Pakistan Economy - News & Updates - Archive

[Owais]

All villages to be provided electricity by 2007: Musharraf

KARACHI (August 10 2006): President General Pervez Musharraf has exhorted the officials of utility services and government departments to work hard for the welfare, well-being and betterment of the people, during briefings on supply of electricity, water and gas at the Chief Minister House here, on Wednesday.

Sindh Governor Dr Ishratul Ibad, Chief Minister Dr Arbab Ghulam Rahim, federal and provincial ministers, advisers to Chief Minister, members of provincial assembly and nazims of various districts were present on the occasion.

Expressing his views, the President said the purpose of such meetings is to create awareness about what is being done in these important sectors and have co-ordination so as to do more for the good of the masses.

Musharraf said the focus on providing electricity, gas and clean drinking water is to help improve the living conditions of the people, adding the briefings today in these sectors were also aimed at assessing the achievements as well as ground realities and the future plans in these areas.

President said he would like to know as to what is being done in the education and health sectors- the ground realities.

With regard to the target for provision of electricity, he said all villages with more than 10 households would have to be electrified by December 2007. As far as gas is concerned, the target is all district and tehsil headquarters. For clean drinking water, there should be a filtration plant at every union council by December 2007.

Musharraf pointed out that the country's economy has revived and stressed that improvement in this vital area has to be transformed into "public gain". He said the focus should be on poverty alleviation, unemployment control as well as checking prices and inflation.

Musharraf said the standard of living of the people should be enhanced and they be provided with basic utilities like electricity, gas and clean drinking water.

He also laid stress on bringing about improvement in human resource through quality education and better health facilities. The President pointed out that the United Nations has also come up with Millennium Development Goals (MDGs) by 2015 and added that we should try to remain ahead of the deadline set by the UN for achieving these MDGs.

Referring to the briefing by Chairman Water and Power Development Authority (Wapda), Tariq Hameed, he said the process of electrification has increased manifold. Musharraf appreciated the good work being done by Wapda in this respect.

He said for provision of electricity to all by the year 2007, first power should be made available to villages with 100 and 50 houses respectively and later to villages with 10 houses can be covered.

Referring to the briefing by Chief Executive Officer of Karachi Electric Supply Corporation (KESC), Frank Scherschmidt, the President said the total demand of electricity in the metropolis is 2,300 MW and deficiency at the moment is 100 to 200 MW. He said the problems pertain to generation as well as distribution.

He pointed out that there is a big industrial backlog and asked how the demand for 900-MW additional power will be met if by June next the demand increases from 2,300 MW to 3,200 MW. The President said we were striving for enhancement in the generation of electricity.

Musharraf said by June next the generation of electricity would be about 3,100-MW with the addition of 800-MW but the shortage would remain between 100 to 200 MW, However, the industrial backlog would be cleared by then to a great extent. He said by 2007-08 we would be able to meet the electricity demand.

Musharraf pointed out that KESC is planning to invest a sum of Rs 22 billion to streamline the system. He was of the view that KESC should be supported in its efforts and be encouraged.

The President also pointed out that the production of vehicles in the country has risen to about 200,000 units annually. He said with the boost in economy and seven to eight percent growth rate the people now have money and are purchasing cars and motorcycles.

Musharraf said the biggest indicator of development is the energy requirement whose demand is on an increase in the country and the government was taking steps to meet this demand.

He said Pakistan would acquire gas from Iran through pipeline and that the matter regarding the pricing formula is being sorted out.

He described Pakistan as the centre of "connectivity" in this region.

He said the Thar coal can be gasified and can be used for generation of electricity.

He was of the view that gas should be used for generation of electricity rather than oil and alternate sources like windmill might also be used for curtailing expenses. Nuclear option for generation of electricity also incurs same expenses as of gas or coal, Musharraf said, adding this would help save the consumption of oil which will also help curtail the import bill.

The President further said privatisation is the way forward. We were thinking of corporatisation of Wapda and later on privatisation of this organisation, he said.

The President said he would address the nation on August 14 and would spell out the vision ahead.

