Pakistan textile city to be launched in April to get GSP plus status benefits

The federal government has initiated a mega project, Pakistan Textile City, with a vision to develop and operate Pakistan’s first state-of-the art industrial zone near seaport dedicated for the value-added textile sector. The Pakistan Textile City Limited is a public private joint venture company. In order to get maximum benefits from GSP Plus status, much-awaited investment oriented project – Pakistan Textile City – will be launched in the second quarter of this calendar year.

It will be a one window operation, uninterrupted utility supply, captive power plant, dedicated water supply pipeline, combined effluent treatment plant, sewerage and storm water drainage, fire fighting system and potable water supply line are some of the salient features of this mega project.

Sources said the board of directors of Pakistan Textile City has decided to complete the development work regarding basic utilities by end-March 2014 and formally launch this project in April or May this year to make the most of GSP Plus status.

Under the new business plan the board of directors of Pakistan Textile City has decided to launch this mega project in different phases with a vie to ensuring fastest development of the infrastructure that can meet the industries” requirement as well as international standards.

As it’s a mega project and needed billions of rupee investment for utilities and infrastructure, the board has planned to initially launch this project on over 100 acres land instead of previous plan to launch the complete project on 1,200 acres,” sources said.

Under the new business strategy, the management is aggressively working on the project and some 60-70 industrial plots of half to 5 acres have been marked on 106 acres land, where state of the industrial infrastructure and all necessary and basic facilities such as water, power and gas will be available for the value added textile industry.

The management of Pakistan Textile City has almost completed the arrangements for uninterrupted power supply from K-Electric (formerly KESC), water from Karachi Water and Sewerage Board (KW&SB) and gas from Sui Southern Gas Company (SSGC) for the industries to be set up at the Textile City, they added. Pakistan Textile City has signed an agreement with K-Electric for supply of 50MW power supply for industries and initially one MW supply will start in March this year. Overall cost for power supply has been estimated at Rs 36 million of which some Rs 24 million have already been paid by the management to K-Electric.

SSGC has also approved gas supply of 9mmcfd for the project and water supply pipeline is likely to be laid soon. Overall cost of water supply project has been estimated at Rs 1.5 billion of which some Rs 700 million will be paid by the government of Sindh, while the remaining by the federal government. The management is also striving to install a combined effluent treatment plant for the industries to meet the international standards. In the first phase, a small treatment plant will be installed on the site, while in the next phase a mega plant will be set up.

As per proposed plan, this project will have to complete a chain of textile industry – weaving, dyeing, towels, knitwear, bed linen and denim along with supported industries such as printing, thread, zips, buttons, engineering workshops and packaging. The total cost of the project has been estimated at Rs 13 billion. The federal government has majority shares with 40 percent holding in the company, while Sindh government has a share of 16 percent, National Bank of Pakistan (NBP) 8 percent and Port Qasim 8 percent.

In addition, other seven institutions – Pak-Oman Investment Company, Saudi-Pak Investment Company, Pak-Kuwait Investment Company, Pak-Libya Investment Company, PIDC, EPZ and NIB Bank have remaining 28 percent holding.

Pakistan Textile City has already spent Rs 159 million on the water project, Rs 175 million on roads and Rs 500 million on land levelling. A loan of Rs 1.5 billion has also been obtained from NBP under government of Pakistan guarantee. The project is being launched at a time when the country has got duty-free access to the European markets for next 10 years. Therefore, it is expected that this project will attract local and foreign investors in large number, exporters said.

Textiles have always been the backbone of Pakistan’s industrial base providing close to 60 percent of foreign exchange earnings and employing around 40 percent of workforce. After GSP+ several textile industries are planning expansion and the project will provide better investment opportunities to the textile sector.

This project will not only boost export potential of value added textile products but also create employment opportunities for over 20,000 peopled.