An economic opportunity zone

January 3, 2021

Owing to improved law and order, ample resources, easy connectivity and excellent location, Hattar can be a haven for industrialists

Hattar is a union council of Khanpur tehsil, in Haripur district. It is best known for Hattar Econonic Zone, the oldest and most significant industrial estate in Khyber Pakhtunkhwa.

Four major roads connect Hattar EZ to the rest of the country. These are the Hazara Motorway, the Taxila–Haripur Road, the Khanpur Road and the Karakorum Highway. An hour’s drive from Islamabad, Hattar Industrial Estate Interchange on Hazara Motorway leads directly to the zone. A railway station connects Hattar to Karachi by train. A proposed dry port and extension of railway line at Havelian near Hattar will see a new track laid to the Pakistan-China border at the Kunjerab Pass where it will link up with China’s Kashgar Hotan Railway.

Established in 1984 with an area of 1,443 acres, Hattar Economic Zone hosts over 300 industrial units that employ over 40,000 people. Rs 553 million was spent on the rehabilitation of Hattar EZ by KPEZDMC. This included repair, replacement and improvement in roads, sewerage, water supply and streetlights. The construction of a dual carriage road and a flyover by PKHA passing through Hattar EZ is in progress.

The Hattar EZ grid station has a capacity of 160 MW. Two new transformers are being installed to provide 80 MW of additional electricity.The HEZ receives 14.5 MCFD of gas supply from the SNGPL. The Hattar Special Economic Zone was launched in December 2015 by the then chief minister, Pervez Khattak.

The SEZ is expected to attract Rs 40 billion investment and will provide jobs to 25,000 people. Rs 4 billion investment has already been mobilized from China, Canada, KSA and Pakistan. The zone has a total area of 424 acres and 332 acres of saleable land. So far, 1,456 applications for 4,032 acres have been received. 285 acres have been allocated so far to 99 industries.

Applications for allotment of 28 acres for 13 industries are in the approval process. Five industries are already in production phase while 30 units are under construction. Three of the units have availed of Rs 450 million duty exemption for plant and equipment under SEZ Act 2012. Currently, the zone authority is providing road access, water and electricity for construction through its transformers.

Initially, 10 MW electricity will be provided through a double circuit 11 KV feeder line. More than half of the poles out of 217 have been installed by the PESCO. Additionally, 40 MW electricity will be supplied through a 132 KV grid station at Hattar SEZ. Two transformers of 40 MW each are being commissioned at the grid station.

The electric power for the zone will be provided by 132 KV Kangra grid station which is at a distance of 13 kilometres s from the zone. In the long term the zone is expected to have 24 MMCFD gas from Kamra through a 48-kilometre, 12-inch diameter pipeline, costing Rs 1,830 million. As a short-term solution, 2.5 MMCFD CMS has been constructed at the zone at a cost of Rs 39 million. This capacity is expected to reach 5 MMCFD. A PC-1 (project digest) asking for Rs 2.8 billion has been sent for approval by KPEZDMC to the Planning and Development Department for completion of road infrastructure, water supply, boundary wall, sewerage, street lights etc.

As per SEZ Act 2012, the responsibility for bringing gas and electricity to the doorstep of an approved SEZ lies with the federal government. Hence, the cost of transmission line, feeder, poles and gas pipe, etc, to the HSEZ is being borne by the federal government. Investments at Hattar SEZ offer a 10-year income tax holiday and one time duty free machinery imports, according to the SEZ Act.

For transparency in plot allotment, an SEZ Committee has been constituted by the Federal Board of Investment. It consists of the KPEZDMC CEO, the KP BOIT CEO, the KP SEZA director, the federal SEZ BOI director and the Haripur deputy commissioner. The committee approves plot applications and is responsible for overseeing SEZ issues. To avoid speculation in property, the SEZ Act warrants that after allocation of land, the enterprise must start construction within six months and start production within two years.

After six months of satisfactory commercial production, the KPEZDMC will sign a lease deed with the zone enterprise. The allottee not allowed to transfer the plot until the signing of the lease deed.

A 2010 report on impediments to investment at HSEZ said most of the plots at the zone were in a depression and needed investment in filling with compacted soil.

Over 100 units at Hattar Economic Zone are currently ‘sick’ or closed. The government needs to devise a strategy to revive these units or re-allot these plots to new investors.

The environmental fallout of the industries needs immediate attention. Effluents from industries at the Hattar Economic Zone are released into open area near the zone without treatment, resulting in diseases among locals and loss of agricultural land. Some of the industries also release toxic gases detrimental to human health. The EPA has no representation in the Haripur district and environmental issues are looked after by three officers based in Abbottabad. The government should install an effluent treatment plant and have a well-equipped EPA office at Hattar to curb pollution.

Two cement plants with a production capacity of 1.27 million tonnes per annum and 1.12 million tonnes per annum are operational in Hattar. These plants provide jobs to over 1,500 people. The FWO and Fatima Group have acquired mining leases of limestone from KP Mines and Minerals Department in the vicinity. Fatima Cement expects to invest $350 million, while the FWO will $250 million. Together the two will provide 2,000 new jobs.

Khanpur is also to host a digital city. In Phase 1, 86 kanals land has been acquired for the project. This will eventually go up to 1,000 kanals. The project will host IT-related manufacturing industries, a Software Technology Park and Business Process Outsourcing. The project will be part of the upcoming Special Technology Zones Act and initially create 5,000 jobs.

Many industries at Hattar will take advantage of the Park and improve their business processes by automating their procedures. In September 2020, Prime Minister Imran Khan inaugurated the 300 kanal, purpose-built Pak Austria Fachhochschule in Khanpur. It is the first university in Asia, in which eight leading engineering universities from Austria and China have come together as partners. These include three Austrian Universities of applied sciences and engineering and five Chinese leading universities. The Institute will provide quality human resource to industries in the region while a TEVTA Centre and aPolytechnic Institute in Haripur are already providing skilled labour.

Given a satisfactory law and order situation, easy connectivity and excellent location, Hattar is a haven for industrialists.

The writer is Head of Business   Development and Media at KPEZDMC

Hattar: An economic opportunity zone for Pakistani