On the occasion President also discussed the Hudood Ordinance and said that we will have to understand it and see that amendments can be made according to the Islamic injunctions. He said the assemblies should discuss and make decision regarding this. Earlier, Sindh Chief Minister, Dr Arbab Ghulam Rahim, called on the President at the CM House.

 

[Neo]

ISLAMABAD, Aug 9: A Chinese telecommunication player is investing about $300 million in Total Telecom, a local company to re-launch Instaphone with CDMA technology, Dawn has learnt reliably.

Six million CDMA (Code Division Multiplier Access) lines will be available for the subscribers from early next year soon after its re-introduction.

Total Telecom has recently purchased all the shares of Instaphone (Millicom Group) in Pakcom Limited, a cellular operator in Pakistan. Total Telecom is also the owner of Tele Card, the first Pakistani company providing alternative, integrated service provider of telecommunication users through Long Distant International (LDI).

Launched in 1991, Instaphone is the pioneer of mobile telephony in Pakistan and has over 360,117 subscriber base across the country.

At present the company has a wide range of economical packages in both pre-paid and post-paid categories, having a network reach over 185 cities across Pakistan but currently operating on the TDMA network, an old digital technology.

Instaphone is also first mobile operator in Pakistan whose licence was renewed for 15 years after completion of its full tenure of operations.

Telecommunication experts believe that CDMA is the choice of the future since it offers better sound quality, handles more call volume than old technology and has the potential of providing television services.

Based on spread-spectrum communication technique, it can handle data transmissions better than other technologies.

CDMA networks are also built with standard IP packet data protocols, when other network requires costly upgrades to add new data equipment in the network for which they also need new data phones. Standard CDMA phones also have TCP/IP (Transmission Control Protocol/Internet Protocol) and PPP (Point to Point Protocol) built into them.

It is believed that China Telecom Limited has shown interest to invest and activate the Instaphone to compete in the growing mobile telecommunication sector of Pakistan.

 

[Neo]

KARACHI, Aug 9: The telecom sector in Asian has seen the highest growth rate in which China and India lead in terms of numbers but Pakistan excels in terms of growth rate where mobile phone subscribers’ base is increasing at the rate of two million subscribers per month.

This was stated by Ufone president and CEO Babar Khan at the inaugural ceremony of the sixth ITCN Asia 2006 at the Expo Centre here on Wednesday.

He said it took approximately 12 years to reach one billion GSM subscribers worldwide in 2004 but only the last two-and-a-half years witnessed a sudden growth to two billion. At this rate the overall GSM base is expected to cross 3.3 billion by 2010.

In a competitive business environment, he said it was now necessary to introduce differentiating offers by continuously introducing the latest technology, he said. Ufone has around 7.5 million subscribers.

Bilal Munir Shaikh, vice-president marketing, Mobilink, speaking at the ITCN Asia conference said cellular had emerged as the fastest growing sector in Pakistan by posting a growth of 149 per cent since 2002.

He said the telecom industry had stimulated Pakistan’s economic growth by its contribution to foreign direct investment from a meagre 1.3pc in 2001-02 to 45.3pc in 2005-06.Telecom sector’s contribution to the exchequer in the shape of duties and taxes had surged from $167 million in 2001-02 to $845 million in 2005-06, he said, adding that Mobilink had been in forefront with an investment of over $1.2 billion.

Motorola country-manager Nadeem Safdar said the company was investing further in developing new networks and handsets offering to address every segment of the market.

“The company is helping transform mobile phone from a luxury item to one that is affordable and one that will boost overall economic development of Pakistan,” he added.

APP adds: Earlier, former federal minister Dr Abdul Hafeez Sheikh formally inaugurated the sixth ITCN Asia 2006 international exhibition and conference at the Karachi Expo Centre on Wednesday.

Speaking on the occasion, he said a large number of foreign delegates were participating in the event which would highlight Pakistan's potential to the world.

“This will have a positive impact on Pakistan's economy and further improve the image of the country as well as Karachi,” Dr Sheikh noted.

