Pakistan Economy - News & Updates - Archive

[Neo]

Thursday, October 12, 2006

PIA acquiring ATR aircraft

KARACHI: Pakistan Interna-tional Airline (PIA) will receive three brand new ATR aircraft in next November, December and January, and the rest will be received in May 2007.

The first aircraft was delivered earlier in the year.

The airline has ordered seven brand new ATR’s. PIA has temporarily grounded one ATR due to component failure, the airline statement said here on Wednesday.

Components are to be acquired from outside, and once PIA replaces components the aircraft will be able to fly again.

The statement said PIA had planned to use the F-27s along with the sequential arrival of the ATRs to meet its domestic schedule requirements. The plan envisaged grounding of one F-27 for every new ATR that was delivered to PIA and thus replacing the entire Fokker 27 fleet with the newly-acquired ATRs.

The statement said the unfortunate grounding of the complete F-27 fleet resulted in PIA operating its Boeing 737 aircraft on routes where it was capable of landing, to subsidize the operation of domestic flight schedule.

Similarly, the C-130s of the Pakistan Air Force were being used to serve Northern Areas, until the replacement occurred, just as the ATR was flying down the Mehran coastal cities. These Mehran coast flights will resume shortly, as aircraft components have been replaced to make it operational.

PIA always has the highest consideration of passenger safety and comfort in mind and towards this end we never fail to ensure that all PIA flights are operationally completely safe to fly. We hope that the ATR is ready soon and safely airborne again, the statement said.

 

[Neo]

Thursday, October 12, 2006

Pak, China set to sign economic cooperation deal

ISLAMABAD: Pakistan and China are all set to sign first ever Five year Trade and Economic Cooperation Action Plan during the forthcoming visit of the Chinese President starting from Nov 23, a senior government official told Daily Times on Wednesday.

The Five Year Action Plan would cover the cooperation in the areas like trade, power generation, investment, energy, minerals, manufacturing, agriculture, IT and telecommunication, tourism, low cost housing, infrastructure, banking, insurance, transportation, engineering and construction.

Pak-China Five year Trade and Economic Cooperation Action Plan would be finalised and initialed in first meeting of the Economic Cooperation Group (ECG) scheduled during November 9-12, 2006. A Chinese Assistant Minister will be heading a high level delegation to participate in the Economic Cooperation Group meeting to be held at Islamabad.

The Five year Trade and Economic Cooperation Plan is the continuation of the Framework Agreement on Expanding and Deepening Bilateral Economic and Trade Cooperation between Peoples Republic of China and Government of Pakistan which was signed on February 20, 2006 during the President of Pakistan’s visit to China.

The Framework Agreement aims to create a favourable environment for Chinese enterprises in the nine major areas of the economy of Pakistan. These areas and their sub areas include agriculture, plant protection, breeding, fishery and processing, light industry textile, electromechanical projects, infrastructure and public engineering construction, exploring, exploiting and processing of mineral resources, cooperation in the energy sector, cooperation in the information technology and telecommunication sector, development of tourism, banking, insurance and transportation, low cost housing and other areas of interest.

Both sides agreed to establish Economic Cooperation Group (ECG) at the working level under framework of the Joint Committee on Economic, Trade Scientific and Technical Cooperation between China and Pakistan.

A 17 member delegation of Chinese Expert Group headed by Mr. Gou Husheng, vice President China International Engineering Consulting Corporation (CIECC) visited Pakistan during July 16th-26th and held discussion with concerned ministries and departments of the government of Pakistan.

Some delegation members also visited Karachi and held meetings with provincial government, city government, Karachi Port Trust and Port Qasim Authority. The purpose of this visit was to collect information, data and specific projects for preparation of Five Year Action Plan under the said agreement.

The official further informed that an advance working team is arriving Pakistan in the last week of October 2006 and will remain in Pakistan till the 2nd week of November 2006. The team will discuss various project proposals with the relevant ministries and divisions. According to the schedule, Chinese Assistant Minister will be arriving Pakistan from November 9th-12th to hold the first meeting of Economic Cooperation Group (ECG) to finalize and initial the Five Year Action Plan. This Five Year Action Plan will be formally signed during Chinese President’s visit to Pakistan starting from November 23, 2006.

