Pak Suzuki Motor Company Ltd (PSMCL) has announced that it would review its decision to invest $460 million in Pakistan’s auto sector if the government does not respond to its request for incentives until April, according to PSMCL spokesperson Shafiq Ahmed.
The automobile industry is a major economic engine in the country, providing many jobs and numerous economic opportunities to the individuals, businesses and communities. The auto industry plays a key role in the in supporting other industries. It is arguably one of the largest and most competitive sectors of the economy. PSMCL’s proposed plant has been forecasted to generate 319,000 direct and indirect jobs in the country, Mr. Ahmed noted.
Company spokesperson argued that the company has been waiting a year for government’s response, adding that Finance Minister Ishaq Dar had assured PSMCL that the company would get approval for incentives by January 2017.
The PSMCL’s principal in Japan has been waiting anxiously for the incentives to be approved by the government so that work on the project could begin in time, Mr. Ahmed maintained. The project has already suffered a time overrun, he said, noting that the company’s financial year started from January 1.
As per the available data provided by PSMCL, the project is expected to attract more than $660 million in investment, of which foreign direct investment from Japan accounts for $250 million. The company will arrange the remaining $210 million through its own funding sources and bank borrowings while vendors have agreed to invest an estimated $200 million.
He further stated that the company has already acquired land for the plant. Once incentives are factored in, the project, which will take 18-24 months to complete, will be rolled out.