________________________________________________________________ b) Which application make available and the source. ____________________________________________________________________________________________________________________________________ ((Please give Bank reference or some documentary proof in support of your statement). I f the application is an alien or a company incorporated outside Azad Kashmir / Pakistan. State full particulars of the company to be incorporated by the application in Pakistan for the purposes of receiving the grant of any license or lease which may be granted including particulars similar to those specified in 4 (d) (e) (f) and 11 above and the amount of the capital proposed ___________________________________________________________________________________________ (Documentary evidence of incorporation of the company in Azad Kashmir / Pakistan should be furnished along-with a copy of Memorandum an Articles of Association and prospectus of the company as soon as the company has been incorporated in Azad Kashmir / Pakistan. ___________________________________________________________________________________________________________________________________ Any special remarks _________________________________________________________________________________________________________________ I/We hereby declare that all the foregoing particulars are correct. A/We hereby undertake to reserve the amount of credit balance certified by the Bank as my / our capital exclusively for investment on works connected with the license or lease applied. I/We hereby solemnly declare that event of Government me us the required License / Lease. I/We will abstain from all political activity / activities what so ever affecting the sovereignty of Azad Kashmir / Pakistan or such as may be tantamount to interference in its internal affairs and that i/We will eschew all espionage. In the Event of any violation of this undertake by me / us the Government shall have the right to cancel the license / lease provided that any dispute as to whether any of my / our activities can be considered as a violation of this undertaking, shall be decided in accordance with Rule 74 Azad Jammu & Kashmir Mining Concession Rules 1977 and the appropriate clause in the license / lease. Signature (s) of Application (s) __________________________ Date ____________________ The applicant is a company State capacity in which form is signed. Note). Application fee should be deposited in advance in any Government treasury in Azad Kashmir under the head XXXII-Industries-Mineral receipts arising out of Mines and Oil Fields and Mineral Development (Federal Control) Act, 1948. Other receipts at the rate of (a) Rs. 30 per mineral for the first 400 acres and rupees 10 for each additional 400 acres or part thereof in case of prospecting license, and (b) Rs. 60 mineral in case of mining lease. A receipt copy of the chalan should accompany the applicant, which should be addressed to the Director Mineral Resources, Azad Govt. of the State of Jammu and Kashmir, Muzaffarabad.

10) 11)

12)

13)

14)

FOR FURTHER DETAIL PLEASE CONTACT

Directorate of Mineral Resources Govt. of Azad Jammu and Kashmir Muzaffarabad.

Phone No.05822-920045

33

INVESTMENT OPPORTUNITY IN AJK MINERAL SECTOR

Azad Kashmir Mineral & Industrial Development Corporation (AKMIDC), a state enterprise of the Govt of AJ&K, was established in 1971 under Act XVII. The Corporation soon after its creation started mineral exploration & evaluation activities in the state which are continued till now. The geological environment of AJK is comprised of three types of rocks, i.e. Sedimentary, Igneous and Metamorphic. The type of mineral deposits found are; Industrial Minerals, Gemstones, precious Metals and Base Metals. The Industrial minerals and base metals are found in all the three rock type and thus spread in the whole of the AJK territory, whereas gemstones are confined to metamorphic terrain and thus occur in the upper parts of Neelum Valley. The most economically promising mineral deposits are ruby, graphite, bentonite, granites & cement materials and AKMIDC prepared comprehensive studies of these deposits. The worth of proven mineral deposits is more than Rs. 70 million.

Sr.No

Name of Mineral & Location District Ruby Neelum Graphite Neelum Bentonite - Mirpur & Bhimber Granite Marble - Muzaffarabad, Neelum & Kotli. Limonite- Muzaffarabad

Proved Reserves (Million Tons) 40 million grams 01.000 04.000 01.000 19.000

Probable Reserves (Million Tons) 05.000 00.000 04.000 14.000 15.000

Total Reserves (Million Tons) 45 million grams 01.000 08.000 15.000 34.000

1 2 3 4 5

0.065

0.000

0.065

Coal - Muzaffarabad,& Kotli.