Pak-China Free Trade Agreement and Memorandum of Understanding (MoU) on cooperation in Energy sector would also be the part of this action plan. Chinese petroleum industry had earlier indicated shifting of energy related industry and its access capacity to Gwadar Port Energy Zone (GPEZ) and had also estimated that this zone can attract Chinese investment of around $13 billion. Pakistan is also eyeing Chinese oil and Gas exploration and development companies to invest in Pakistan and transfer latest technology in this sector.

 

[Neo]

Thursday, October 12, 2006

Musharraf stresses Balochistan development

ISLAMABAD: President General Pervez Musharraf said on Wednesday that timely completion of development projects would bring Balochistan at par with other provinces.

Presiding over a meeting that was attended by the prime minister, Musharraf underscored the need for technical education in creating job opportunities. Prime Minister Shaukat Aziz said the government was taking steps to provide electricity, potable water and gas to people at the grassroots level.

The meeting was told that the federal government had created 33,000 permanent jobs for the people of Balochistan. The meeting decided to increase the provincial quota for Balochistan from 3.3 percent to 5 percent in accordance with the 1998 census. The Balochistan governor and chief minister briefed the meeting on the pace of development projects, and the arrangements being made to improve the law and order situation.

 

[Neo]

Cell phone subscriber base crosses 40m mark

KARACHI: Cell phone subscriber base crossed 40 million mark for the first time ever, as mobile phone companies added almost seven million fresh customers during the first quarter of 2006-07 on continued popularity of the service across the country.

Latest figures compiled by Pakistan Telecommunication Authority revealed that cellular phone connections stood at over 41.50 million by September 2006, which crossed 34 million by the end of last fiscal.

“By September 30, 2006 total number of cellular subscribers stood at 41.50 million (41,502,203),” said a PTA official. “It reflects a 16.8 per cent growth in total cellular subscriber base from July to September 2006.”

He said during first quarter of the fiscal almost seven million (6,995,646) new connections were sold on the back of comparatively cheaper tariff offers due to increased number of service providers.

“So there was over 25 per cent mobile density rate by September 2006,” said the PTA official. “Almost all the four major companies - Mobilink, Ufone, Al Warid and Telenor - grabbed better market share during the first three months of 2006-07, which also brought different tariff packages for the subscribers.”

The figures gathered by the telecom watchdog show Mobilink led the market with 20.31 million subscribers followed by Ufone, which was serving 8.86 million people across the country by the end of first quarter.

With the arrival of UAE-based Al Warid Telecom and Norwegian Telenor both competition and subscriber base grew at much faster pace, as the last year’s entrants attracted 5.93 million and 4.59 million subscribers respectively by the end of September 2006.

The PTA data says by September 2006 Paktel, which offers both AMPS (advanced mobile phone system) and GSM (global system for mobile communications) services enjoyed 1.50 million subscribers and the only AMPS service Instaphone had a share of 285,000 by the quarter end.

The cellular density witnessed phenomenal jump in the last two years as mobile phone grew by staggering 170 per cent during 2005-06, which outnumbered almost six-decade old fixed telephony service by more than 500 per cent in 15-year operations.

Analysts see growth in cellular subscribers in line with expectations, but say the current fiscal the mobile phone service providers may not witness such phenomenal jump in customers’ numbers, which have already reached to a higher level.

“The growth is likely to remain slow in percentage term during 2006-07,” said Anwaar Ahmed Khan, a telecom analyst at Capital One Equities. “The companies may enter into those areas where they have yet to initiate service, which would need network expansion and investment.”

He said a cutthroat competition was expected among the operators during 2006-07, after the mobile number portability (MNP) was implemented by all the six cellular operators across the country.

“The MNP would decide the real market leader,” said Khan. “After the MNP implementation the companies must have to improve their service quality to keep their subscribers intact.”

