Tussle between industry, climate ministries delays EV assembling in Pakistan

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PM Imran Khan wants quick implementation of NEVP

When the National Electric Vehicle Policy (NEVP), spearheaded by Ministry of Climate Change, was given a green signal by the Federal Cabinet on November 5, 2019; there was no need for another Ministry to interfere because Cabinet’s decision is considered final.

However, in case of NEVP, the situation is almost reverse owing to continuous backlash by the Japanese dominated assemblers’ body – Pakistan Automotive Manufacturers Association (PAMA) since the day NEVP was announced by the Federal Cabinet on November 5, 2019.

PAMA’s series of letters showing serious reservations over NEVP to the Advisor to Prime Minster on Industries and Production, Abdul Razzak Dawood has finally paid off as Mr Dawood made an entry to support Japanese vehicle assemblers.

Mr Dawood in the 30th meeting of Auto Industry Development Committee (AIDC) has authorized the strong arm of Ministry of Industries, the Engineering Development Board (EDB) as the key department to formulate the electric vehicle (EV) policy and directed it to submit draft proposals in this regard by the next month.

On the above developments, Chairman Association of Pakistan Motorcycle Assemblers (APMA), Mohammad Sabir Shiekh said “what is the legal status of November 5 NEVP when EDB has now been tasked with fresh mandate to formulate EV policy.”

Before new role of EDB, the Ministry for Climate Change (MoCC) had summoned an inter-ministerial meeting in Islamabad in last week of December 2,109 to discuss NEVP. The MoCC had also informed relevant ministries and government departments that the “NEVP needs to be operational by January 2020 by validation of incentive packages through the Economic Coordination Committee (ECC).”

Amid lack of infrastructure, Prime Minister Imran Khan has already called for early implementation of NEVP, especially for two- and three-wheelers as well as buses for public transport in order to prevent smog.

The climate ministry said the subject policy under section 8 envisages the constitution of an inter-ministerial committee which would include members from the federal line ministries, provinces, private sector and the academia.

This committee would be responsible for overseeing all issues related to the entire electric vehicle value chain in order to smoothly introduce and coordinate efforts towards local manufacturing.

It will also be responsible for overseeing standardization, regulation and compliance towards infrastructure. Periodic amendments in the policy based on changing technology and marketplace will also be its responsibility.

Again PAMA came hard saying that it had neither been taken into confidence on NEVP nor invited in the inter-ministerial meeting.

PAMA recalled that on November 4, 2,019, the news was swirling in the market that NEVP policy was on agenda of federal cabinet meeting the next day.
Before this, the climate ministry had circulated draft policy of electric vehicle while requisite input from the stakeholders on it was still to be obtained.

On the instance of MoCC, the EDB conveyed a meeting on May 23, 2019 with the auto sector people on the formulation of electric vehicle policy.
Here, the stakeholders had unanimously voiced that the concerned ministry was alien to the subject and it was the domain of Ministry of Industries and Production (MoIP).

PAMA had been interacting with the MoIP and the EDB and further held a consultative meeting with its own officials on November 1, 2019 in Karachi to discuss proposal on NEVP formulation for auto industry.

It was surprising for PAMA that NEVP was on the agenda of November 5 federal cabinet meeting when stakeholders were in the process of discussing it with EDB and the policy on same subject was being presented by the other arm of the government for approval.
The government had taken a crucial decision on electric vehicle policy while the entire auto industry was groping in the dark as it had neither discussed nor heard an official word in this regard, the Association said.

PAMA informed the Commerce and Production Adviser Abdul Razzak Dawood that it was unusual that the EDB under the aegis of MoIP had initiated discussion with the stakeholders on electric vehicle policy while the other ministry had already espoused the summary, on the same subject, and submitted it to the cabinet for approval.

Sabir Sheikh, by telling his story on NEVP, said after the announcement of NEVP on November 5, 2019 by the federal cabinet, the EDB called upon all car assemblers of Pakistan on January 16, 2020 for the 30th meeting of AIDC. Letter was issued on January 10, 2020.
Around 50 stakeholders including government departments were invited in the meeting. The main agenda of the meeting was discussion and formulation of NEVP by the EDB (four and two/three wheelers).

Chairman APMA Sabir Sheikh, who is also the chairman of Pakistan Electric Vehicles Manufacturers Association, said he was invited in the meeting as per invitation letter but the EDB did not send intimation or letter or email or phone for the meeting.

