Need to replenish bulldozer stock

Published January 26, 2009

PAKISTAN has a total land area of 79.61 million hectares (MH) including 31.51 million hectares cultivable area. At present, an area of 22.51 MH is under agricultural use, whereas more than 28 per cent of the area remains waste. To improve the agriculture growth rate, there is a need to turn quickly the waste land into cultivable area.

Over the last 18 years, there has been a nominal increase of 1.49 MH in cultivable area and it has increased from 21.82 MH in 1990-91 to 22.51 MH in 2004-05,remaining almost constant since then. The highest area of 23.04 MH was, however, under cultivation in 1997-98. In fact, there had been erosion and degradation of cultivable land over years. Taking into account these two factors, the lowest waste area of 8.83 MH was in 1992-93.

To bring more area under cultivation, earth moving machinery, such as bulldozer, is necessary. It is employed for improvement and leveling of land, reclamation and conservation of soil and construction of embankments. To develop the available nine MH waste farm area, some 2,400 bulldozers, of 90-120 HP capacity each, are required over a period of 25 years. This needs a financial outlay of over Rs39 billion, including foreign exchange component of $360 million, at the present rate.

As a matter of policy, bulldozers are maintained in public sector by provincial governments and rented out to farmers. Unfortunately, there has been no replacement or replenishment for the last two decades or so, of old and obsolete bulldozers in the provinces.

The government of Punjab maintains a fleet of 553 bulldozers, out of which only 350 are operatable at present. Likewise, 133 bulldozers, out of total of 500 units, are operative in Sindh, whereas there are hardly a dozen of bulldozers in use in Balochistan and NWFP. The provincial governments maintain a large number of mechanical workshops for maintenance and repair of bulldozers. But these facilities are 30 years old and require major BMRE to be functional.

For many years, the federal ministry of food, agriculture and livestock (Minfal) has plans to procure bulldozers to enhance farm mechanisation capacity of the provinces, but somehow the procurement process is not finalised for one reason or the other, and funds lapse.

According to initial plans, 650 bulldozers were to be procured and distributed as 200 units to Punjab, 150 to Sindh, 200 to Balochistan and 100 to NWFP governments. The World Bank and Japan provided economic assistance for import of bulldozers but these were not availed.

In 1995, efforts were made to import bulldozers from Iran on staggered delivery basis, under barter arrangement in exchange of plant machinery for two sugar mills. But this did not materialise either. An attempt was made by Minfal in October 2007 and international bids were invited to import of 300 bulldoze with its own funds.. The government had approved allocation of 200 units for Balochistan and 100 for NWFP to reclaim 2.19 MH areas of waste land. But due to non-adherence of the prescribed rules and procedures by the ministry, the final decision to place order is still pending. And now there are financial constraints.

Agriculture has remained a priority sector for all successive governments, with emphasis on large-scale mechanisation. Yet, almost nothing has been done to promote optimal indigenisation of the required machinery for agriculture sector. Tractor industry is well established , still some 10,000 tractors are being imported every yearly. There are more than 500 manufacturers of farm machinery and implements, but do not have latest technology and modern production methods.

The proposed of local manufacturing of bulldozers has a long history of failures.. It was in early 1970s that the Pakistan Industrial Development Corporation (PIDC) had launched a project for progressive manufacturing of bulldozers in collaboration with FIAT-ALLIS. Licensing agreement covering technology transfer was signed between the PIDC and the Italy-based multinational company.

Comprehensive plan for phase-wise manufacturing of parts, components and assembly was finalised, availing design and production facilities at the Heavy Mechanical Complex and other engineering units. As per procedure, the PC-1 was got approved from the government. But there was no headway.

The project was revived in the 1980s. The foreign partners confirmed their interest and arranged equity in the joint venture through their local agents. A revised set of formalities were completed by the sponsors with the government, updating the plans. At the advanced stage of take-off, however, the Japanese manufacturers Komatsu entered the scene, apparently showing interest in the project, but in fact putting spanner in the whole process. During these years Komatsu had captured the local market, supplying bulldozers under the Japanese grants and credits. They were not serious in local manufacturing venture, as proved later. Thus the project could not see the light of the day.

China has established a sound base for capital goods industry and produces a large number of bulldozers under license from Komatsu, Caterpillar and other international Original Equipment Manufacturers (OEMs). These are of comparable quality but about 30 per cent lower in price. Therefore, the State Engineering Corporation proposed in 1999 to Shantui Machinery Construction Co, the manufacturers of Komatsu bulldozers in public sector, to assemble and produce bulldozers at the Heavy Mechanical Complex, on principles of co-production and co-financing, against the Minfal requirements.

The Chinese delegation visited the stakeholders and, after due diligence, agreed to implement the idea and prepared a soft-term financial package also. But, somehow, the government backed out once again. It was after few years that the Chinese manufacturer, along with Komatsu and a trading house in Hong Kong, jointly offered bulldozers in CBU (completely built up) condition to Minfal, totally on import basis. It may be of interest to know that Komatsu later established, in 2005, a joint ownership company in China with Shantui, for marketing of bulldozers in selected countries under the Chinese suppliers’ credit.

Of late, there have been fresh initiatives by the government in this direction. The federal minister for industries and production has recently announced establishing industrial estates for manufacturing of agricultural machinery. The board of investment is inviting investment in manufacturing of construction equipment and machinery, including bulldozers of 75-150 HP, at an estimated cost of Rs500 million.

With a future outlook, it is vital to undertake progressive manufacturing of bulldozers locally, without further delay, seeking license from the Original Equipment Manufacturers (OEM). It will provide momentum to the cherished goal of self-reliance, contributing largely towards import substitution and creating employment opportunities.

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