 

[Neo]

KARACHI (August 10 2006): Frank Scherschmidt, Chief Executive Officer of Karachi Electric Supply Corporation, and leaders of business community have agreed that KESC will restore 95 percent power supply in the city by August 12.

This agreement was reached during a meeting held at Karachi Chamber of Commerce and Industry (KCCI) on Wednesday, which took place on the intervention of Governor Sindh Dr Ishratul Ibad and provincial Minister of Industries Adil Siddiqui.

The KESC CEO admitted that the power utility has no computerised system to monitor defects and only relies on the information provided by its staff. All this confusion had occurred due to misinformation given by the staff, he was of the view.

Scherschmidt agreed with a proposal of setting up a monitoring cell having six representatives from KCCI, Site Association of Industry (SAI) and two representatives from KESC.

After overcoming the present power crises the cell will identify those PMTs which are overloaded and assist the KESC in improving power supply in the city.

During the meeting it was pointed out that there are may industries in site who have expertise in power sector and can assist the KESC in rectifying as well as identifying defects. Scherschmidt appreciated the offer.

Taking to Business Recorder, KCCI President Haroon Farooki said that the CEO apologised on the statement of KESC spokesman, who termed the joint press conference of KCCI and SAI as a move to gain political mileage and concessions. Scherschmidt also apologised on poor performance of the KESC, he added. Farooki said that the KESC chief agreed for compensation to those families whose near and dear ones lost lives due to electrocution.

Replying to a question, the KCCI chief said that Scherschmidt informed the meeting that he is an employee of the KESC and had no knowledge about KESC privatisation agreement.

 

[Neo]

ISLAMABAD (August 10 2006): The government of Balochistan on Wednesday has signed a cost sharing agreement with United Nations Development Programme (UNDP) for "Area Development Programme Balochistan, Phase II", for which the latter would provide $2.6 million to help in poverty reduction.

This is a four-year $14 million project and would be executed in nine selected districts of the province. For this, the World Food Programme (WFP) would provide $0.70 million, communities (cash/kind) $1.0 Million while the provincial government would spend $4.2 million from its kitty on the project. There is a financing gap of six million dollars, which would be filled by other donors.

In a ceremony held here, the Additional Chief Secretary (Development) Balochistan, Qayyum Nazar Changezi and Jan Vandemoortele, Resident Representative UNDP Pakistan signed the agreement.

"I feel honoured to be representing the government of Balochistan at an occasion where the government is actively partnering financially and otherwise for the development of the people of Balochistan," said the Additional Chief Secretary while addressing the gathering. "This has been possible only because the project and its implementing partners have proved its viability and I am confident that through this initiative many more lives in my province will be saved from the grips of poverty."

The project would focus areas include community mobilisation and capacity building, local capital generation, improvements in agricultural and livestock productivity, creating income generation activities and improving access to markets and services. In addition, facilitation for access to social sector services will be provided and women's role in development will be strengthened. Vandemoortele said, "the success of Phase I is demonstrated in the visible development of the thousands of people that were supported through this initiative. I am confident that with this support provided by the government of Balochistan, the project can be up-scaled and will be even more successful," he further added.

 

[Neo]

Thursday, August 10, 2006javascript:; http://www.dailytimes.com.pk/print.asp?page=2006\08\10\story_10-8-2006_pg5_1

ISLAMABAD: The Chinese petroleum industry has indicated an interest in shifting its excess capacity to Gwadar, bringing in estimated investment of $13 billion, a senior government official told Daily Times on Wednesday.

The China Chamber of Petroleum Industry (CCPI) and All China Federation of Industry and Commerce (ACFIC) conveyed to Pakistani authorities during a recent visit that the Chinese petroleum industry is keen to invest in Pakistan’s energy sector, the official said.

The ACFIC and CCPI indicated that both the public and private sectors should cooperate in energy projects in Pakistan, with the Chinese private sector in particular seeing a lot of opportunities here, the official said.

This cooperation will not be restricted to building an oil pipeline to set up an energy corridor to Gwadar, but also in shifting energy related industry to Pakistan.

However, the government will need to provide strong support to lay down a framework for a safe financial, investment and security environment in Balochistan to attract this investment, the official said.

