Coastal to invest $5.8b in Pakistan automobile plant
A prominent foreign group has decided to invest $5.8 billion in Pakistan to manufacture Mercedes-Benz trucks, buses and cars.
Coastal Group would make all the financial investment in the project, while Daimler Chrysler would provide technology transfer.
Daimler Chrysler and Coastal Group are believed to be creating a big vendor industry in the process. The group would set up their plant on 1,200 acre plot near Shaikhopura, Lahore.
"This huge investment would create 5,000 jobs directly and indirectly," said Umar Ahmed Ghumman, minister of state for privatisation and investment and chairman Board of Investment (BoI) at a news conference yesterday.
It was on May 7,1998 that two of the world's leading car manufacturers, the German Daimler-Benz AG and the USA-based Chrysler Corporation, announced their merger. The new company called Daimler-Chrysler became the world's fifth-largest car maker with combined revenues of around $130 billion, operating profit of around $7billion, and a workforce of more than 420,000 employees.
The minister said the groups would export products to neighbouring countries as well as to the Gulf region, which would earn billions of dollars in foreign exchange for Pakistan. A training institute conforming to international standards would also be established in Pakistan.
An industrial estate (vendor industry) would also be set up to locally produce spare parts as per European standards for local and export purposes, Mr Ghumman said.
Responding to a question about the reported violation of rules in import of Black Cabs from the United Kingdom, Mr Ghumman said: "We are importing duty-free 300 Black Cabs for testing purposes. The government had to give this facility in order to invite $1billion investment from Prime Transport Limited to assemble, manufacture and operate London taxis in Pakistan under joint venture partnership with LTI of UK and ST Electronics of Singapore."
The minister said 150 of the Black Cabs would be tested in Karachi, 100 in Lahore and 50 in Islamabad to conform to the local conditions while manufacturing the cabs locally. He said no rules of the Public Procurement Regulatory Authority (PPRA) had been violated as the matter did not involve any investment by the government and the investment did not involve any scam. "I have no personal connection with the person who has invested the money. He is a Pakistani. His name is Dawood Khan and he belongs to Karachi. He wanted to introduce a secure and safe taxi system in Pakistan after a 15-year-old girl from his family was raped and killed by a taxi driver," he said.
The minister said no one was ready to provide such an investment for purpose-built Black Cabs, but still tenders were invited in various newspapers to ensure transparency, he said.
The minister said that as per the agreement, the London taxis would charge Rs11 per kilometre, which was reasonable. He added that the manufacturing plant for Black Cabs was being set up in Gharo, Sindh, on a 300 acre plot. The plant had to be shifted to Pakistan because the manufacturing of a single Black Cab required 43,000 sterling pounds in the UK compared to the 22,000 sterling pounds in Pakistan.