Surprisingly, on January 21, 2020, another government department of Islamabad sent me a letter seeking reason for not attending the meeting. He said he had informed the government official that he had been the member of AIDC for the last 10 years and still the member of AIDC.

“I do not know who had omitted my name from new list of AIDC,” he said adding that the government has not been holding negotiations on EV with genuine stakeholders who want to start EV business in Pakistan.

“When the Federal Cabinet had already approved NEVP on November 5, I fail to understand why EDB is trying to formulate EV policy,” he said adding “which department is powerful whether the federal cabinet or the EDB.”
Half of the stakeholders, who were invited in the meeting, could not participate in the meeting, he said.

Serious apprehensions were expressed by the auto sector that several government functionaries including the Ministry of Science and Technology and the environment agencies were also involved in EV policy making.

The representatives of Pakistan Automotive Manufacturers Associ¬ation (PAMA), Association of Pakistan Motorcycle Assemblers (APMA) and Pakistan Association of Auto Parts and Accessories Manufacturers (Paapam) expressed the query in this regard.

It was decided by Dawood that EV Policy is the domain of MoIP as per the rules of business and thus EDB should be the focal department.

Sabir urged the Federal Minister Abdul Razzak Dawood to take feedback from all the stakeholders including APMA before finalizing NEVP.

Dawood authorized preparation of policy to EDB and it was directed that the first draft within one month. Various tariff and non-tariff proposals were discussed in the meeting, while stakeholders sought 15-20 days for submission of concrete recommendation on local manufacturing of EVs.

EDB Chairman Raza Abbas asked the auto industry to respect the timeline for submission of proposals to the board so the first draft could be finalised before the end of February.
Sabir asked EDB Chairman Raza Abbas that he should mention APMA chairman name in the list of AIDC.

The meeting noted that investment in the EVs would be under the Auto Development Policy (ADP 2016-21), which would include investment plans, standardization of equipment, promotion of localisation, exports of parts and components in long run, employment generation and positive impact on national economy.

Sabir said all the sick industries of two and three wheelers should be allowed without wasting time to start production of EVs in their factories. They are already approved assemblers with vast experience of assembling coupled with already available infrastructure at the factories for assembly of EVs.

However, Dawood stressed that “Make in Pakistan” will be supported in each policy including EV manufacturing, and highlighted the government’s policy to discourage imports to promote creation of job in country.

“We also support” Make in Pakistan” policies for EVs to support Ministry of Industries’ policies,” he said.

Adviser to the Prime Minister on Climate Change Malik Amin Aslam in another inter ministerial meeting held in the third week of January 2,020 said electric vehicle policy would focus on encouraging manufacturing of vehicles locally with made-in-Pakistan tagline.

He said local production incentives would be offered to auto manufacturing sector.
Sabir said the EDB, AIDC, PAMA, PAAPAM, APMA, PEVMA etc are all one agenda organizations of the auto sector. The above names give an impression that they are different departments but practically they have same agenda and issue.

The agenda included finalisation of modalities regarding two and three wheelers import, manufacturing of infrastructure and parts after discussing them with relevant stakeholders including AIDC and PAAPAM and sending them to ECC for approval.

Listing benefits, the prime minister’s adviser said that possible benefits of electric vehicle penetration included decrease in emissions from transport sector, reduction in fuel import bill, and enabling the localization of EV manufacturing.

“It would enable Pakistan to become part of the global value chain of EV manufacturing,” he said.

Participants called for further consultations with stakeholders for four wheeler electric vehicles. They emphasized that standardization was an area where parameters needed to be specified.
Participants also decided that a subcommittee would be formed to draft parameters for standardization and finalization of recommendations for the ECC for two and three wheeler electric vehicles.

However, the Ministry of Industries and Production was requested to discuss proposed incentives with AIDC and PAAPAM etc., and convey their input for two and three wheelers within a week and for four wheelers within 15 days.

He invited AIDC and PAAPAM through the industries ministry for consultative meetings with the existing automobile manufacturers to address their concerns, if any.

An auto industry stakeholder said a Pandora box has been opened after the task to formulate the EV policy was given to the EDB, thus posing serious legal and constitutional issue when Federal Cabinet of the PM was not competent enough to approve any policy.

There were also reports that some serious stakeholders, who pushed on this government towards EV, were not invited in the January 16, 2020 meeting.

Some EDB officials were blamed for playing negative role by sidelining genuine stakeholders from the meeting. This is evident from a recent local newspaper report headlined “Govt officials accused of taking billions from auto sector.”

This exclusive article on Electrical Vehicle, published in Automark Magazine’s printed edition of February-2020

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