He said the Chinese petroleum industry sees four potentially fruitful projects. Firstly, an oil pipeline linking Gwadar to Xinjiang in China to set up an energy corridor. The economic viability of such a project is yet to be worked out. Secondly, the development of Gwadar Port Energy Zone, where the Chinese could set up an oil refinery with a capacity of 21 million tonnes.

China has been preparing a similar project along the Yangtze River in collaboration with Saudi Arabia for the last two years, but has now indicated it could shift the project to Pakistan, the official said. Other countries besides China will also be invited to invest in the project.

Thirdly, the Gwadar energy zone could accommodate other energy sector industries. The Chinese business groups said that China has excess capacity in the petroleum services industry and planned to move the excess capacity to Dubai, but was now considering shifting it to Gwadar, the official added. According to their initial estimates, the Gwadar Port Energy Zone could attract investment of up to $13 billion.

Fourthly, the Chinese petroleum industry also indicated an interest in oil and gas exploration projects in Pakistan, the official said. The Chinese business groups had proposed that a Pak-China energy and trade cooperation promotion association be established for such projects.

The association would include members from the oil and gas sector and other industries in the power sector. They had also suggested that a Pak-China joint investment company be set up to finance these projects, the official said.

 

[Neo]

Total debt up by 4.8% in 2005-06

Thursday, August 10, 2006
javascript:; http://www.dailytimes.com.pk/print.asp?page=2006\08\10\story_10-8-2006_pg5_2

KARACHI: Pakistan’s total external debt has increased by 4.8 percent or $1.642 billion during the 2005-06 fiscal year to $35.679 billion compared with the $34.037 billion in debt in the 2004-05 fiscal year.

According to State Bank of Pakistan data, “Pakistan’s total external liabilities stood at $37.265 billion at June 30, 2006 compared with the $35.834 billion on June 30, 2005.”

The external debt during the second quarter of 2005-06 stood at $35.245 billion from the $35.675 billion in the corresponding period of the previous year, while total external debt stood at $33.523 billion from the $33.918 billion in the corresponding period of the previous year.

Thus the external debt fell in the second quarter of the previous year but was still higher than the previous year’s external debt.

On June 30, 2006, medium and long term (one year) debt increased by $1.594 billion to $32.407 billion from the $30.813 billion in 2004-05.

This year, the debt owed to the Paris Club fell by $183 million or 1.4 percent to $12.831 billion, which stood at $13.014 billion on June 30, 2005. The country’s multilateral debt increased to $1.169 billion in 2005-06 to $16.527 billion from the $15.358 billion in 2004-05.

The country’s Private Non-guaranteed Debt shot up by $243 million or 18 percent to $1.585 billion from the $1.342 billion in the last fiscal year.

This year, the debt owed to the International Monetary Fund (IMF) went down by $120 million or 7.4 percent to $1.491 billion from $1.611 billion in 2004-05, the SBP’s data said. The external liabilities of the country have increased to $37.267 billion from $35.834 billion.

The debt of Special US Dollar Bonds stood at $247 million on June 30, 2006 after a decline of $174 million from the $421 million mark on June 30 2005. Foreign Currency Bonds (NHA/NC) fell to $109 million from $131 million.

National Debt Retirement Program, Central Bank Deposits, NBP/BOC Deposits and other liabilities (SWAP), however, remained unchanged during the 2005-06 fiscal year, according to the SBP data.

http://www.dailytimes.com.pk/default.asp?page=2006\08\10\story_10-8-2006_pg5_2

 

[Neo]

KARACHI: India’s giant call centre industry stretches its footprint to Pakistan by setting up first ever operation in the country in partnership with a local firm, which involves around half a million dollars investment.

Sources in telecom industry said the fresh development marked TeleBrands India as first company from the neighbouring country to establish its inbound telesales call centre in collaboration with Pakistan’s Phonecast Private Limited.

“The operation of that centre is now on in Karachi,” said a source. “Initially it offers 48-agent service and the two groups (TeleBrands India and Phonecast Private Limited) plan to increase that to 150 in near future.”

