13.

PAKISTAN (1)

Mr. Sarfraz
Research Officer,
Ministry of Industries &
Production,
Government of Pakistan,
Islamabad

INDUSTRIAL ESTATES IN PAKISTAN

Land and Economy

Pakistan is a land of 140 million peoples. It is located between 23 and 37
degrees latitude north and 61 and 76 degrees longitude East. It is flanked by Iran and
land locked by Afghanistan in the West, the Central Asian Republics and China in the
north, India in the South East, and the affluent Gulf States just across the Arabian Sea in
the South. Pakistan, spread over a landmass of 796,095 Sq. Kilometers is a federation
of four Provinces, Punjab, Sindh, North West Frontier, and Baluchistan.
Pakistan ranks amongst the top seven fastest growing economies of Asia.
Except for the period of the fifties and the seventies, annual Gross Domestic Product
(GDP) has grown at a rate exceeding six per cent per year. Although agriculture is still
the mainstay of the economy, its share in the GDP has declined over time to 24%. It
still employs 48% of the manpower, however. The share of the manufacturing sector in
GDP has constantly been increasing. The growth of the manufacturing sector has
averaged more than 8% over the last 40 years.
In manufacturing, cotton yarn and textiles are the leading sectors, followed by
food processing industries largely based on indigenous raw materials. The growing
emphasis on the development of engineering, electrical, and non-electrical machinery,
automobiles and chemical industries and the rapid flow of an ever-increasing proportion
of investment into these sectors has diversified the industrial output.

Environmental Profile
Pakistan is a densely settled land, having an area of approximately 88 million
hectares and a population of about 140 million, growing at a rate of around 2.7 percent
per annum. Pakistan accounts for only 0.67 percent of the world’s land and 2 percent of
the world’s population. The forest covers only 4.57 million hectares or 5.2 percent of
the land area of the country, contrary to sustainable use requirements, which call for
25% forest cover. The rate of deforestation is 7000 to 9000 hectares per annum.
Pakistan has the largest irrigation system and relies on irrigation for more than 90
percent of its food and fiber production. Surface water is the main source of water for
irrigation. Water withdrawals have increased markedly since 1960-61, but there has
been no significant improvement in water -use productivity/crop output per unit of
water. Only 30 percent of diverted water in the canals reaches the crop due to high
levels of loss in the existing canal and watercourse network. More than 55 percent of
land in Pakistan has either been or is likely to be affected by desertification. Soil



erosion has affected 1.2 million hectares of land. Salt affected lands are estimated at 4.2
million hectares, while 2 million hectares are water logged.
Pakistan generates over 50,000 tonnes of solid waste per day, out of which
nearly 19,500 tonnes comes from urban areas. Municipal corporations spend 20-25
percent of their budgets on solid waste collection and disposal; nearly 50 percent
remains uncollected or dumped in low-lying areas causing considerable land pollution
problems and unhygienic conditions. Dumping of untreated municipal and industrial
wastes into the rivers has severely threatened the aquatic life. Similarly, no proper
treatment is given to hospital wastes (solid and liquid) before disposal. Pakistan has a
990 km long coastline. The coast is rich in seaweeds and mangroves. However,
industrial effluents, domestic sewage and agricultural run-off find their way, untreated,
into the sea causing serious threats to marine life. Most striking is the depletion of the
mangrove forests in the coastal areas due to oil slicks in creek areas, which has reduced
natural fish and shellfish nurseries.