01.000

29.000

30.000

Lime Stone Muzaffarabad

70.000

30.000

100.00

Gypsum. Muzaffarabad & Hattian Bauxite Kotli Fireclay Kotli Quartzite - Kotli Pozzollana Kahuta

4.000

01.000

05.000

10 11 12 13

05.000 05.000 05.000 00.500

02.000 02.000 02.000 0.500

07.000 07.000 07.000 01.000

34 MINERAL DEPOSITS WITH COMPLETE STUDIES & READY FOR EXPLOITATION FEASIBILITY

1. EXPLOITATION OF RUBY DEPOSITS OF AZAD KASHMIR Location The Ruby deposits of Azad Jammu & Kashmir are found at Nangimali area of Upper Neelum Valley. The area falls in Survey of Pakistan Topo sheet No.43- J/5. Accessibility Nangimali is about 25 km from Kel. The Kel is about 160 Kilometers north east of Muzaffarabad. Kel is linked with Muzaffarabad by partially metal road open for about 8/9 months, whereas onwards by a fair weather road open 5 to 6 months. Reserve Potential 40 million grams of ruby potential has been assessed in Nangimali area. Recently ruby has been discovered in the vicinity area of Chitta Katha and on the basis of preliminary exploration during 2005 and 2006 a similar deposit to Nangimali is expected, with very high ( about 40 times than Nangimali) per cubic meter recovery of ruby.

Market Studies With the technical and financial assistance of UNDP, this stone have been introduced in the World market as Kashmir Ruby by participating in the international gem shows held at Tucson, USA, and in the gem markets of Thailand, Switzerland and UK. These promotional activities established Kashmir Ruby as highly desirable unique gemstone of the world.

35
Feasibility Comprehensive Feasibility Study for Commercial exploitation of Nangimali Ruby Deposits has been prepared in 2003. The Study envisages annual production of 300 kgs production after 2 years mine development. Total investment is estimated to be Rs. 112 million. 2. ESTABLISHMENT OF GRAPHITE PROCESSING PLANT Location The graphite deposits are found in Bagnaunwali Seri, Tarli Domel and Mohriwali areas of Upper Neelum Valley. The area falls in Survey of Pakistan Toposheet No.43-J/5 & I / 8. Accessibility Bagnaunwali Seri, Tarli Domel and Mohriwali areas are about 6 km, 13 km and 35 km from Kel respectively. The Kel is about 160 kilometers north east of Muzaffarabad. Kel is linked with Muzaffarabad by partially metalled road open for about 8/9 months, whereas onwards by a fair weather road open 5 to 7 months. Reserve Potential A total of one million ton proved reserves of graphite are present at all threelocalities i.e. Bagnaunwali Seri (0.3 m ton), Tarli Domel (0.6 m ton) and Mohriwali (0.1 m tone). The graphite at first two localities is foundry grade whereas last one is crucible grade. Feasibility A comprehensive feasibility study covering mining, processing & marketing was prepared in 1989. In the said feasibility study total investment required was Rs. 67.00 millions which needs to be updated. 3 ESTABLISHMENT OF CEMENT MANUFACTURING PLANT AROUND MUZAFFARABAD Location The limestone / Shales and Gypsum (Cementious material) bearing areas are located within 10 km2 radius around Muzaffarabad town. The area falls in Survey of Pakistan Toposheet No.43-F/7. Accessibility The limestone and shale deposits of Batmang area are located on all weather metalled (Neelum valley) road at a distance of about 4 km North of Muzaffarabad..