He said talks for the newly-inaugurated call centre was initiated by ITES Consortium, country’s premier call centre consulting consortium, after two successful international call centres in Pakistan.

“ITES Consortium has already successfully implemented two international call centres in Pakistan namely Ensign CommuniquÈ, which is a project of Shaheen Foundation and Crestel of Crescent Standard Group, through its partner VELink USA and Phonecast,” added the source.

Call centres industry in Pakistan has witnessed sharp growth during the last two years on the back of increased interest of western firm to outsource their businesses. The country’s software service industry and an accompanying sector that runs call centres and back-office work conducted over high-speed telecoms are also growing at a faster pace.

The country’s software exports crossed $70 million during 2005-06, first time ever, registering a 50 per cent growth, as western firms started turning more and more to Pakistan for IT-enabled services to cut costs and raise profits.

Operators believe that with increased interest of foreign investors in Pakistan’s IT and telecom sectors the figures may grow manifold in days to come.

“The world offers the best business opportunities to our growing call centre industry, which has potential to grow by many times,” said Abdullah Butt, President Association of Call Centre Operators, who is also the CEO of Phonecast Private Limited.

“But unfortunately we are not getting that due share. With the arrival of reputed and recognised call centre players, the country would be able to increase its software and IT-enabled services export manifold, as costs of outsourcing has reached all-time high, in the developing countries including India.”

He said the two groups had already proved their commitments by initiating call centre project, which was first of its kind in the country.

“The groups plan to invest $20 million in Sindh and with initiating call centre project it shared $2 million,” added Butt.

TeleBrands is India’s largest telemarketing company that specialises in direct response TV (DRTV) and call centres and the particular Indian company is planning to invest Rs200 million in IT and telecom sector in Pakistan by marketing its products via state-of-the-art call centre facility.

India’s IT industry exports, based on strong English language skills and cheaper wages, crossed $10 billion and was growing at least 26 per cent a year up till last financial year.

 

[Neo]

ISLAMABAD, Aug 10 (Reuters) - Pakistan's trade deficit narrowed to $1.23 billion in July from $1.47 billion in June, but was almost double the $726.9 million deficit posted in July 2005, according to provisional data released by the Bureau of Statistics on Thursday.

The trade deficit for 2005/06 fiscal year, that ended on June 30, widened to a provisional $12.11 billion from $6.21 billion in 2004/05. Exports fell to $1.22 billion in July from $1.51 billion in June and were just below the July 2005 figure of $1.26 billion. Imports declined to a $2.46 billion in July from $2.98 billion in June and were up over 23 percent from the July 2005 figure of around $2 billion.

 

[Owais]

Around 6,000 ghost entities on sales tax roster detected

ISLAMABAD (August 11 2006): The Central Board of Revenue (CBR) has identified 6,000 firms/units registered with the Sales Tax Department, who have neither obtained the National Tax Numbers (NTNs) nor traceable at the declared business addresses.

Sources told Business Recorder on Thursday that the Board detected these entities during scrutiny of computer record to update database.

Around 6,000 entities have obtained the Sales Tax Registration Numbers (STRN), but operating without the NTNs. Even their record is not available in the 'NTN Master Index.'

When asked about these entities nature of businesses, sources said that it is not clear whether these units were actually carrying out businesses in the field or have obtained the STRNs for some other purposes.

The CBR has still to decide the fate of these ghost entities. One of the options is to de-register them. However, the latest data has been submitted to the CBR Sales Tax Wing, which is the competent authority to take action, officials said.

Sources also dispelled the impression of issuing fresh NTNs to these firms/units, as they have no contact with the regional collectorates. On the other hand, it has also been apprehended that some of these units might have obtained registration to claim fraudulent refunds.

The CBR is legally empowered to cancel the sales tax registration of people, who failed to file sales tax returns for the last six months.

 

[Owais]

Long-term financing: SBP directive

KARACHI (August 11 2006): The State Bank of Pakistan (SBP) has directed all banks/DFIs to revise their rates of finance on the loans outstanding under Long Term Financing for the Export Oriented Projects (LTF-EOP) Scheme effective from July 14, 2006 so as to pass on the benefit of reduction in spread to the borrowers of export oriented project.

