Work on the first Combined Effluent Treatment Plant in Pakistan, being set-up in the Korangi industrial area for tanneries, has been stopped owing to a row over the contribution of industrialists to the plant.

The project was initiated in 2002 with an estimated cost of Rs521 million (US$10.9 million). The Export Promotion Bureau (EPB) had pledged Rs334 million (US$6.9 million) from its Export Development Fund for the plan while Rs146 million (US$3 million) were to be given by the Pakistan Tanners Association (PTA).

An amount of Rs20 million (US$417,276) was granted by the Netherlands government as technical assistance while 70% of the cost of the land amounting to Rs31 million (US$646,805) was provided by the defunct Karachi Development Authority for setting up the plant. But the EPB released only Rs187.85 million (US$3.9 million) and then stopped further payments on the grounds that the PTA was not raising funds for its share.

Sources at the EPB state that the PTA has only been able to contribute Rs10 million (US$208,645) , leading the EPA to believe that tannery owners may fail to donate the remaining share. This raises the question that if the PTA cannot generate funds for construction, then who will bear its operational cost of Rs50 million (US$1.04 million) annually? The EPB demands that the PTA submit a surety for the release of the remaining share.

Gulzar Firoz, chairman of the PTA Environmental Management Committee and chief of the project, claimed that the tanneries body had so far contributed Rs40 million (US$834,580). He said the economic recession and considerable fall in the exports of leather had affected the process of raising funds. However, he said they were making efforts in this regard. The chief of the project also said that a group of around 100 tannery owners, with approximately 30% of funds in the share, disagreed about the payment formula and demanded that large tanneries should increase their share. The PTA was trying to convince them and had offered that they could pay by installments.

He said that if the EPB did not immediately release its remaining share, the millions of rupees spent on the project would be lost if the plant closed. He also said the PTA had managed to make savings of about Rs51 million (US$1.06 million) on the total estimated cost of Rs521 million (US$10.9 million).

Around 200 (90%) tanneries in Pakistan are located in Sector 7-A of the Korangi industrial area. At present, 80% of the civil work is said to have been completed.

Source: Daily ‘Dawn’