KARACHI: The disqualification of the Southern Cement plants for claiming Inland Freight Subsidy was removed on Tuesday, paving way for product originating within minimum of 100 kms from seaport, also to qualify for subsidy.
According to cement producers, the courts passed ruling on Tuesday morning to the effect that the disqualification on products originating within 100 kms from seaport was removed till the final disposal of the case.A senior official at a cement company said that the companies in the Southern zone could now submit documents and claim subsidy; the final outcome of which would be determined on the disposal of the case. All shipments after March 29, 2010, would be eligible.
The development caused quite a stir at the markets on Tuesday, where the news was received with interest. The court judgment was in the matter of a suit filed by the cement producers against notice issued earlier on March 29 by the Trade Development Authority of Pakistan (TDAP) in respect of “Inland freight subsidy.”
The notice had stated: “Extra cost on inland transportation erodes export competitiveness of a range of developmental products.”
It stated that the Government of Pakistan, in Trade Policy 2009-10 had decided to compensate inland freight cost to exporters of cement, light engineering, leather garments, furniture, soda ash, hydrogen peroxide, caustic soda, sanitary wares including tiles, finished marble/cut to size market blocks/granite and onyx products.
Among the terms and conditions, TDAP had stipulated that exports routed through sea would be eligible for the subject facility; shipments made between issuance of Public Notice (March 29, 2010) and June 30, 2010 would be eligible for subsidy; cement sector would be offered 35 per cent of inland cost whereas all other sectors would be subsidised at 50 per cent.
But it was the third term and condition in the TDAP notice that had given the cement plants in the Southern region a cause to complain.
It said: “Products originating minimum 100 kms from sea port would qualify for subsidy,” which in effect meant that plants located within 100 kms radius of the port stood unqualified to claim the subsidy.
The fate of the TDAP notice would be final only on the disposal of the case, but for the moment it had provided relief to plants located near the sea port, for receiving fair and equitable treatment.
A cement sector analyst said that the decision could not have come at a better time for summer marks the peak off take season for the building product.
Source The News
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