In this connection, the SBP said that instructions regarding reduction in spread of banks/DFIs on financing provided by them under the LTF-EOP Scheme are also applicable on the loans sanctioned/disbursed prior to the issuance of SMED circular No 15 dated July 15, 2006.

 

[Owais]

PC declines to take PCP for privatisation

ISLAMABAD (August 11 2006): The Privatisation Commission on Thursday declined to take Printing Corporation of Pakistan (PCP) for sell-off, saying liquidation for this debt-ridden entity would be the best option.

Its authorities told the PC Board, which met here with Privatisation minister, Zahid Hamid, in the chair that PCP's assets were much less than its liabilities and it would be next to possible to attract any buyer for this entity.

Sources said PCP was almost a sick unit as its liabilities and assets sheet showed a difference of Rs 5.5 billion. It took loans from different banks and DFIs but did not honour its commitment and as on June 2006 it owed Rs 5.5 billion more than its total assets.

PCP also owed millions of rupees to different organisations as it could not fulfill its commitments for printing orders placed by different government ministries/divisions and corporations although it got substantial portion of the money in advance.

PCP's history has been very shaky. At least one of its former chief and many other officials are facing corruption charges and the officials of the Privatisation Commission were of the view during the meeting that the entity's bad reputation could be a major problem in its sell-off through bidding.

However, on the insistence of the Cabinet Division the Privatisation Commission agreed to refer the PCP's case to the Cabinet Committee on Privatisation (CCoP) but its officials categorically told the Board that they will take the same position before the CCoP and suggest to de-list PCP and take other route to get rid of it.

It may be noted that PCP is a subordinate organisation of Cabinet Division and for the same reason it advocated its reference to CCoP during the Board meeting.

The Board also approved an offer of Rs 156 million for machinery of Lasbella Textile Mills and referred it to the CCoP. The Privatisation Commission had offered Lasbella Textile Mills' machinery for sale.

The sources said the Board could not take-up Pakistan Steel Mills Corporation (PSMC) case for the reason that exactly at the time when the meeting was in progress the minister and other officials had to rush to Parliament House to brief Prime Minister Shaukat Aziz and some other members of the ruling party on the future of the sale.

After a detailed presentation to the Prime Minister on PSMC transaction Privatisation Minister spoke to the mediamen. He defended the government, saying the Supreme Court did not mention corruption in its detailed judgement and only pointed out procedural flaws which would be looked into for the future transactions.

 

[Owais]

Palm oil imports decline significantly

KARACHI (August 11 2006): Palm oil and olien imports have declined significantly, almost 50 percent, during the last 25 days due to skyrocketing international prices and non-viability of trade, importers said on Thursday.

They said that prices of palm and olien oil keep rising on the international front and this situation has badly hit the import process, which they say, was going smoothly during the last first week of last month.

Commercial importers said they are currently monitoring the international trade meticulously on daily basis, however, the number of placement of fresh orders has slashed to almost 50 percent.

"Actually, we had been cautious when the prices broke $475 per ton fence, however, we (importers) kept bringing in the commodity as the trade was viable three weeks prior," said an importer.

"We are very carefully placing import orders now because it has been anticipated that the international prices of palm oil or olien oil might see declining trend to some extent in the next couple of weeks," said an importer.

He said that the international prices have gone up considerably during the last 25 days and this price-hike has directly hit those who are still engaged in importing palm oil or olien oil.

"An aggregate $55 per ton has been increased during the last 25 days," said a leading importer, adding the international palm oil or olien oil prices started rising from $475 per ton to $527 per ton during the period under review.

He said the importers are reluctant to import palm oil in bulk quantity as they are anticipating that an expensive commodity would raise the domestic prices and that situation could affect the sale of the imported commodity.

"Another factor, which has provided a justification to the importers to import lesser quantity, is the availability of sufficient imported commodity in the country and regular production," a trader said, adding that some fund managers are also playing with those, who are sitting on the stocks.