Issues and Problems

Deforestation resulting in soil erosion, desertification and flooding has caused
considerable damage to our eco-system. The country is facing serious environmental
and human health problems due to industrial pollution, stemming from poor planning, =
environmental awareness, and inadequate pollution control facilities. Indiscriminate
discharge of industrial effluents and air emissions have contaminated ground and
surface water, degraded land and air quality, and affected flora/fauna and human health.
The current level of industrial pollution is costing the country substantially in the form
of increased illness, premature deaths, damage to crops, livestock and fisheries and even
damage to buildings and infrastructure facilities.
Emissions of carbon dioxide, sulphur dioxide, and particulate are the major
sources of air pollution at thermal power plants and in the cement industry in Pakistan.
These not only pose nausea and potential health hazards to human beings, they also
damage landscape and wildlife.
Vehicular emission, mainly in cities, is the single largest source of air pollution.
Traffic in urban areas has tremendously increased in the last few decades. The total
vehicles in the country, which were about 0.85 million in 1982, has increased to 3.10
million in 1996 and are estimated to exceed 4.5 million by the year 2000. Random tests
have shown that the level of pollution in the metropolitan cities is as high as 3 times the
acceptable limits because of poor maintenance of vehicles and adulteration in fuel.
Water logging and salinity remains Pakistan’s top environment challenge. The
country is losing 25 per cent of its potential crop production, a value of $2.5 billion
every year. Excessive percolation of water from canal system, evaporation of the saline
ground water, inadequate availability of water from rain or irrigation to meet the
leaching requirement of the soil, and irrigation from tube well with high salt
concentrations are the main cause of water logging and salinity in the country.
Forests occupy only 4.57 percent of the land area in Pakistan. Only one-third
of the forests are productive in terms of timber extraction. Moreover deforestation in
the country is increasing at an alarming rate. According to the recent WWF Report,
Pakistan is facing one of the highest deforestation in the world, with the annual loss
amounting to 4.15 per cent of its forest area. Pakistan is also facing serious rangeland
degradation problems. About 80 per cent of the total rangeland in the country is
believed to be degraded. Much of the rangeland is threatened by overstocking,



overgrazing and over harvesting of the natural vegetation leading to soil erosion and
land degradation.
In addition to these domestic issues, Pakistan faces trans-national and
international environmental protection and preservation issues, such as soil erosion,
wildlife, desertification, melting of glaciers, air pollution, depletion of ozone layer,
disturbances in eco-system through international actions, ratification and compliances of
international laws, Environmental legislation, WTO climate change, marine pollution
and its effect on aquatic life, EL-Nino effect. All these factors directly or indirectly
affect the environment in Pakistan.

Pakistan’s Efforts
In Pakistan, environmental concern started in the early 1970s, leading to some
policy initiatives by the Government and involvement of Non-Governmental
Organizations (NGOs) and private sector in conservation activities. A number of
initiatives have been undertaken during the last decade. The Environmental Protection
Ordinance was promulgated in 1983, followed by the National Environmental Quality
Standards in 1993 for municipal and industrial effluents, gaseous emissions and motor
vehicles exhaust. In March 1992, the Federal Cabinet approved the National
Conservation Strategy (NCS) and set-up a Cabinet Committee for the implementation of
Environment Action Programmes. In addition establishment of the Environment
Section in the Planning Commission and Environment Cells in the P&D Departments at
the provincial level, have significantly contributed to raising environmental awareness.
The enactment of the Environmental Protection Act-1997 was a break through that gave
legal cover to environmental decision-making. The Provincial Environmental
Protection Agencies (EPAs) were made functional and similar structures have been
instituted by various organizations like WAPDA, OGDC, Pak Steel etc.
The Eight Five Year Plan focused on; (i) environmental pollution control, (ii)
conservation of natural resources and sustainable development, (iii) creating a coherent
statutory framework, (iv) strengthening regulatory, technical and participatory
institutions, (v) formulating and implementing a communication programme, and (vi)
implementing environment sector projects both at federal and provincial levels. Efforts
were made to improve environmental legislation, enforce National Environmental
Quality Standards, initiate Environmental Impact Assessment (EIA) procedures for
public and private investments, and incorporate more environment-related investments
into all development expenditures.
In order to effectively implement the environment programmes of the Eight
Plan, all the provincial Governments formulated their respective provincial conservation
strategies, delineating their action plans with emphasis to carry forward the process of
NCS implementation. Government of NWFP has prepared the Sarhad Provincial
Conservation Strategy (SPCS) while Baluchistan is in the process of doing so. The
notable features of SPCS include the reorientation of existing environment programmes
to focus more on participatory project implementation involvement of the private sector,
and to define the roles of both the Government and the community.
The private sector was involved in a crash afforestation campaign, beginning
monsoon 1995, throughout the country. The power generation companies in the private
sector were asked to plant trees in the areas adjacent to their installations on the basis of
10 acres per mega watt produced. The Federal and Provincial Governments made land
available without disturbing the proprietary rights. The Federation of Pakistan

 