MNP is a system, which enables a mobile phone subscriber to carry the same number while changing the cellular mobile operator.

The project, which requires Rs600 million, was earlier decided to implement in January 2006 but later the deadline was extended to November 2006. The service, however, is not in place yet and no new deadline has been announced.

 

[Neo]

Govt mulling projects to provide over 20 e-services: Awais
Friday October 13, 2006

ISLAMABAD: Minister for Information Technology Awais Ahmad Khan Leghari Thursday said his ministry was working on a series of projects to provide wireless broadband services to over 100 major urban centres to lay the groundwork for provision of e-services to the public.
"We are planning to use resources from the Universal Service Fund to take the wireless broadband internet service to at least 100 towns with up to 0.5 million population as a way to increase awareness about using IT as a tool to improve socio-economic conditions," he said during a meeting with a five-member Intel Corporation delegation led by Intel Corporation Vice President John Davies who called on the president to brief him on Intel’s plans and new initiatives for participating in the growth of IT industry in Pakistan.

Awais said his ministry was planning to use the USF aggressively to increase teledensity and broadband penetration by setting up more tele-centers which would also become the hub for provision of all key public services besides being repositories of knowledge and information for the local people. He said the USF would become operational in about a month and the World Bank had also agreed to provide Pakistan a sum of $125 million to fund any project to increase universal access in the country.

He said it were not just the urban areas starving for e-services but the rural areas were also eagerly looking for the delivery of such services. He said the provision of about 20 public services electronically would involve massive investment and the government would like to outsource the provision and subsequent handling of these services to the private sector to add value to the local industry. He said his ministry would also invest heavily into the content development in local languages and efforts would be made to use Urdu as a medium of distribution of the public services.

The minister said the computer industry in Pakistan was going from strength to strength and though the imposition of GST had been a stumbling block, the ministry was doing all it could to ensure there was no discouragement to computer manufacturing and user proliferation. He conceded there was a need to introduce low-cost personal computers to the literate population, especially students and government employees, and his ministry would consider provide incentives for any such initiative. He said Pakistan being a country of 150 million people, including a growing middle class endowed with better literacy, could be an ideal place for investment for any international company.

Later while addressing a function on the occasion of the launch of ’World Ahead Programme’ in Pakistan by Intel Corporation, Awais Leghari said e-services and telemedicine were some of the key facilities which could be provided to people at tele-centres. He welcomed Intel’s initiative and hoped other companies would also help in the government efforts to accelerate access to technology and improve opportunities for education, commerce, healthcare and communication for all Pakistanis.

He hoped the Intel’s World Ahead Program would provide a foundation for technology usage and ownership besides extending broadband internet access and preparing students for success in today’s knowledge-based economy. He said Pakistan was emerging on the radar screen of IT global market as there was a huge amount of good stuff happening in the It sector in Pakistan. He said Pakistan was an IT-savy country and was increasingly being recognized as a strategic location for big companies to expand their operations. Earlier, John Davies said his company was launching its World Ahead Program in Pakistan, with the objective of accelerating access to uncompromised technology for all people in Pakistan.

Under the programme, Intel would establish six tele-centres at Attock, Multan, DG Khan, Sukkur and Gwadar to provide low-cost connectivity for voice and data, ICT training and basic telemedicine. The project would help provide an easy access to e-mail for job-hunting; gathering information about farming weather and the pricing of crops. "These tele-centers will be a key step in bridging the digital divide and making technology more easily accessible to citizens in Pakistan," said Mr Davies.

He said his company had a strong history of collaboration with the government of Pakistan to bring technology close to people’s lives. "The Intel World Ahead program does more than just provide affordable PCs," he said, calling it "a holistic programme to help build everything from the right systems tailored to local needs, and critical connectivity, to sustainable local capabilities through quality education that makes a meaningful difference in people’s lives".

 

[Neo]

20 central research laboratories set up in major universities
Wednesday October 11, 2006

FAISALABAD : The Higher Education Commission (HEC) has established more than 20 Central Research Laboratories in major universities across Pakistan to support the conduct of truly world-class research.

