EPZA urges businesses to look into new export zones initiative

KARACHI: Chairperson of the Export Processing Zone Authority (EPZA) Saifuddin Junejo has urged the business community to take advantage of the EPZA’s two new concepts of private and public-participated EPZs.

Private EPZs allow potential investors, having the required capital and land, to develop, maintain and operate these export zones. In public-participated EPZs, investors can develop and maintain export zones, but only the EPZA can operate them.

Speaking at a meeting during his visit to the Karachi Chamber of Commerce and Industry (KCCI) to deliver a presentation on ‘Private and Public-Participated EPZs’, the chairperson added that the EPZA has already started receiving several requests from local and foreign investors who have shown interest in establishing EPZs; these requests will now be processed by the EPZA and the federal government per the timeline.

According to Saifuddin Junejo, “We have created this opportunity in line with the prime minister’s vision to establish EPZs in all the cities, which offer the best incentive packages, including tax exemptions, immunity from the Foreign Exchange Regulation Act (FERA), and no restrictions under import and export policies, which are not applicable to business units at EPZs.”

The Karachi Export Processing Zone was originally planned to be established on an area of 3,000 acres, but it was spread over an area of just 300 acres, which was very small as compared to other such zones in the region, the chairperson noted, while referring to the free zone of the UAE’s Jebel Ali in Dubai, which is spread over a huge area of 15,000 acres.

He also noted that last year, the trading volume of the Jebel Ali free zone alone stood at $104 billion, whereas Pakistan’s exports, with thousands of industries across the country, could hardly reach around $28 billion. “It is due to the fact that we have neither been able to expand the existing EPZs nor established new EPZs,” he added while expressing optimism that the new concept for private and public-participated EPZs will encourage many potential investors to establish SEZs in any area of Pakistan.

Saifuddin Junejo mentioned that a total of nine EPZs are operational in Pakistan, and while the same number of EPZs are also functioning in Bangladesh, Pakistan’s EPZs’ contribution to national exports was not more than 3-4 per cent. Contrary to this, in Bangladesh, SEZs were performing much better by contributing around 16 to 20 per cent.

Director of Investment Promotion at the EPZA Ghulam Mustafa Wahocho, in his presentation, stated that as the government does not have land and funds to develop more EPZs, there was

a dire need to go for other alternate options, such as private and public-participated EPZs. In this regard, the Private and Public Participated EPZs Rules 2023 have been framed, which have also been posted on EPZA’s website.

Explaining the criteria for establishing these EPZs, he said that 50 acres of land in ownership or on a 50-year lease, extendable to a further period of 50-99 years, is one of the major requirements, along with sufficient capital or a capital plan. Other requirements include the SECP’s registration for developing and operating EPZs. “The developer and operator may transfer the title of land lease or ownership to the authority along with all rights and privileges under the agreement,” he added.

He said that these EPZs will be notified under a pre-defined timeline, which comprises 15 days for the evaluation by the EPZA; 15 days for the approval by the Board of the EPZA; and 60 days for the approval by the federal government.

He requested the Karachi Chamber to disseminate information about private and public-participated EPZs amongst its member companies and potential investors so that they could avail themselves of this opportunity and play their role in increasing Pakistan's exports.

Earlier, President of the KCCI Iftikhar Ahmed Sheikh said that, keeping in view the immense experience of the chairperson of the EPZA, who has dedicatedly discharged his services at Pakistan Customs and also as a commercial counsellor at Pakistan’s Consulate in China, the EPZA’s functioning would improve further and that it would offer all the required facilities along with incentives to attract the maximum number of local and foreign investors.