Find market for local products, govt asked
KABUL (Pajhwok): The Afghan Investment Company (AIC) says it intends to establish a thermal power station having the capacity to produce 40 megawatts of electricity to boost the production of the formerly state-run Ghori Cement Factory in northern Baghlan province.
Islamuddin Ahmadi, the firm’s director, told Pajhwok Afghan News that the government in return should make efforts at finding market for locally-manufactured products.
He criticised the new mining law, saying they paid tax on 1400 hectares factory’s land without benefitting from it. The land has been acquired on lease.
The Ghori Cement Factory was established about 50 years ago in the capital of Baghlan province, Pul-i-Khumri. It is the only active cerement plant in Afghanistan and the lease for the enterprise was granted to the AIC for 49 years seven years back.
In the past, the mega cement plant would produce 400 tonnes of cement per 24 hours. However, the AIC says the production has increased to 1200 tonnes a day and the project currently employs 1500 workers.
The AIC has also been granted contracts for coal extraction from “Karkar and Dodkash” mines to operate the second cement plant, Ghori-II.
AIC chief Islamuddin Ahmadi told Pajhwok Afghan News that the firm had so far invested $200 million in the cement factory.
He said they planned to make operational a third cement plant to increase the cement production to three million tonnes per year.
One cement producing plant at the Ghori Factory had completely been made operational and the second plant 80 percent complete and the remaining 20 percent would take two months to finish, he added.
Once completed, the second plant would produce 1400 tonnes of cement, said Ahmadi, who added they planned to ink a contract with the Ministry of Mines on the establishment of the third cement plant.
However, he did not say how much the third plant would cost, but said the three plants would produce three million tonnes of cement annually.
Ahmadi said if the new government took essential steps toward encouraging investments, their firm would establish a thermal power station within one year’s time in Pul-i-Khumri.
He said coal from the two mines would be used in the power project, which would produce 40 megawatts of electricity.
Ahmadi said most of their products lacked market, adding cement produced at the Ghori factory was of high quality but mostly imported cement was used in much of the country.
He said the Ghori factory currently produced 360,000 tonnes of cement a year while Afghanistan consumed four to five million tonnes cement each year.
He asked the government to take effective steps toward encouraging local industry. “The government should encourage the private sector and should stress on the use of locally produced items,” he urged.
Without going into details, Ahmadi claimed it was clearly written in most contracts for development projects that Pakistani cement should be used.
Other Afghan businessmen and investors have made similar demand from the government. They say the government should increase tax on imported goods in a bid to encourage local industry.
President Hamid Karzai signed the mines law about two weeks ago amid criticism from civil society groups and mine experts over some provisions.
The critics say the law has some problems with regard to environmental protection and some firms could misuse the law.
Ahmadi said the AIC had been given on lease the Ghori cement factory for 39 years under the previous mines law. He said their investment could hit a snag because the lease was shown 30 years in the new law.
He said the Ministry of Mines wanted a review of the contract signed with the AIC under the new law.
Ahmadi said despite some weaknesses, the new law had some positive aspects because it had been framed in consultations with Afghan and foreign experts.
He also complained that under the contract, they had been allowed 2045 hectors of land but they benefitted from 680 hectors only and paid tax on the rest.
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