36
The deposits of gypsum are located at Sherwan, Shawai, Balok Bhana and Thangar area about 2 to 4 km Northwest of Muzaffarabad and are easily accessible with all weather roads. Reserve Potential About 100 million tones reserves of limestone / shales and four million tones of gypsum are present. Feasibility Preliminary feasibility study covering reserve potential and suitability of material for cement manufacture is available. Different studies including costs, marketing, size and location of plant etc. are to be done. Tentative investment required for establishing a cement plant with 2000 ton / day capacity is Rs. 3.00 billion. 4. ESTABLISHMENT OF BENTONITE PROCESSING PLANT Location The Bentonite deposit of Sadiqabad-Kathar is located near Dudial, District Mirpur and fall in Survey of Pakistan Topographic Sheet No.43-G/11. Accessibility The Mirpur town is the District headquarter and lies about 120 kms from Rawalpindi and connected through the grand truck road via Dina and Mangla. The Dudial town can be approached at a distance of 65 kms from Mirpur along MirpurChakswari road and 85 kms from Rawalpindi via Kalar Sayyadan-Dan Gali road. Reserve Potential Four million tones proved reserves of bentonite are found in Dudial area. Market Studies Presently activated fullers earth is being produced in the country and is also imported from West Germany, China, USA, U.K, Malaysia and Indonesia to meet the shortfall in demand. Feasibility A Comprehensive Feasibility Study for Commercial exploitation of Dudial bentonite and establishment of Fullers earth plant is available. To mine and process 25 tonnes of bentonite per day Rs 93.00 millions will be required as per estimates prepared in 2006.

37
5. QUARRY DEVELOPMENT & ESTABLISHMENT OF GRANITE / MARBLE CUTTING, POLISHING PLANTS IN NEELUM AND MUZAFFARABAD DISTRICTS Location and Accessibility The Marble & Granitic terrain lies towards NE of Muzaffarabad town. The area falls in survey of Pakistan toposheet Nos 43 / F 10,14,15 & 43 / J1 &9.The area can be approached through Neelum valley road. Upper reaches of major streams passing through the granitic terrain are accessible by fair weather truckable roads. Khawaja Seri Area Khawaja Seri is located at about 150 kilometers North east of Muzaffarabad on Kel- Neelum valley road. The dolerite (black coloured) deposit is about 1 to 1.5 kilometers off the main road. In this area total of three dolerite bodies of different sizes have been located. They are intermittently exposed at different topographic

levels indicating them as a part of the same mass underneath. The tentative calculated reserves are about 100 million tons on the basis of exposed length, thickness and workable depth. Kensi Area Kensi is located at 95 kilometers north east of Muzaffarabad. The first 70 kilometers are on main Neelum valley road and the rest 25 kilometers on Kundalshahi Jagran road. The quartzite is silver grey coloured and reserves are more than 150 million tons. Keran Granite Keran is located at about 90 kilometers from Muzaffarabad. The granite deposits lie on main Neelum valley road. The granite is grey coloured having extensive reserves. The rock is less jointed and the size of the block extracted for cutting and

polishing purposes is exceptionally of good size and grade. The tentative calculated reserves are about 289 million tons on the basis of exposed length, thickness and workable depth.

38
Chaijwa Nala The Chaijwa village is located at about 65 kilometers north east of Muzaffarabad. The first 60 kilometers (up to Jura) are on main Neelum valley road and the rest 5 kilometers on fair weather 4X 4 truckable road. The dolerite deposit is black in colour with tentative reserves of one million ton Chugian Nala Chugian is located about at about 50 kilometers north east of Muzaffarabad. The first 30 kilometers are on main Neelum valley road and the rest 20 kilometers on fair weather 4 X 4 truck able road. This is very promising area having several dolerite (jet black) and light whitish grey granite deposits. A total of eight dolerite bodies of different sizes have been marked between Harla to Trakana baihks in Chugian Nala and onwards to eastern slopes of Sarsangar gali. They are intermittently exposed in a 3 km long belt at different topographic levels indicating them as a part of the same mass underneath. The lowest level so far located is at 2500m ASL in Pathra baihk that passes up to Sarsangar Gali at 3130m

