Saturday, September 20, 2008
By M Farhan Zaheer
KARACHI: Recent incidents of violence in and around the Hub Industrial Area and the RCD Highway which connects this Balochistan town to Karachi has forced investors to rethink expansion plans and also to take unprecedented steps to protect their employees, a survey by The News has learnt.
In all this, the governments of both Balochistan and Sindh have remained unhelpful to the investor companies and it is feared that their scaling down of business would affect hundreds of jobs and thousands of livelihoods connected to this industrial area. An official of a company, when asked by The News, said that there is fear amongst those multinationals who are working out of Hub. “We fear for our employees who make the trip daily and we are afraid our head office will tell us to wind up the operation in Karachi,” said a senior executive asking not to be named.
Crime rate is low in this area. The main problem is politically motivated terror attacks. In one such attack, a bomb exploded in the main market of Hub town, killing and injuring a number of people. In another attack, a convoy of foreigners was attacked. In third instance, the chairman of the Shipbreakers Association was murdered. The police remain unable to identify those responsible.
The town of Hub starts from the outskirts of Karachi with Hub Chowki, a busy street with shops on either side. It is a bustling market and a busy bus stand giving the impression of thriving trade and commerce. Nearby is Lasbela, which is the industrial capital of Balochistan. This is also the gateway to the upcoming Gwadar Port, and its industrial growth rate has been outstanding due to its proximity to Karachi, as well as the favourable terms of setting up business here.
Local officials told The News that the total area of Lasbela is 15,153 square kilometres. The 1998 census shows it has a population of over 313,000. The prominent cities of Lasbela district are Hub, Winder, Gadani, Uthal, and Bela.
Hub is unquestionably the centre point of industrial and business activities of Balochistan, say government officials. According to the revenue collection data of Balochistan for 2004-05, Hub generated Rs1,395 million out of the total revenue collection of Rs1,740 million of the province. The remaining Rs345 million was generated by the rest of Balochistan, including Quetta, the provincial capital.
The industrial estates in Lasbela are Hub Industrial Trading Estate (HITE), Winder Industrial Trading Estate (WITE), Uthal Industrial Trading Estate (UITE), Gadani Ship-Breaking Yard, and some newly established industrial areas such as Marble City and Zero point.
Lasbela Chamber of Commerce and Industry (LCCI) was formed in 1995. In 2004-05, the LCCI said that there was an investment of around Rs145 billion in the district with total 150 operational units. Currently, LCCI represents over 230 industries with Rs250 billion estimated investments.
There are total of 230 to 250 industries in Lasbela with 200 to 225 active units operating in Hub alone. The total workforce in the Hub industrial area is estimated to be 0.3 million.
The industries in Hub produce power, cement, textile yarns and fabrics, food products, pharmaceuticals, chemicals and petrochemicals, ceramics, engineering goods, as well as the traditional marble and granite products.
Notable multinational companies, such as Dawood Yamaha Ltd, Otsuka Pakistan Ltd, Proctor & Gamble Pakistan Pvt Ltd, and Cadbury Pakistan Ltd, also operate in the district.
Security concerns were raised in Hub when back-to-back incidents occurred, leaving several casualties. Some months back, a firing incident left three people dead and several other employees of Attock Cement injured. “Such incidents in the area tarnish the country’s image and affect investment prospects,” said Babar Bashir Nawaz, Chief Executive Officer of Attock Cement near Hub Chowki.
“We used to have three shifts of eight-hour everyday, but after the security threat, we have cut them down to two 12-hour shifts without affecting our production.”
Nawaz added that the company had taken security measures, but also pointed out that the overall law-and-order situation is the government’s responsibility. “At present, the law-and-order situation is under control, but how can one be so sure when some disturbances have taken place recently?”
However, according to Ismail Suttar, CEO of Hub Pak Salt Refinery and Vice-President of LCCI, “The peaceful business environment in Hub is outstandingly appealing.”
He said that industries employ locals when facing a shortage of hands.
Industry workers from Karachi cost two thousand to three thousand rupees per employee in transport charges. One is not clear whether the move is to terrorize businesses or drive away employees from Karachi, say some officials.
In all this, the business prospects of not just Hub but of Balochistan have come under a cloud.
While smaller companies say that they will weather the storm, larger companies are fearful if their schedules are disrupted further, they would have to pack up and move away, possibly not just from Balochistan but from Pakistan too.
In all this, the Balochistan government, which remains resource deficient has left matters be without showing any initiative or interest.
http://www.thenews.com.pk/daily_detail.asp?id=136864 |
