INTERVIEW: CHAIRMAN AND PRESIDENT OF HBL
An exclusive interview with Managing Director SITE Ltd.
By ROBIN FERNANDEZ
August 9 -15, 1999
If Pakistan takes a giant leap forward in industrial development over the next few years, it will mean that the clear vision of men like Mir Hussain Ali, Managing Director of SITE Ltd., has triumphed in the face of corruption, tortuous bureaucracy, unending water shortages and frequent power outages.
Mir Hussain Ali, a former commissioner of Karachi, has been putting all out efforts to give a new shape to the Sindh Industrial Trading Estates Ltd since he took over the provincial governmentís behemoth late last year. Already he has cut short the time taken by the organization to examine issues related to individual plots through a newly-installed computer network. The introduction of computerized proforma and the decentralization of authority promise to make SITE Ltd a more efficient body.
He is hopeful that recent moves taken to empower officers of the department would discourage corrupt practices as well as prevent the illegal sale and transfer of plots. By delegating powers to his staff, the head of SITE Ltd. has allowed himself more time to concentrate on policy-making. There has been no real improvement in the hitherto dismal output of the seven industrial estates of the organization, Mir Hussain Ali points out. Official figures show that only 30 per cent of the saturated industrial estate in Karachi is under production. In other parts of Sindh, the output of industrial estates, as a whole, is thought to be much lower. But there are signs of improvement at SITE Superhighway, formerly known as SITE North Karachi.
The current stagnation can be traced to the absence of incentives for industrialists, water scarcity and inadequate power supply. Garbage and sewage ó the two municipal headaches around the world ó also pose a challenge to the organization.
One of the biggest worries of SITE Ltd, a not-for-profit organization, is making available sufficient funds to carry out its plans. Key development projects are often put on hold due to the shortage of funds. But in some cases in the past the budgetary allocations were not used for the development of SITE Karachi. Only one-third of the overall funds allocated to the industrial estate over the past decade was actually spent on road construction and drainage.
Mir Hussain Ali wants to change all that. He recognizes the need to establish a mechanism promoting close coordination between SITE Ltd. and state-run institutions like the Department of Industries, the Board of Investment, the Small and Medium Enterprise Development Authority and the Pakistan 2010 Program. He believes such linkages can help SITE Ltd. find financial and technical assistance for its various programmes. Among them are the proposed hook-up of industrial estates with an independent grid station for uninterrupted power supply, the construction of an environmentally friendly underground sewer system and a sewage treatment plant, as well as launching a project intended to boost the supply of water to the industrial estates.
With the aim of improving communications, Mir Hussain Ali plans to build an estate avenue linking Mauripur Road to Nazimabad, a bustling suburb close to SITE Karachi. Soon the organization is going to undertake road construction in hilly areas of SITE Karachi that had been allotted to industrialists a long time ago but had not been developed due to the harsh terrain.
But the crown jewels of SITE Ltd. will probably be a 50-acre software zone, the first of its kind in Pakistan, which is expected to be built within the next two years.
Encouraged by calls given by industrial unit owners for allowing civil servants a longer tenure as managing director, Mir Hussain Ali is seeking to expand the scope of activity of the organization. In an interview with PAGE, Mir Hussain Ali speaks about the role of SITE Ltd in the industrial development of the country and his own vision of the future of the semi-autonomous body in the next millennium.
On the present role of SITE Ltd
Basically, we are trying to improve the infrastructure in industrial estates. At the same time, through the Industries Department and other government bodies, we are trying to motivate people towards (investment in) industries.
On the potential of industrial estates
As far as I am concerned, SITE Superhighway has immense potential. During its first phase, plots were allotted and developed.Although the (industrial) units have already started to operate there, only an estimated 20 per cent of the plots have been utilized so far. We feel that the pace of industrialization will pick up in the area, as the problems of water supply, electricity and telephones have been resolved to a certain extent. The allotment process in SITE Superhighway has been delayed for several years now. As early as 1991-92, people were asked to apply for allotment of land. And since then their application was kept pending. Now we are at a stage where we intend to allot these lands through computerized balloting. Once the allotment process is over, we will be able to undertake development projects in the area. SITE Nooriabad, which had suffered setbacks in recent years, is poised to grow. With the abolition of octroi and other export taxes, I believe, most of the industrialists want to shift there. The importance of SITE Kotri and SITE Hyderabad also can not be discounted. We are concentrating our efforts there as well. But it depends more on the policies of the government to provide incentives to industrialists.
On the stagnant condition of industrial units
I think stagnant would be the word to use for the industrial estates in Karachi, Kotri, Sukkur and Hyderabad. But SITE Superhighway has shown signs of improvement in the last three years. I think we will be able to increase the number of industrial units there. A two-fold increase is expected. There are three factors linked to stagnation including a lack of incentives, water shortages and the interrupted supply of power. A good number of textile units rely on water. At present, we are receiving up to 4 million gallons of water per day (4 MGD) or one-third of the minimum requirement of 12 MGD. Whereas the water situation has become worse, the power outages have become less common.
On the use of alternative sources of water and electricity
There are no such plans for SITE Karachi. But at SITE Superhighway we intend to have an independent grid station. KESC, the local power corporation, has agreed to the plan. As far as water is concerned we are looking at a number of options. We have already set up a small sub-soil water distribution network and tubewells. We are also looking at the possibility of treating sewage. We are considering the option of acquiring separate supplies from the River Indus.
