The Punjab Industrial Estate Development and Management Company (PIEDMC) has devised a land leasing policy for industrial estate developers and industrialists. This policy intends to establish a clear and competitive method for leasing property in industrial estates and promote investment in lagging industries like textiles and clothing. The policy also covers the eligibility requirements, application procedure, lease periods, rent rates, fines, dispute resolution, and other industrial estate land leasing elements. At present, the Government of Punjab currently has 10 Industrial Estates, out of which six have been allocated the following land. These industrial estates include the Quaid-e-Azam Apparel Park: 1536 acres of land, Sundar Industrial Estate: 1763 acres of land, Multan Industrial Estate: 1410 acres of land, Bahawalpur Industrial Estate: 500 acres of land, Chunian Industrial Estate: 300 acres of land, Vehari Industrial Estate: 277 acres of land, Bhalwal Industrial Estate: 450 acres of land, and Rahim Yar khan Industrial Estate with 450 acres of land. All these industrial states collectively occupy 6686 acres of land, and the future leasing plan is much more.
According to the drafted policy, these industrial estates will have all the required amenities and be designated a Special Economic Zone (SEZ) under this land leasing program. The constructed land will be leased for 30 years with the option to renew at the end of the term. Land can be leased to either foreign or domestic investors without prejudice. The investors and PIEDMC/FIEDMC will sign a Land User Agreement. The agreement will require investors to finish construction and begin commercial operations within 24 months of signing. If this duty is not completed within three months, the Land User Agreement will be renegotiated. The agreement will be canceled unless a conclusion is achieved. Lease payments will be issued monthly and will cover the Government of Punjab’s real land and infrastructure development expenditures and subsidized borrowing charges. These costs will be borne by the investor over the course of the 30-year lease and will not rise in line with inflation or land price variations.
When signing the Land User Agreement, investors must contribute a security deposit, a specified percentage of the entire capital cost. The deposit will be reimbursed if the lease is not renewed at the end of the 30 years. PIEDMC/FIEDMC will oversee the industrial estate's operation and upkeep. Investors will be expected to pay monthly operating and maintenance charges per acre to meet the management businesses' real expenses. These prices will rise yearly in line with the current inflation rate.
However, the efficient use of land by the industrial estates and the land leasing process is still questionable due to the land leasing issues in Pakistan’s industrial parks. The following aspects need to be incorporated while devising the policy. First, the impact of industrial development on land and spatial policy, such as the need to balance economic and social development with environmental protection, biodiversity conservation, climate change mitigation, and resilience. Second, the spatiotemporal nonstationary impacts of impact variables on industrial land price over time, such as tax, leased land, population, and location quotient index change across various regions and cities. Third, the international principles for industrial parks are being implemented, such as the requirement to provide an adequate legal and institutional framework for urban and territorial planning, land-use rules, land tenure, land transactions, and land-based finance. These principles aim to promote social and spatial inclusion, suitable densification, mixed-use of land, adequate and accessible public spaces, agricultural land and cultural heritage conservation, and innovative land administration procedures.
The following are some recommendations based on the best global land leasing practices from China and Vietnam that Pakistan can adopt. First, there is an exigent need to establish a transparent and competitive mechanism for land leasing that ensures fair and market-based land prices, protects the rights and interests of both lessors and lessees and prevents speculation and corruption. Second, create a comprehensive and participatory land use planning and management system that balances industrial land demand and supply, assigns land in accordance with approved master plans, and monitors and evaluates land use performance and effects. Third, there is a need for clear regulations to be established, and approval processes need to be streamlined, in addition to attractive incentives and support programs being implemented. Fourth, there is a need for proactive marketing and promotion to be engaged in public-private partnership models for the sustainable development of industrial estates.
There should also be an investor support services center that provides facilitation to investors in addition to regular performance evaluations. These steps seek to establish a transparent and investor-friendly environment, attract diversified investors, and ensure the efficient utilization of land in industrial estates that contribute to long-term prosperity and sustainability.
According to the drafted policy, these industrial estates will have all the required amenities and be designated a Special Economic Zone (SEZ) under this land leasing program. The constructed land will be leased for 30 years with the option to renew at the end of the term. Land can be leased to either foreign or domestic investors without prejudice. The investors and PIEDMC/FIEDMC will sign a Land User Agreement. The agreement will require investors to finish construction and begin commercial operations within 24 months of signing. If this duty is not completed within three months, the Land User Agreement will be renegotiated. The agreement will be canceled unless a conclusion is achieved. Lease payments will be issued monthly and will cover the Government of Punjab’s real land and infrastructure development expenditures and subsidized borrowing charges. These costs will be borne by the investor over the course of the 30-year lease and will not rise in line with inflation or land price variations.
The constructed land will be leased for 30 years with the option to renew at the end of the term. Land can be leased to either foreign or domestic investors without prejudice.
When signing the Land User Agreement, investors must contribute a security deposit, a specified percentage of the entire capital cost. The deposit will be reimbursed if the lease is not renewed at the end of the 30 years. PIEDMC/FIEDMC will oversee the industrial estate's operation and upkeep. Investors will be expected to pay monthly operating and maintenance charges per acre to meet the management businesses' real expenses. These prices will rise yearly in line with the current inflation rate.
However, the efficient use of land by the industrial estates and the land leasing process is still questionable due to the land leasing issues in Pakistan’s industrial parks. The following aspects need to be incorporated while devising the policy. First, the impact of industrial development on land and spatial policy, such as the need to balance economic and social development with environmental protection, biodiversity conservation, climate change mitigation, and resilience. Second, the spatiotemporal nonstationary impacts of impact variables on industrial land price over time, such as tax, leased land, population, and location quotient index change across various regions and cities. Third, the international principles for industrial parks are being implemented, such as the requirement to provide an adequate legal and institutional framework for urban and territorial planning, land-use rules, land tenure, land transactions, and land-based finance. These principles aim to promote social and spatial inclusion, suitable densification, mixed-use of land, adequate and accessible public spaces, agricultural land and cultural heritage conservation, and innovative land administration procedures.
There is an exigent need to establish a transparent and competitive mechanism for land leasing that ensures fair and market-based land prices, protects the rights and interests of both lessors and lessees and prevents speculation and corruption.
The following are some recommendations based on the best global land leasing practices from China and Vietnam that Pakistan can adopt. First, there is an exigent need to establish a transparent and competitive mechanism for land leasing that ensures fair and market-based land prices, protects the rights and interests of both lessors and lessees and prevents speculation and corruption. Second, create a comprehensive and participatory land use planning and management system that balances industrial land demand and supply, assigns land in accordance with approved master plans, and monitors and evaluates land use performance and effects. Third, there is a need for clear regulations to be established, and approval processes need to be streamlined, in addition to attractive incentives and support programs being implemented. Fourth, there is a need for proactive marketing and promotion to be engaged in public-private partnership models for the sustainable development of industrial estates.
There should also be an investor support services center that provides facilitation to investors in addition to regular performance evaluations. These steps seek to establish a transparent and investor-friendly environment, attract diversified investors, and ensure the efficient utilization of land in industrial estates that contribute to long-term prosperity and sustainability.