Apparel Sourcing Intelligence - Worldwide

Pakistan Textile City “on verge of collapse”: Minister

Pakistan’s decade-overdue on-again, off-again Karachi Textile City project is “on the verge of collapse”, the country’s Textile Minister, Abbas Khan Afridi, told its National Assembly on March 2, as the meeting raised serious questions over a similar project near Lahore.

Speaking to the National Assembly Standing Committee on the Textile Industry, Afridi said  the project – first started in 2004 – should either be shelved or developed, but was currently incurring “huge losses” after repeated delays and a number of so far unresolved practical problems – including serious questions over energy provision.

The Karachi project – a plan to put a substantial textile and garment making complex near Karachi’s port – has twice been put on ice since it was first proposed, Its budgeting, the feasibility of providing the necessary energy, water and waste management and the likelihood or real commercial investment have always been obscure. A few days earlier, the country’s Prime Minister had claimed  that Chinese investments would ensure the country’s recurrent energy problems would be dealt with by 2017. 

Press rumours over the previous few weeks have been that the current project team working on the Textile City is being reduced as budgets run out. Afridi stressed the scale of development the project, if delivered and successful, could bring (which no-one doubts) – but he provided no grounds for thinking the project could be delivered, or would create a viable industry anyway.

The committee agreed to discuss the project further at its next meeting – but made no decision either way about the project’s short term future.

At the same time, it is reported “the committee was informed” about serious problems with a parallel Faisalabad Garment City project near Lahore, widely reported as being funded by China’s Shandong Ruyi:

  • Though its publicity material talks about a substantial, multi-investor, project the only operating business in Phase 1 of the project appears to be Ruyi’s associated company, Massod Textile
  • In phase 2, the committee recommended, “only smaller units or clusters would be allowed in the project ranging from 20-50 machines.” This is the precise opposite of what the puffery had claimed
  • Though Ruyi have been reported to be funding the project, the committee was asked to approve taxpayer funds for building phase 2, a training centre and providing water and energy at the project site.  With Pakistan’s limited record of successfully providing agreed public funds to real infrastructure projects, the timing and likelihood of the allegedly privately-managed Faisalabad may be as questionable as its Karachi peer.