ASL. The numerous occurrences and their lateral extension indicate huge reserves. The grey granite found in the area is fine grained, less jointed and large size blocks can be extracted for cutting & polishing. This has been indicated a potential target. The tentative calculated reserves are about 157 million tons on the basis of exposed length, thickness and workable depth. Market Studies About 60 tons of granite samples (grey & black) from various deposits were cut and polished. The material is unique and highly desirable in the local & international markets. Feasibility Comprehensive geological studies are underway and on its completion a mining feasibility study for commercial exploitation of these deposits shall be prepared. Tentatively Rs. 250 to 300 million will be required for quarry development and cutting / polishing plants.
AZAD KASHMIR MINRAL & INDUSTRIAL DEVELOPMENT CORPORATION Near Abbass Institute of Medical Science Ambor, P.O. Box #8, Muzaffarabad, Azad Kashmir PH: 05822-921577, 921578, 921580, Fax: 05822-921576

39

TOURISM IN AZAD JAMMU & KASHMIR

Tourism has established as an itself

important in the

industry

world. It has proved its effectiveness in economic uplift as well as in introducing historical and traditional heritages. Besides other benefits, Tourism is a growth industry and grows faster than most other exports oriented industries. Tourism industry may promote a better image of the country and thereby enable it to achieve other objectives. Tourism can be an instrument of a process of transferring wealth from richer parts to the poorer parts of the country and securing a more equitable distribution of wealth. In Azad Jammu & Kashmir potential-wise, after hydro power, tourism can be described as the other main resource. Tourism in Azad Jammu & Kashmir: Azad Kashmir is bestowed by nature with exquisite natural beauty and has great potential for development of tourism. The picturesque beauty of its valleys, dense forests, winding rivers, turbulent foaming streams, majestic towering mountains, bracing climate, historical & cultural heritage, holistic shrines & festivals and diversity of flora and fauna all go together to make it an excellent tourist resort.. The area is full with variety of landscapes. Hiking and tracking sites, trout fishing in the frozen waters of the Neelum River and the remains of the Buddhist civilization in the Sharda Valley are other areas of tourist attraction. The beautiful wood work, the famous Kashmiri handicrafts,

40
traditional Kashmiri foods and above all a clean and pristine environment presents other areas of delight for the tourists on this heaven on earth. The custom rich and traditional society of AJK is also a subject of anthropological value. The State of Azad Jammu & Kashmir contributes a distinctive cultural entity developed by its people, which is profoundly different from the rest of the SubContinent. Its mountain terrain and wide valleys decanted harsh terms on the development of its culture. This is why the people of Azad Jammu & Kashmir have developed into a persistent hard-working, non aggressive race which leads a simple & frugal life. Their dances, music, dress, traditions, jewelry, handicrafts and performing arts all are windows to their character. A- HELI-TOURISM: The Heli-Tourism product is a new initiative world-wide, which is the largest service provider, to enable tourists to travel from one destination to another with the double benefit of cutting down on travel time while enjoying a birds eye-view of the unique beauty of nature. For those who can pay, the joys of chopper rides might be a lot more accessible than the vicarious pleasure of seeing a screen. Moreover, the vertical lift technology of helicopters has far more utilitarian aspects to its credit than only being an effective mode of transport. Besides connecting the remotest places to the centre, helicopters can perform SAR (Search And Rescue), EMS (Emergency Medical Services), Law Enforcement, Power Line Survey, Fire Fighting, ENG (Eloctronic News Gathering) missions etc. In Azad Jammu & Kashmir, heli tourism services to popular destinations, could tag convenience with a sense of adventure as well as pack in the utility of quick travel. The heli service may be expensive but is likely to grow in popularity. There are keen adventure enthusiasts would like to travel to inaccessable mountain peaks for trekking, skiing, paragliding and bunjee jumping etc.

Besides, heli service could also be used for other official purposes as well for SAR (Search And Rescue), EMS (Emergency Medical Services), Law Enforcement, Power Line Survey, Fire Fighting, ENG (Eloctronic News Gathering) missions etc. especially proven services rendered by the helicopter during the disastrous earthquake of 2005.