According to HEC report, which highlighted the two-year key achievements (July 2004 to June 2006), the HEC Digital Library now provides access to over 20,000 leading research journals, covering approximately 75 percent of the world's peer-reviewed scientific journals. The 'Access to Scientific Instrumentation' program has been launched to facilitate access to sophisticated scientific instrumentation to researchers across the country.


The Commission also granted charter to 13 new universities over the past two years, with the majority opened in areas where higher education opportunities were previously unavailable. The Commission has supported the establishment of new universities in order to spread higher education to all areas of Pakistan.


The report said that additional residential facilities, particularly catering to female students, have also been constructed at universities across the country to remove access barriers for students from remote areas.


During the past two years, the Commission has undertaken a systematic process of implementation of the five-year agenda for reform outlined in the HEC's Medium-Term Development Framework (MTDF), in which access, quality and relevance have been identified with key challenges faced by the sector.


Over 2000 scholarships have been awarded during the period under the indigenous Ph D programme, undertaking measures at each step of the process to ensure that international standards of quality are not compromised.


The implementation of Indigenous Ph D programme has led to a dramatic increase in the number of students engaged in Ph D programs over the previous years. This crucial performance indicator has risen by 56 percent, whilst ensuring international standards of quality are maintained at every stage.


Increased Ph D enrolment has been supported by increased funding for research and investments in facilities and equipment. With an increased number of Ph D faculty in universities in Pakistan, the ratio of faculty-to-students remains less than 2 students to each Ph D faculty member.


Foreign scholarship programs have been geared towards improving the research base in areas of key national relevance where the requisite facilities are not available within Pakistan, particularly in areas relating to engineering and applied and pure sciences.


Selected through an independent and rigorous screening process, Ph D scholars have proceeded to Germany, France, Austria, Netherlands, Korea and China. In addition, scholars have also been sent to premier research institutions in the US, UK, Australia and New Zealand. During the past two years, more than 700 scholarships have been awarded for students to study abroad. In addition, a programme to fund Post-Doctoral Fellowships has been successfully completed, placing more than 100 scholars for 9-12 month fellowships in premier academic and research institutions abroad.


A massive program was also launched during the period to increase the number of seats available in the universities and to provide increased opportunities to students to study in the universities in Pakistan. As a consequence, enrolment in universities has increased by more than 40 percent in the past two years. Enrolment in distance learning programs, which provide opportunities for education to the most remote corners of the country, has also shown substantial increase. With approximately 128,500 students inducted in distance learning courses at various levels, current enrolment in these programs has increased by 19 percent over previous years.

 

[Neo]

World's 5th largest gold, copper reserves found in Pakistan

The world's fifth largest reserves of gold and copper were discovered in Chaghi area in Pakistan's southwest Balochistan province, local newspaper The News reported on Thursday.

Director General of Provincial Department of Mineralogy Maqbool Ahmed said that two multinationals, Canadian and Chilean-firms, which were issued licenses 10 years earlier for exploration of gold in the Bekodik area, have completed the exploration work and have chalked out a project for the extraction of gold and copper.

In the preliminary stage, the two companies will invest a billion U.S. dollars in the project, Ahmed said.

According to Ahmed, 200,000 tons of copper and 400,000 ounce of gold will be produced annually through the said project.

The Balochistan government will get a share of 25 percent. With the start of the project, employment will be provided to 3,000 youth of the province.

According to Ahmed, there are gold reserve in Zhob and Lasbela districts of the province and nine multinationals have been issued licenses for their exploration.

However, the opposition parties in the province expressing their reservations charged that federal government wishes to loot the resources of the province.

Source: Xinhua

 

[Owais]

OGDC gets go-ahead to restart work in Balochistan


ISLAMABAD (October 13 2006): After a break of two years, President General Pervez Musharraf has given Oil and Gas Development Company (OGDC) a go-ahead signal to restart drilling activities at abandoned oil and gas exploration fields in Balochistan, it was learnt here on Thursday.

