Southern companies win freight subisdy

Southern companies win freight subisdy
Published: 30 March 2010

The disqualification of the Southern Cement plants for claiming Inland Freight Subsidy was removed on Tuesday, paving the way for products originating within a minimum of 100km from seaport, to also qualify for the subsidy.

According to cement producers, the courts passed a ruling on Tuesday morning to the effect that the disqualification on products originating within 100km from seaport was removed till the final disposal of the case. A senior official at a cement company said that the companies in the Southern zone could now submit documents and claim the subsidy; the final outcome of which would be determined on the disposal of the case. All shipments after March 29, 2010, would be eligible.

The development caused quite a stir at the markets on Tuesday, where the news was received with interest. The court judgment was in the matter of a suit filed by the cement producers against notice issued earlier on March 29 by the Trade Development Authority of Pakistan (TDAP) in respect of “Inland freight subsidy.”

The notice had stated: “Extra cost on inland transportation erodes export competitiveness of a range of developmental products.”

It stated that the Government of Pakistan, in Trade Policy 2009-10 had decided to compensate inland freight cost to exporters of cement, light engineering, leather garments, furniture, soda ash, hydrogen peroxide, caustic soda, sanitary wares including tiles, finished marble/cut to size market blocks/granite and onyx products.

A cement sector analyst said that the decision could not have come at a better time for summer marks the peak off take season for the building product.