41
The Govt. of AJK taking all these aspects into consideration, decided in principle to setup a heli-service for tourist operations as well as multiple purposes. In this regard, AJK Tourism Department intends to establish HeliTourism in AJK through PublicPrivate Partnership, which is planned for Improvement of accessibility in AJK and regions of potential tourist areas, which are not connected by roads. Promoting arrivals to the destinations of interest by creating hub & spoke operations, giving impetus to Heli-Tourism and helicopter services to areas not serviceable by fixed wing aircraft is the main theme of the project. In this regard, Bids/ Offers are invited from reputed organizations for the long term Heli-Tourism operations. Specifications of the Helicopters and terms & conditions can be obtained from office of the Director General AJK Tourism & Archaeology, Muzaffarabad. BChairlifts/ Cable Cars: Chairlifts & Cable Cars are considered to be very popular mode of recreation. Azad Jammu & Kashmir has many beautiful

places which due to their locations, altitude varying from 5000 Ft to 8500 Ft above sea level, enchanting surroundings and aesthetic atmosphere have great potential for installation of Chairlifts & Cable Cars etc. Installation of such devices will not only provide linkage between adjacent tourist spots but also create additional recreational facilities to the locals and visitors besides enhancing the tourist potential and economic

development of the areas. Survey & Feasibility Study has been carried out through a reputed expert Firm. The Consultant Firm has recommended that installation of chairlift/ cable cars in between Saran-Pirchinassi is a most feasible project with the following submissions:

SITE POTENTIAL Saran Pir Chinassi Project is Located in Muzaffarabad District, East of Muzaffarabad City Some 27 Kilometers away

approachable by a Black Top Road. Saran Has An Altitude Of 2,335 Meters And Already Has A Tourist Lodge. Pir Chinassi has

42
an altitude of 2,924 meters and tomb pir shah hussain bukhari is situated at the top of Pir Chinassi peak. The proximity to the capital city, natural beauty of the area and the tomb of Shah Hussain Bukhari make this site the premier location for the installation of cable car system. SYSTEM TECHNICAL DETAILS SYSTEM 8 MGD (8 PERSON MONO-CABLE DETACHABLE GONDOLA) CAPACITY NUMBER OF PARS/CABIN SPEED LOCATION OF DRIVE LOCATION OF RETURN LENGTH HEIGHT DIFFERENCE NUMBER OF CABINS TRIP TIME 1000 PERSONS \ HOUR 8 PERS 5 METERS \ SECOND STATION I (Saran Area) STATION 2 (Pirchinassi Top) 2.0 KM 500- 800 M 19 NOS 15 - 20 MINUTES

CAPITAL COST ESTIMATES The cost is subject to changes in the cost of equipment, Rupee Euro exchange rate and general inflation and should be taken only as a notional figure.

SUMMARY OF CAPITAL COST ESTIMATION SUMMARY OF CAPITAL COST ESTIMATION Item Cost of Ropeway System (Euro 6.0 million @ Rs.115) Taxes @ 30% Freight (Karachi - Saran/ Pir Chinassi Ins. @ 2% Construction (Pylons + Stations) Total = 1000.00 207.00 3.00 18,00 82.00 Rs. Millions) 690.00

43

HYDRO POWER GENERATION

The State of Azad Jammu & Kashmir by virtue of its topography, meteorology and hydrology is blessed with abundant hydropower potential. A comprehensive planning of the hydropower resources of the State has been carried out by WAPDA in collaboration with international agencies for carrying out the comprehensive planning of available hydropower resources with the following objectives: To assess the total hydropower potential of the rivers/streams available to meet the national power demand and the local demand in isolated system. To rank the identified projects for development in order of priority both for national and local power needs. The study area comprised of a part of Jhelum river basin, upstream of Mangla reservoir, which lies within the territory of Azad Jammu & Kashmir The study conducted preliminary investigations, identified potential sites and gave recommendations for further detailed studies on sites ranked to be most viable. As a result of these investigations a number of sites have been identified, that offers attractive prospects. According to preliminary estimates, potential of about 7000 MW has been identified in the three major river catchments and their tributaries in Azad Jammu & Kashmir. Important features of these project sites are: Early rising characteristics during lean periods when output from other hydropower stations are low.