The Frontier Constabulary (FC) has been ordered to provide fool-proof security to OGDC crew to avoid any untoward incident during the exploration work. Sources said the law and order situation in Balochistan was discussed at a high-level meeting, chaired by President Musharraf, decided to follow an aggressive policy for oil and gas exploration work and take snipers to task if they tried to block the move.

Balochistan Governor Awais Ghani, Chief Minister Jam Yousaf, the chief secretary, and other high-ranking officials of the province attended the meeting. Sources said the President told the meeting in clear terms that the government would carry out oil and gas exploration and production work in Balochistan, and not allow anyone to disturb its plan.

Talking to Business Recorder regarding the restart of exploration activities in Balochistan, an OGDC official said: "We have received a go-ahead signal and this will be translated into action shortly."

The most of Balochistan area has promising gas and oil reserves, but these resources remained untapped. Sardars' duplicity in words and actions adversely hit the OGDC and other oil and gas exploration and production companies work in Balochistan.

The OGDC, a major share holder, in Balochistan had abandoned exploration work at Kuhlo and Kalachas when its crew were attacked at these gas fields by gunmen belonging to Mari and Bugti tribes. It suffered a loss of lives of its some of the crew members in these missile attacks. Kuhlo and Kalachas fall in the most promising belt for oil and gas production and initial reports are indicative of huge gas reserves in these fields.

The OGDC has a number of gas fields in Balochistan, Uch, Pirkoh, Kuhlo, Kalachas and Sanora and Zin are of great importance. Surveys show that Kuhlo and Kalachas have 400 percent more oil and gas reserves than Sui fields, which had been a single source of gas supply to the whole country for decades.

Sui and Uch fall in Bughti's area, while Kuhlo and Kalachas in Marri's and Sanora in Mangal's area. These fields have been an easy target for snipers' missile attacks during the last two years. However, with the killing of Akbar Khan Bughti in an encounter with the forces, the situation in Balochistan is different and the authorities want to restart oil and gas exploration and production work in the province on fast track basis.

 

[Owais]

Trade gap widens to $3.158 billion in first quarter


ISLAMABAD (October 13 2006): Pakistan racked up a $3.158 billion foreign trade deficit during the first quarter (July-September) of the current fiscal year 2006-07, which is about 31.69 percent higher than the last fiscal deficit of $2.398 billion, the Federal Bureau of Statistics (FBS) announced on Thursday.

During July-September 2006-07, nation recorded total exports of $4.269 billion and imports of $7.428 billion resulted in a goods and services deficit of $3.158 billion and the gap is steadily widening.

It indicates that Pakistan spent more on imported petroleum products, machinery, sugar, raw material and other goods and services. Everybody paid more for oil. Meanwhile, Pakistan businesses sold far less exportable products overseas.

The data reveal that Pakistan economy pulled in 13.38 percent more imports during three months of the current fiscal year than imports worth $6.551 billion recorded during the same period of the last fiscal while, its exports depicted an increase of only 2.88 percent against $4.153 billion during corresponding period last fiscal year.

The high growth in imports and slow pace of exports is responsible for burgeoning gap-a matter of great concern. The most worrisome feature of the FBS data was that exports during September 2006 declined by 4.53 percent to $1.416 billion while imports amounted by 5.22 percent to $2.321 billion as compared to the corresponding month last fiscal year.

It is worth mentioning that the government has targeted imports of $28 billion and exports, $18.6 billion, with a trade deficit of $9.4 billion. Now, in July-September (2006-07), the trade deficit stands at a bumpy $3.158 billion. At this rate, the deficit for the whole of the fiscal year 2006-07 would work out to be near $13 billion.

A glance at the trade data shows consistent rise in the country's imports is disturbing for trade officials as export-import gap would be much wider than the estimates for the financial year 2005-06.

The burgeoning deficit has put pressure on the rupee, which could also create inflationary pressure as Pakistan pays more for imported goods. It suggests the rupee may still need to fall to help narrowing the gap. But there is a risk pushing inflation higher if it does.