Chambers of Commerce and Industry (FPCCI), started a joint Environmental
Technology Programme for Industry (ETPI) with the collaboration of Dutch
Government. The ETPI envisaged promotion of environmentally friendly technologies
for the production of environmentally safe products by Pakistan’s
manufacturing/industrial sector.
Pakistan Tanners Association (PTA) established a private company,
Environmental Management Limited, for implementing a Combined Effluent Treatment
Plant, a solid waste management program, a occupational health and safety program,
and a drainage system for about 160 tanneries located at Korangi at a cost of more than
Rs.1 billion. The Sindh Government provided more than 46 percent of the finances
through the Export Development Fund and individual tanners, while the remaining 54
percent finances would be provided by the international financing institutions. In
Punjab, PTA has been implementing the Cleaner Technology Programme with the
assistance of the Netherlands Government. “Initial Environmental Examination” of
more than 260 tanneries has been completed. The Pakistan Society of Sugar
Technologies (PSST) and Pakistan Sugar Mills Association (PSMA) organized two
environmental workshops in collaboration with ETPI. Korangi Association of Trade
and Industry (KATI) started an environmental project titled the “Up-gradation of
Korangi Industrial Area”.
On the non-Government side, NGOs were involved in identifying and
addressing pollution problems and suggesting mitigation measures for the industrial
sector as envisaged in the policy decisions taken from time to time. I addition, they
work on conserving natural resources, conducting surveys and arranging workshops for
mass awareness on Environmental problems. NGOs in collaboration with the public
sector organizations focused on the textile industry for formulation of Action Plan for
enforcement of National Environmental Quality Standards. The NGO’s also developed
close liaison and working relationships among themselves and with the Community
Based Organizations (CBOs).
Pakistan is also playing an active role internationally by supporting and
establishing new global partnerships to protect the environment at national, regional and
global level. The country has become a signatory to many international
Conventions/Protocols/Agreements like Agenda-21, UN Framework Convention on
Climate Change (UNFCCC), Montreal Protocol on Ozone Depleting Substances, Global
Environment Facility (GEF), Commission on sustainable Development (CSD) and
Convention on the Control of Trans boundary Movement of Hazardous Waste and their
Disposal.
During the year 1998-99 the following major sectoral programmes were
implemented in order to facilitate both the short and long-term environmental
achievements:

(i) Legislation
The Environmental Protection Act 1997 provides base for developing a legal
framework and implementation strategy in the country. The Environmental Impact
Assessment Guidelines have been prepared for sectoral projects.

 

 (ii) Mass Awareness Campaign
Responding to the pressing need for increasing environmental awareness, a
massive Mass Awareness Campaign has been launched through print and electronic
media.

(iii) Tarbella Watershed Management Project

Phase-II of the Tarbella Watershed Management Project was initiated in the
third quarter of the financial year 1993-94. During 1996-97, an amount of Rs. 89.3
million has so far been released and utilized. This project will help established various
nurseries, construction of new roads, management of old roads and soil conservation in
old and new areas.

(iv) Kasur Tanneries Pollution Control Project

The initial cost of the project was Rs. 263.8 million, which had been revised to
Rs. 378 million. The objective of the project is to provide facilities for evacuation of
the stagnant pools of wastewater, establish collective treatment plant and effluent
disposal systems, and arrange solid waste management systems and in house pollution
control methods in tanneries. About 75-80% work has been completed. An
International Management Firm is going to be hired for the implementation of this
project.

(v) Asian Development Bank Assisted Farm-to-Market Rural Roads

Project
In progress during the 8th Five Year Plan, 1993-98, this four-phased
programme, assisted by the Asian Development Bank, plans to constructed 62,226 km
of ‘farm-to-market’ roads, approved at a total cost of Rs. 17.03 billion. 2280 km of
roadways (36.5%) have already been completed.

(vi) Overseas Economic Cooperation Fund (OECF) Assisted Rural Roads

Construction Project.
This project will provide for the construction of about 3000 k.ms roads in all
the four provinces of Pakistan. The project is supposed to be completed in two phases.
In the first phase, about 730 k.ms roads shall be constructed in 28 selected Districts of
the Provinces at a total cost of Rs. 3910 million. The Phase-I is in progress and will be
completed by April, 2000. The objectives of the project are to facilitate the provision of
goods and services to rural populations, especially in the farming areas.

(vii) Ozone Cell

Pakistan has signed the Montreal Protocol to phase out Ozone Depleting
Substances (ODS). To this end, an Ozone Cell was established in the Ministry of
Environment in 1996. The country programme has been completed and about 15 ODS
phased out sub-projects in refrigeration, foam, fumigation and solvent sectors have been
approved for grant of funding from the Multilateral Fund of the Montreal Protocol.
These sub-projects will help in phasing out 978.2 metric ton of ODS. A grant
equivalent to about US $ 9.0 million has been allocated by the Multilateral Fund for the
Implementation of the Montreal Protocol.

