Wednesday June 07, 2023

Red tape delays Rs1tr investment in Punjab cement sector

23 applications are pending which is actually hindering almost 6.9 billion investment in the province

August 19, 2020

LAHORE: Red tape is delaying almost $7 billion fresh investment alone in the cement sector in the province as the investors applications are moving from one department to the other but not getting approval.

The total number of applications increased from 14 to 23 during the last eight months while the investors held meetings with the provincial minister for industries and trade but all the efforts of the investors are in vain.

The minister seems to be helpless before bureaucracy is only conducting meetings and issuing orders for speedy completion of required formalities to grant No Objection Certificates (NOCs) to the new cement plants and extensions to the existing ones in the province.

These applications in the five districts of Punjab, including Attock, DG Khan, Mianwali, Khushab and Chakwal are pending with different provincial departments, including local government, mines and minerals, environment protection and others. The industry officials said that almost average $250 to 300 million investment was needed for installation of a new plant or extension to the existing ones.

Currently, 23 applications are pending with the Punjab government which is actually hindering and delaying almost $5.75 billion to 6.9 billion investment in the province. If we convert this to local currency it is almost Rs1 trillion investment that is almost two and half times more than the total annual development budget of Punjab. The industry official believed that red tape was adversely affecting new investment in a time when country was in dire need of it.

Industries and Trade Minister Mian Aslam Iqbal on Tuesday chaired a meeting to review the progress on issuance of the NOCs for the installation of the new cement plants in Punjab and expressed extreme dismay on delay in issuances of the NOCs. He warned the provincial bureaucracy that he would not tolerate the red tape culture for issuance of NOCs to the cement sector new investment. He said the department that would not complete the work within approved and given timeline would be answerable.

He observed that new investment was dire need of the country’s survival while the government was responsible for ensuring facilities to the investors. He said that billions of rupees new investment was required for a new cement plant which would also create hundreds of new jobs. He instructed that the department concerned should facilitate the investors instead of creating hurdles. He assured that if legislation was required for installation of the new cement plants the government would bring it. He said that the departments should work comprehensively and provide one-window facilities to the investors.

Secretary Industry Zafar Iqbal briefed the meeting that 23 applications for the new cement plants were received. These applications were sent to the department concerned after scrutiny. However, now these applications are pending with Mines and Minerals, environment, and other departments concerned, he added.

The meeting was also attended by the DGs of Industries, Mines and Minerals department, Environment Protection Department and other officials concerned.

The investors are looking for new investment in cement sector in the backdrop of anticipated growth in the construction sector of Pakistan in near future following the CPEC projects and housing projects announced by the government alongside incentive package for construction sector for economic revival.

According to the industry officials, both new and existing cement manufacturers applied for the NOC with the industry department Punjab for getting permission for the installation of new cement factories in the five districts of the province. However, due to complex procedures, the NOCs were not granted by the industry department rather applications were referred to the other departments concerned.