44
Run-off-river schemes that dispense with large storage reservoirs causing environmental imbalances. A favorable topography that supports high head hydropower projects that utilized simple technology. High annual plant that insures reliable supply for most part of the year. Project locations in close proximity to urban load centers.

AZAD JAMMU & KASHMIR HYDRO ELECTRIC BOARD The Govt. of AJK has assigned top priority to the exploitation implementation and development of hydropower projects in the territory and .has constituted Hydro Electric Board for the development of hydel potential in AJK. Public sector projects are implemented by Managing Director Hydro Electric Board, whereas; Private sector projects are coordinated/processed by Director General Private Power Cell under the Administrative Control of Secretary Electricity/HEB/PPC of Govt. of AK.

In 1989, the Govt. of AJK established Hydro Electric Board to plan and to undertake development of identified hydro potential. It has so far completed 07 projects having total installed capacity of 37.6 MW. Major advantages in exploiting hydropower potential of AJK are: Convenience of interconnection with major high voltage grid network of WAPDA. Low cost of transmission/ dispatch. Low construction cost of power station. Availability of reliable and credible data on Topography, Hydrology, Geology, Seismology, and power systems. Availability of construction material and skilled/ unskilled labor. Risk free environment. Peaceful, law abiding populace with no ethnic or law/ order problems. At present, total demand of electricity of AJK is about 400 MW, which would increase upto 700 MW 2015. The following projects are ready for investment.

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S.No

NAME OF PROJECTS DOWARIAN LUAT NAGDAR SHOUNTER JANAWAHI TAOBUT Total

CAPACITY (MW) 40 49 35 48 12 10 194

1 2 3 4 5 6

ESTIMATED COST (MUS$) 54.414 76.355 66.929 91.76 20.553 22.104 332.115

The plan of the following Hydro Power stations has been approved by the planning commission of Pakistan. Project Gulpur JagranJI Jhing Kotli Chakothi Total Capacity MW 60.00 43.5 7.5 100 131 342 Estimated Cost (in Million) Rs. 6000.00 Rs. 4600.00 Rs. 1800.00 Rs. 9500.00 Rs. 11500.00 Rs. 31600.00

THE POWER POLICY 2002 PROVIDES THE FOLLOWING INCENTIVES FOR INVESTORS IN PRIVATE SECTOR;1. FINANCIAL REGIME a) Permission for power generation companies to issue registered bonds. b) Permission to issue shares at discounted prices to enable venture capitalists to be provided higher rates of return proportionate to the risk. c) Permission for foreign, bank to underwrite the issue of shares and bonds by the private power companies to the extant allowed under the laws of Pakistan. d) Non-residents are allowed to purchase securities issued by Pakistani companies without the State Bank of Pakistan's permissions and subject to the prescribed rules and regulations.

46
e) Abolition- of 5% limit on investment of equity in associated undertakings. f) Independent rating agencies are operating in Pakistan to facilitate investors in making informed division about the risk and profitability of the project company's Bonds/TFCs.

2. a. b. c.

FISCAL REGIME. Customs duty at the rate of 5% on the import of plant and equipment not manufactured locally. No levy of sales tax on such plant, machinery and equipment, as the same will be used in production of taxable electricity. Exemption is already available from income tax including turnover rate tax and withholding tax on imports; provided that no exemption of income tax on oil-fired power plants. d. Repatriation of equity alongwith dividends is freely allowed, subject to the prescribed rules and regulations. e. Parties may raise local and foreign finance, in accordance with regulations applicable to industry in general. GOP approval may be required in accordance with such regulations. f. Maximum indigenization shall be promoted in accordance with GOP policy. PRIVATE SECTOR PARTICIPATION. In view of the financial constraints, it has been well realized that private sector

3.

can play an effective role in the development of hydropower projects in AJK. A policy framework of the Government of Pakistan, which provides guidelines for participation of private sector in the development of hydropower projects, has also been adopted in AJK, HEB/Private Power Cell encourage response from the investors and Letters of Intent (LOI)/Letters of Support (LOS) for these projects to investors to promote development in this sector. Foreign private investment would be a break through in the development of hydel sector in AJK and would also lead to social-economic uplift of the region.