 

 INDUSTRIAL ESTATES

In order to strengthen Pakistan’s low industrial base, it was crucial to begin the
formative phase soon after independence. Pakistan’s policy makers banked upon small
industrial estates to groom an entrepreneurial class, which was not existent at the time
of Pakistan’s creation. Pakistan’s first industrial estate “Sindh Industrial Trading Estate
Ltd., Karachi” was established in 1947. Resources were augmented to develop
numerous industrial estates in all corners of the country and today the number of
industrial estates has increased to 72. The industrial estates are distributed in all
provinces. Sindh contains the largest number of industrial estates (24), due to the
strategic location of the Province, which encompasses the only port of the country.
Punjab has established 20 industrial estates followed by 15 in NWFP, 10 in Baluchistan
and 3 in Federal Capital Area, Islamabad.
These industrial estates were enjoying varying degrees of exemptions from
customs duty on imported machinery and other incentives and facilities available under
the rural industrialization scheme, wherever applicable. The necessary infrastructure
facilities were provided in these industrial estates. The private sector has been also
encouraged to establish industrial estates in the country and provision and development
of necessary infrastructural facilities, especially power generation for their industrial
ventures, has been allowed.
The following small medium size industries have been established in the
country, industrial estates:

• Light Engineering
• Wood & Steel Furniture
• Arms & Ammunition
• Steel Re-rolling Mills
• Aluminum
• Plastic Products
• Shoes and chapples making
• Electric bulbs manufacturing
• Textiles
• Pharmaceutical
• Soap
• Chemical
• Flour Mills
• Ghee Mills
• Food products
• Ceramics & marble units.

Major issues & problems in the management of small industrial estates:

The following are the major issues and problems apparent in the management
of small industrial estates:
• Delay in clearance of estate dues such as water charges, maintenance
charges & cost of land etc. by the industrialists.
• Non-compliance of terms & conditions of lease agreements from the
entrepreneures.

 

 • Non-existence of specific power / authority for Industrial Estate
Management for the recovery of dues / un-lawful activities in the estates.
• Lack of security arrangements.
• Direct interference of dozens of other govt. departments in the dealing with
the industrial units of Industrial Estates without any
consultation/permission from concerned the Industrial Estates
Management.
• Recovery of dues from units which are auctioned/liquidated by the banks.

Major policy actions taken by the Government to promote industrial estates:

• Provision of financial assistance to industrial units within or outside the
Industrial Estates through Self Employment Scheme.
• Waiver of penal interest in case all other dues are paid in lump sum by
industrial units.
• Holding of special exhibition to help the industrialists to introduce the
products for sale in the market.

Support measures and incentives specially on policy funding and incentives and
technical support to be provided by the Government:
• Newly established units whether partnership, sole proprietorship OR
private limited concern, may be exempted / relaxed in the payment of
income tax, sales tax for initial three years period after start of production.
• Exemption from properly tax for industrial units established in the
industrial estates as all the infrastructure facilities are provided by the
Industrial Estates Management and Municipal Corporation / Municipal
Committees do not provide any facility in these Estates.
• Provision of special funds for repair / maintenance work of industrial
estates which have passed at least 15 years period since its establishment.
• Instruction to the banks / DFIs for recovery of dues in case they auction /
liquidate an industrial unit in a small industries estate.
• Establishment of institution for entrepreneurship training / guidance of
skilled / semi-skilled labour.
• Adequate funding / restructuring of existing centres / institutions which are
providing technical education to the industrial labour force of the province.

Current states of activities related to environmental management of Industrial

Estates undertaken by Government especially on policy, promotion, information
and training:
The effluent disposal system for all estates needs to be renovated. All
industrial estates, which were originally in the suburbs, are now within the municipal
limits surrounded by commercial and residential areas, resulting in failure of effluent
disposal and consequent pollution accumulation. Besides the planners, i.e. the
Development Authorities like PDA, all divisions may coordinate with the Industries
Department at the time of planning to overcome these environmental problems.
The Environmental Protection Agency established for the purpose should
coordinate with Estate Management in connection with pollution problems. It has been

 

observed that though the government has formulated the law regarding environmental
pollution, proper implementation has not been executed.