Dec 27, 2010 - Jan 2, 20

Local and foreign textile manufacturers and processors will be able to buy plots in the Pakistan's first dedicated industrial estate, Textile City, inspired by the successful model of Keiretsu, in the beginning of next year.

Zaheer A. Hussain, CEO Pakistan Textile City Ltd. says the industrial plots will be put on sale through local and international advertisements in February or March next year.

Speaking to PAGE, he says development works are underway and targeted to be completed by 2012.

The developer is prepared to go for sale of plots in the Pakistan's first dedicated industrial estate for textile manufactures and allied industries in the beginning of next year. The sale plan was scrapped earlier in January 2010 due to incomplete basic infrastructure. According to the land utilization plan of the textile city, located in the Eastern Industrial Zone at Port Qasim in Karachi, out of total area of 1250 acres 62 percent is allocated for industry, 5 percent for amenities, 5.3 percent for utilities, and 27.7 percent for roads.

Pakistan Textile City, a public-private joint venture company, has an authorised capital of Rs2.2 billion. Government of Pakistan holds 40 percent shares in the company.

It is worthwhile to note that the plots were about to be sold in January this year, but due to unavailability of water, gas, and electricity the plan for sale was scrapped. Around 20 million gallon per day water and 150 mmcfd gas are required to feed the city to keep around 277 units operational while captive power plants will meet the energy needs of the city.

'I hope that basic infrastructure will be completed by yearend,' says Hussain.

Because of its close proximity with the seaport, the city will provide a good location for textile makers engaged in the international trade.

The developer has received positive responses of investors from China, Turkey, Korea, etc. Local textile manufacturers may find it an opportunity cost to shift existing operations to the textile city from the underdeveloped industrial areas. Their visits to the city are manifestation of the interest they are showing towards the new settlement.

Textile city will strengthen the export base of the country. It will increase textile exports by $2 billion, as per a forecast.

Is this the project cost of Rs15 billion or dampened mood of textile companies about expansion that leave question mark over the successful completion of first of its kind in the country Pakistan Textile City within the timeframe by 2012.

Mr. Hussain admits the existence of weak investment line as well as liquidity constraints in general, but he is hopeful of meeting the deadline, maybe because of his international experience of managing industrial zone in Gulf.

"We need to overcome several hurdles in the way of developing modern industrial area with full facilities," he said. The basic purpose is to ensure unbreakable and uninterrupted supply to textile companies in the city basic utilitiesówater, electricity, gas, etc, he says adding, and 'This takes time.'

Installation of 23-km 48 inches diameter external pipeline (from Forebay High Point to textile city) is in progress. The supply by Karachi Water and Sewage Board would be 20 million gallons per day. SSGC has allocated 150 mmscfd gas. Two major projects of effluent treatment plant and captive power plant will be landmark developments in the textile city.

Considering the possible gas shortfall, dual power generation is also an option, according to the CEO. The modular power plant would be installed in phases and first phase would have 68 megawatts outturn. For establishment of effluent treatment plant with capacity of 18 MGD the company appointed NEC consultants in May 2009. Construction of 50 and 100 meters wide road network is underway. Environment Impact Agency has approved the master plan.

Shares of the company are mainly held by government of Pakistan (40 percent), Sindh government (16 percent), Port Qasim Authority (9 percent), and National Bank of Pakistan (8 percent). Private financial institutions hold remaining shares. The response is not measurable but it seems that private partners may go for exit. Local textile companies are operating in the industrial areas in the country and only companies with expansion plan or foreign-based would like to come to the city. In the midst of decline in textile exports, the city would only prove a long-term advantage.

The company is searching foreign joint venture project investors with the help of MinTex, BOI, and Port Qasim Association of Trade & Industry. Local textile companies are also taking interest in the industrial lands. Recently, leading local association of textile companies visited the site and welcomed the development of industrial lands, observed Hussain.

Early operation is in benefits of the company as well, because 'we are running out of cash flows and depending on bank loans to meet the financial needs of infrastructure building and administration'. The company received Rs1.3 billion. Of that, it paid one billion rupees to Port Qasim Authority as payment of the land.

Grading and levelling works (95 percent) have been completed. The calculated market value of plot was Rs1 million per acre, but now after grading and levelling this is calculated at Rs7 million per acre. This is just an updated estimate of current market value and we have not yet finalised pricing policy, he clarified. Similarly, finalization of allotment policy and bylaws is in progress. The decision regarding award of Special Economic Zone status to the textile city is expected in 2010. The status would be advantageous for the companies in the city.