On the prospects of environmentally-friendly projects coming up on SITE lands
Unfortunately, in all our industrial estates we donít have an underground sewer system. We are relying on open-to-the-air drains.
Waste water and industrial effluents pass into these drains and then flow untreated into the River Lyari before making its way down to the sea. The best possible solution would be to build an underground sewer system which would be connected to a treatment plant. Under the law, industrial units have certain obligations ó they should treat harmful efflents to a certain degree at least. But they are not doing that. We are three to five years away from installing an underground sewer system ó if we start now.
On the introduction of tougher steps for protecting the environment
Usually we have seen that if we levy a tax, even on a minor scale, there is public resentment. And people are just not willing to pay. So I donít think a willing response is there. But if we tackle such an issue through the SITE Association, we will have a better response.
On the dumping of garbage and industrial waste by factories
If it is only garbage, then we would be able to remove it. But often it is concrete debris and excavated earth material that is being dumped. A similar amount of waste material is dumped every day. Our equipment is used to clear away the tons of garbage which is then taken to a solid waste disposal unit in Mochko. We have been issuing notices to them, warning of fines amounting to Rs1000 per default. But there has been no response. SITE Association has failed to come up to our expectations, as far as cleanliness is concerned.
On the proposed merger of tax collecting agencies
I am not concerned with the one-window opportunity, apart from providing some space for the operation to be conducted. If the government departments function properly and within the ambit of the law, then industrialists would not have to face so many problems. The usual problem is that of inspectors who collect illegal gratification. Yes, there should be a one-window system and one proforma which would cover all the details for analyses by respective government departments.
On undeveloped plots of land
There are certain hilly areas in SITE Karachi which had been allotted to industrialists. But these areas have not yet been developed. At the time of allotment, the industrialists had accepted the fact that it would take time to develop those areas. But that does not absolve SITE Ltd from its responsibility of developing those areas. In the financial year 1999-2000, we will be embarking on a road construction project there.
On relocation of industrial units from Karachi to other parts of the country
Those industrialists who have a base in Punjab have relocated to a certain extent. But their action has not been at the cost of total closure in Karachi. It is not the mandate of SITE Ltd to facilitate or provide incentives. And it has more to do with the industrialists permanently based in Karachi and who have played a role in the development of the country. It is in their interest and that of the city to make efforts at various forums to apprise the government of various problems they face.
On liasioning with government bodies like Pakistan 2010 Program, BoI and SMEDA
No, I donít think that kind of coordination with government bodies is presently available. We ought to have it, not only with the 2010 Program but with the Board of Investment as well. The linkage between SITE Ltd, the Department of Industries and the federal government is not effective. There is a need to build such linkages whereby regular input can be taken from us and we can be assisted in our various programmes, both financially and technically. I want to put up the idea of linkage and coordination before a meeting of the Provincial Industrial Facilities Board. I also intend to write a letter recommending such linkages.
On problems of financing infrastructural projects
If one wants to improve the system, it involves a lot of budgeting. SITE Ltd operates on a self-financing basis. But if it has to undertake major development projects, it will need grants from the provincial and federal governments. Last year we repaired about 21 roads in SITE areas. We are planning to build an estate avenue which will start from Mauripur Road and join Nazimabad. For that project, and others like it, we need government funding.
We had commissioned a study by a consultant firm which had recommended the creation of a sewer network, interlinking it with the KWSB sewer and then building a treatment plant. But such an operation will cost a lot of money. Last month an international non-governmental organization made a presentation at the Secretariat. During the presentation I put up the project for funding purposes. The project has been included amongst those which will be considered by this organisation.
On the future of SITE Ltd in the next millennium
SITE Ltd has the potential to be a dynamic force in the industrialization process. And since it is a government department that has direct links with industrialists, it has the potential to play a positive role. As such we need to widen the scope of our activity from mere development of industrial zones to policy-making, the granting of incentives and other related issues. If we are able to incorporate that agenda into its mandate, SITE Ltd will have a good future, as far as the next millennium is concerned.
One of the grievances of the SITE Association is that the Managing Director of SITE Ltd is too frequently transferred. They want the MD to be posted there for at least three years so he is able to implement his policies.B
Indus Technology Park
One of the brightest spots on the horizon of information technology in Pakistan is the proposed creation of a software park. The park, to be called the Indus Technology Park, will be built on a 50-acre plot within the SITE Superhighway. It is being built with the aim of setting up a software zone, in much the same way as our neighbouring country, India, has done earlier in the cities of Bangalore and Hyderabad. According to Mir Hussain Ali, Managing Director of SITE Ltd, the town planning of the area has already been completed. SITE LTD intends to erect a properly secured boundary wall around the periphery. One-third of the allotted land has been reserved for a residential colony, which will be built on modern lines.
The park will be developed vertically, rather than on a horizontal plane. SITE has earmarked different plots of varying sizes for the construction of the park. "We plan to have it as a sister concern of SITE Ltd, but it will have an independent board of directors," Mir Hussain Ali said. A business and marketing plan is currently under review. The idea of a software park was floated in October 1998. Officials have spent the last six to seven months on working out concrete plans for the Indus Technology Park. "We intend to make a presentation to the Prime Ministerís Advisor on Sindh affairs in an effort to gain his approval so that he is able to pursue the matter with the federal government," he said. "Without the support of the government, it is not possible to take up such a huge project," he added.
The technology park will be dealing with software houses and hardware manufacture. It will include state-of-the-art educational and training facilities in the field of information technology.