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POTENTIAL HYDRO POWER PROJECTS FOR INVESTMENT S.No NAME OF PROJECTS CAPACITY (MW) 40 49 35 48 12 10 194 ESTIMATED COST (MUS$) 54.414 76.355 66.929 91.76 20.553 22.104 332.115

1 2 3 4 5 6

DOWARIAN LUAT NAGDAR SHOUNTER JANAWAHI TAOBUT Total

TECHNICAL & FINANCIAL PARAMETERS 40 MW DOWARIAN HPP 1. Name of Project Dowarian Hydro Power Project 2. Location 3. Capacity 4. Gross Head 5. Design discharge 6. Mean annual flow 7. No. of units 9. Plant factor 10. Generation Voltage 11. Project Investment Cost 12. Project Economical IRR 13. Project financial IRR 14. Unit Cost 15. Status Located on Dowarian nallah (District Neelum) about 97Km from Muzaffarabad 40 MW 510m 9.6 m3/s 5.97 m3/s 04 (Pelton turbines) 48.77 % 11 KV 54.414 (M.US$) 39.74 % 18.91 % 4.484 (Rs./KWh) Detailed Feasibility Study (Available)

8. Annual Energy generated 170.83GWh

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TECHNICAL & FINANCIAL PARAMETERS 49 MW LUAT HPP 1. Name of Project 2. Location 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. Capacity Gross Head Design discharge Mean annual flow No. of units Annual Energy generated Plant factor Generation Voltage Project Investment Cost Project Economical IRR Project financial IRR Unit Cost Luat Hydro Power Project On the right bank of Chutiari Nallah (District Neelum) about 95Km from Muzaffarabad 49 MW 618m 9.6m3/s 6.90m3/s 04 (Pelton turbines) 214.13GWh 49.9% 11KV 76.355 (M.US$) 34.68% 17.01% 5.107 (Rs./KWh) Detailed Feasibility Study (Available) TECHNICAL & FINANCIAL PARAMETERS 35 MW NAGDAR HPP 1. Name of Project 2. Location 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. Capacity Gross Head Design discharge Mean annual flow No. of units Annual Energy generated Plant factor Generation Voltage Project Investment Cost Project Economical IRR Project financial IRR Unit Cost Status Nagdar Hydro Power Project On the right bank of Nagdar Nullah about 92 Km from Muzaffarabad 35 MW 470 m 09 m3/s 5.44 m3/s 04 (Pelton turbines) 146.05GWh 47.64 % 11 KV 66.929 (M.US$) 27.78 % 14.30 % 6.496(Rs./KWh) Detailed Feasibility Study (Available)

15. Status

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TECHNICAL & FINANCIAL PARAMETERS 48 MW SHOUNTER HPP 1. Name of Project 2. Location 3. Capacity 4. Gross Head 5. Design discharge 6. Mean annual flow 7. No. of units 9. Plant factor 10. Generation Voltage 11. Project Investment Cost 12. Project Economical IRR 13. Project financial IRR 14. Unit Cost 15. Status Shounter Hydro Power Project Proposed on Baral river 48 MW 132 m 50 m3/s 33.03 m3/s 04 (Francis turbines) 48.75 % 11 KV 91.760 (M.US$) 27.56 % 14.39 % 5.951(Rs./KWh) Detailed Feasibility Study (Available) TECHNICAL & FINANCIAL PARAMETERS 12 MW JANAWAHI HPP 1. Name of Project 2. Location 3. Capacity 4. Gross Head 5. Design discharge 6. Mean annual flow 7. No. of units 9. Plant factor 10. Generation Voltage 11. Project Investment Cost 13. Project financial IRR 14. Unit Cost 15. Status Janawahi Hydro Power Project Proposed on Baral river 12 MW 400 m 3.60 m3/s 3.29 m3/s 03 (Pelton turbines) 49.9 % 11 KV 20.553 (M.US$) 13.42 % 7.079 (Rs./KWh) Detailed Feasibility Study (Available)

