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News Clips 27 January, 2016

[ Ministry of Textile being run without person in command ]
[ Non-professionals being allowed to use WeBOC: APCAA ]
[ Construction of Karachi Garment City: National Assembly body concerned over non-provision of land ]
[ Energy shortages: 'Textile industry facing tough competition against regional competitors' ]

Ministry of Textile being run without person in command   [ top ]

Business Recorder, January 27, 2016
The country''s textile sector, which accounts for 55 percent of total exports, is being run on an adhoc basis as there has been no textile minister for the last ten months. The officials at the ministry of textile industry told Business Recorder that the ministry''s performance lacks co-ordination after Senator Abbas Khan Afridi left as Minister on completion of his tenure in March 2015 as senator and no new appointment has so far been made to fill the slot. 

According to the latest figures of Pakistan Bureau of Statistics (PBS), textile exports fell by 8.9 percent to $6.269 billion in the first half of current fiscal year (2015-16) as compared to exports of $6.884 billion in the same period of last year. On month-on-month basis, the textile group exports increased by 8.2 percent to $1.04 billion in December as compared to the previous month''s (November, 2016) exports of $961.455 million. On year-on-year basis the exports also decreased by 11.21 percent in December against exports of $1.171 billion in December, 2014. 

Officials revealed that Prime Minister Nawaz Sharif - the Minister-In Charge of the ministry of textile industry in the absence of a federal minister - has designated Federal Minister for Commerce Khurram Dastagir Khan as chairman Federal Textile Board (FTB). The FTB was restructured and notified to facilitate the textile sector stakeholders. The platform was supposed to be used to monitor the implementation of textile policy (2014-19) including rationalisation of cess/surcharges applicable on textiles value chain industry and its exports and its utilisation. Dastagir was also given the additional charge to look into the parliamentary affairs of the ministry. 

However, the absence of a regular minister who can provide policy guidelines with changing domestic and international scenarios is resulting in serious problems for the sector, said officials, adding that some important decisions regarding textile policy and Export Development Fund (EDF) are pending since long. Textile policy (2014-19) envisaged increasing textile exports to $26 billion in five years, however the implementation of the policy hangs in the balance and little work has so far been done in this regard. The concerns of the industry about the pending sales tax refunds, withdrawal of various surcharges on electricity like tariff rationalisation surcharge, gas and power availability at competitive prices with other regional countries, withdrawal of Gas Infrastructure Development Cess (GIDC) and restoring zero rated facility are still pending. Sources revealed that in the absence of a dedicated minister there is no single forum where the stakeholders can engage the government to resolve their problems. 

Non-professionals being allowed to use WeBOC: APCAA   [ top ]

Business Recorder, January 27, 2016
Customs department, which is supposed to take all possible measures to avoid security risks, is said granting permissions to operate Web Based One Customs (WeBOC) for self-clearance of imports or exports consignments to non-professionals against undue gains. 

Talking to Business Recorder, Arshad Jamal, Vice Chairman All Pakistan Customs Agents Association (APCAA), said that WeBOC, which customs claimed as automated system, was not working as per standards, following its manual Risk Management System (RMS). He said that non-professionals were being allowed to use the system for self- clearance of consignments against undue gains creating serious security risks to the country's imports and exports. 

On one hand, the Federal Board of Revenue (FBR) has made a six-month diploma mandatory for the license renewal of custom agents, which he termed as justified because it is technical & lawful system. On the other hand, the customs department is giving permissions for self-clearance to non-license or unprofessional persons against undue gains, he maintained. 

He alleged that the ID's of WeBOC system were being used by non-professionals, who didn't even know about the tariffs and customs related laws. Moreover, he said that customs department was protecting the said illicit activity as no mechanism had so far been evolved to monitor the process of issuing user IDs of the system. Resultantly, actual taxpayers are facing immense difficulties while dealing with customs related affairs, he added. 

Arshad said requested member custom to look into the matter and evolve a proper mechanism for the clearance of goods on self clearance and suggested that the process of the issuance of IDs for self clearance should be done as per licensing rules with the aim to eliminate such malpractices. He also recommended the authorities to monitor the performance of the self clearance and categorise the sector of import through audit and added that member customs should issue instructions to all concerned offices to evolve criterion for evaluating the performance of customs agents in co-ordination with APCAA for license renewal. 

Construction of Karachi Garment City: National Assembly body concerned over non-provision of land   [ top ]

Business Recorder, January 27, 2016
National Assembly Standing Committee on Textile Industry met in Karachi on Tuesday under the chairmanship of Khawaja Ghulam Rasool Koreja, MNA. A statement issued here said that it discussed the issue of allotment of land for the Karachi Garment City with the Land Utilisation Department, Government of Sindh. 