Another Karachi-based importer said that some previously booked contracts are being realised with the arrival of commodity, adding that import contracts that had been booked during May and June (2005), have been arrived during July and still arriving here.

"Deals of around 0.2 million tonnes of palm oil and olien oil are being actualised these days and an ample supply of refined edible oil would be available in the local market during the month of Ramazan," he added.

Meanwhile, it is pertinent to mention here that a number of countries had started setting up plants for the production of bio-diesel with palm fruits, including Singapore, Malaysia, China and some European countries. This situation has badly destabilised the world's scenario where the demand and supply gap is consistently widening and pushing the international and domestic markets' prices towards unprecedented levels.

 

[Owais]

More banks eyeing Pakistan: Financial Times

ISLAMABAD (August 11 2006): After the Standard Chartered's agreement to buy a majority stake in Union Bank, there are prospects of other western banks entering the country's banking sector.

Analysts said there are talks of at least two other western banks looking to buy controlling stakes in Pakistani banks, according to a report published in the Financial Times on Thursday.

The report quoted Prime Minister Shaukat Aziz as saying that the Standard Chartered's buying major stake in Union Bank could be a precursor to other western banks entering the country.

According to the report, the prime minister said the agreement confirmed that the reforms initiated to turnaround the performance of banks were beginning to pay off.

"We understand there is interest from other global players (international banks), which we welcome. Pakistan is a country of 165 million with a growing economy," Shaukat said.

 

[Owais]

First IC3 pilot project to be built at Port Qasim

KARACHI (August 11 2006): Pakistan is going to start construction of its first pilot project of Integrated Cargo Container Control (IC3) programme that would facilitate reduction of scanning cost of its cargoes destined to the United States and help control illegal transportation of arms, radioactive materials and narcotics.

Sources told Business Recorder on Thursday that the groundbreaking of country's first IC3 programme would start on Saturday in the proximity of Port Qasim Authority (PQA).

The PQA has allocated 10 acres land for IC3 programme, out of which five acres would be occupied for installation of scanning equipment and rest of the land to be reserved for container stacking yard.

By implementing this programme at PQA, Pakistan would have an edge over India for having trade security measures in place. The IC3 programme is implemented in 42 countries around the world.

This pilot project at PQA for scanning of commercial cargo would be operational in six-month period thus preventing to use containers for transportation of arms, radioactive materials and narcotics to the US.

The implementation of the IC3 at PQA will reduce the cost of country's exports to US. At present containers of Pakistani commercial cargo bound for US ports are being scanned at Hong Kong, Colombo and Salala causing extra financial burden on local exporters.

The facility of scanning of US bound containers at PQA will also save time for completing export orders of US buyers.

Pakistan is expecting further increase in exports to the US in future and the trade security measures to be implemented will help the country to safeguard its trade interests.

The US Customs will not subject the screened cargo to re-examination on arrival at US ports. The arrangements for implementing the IC3 Programme were earlier negotiated and finalised by senior customs officers of Pakistan and the US.

The IC3 programme envisages joint screening of US-bound containerised cargo from Pakistan via live video link by customs authorities of Pakistan and the US.

According to agreement, the government of Pakistan would safeguard its export's interests to US markets by ensuring the security arrangements of cargo containers at Pakistani ports.

The IC3 Programme will serve the purpose of Container Security Initiative (CSI) and Mega Port Initiative (MPI) of the US government to ensure secure cargo supply chain for the US in Pakistan.

The US authorities, after the terrorist attacks of September 11, had proposed its trading partners to comply with the Container Security Initiative (CSI) and Mega Port Initiative (MPI) for its internal security needs.

The implementation of the measures proposed in these two initiatives by the US government would enable Pakistan to have containerised cargo direct access to US ports.

The federal cabinet at its meeting held in mid-February this year had approved the Implementation of Integrated Cargo Container Control (IC3) Programme at Port Qasim.

In the first week of March this year, Pakistan and US had signed a Declaration of Principles on enhancing international maritime trade security under a bilateral initiative called the IC3 Programme.