8. Annual Energy generated 223.85GWh

8. Annual Energy generated 51.73 GWh

12. Project Economical IRR 21.00 %

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TECHNICAL & FINANCIAL PARAMETERS 10 MW TAOBUT HPP 1. Name of Project Taobut Hydro Power Project 2. Location 3. Capacity 4. Gross Head 5. Design discharge 6. Mean annual flow 7. No. of units 8. Annual Energy generated 9. Plant factor 10. Generation Voltage 11. Project Investment Cost 12. Project Economical IRR 13. Project financial IRR 14. Unit Cost 15. Status Proposed on Gagai river 10 MW 66.0 m 20.0 m3/s 12.45 m3/s 04 (Francis turbines) 47.68 GWh 52.8 % 11 KV 22.104 (M.US$) 16.84 % 11.54 % 8.608 (Rs./KWh) Detailed Feasibility Study (Available)

NAME OF PROJECTS

CAPACITY (MW)

Project Investment COST (MUS$)

JAGRAN-IV

24

42.00

CHANGAN

9.0

17.00

HARIYOLA-ZAMINABAD

21

28.00

Total

54

87.00

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PROJECT PROFILE 22 MW JAGRAN-IV 1. Name of Project 2. Location 3. 4. 5. 6. Capacity Gross Head Design discharge Mean annual flow Jagran-IV Hydro Power Project Located on Jagran river about 86 Km from Muzaffarabad 22.0MW 156 m 18 m3/s 15.59 m3/s 04(Francis turbines) 51.25 % 11 KV

7. No. of units 9. Plant factor 10. Generation Voltage

8. Annual Energy generated 98.20 GWh

11. Project Investment Cost 42.000 (M.US$) 12. Project Economical IRR 25.33 % 13. Project financial IRR 14. Unit Cost 15. Status 14.26 % 6.080 (Rs./KWh) Detailed Feasibility Study Completed

PROJECT PROFILE 9 MW CHANGAN - II 1. 2. 3. 4. 5. 6. 7. 8. 9. Name of Project Location Capacity Gross Head Design discharge Mean annual flow No. of units Plant factor Changan - II Hydro Power Project Located on Changan nullah about 103Km from Muzaffarabad 9.0MW 360m 3.0m3/s 1.79 m3/s 03(Pelton turbines) 48.9 % 11 KV

Annual Energy generated 38.46GWh

10. Generation Voltage

11. Project Investment Cost 17.000 (M.US$) 12. Project Economical IRR 29.50 % 13. Project financial IRR 14. Unit Cost 15. Status 15.49 % 6.091 (Rs./KWh) Detailed Feasibility Study Completed

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PROJECT PROFILE 14 MW HARIYOLA-ZAMINABAD 1. Name of Project Hariyola-Zaminabad Hydro Power Project 2. Location 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. Located on Agar nullah about 20 Km south of Muzaffarabad Capacity 14.0MW Gross Head 366m Design discharge 5.20m3/s Mean annual flow 3.71 m3/s No. of units 04(Pelton turbines) Annual Energy generated 75.48 GWh Plant factor 61.6 % Generation Voltage 11 KV Project Investment Cost 28.000 (M.US$) Project Economical IRR 24.85 % Project financial IRR 14.56 % Unit Cost 6.399 (Rs./KWh) Status Detailed Feasibility Study Completed FOR FURTHER DETAIL PLEASE CONTACT Azad Jammu and Kashmir AJK Hydro Electric Board B-36 Upper Chatter Housing Scheme Muzaffarabad. Phone No. Fax No. 05822-921064 05822-921063