After the clearance of company liabilities and the official documentation of the land to the authorities of Port Qasim (PQA), the Economic Coordination Committee (ECC) has finally approved the winding up of Pakistan Textile City Limited (PTCL). As reported by the sources; “PQA had originally leased the land to PTCL and the terms of lease did not allow its further sale or transfer to another party.”
The overview of the issues showed that the company was facing some serious financial challenges and was considering selling the 200 acres land of the company to K-Electric to set up a coal-fired power plant. In this response a summary was sent to the Economic Coordination Committee as a response to which the Prime Minister ordered the winding up of the company once all the necessary requirements are completed, including the liabilities and clearance.
The Pakistan and Sindh government are the major stakeholders of the Pakistan Textile City Limited. Whereas the Pakistan government owns 56% shares and that of Sindh government holds 16% of the net shares of the company. The core purpose of the Pakistan Textile City Limited was to setup as well as manage an exclusive location for the production of value added products related to textile.
The stated reason for the failure of the project is found to be insufficient availability of resources like water, gas and electricity. Though the issue and the need of these resources were highlighted since long but it remained unresolved despite of the fact that the government was informed by the matter on a number of occasions.
The recently held meeting of ECC with the finance minister Mr. Ishaq Dar, as a chair person, has finally approved the amount of Rs12 million on the request of Finance Division for the settlement of outstanding liabilities to wind up the PTCL. The Pakistan Textile City Limited was established as a company, back in May 2004. The company was established as a part of export processing zone in three cities of Pakistan, including; Faisalabad, Lahore and Karachi. The company was established followed by the decision of Cabinet Division on 19th July, 2013.
The establishment of the company was aimed at providing textile sector with infrastructure to enable it to move for value addition and its expansion in size and volume to compete in the national market and to create, implement and manage an exclusive area for the textile related value added product. With a view to implementing the project, the company obtained a certificate from Securities and Exchange Commission of Pakistan (SECP) on Jan 1, 2015 for commencing its business.
However, due to the above addressed issues, because of which the project failed achieved the expected results, the textile sector of Pakistan, especial the exports have suffered a major loss and a low morale of the representatives. Because of the unsolved issues of gas, water and electricity the company has to face a massive loss with the blockage of accounts by the National Bank of Pakistan. The said reason is the non-payment of the principal amount.
Back on 17th of November 2016, a meeting of Board of Directors (BoD) was convened on winding up of the company. The meeting decided that due to non-availability of financial resources and required infrastructure, including natural gas, the company was unable to continue its existence and, as decided by the committee formed earlier by the federal government, the process of voluntary winding up started as laid down in the Companies Ordinance 1984.
The Pakistan Textile City Limited has intimated that the process of winding up of the company be started after the clearance/payment of outstanding liabilities, financial obligations up to Rs12 million. The Finance Division was requested to approve Rs12 million as equity share of the government of Pakistan. While approving the winding up of the company, sources added that the Prime Minister directed that all the assets of the company should be disposed of through an order of transfer to the PQA, which originally leased the land to the Pakistan Textile City Limited as the terms of lease do not allow its further sale or transfer to a third party.