It said that the Committee was informed that the federal government has released Rs 300 million but there is a dispute between Pakistan Steel Mills, Government of Sindh and the Textile City regarding provision of land. The Committee expressed concern over the non-provision of land for the construction of Karachi Garment City. The Committee directed the Ministry to invite the Chief Secretary Sindh along with Deputy Commissioner concerned to brief the Committee on the said issue at the next meeting. The Committee also directed that representative of Steel Mills and Secretary Industries should also be called in the next meeting so that matter could be resolved at the earliest. 

The Chairman, Pakistan Textile City Limited (PTCL) briefed the Committee about the problem faced by its management regarding establishment of Textile City. The Committee decided to approach Prime Minister Secretariat for the supply of natural gas in textile city. The statement further pointed out that the Committee also found misappropriation in the construction of water pipeline as out of 24 KM only 3.5 KM line was constructed with the huge amount of Rs 700 million. 

It said that the Committee directed the management of PTCL to submit the complete break-up of the project to the Standing Committee in its next meeting. The following MNAs Sardar Muhammad Shafqat Hayat Khan, Rana Umer Nazir Khan, Haji Muhammad Akram Ansari, Mian Shahid Hussain Khan Bhatti, Malik Shakir Bashir Awan, Jamshaid Ahamd Dasti, Romina Khurshid Alam were present in the meeting. 

Energy shortages: 'Textile industry facing tough competition against regional competitors'   [ top ]

Business Recorder, January 24, 2016
Textile industry in Pakistan is facing tough competition against the regional competitors including Indonesia, Vietnam, Sri Lanka, Bangladesh, China and India. A comparison chart prepared by All Pakistan Textile Mills Association (APTMA) reveals the textile industry in the regionally competing countries are enjoying 24/7 energy availability to the textile mills. But the textile mills in Pakistan, particularly those in the province of Punjab, are facing energy shortage. The Association has further claimed that over 100 textile mills have closed down production capacities because of energy shortage and other relevant factors in Punjab. 

In addition, the textile industry in Pakistan is paying an energy tariff of 14.25 Cents/KWh comparing with 9 Cents/KWh in Indonesia, 7 Cents/KWh in Vietnam, 9 Cents/KWh in Sri Lanka, 7.3 Cents/KWh in Bangladesh, 8.5 Cents/KWh in China and 9 Cents/KWh in India. 

However, the textile industry in Pakistan is enjoying equal treatment on the matrix of interest/policy rate. The data shows the interest/policy rate for textile industry in Pakistan is 6 percent against 7.5 percent in Indonesia, 6.5 percent in Vietnam, 6 percent in Sri Lanka, 5 percent in Bangladesh, 4.6 percent in China and 6.75 percent in India. 

But it has registered an alarming slide on the bar of minimum wage rate, which is $125 per month in Pakistan against $74 per month in Indonesia, $90 per month in Vietnam, $66 per month in Sri Lanka, $68 per month in Bangladesh, and $90 per month in India. It is only China, which is leading even Pakistan on this front with $200 per month wage of textile workers. Therefore, the Chinese entrepreneurs are in the process of assessing the strength of Pakistan market to relocate its textile units here in the days to come, said one local textile miller. 

So far, as the currency change is concerned during the period starting from December 2013 to December 2015, it is -15.2 percent in Indonesia, -5.6 percent in Vietnam, -9.3 percent in Sri Lanka, -0.6 percent in Bangladesh, -5.1 percent in China, -8.1 percent in India against +3.0 percent in Pakistan. The Association data has further pointed that there is no investment promotion scheme/park in Pakistan throughout the region, which is a common feature of textile industry in all competing countries. Similar is the claim regarding the export promotion incentives/schemes. 

It is interesting to note that the technology up-gradation in India, China, Bangladesh and Vietnam is 100 percent of looms with less than 10 years of age against 25 percent in Pakistan and 22 percent in Indonesia. Pakistan textile industry is also on the higher end on duties, taxes and surcharges on exports, which is greater than 5 percent against less than one percent in Indonesia, Vietnam, Sri Lanka, Bangladesh and China which a nil in India. 

The installed capacity utilisation is equivalent to 95 percent in Vietnam, Bangladesh and China, 90 percent in Indonesia, Sri Lanka and India and less than 70 percent in Pakistan. The textile and clothing exports growth data from 2011 to 2014 has revealed that the Indonesia has registered $0.43 billion growth, followed by $8 billion in Vietnam, $0.75 billion in Sri Lanka, $6 billion in Bangladesh, $50 billion in China and $6 billion in India. It has decreased by $0.5 billion in Pakistan. 

The data shows share of Pakistan in world textile and clothing export market has touched down to 1.6 percent in 2014 against 2.23 percent in 2005. The world textile and clothing export market was around $400 billion in 2005, which has reached to $800 billion in 2015. The industry sources said Pakistan textile and clothing exports should have been $18 billion in case it could keep the momentum of 2.23 percent over the period in between 2005 to 2014.