More worrisome still, several economists said, if the current pace persists there is the possibility that the swelling trade deficit will eventually cause a steep drop in the rupee against dollar and other currencies.

Local importers would demand more dollars in coming months to finance their surplus imports. It would also increase interest rates rapidly and lower living standards in the country.

 

[Owais]

Defence clearance must for developing islands

ISLAMABAD (October 13 2006): The federal government has linked construction of $43.135 billion Diamond Bar Island City near Karachi with the clearance from the defence ministry, especially Pak navy, which is reportedly opposing the project, sources in the finance ministry told Business Recorder here on Thursday.

A United Arab Emirates-based firm EMAAR has planned the project, which is expected to take about 13 years. The Port Qasim Authority (PQA) would earn $3.72 billion.

The UAE company will develop projects on 12,000 acres of land on Bundal and Buddo islands, comprising residential, commercial and leisure real estate projects, industrial parks, free zone and port terminals. "The economic co-ordination committee (ECC) of the cabinet deliberated the project in detail and sought the viewpoint of Pak navy regarding proposed utilisation of two islands," sources added.

The firm would be entitled to have 85 percent profit on all cash capital requirement while the remaining 15 percent would go to the PQA for providing two Islands on 99 years lease. Sources said the ECC also rejected the agreement prepared by the ports and shipping ministry with the firm, saying "the agreement is not comprehensive and requires many clarifications".

According to sources, some of the ECC members were worried that the project would have negative impact on operational requirements, suggesting it should not be cleared in haste. "Queries were made about the ownership of two islands and operational requirements of Pak navy as well as various aspects of the project relating to demarcation of islands, non-performing liabilities in the event of non-execution of the project, dispute resolution mechanism, environmental and hydrological aspects," sources further said.

The PQA's professional capacity to carry out analysis of legal, financial and environmental issues also came under discussion, sources continued. The ECC, after holding a detail discussion on merits and demerits of the project, approved the proposal, in principle, with following observations:

i) To sort out the issue pertaining to Pakistan navy and come up with a solution.

ii) To carry out environmental and hydrological studies within the fixed deadlines.

iii) Defence Housing Authority (DHA) be made part of all discussions.

iv) The PQA will engage highly professional teams of legal and financial advisors in consultation with law and finance ministries for examination and completion of technical matters/documentation on fast-track basis within a period of three months. The finance ministry would provide budgetary support for engaging the two teams.

v) The law ministry would vet documents to be signed by the PQA and EMAAR.

The ports and shipping ministry, in its briefing, also informed the ECC in response to PQA's advertisement, four firms submitted their expressions of interest (EoIs) out of which only M/s EMAAR was pre-qualified, sources concluded.

 

[Owais]

Future of seafood exports to EU at stake


KARACHI (October 13 2006): The future of seafood exports to the European Union (EU) is in doldrums due to unhygienic conditions at the Karachi Fish Harbour, sources said. Talking to Business Recorder on Thursday, sources said the European Union's Marine Fisheries Department (MFD) had suspended the operational work of K-1 (EU corridor) auction hall due to unhygienic conditions.

The hall was reserved for the seafood exports to the European countries, they added. Sources said MFD officials had sent many notices to the Karachi Fisheries Harbour Authority (KFHA) for inspection of the K-1 hall but KFHA did not take the MFD's notices seriously to implement the EU recommendations on the harbour, including K-1 hall.

They said the MFD was a competent authority of the EU here to inspect the whole harbour and implement the EU recommendations. They said the MFD gave a month's time to the KFHA for strictly implementing the EU rules but the authority did not follow its instructions. MFD officials found a lot of irregularities due to which it had suspended operational work of seafood exports from the K-1 hall.

They said there was no standard operating system in the K-1 hall, entire jetty, channel and at boats. The MFD's inspection team found a lot of irregularities like wash basins were not cleaned; shrimps and fish were being washed at the floor. The people were smoking and eating pan in the EU corridor. Besides, they said, entry in the K-1 hall is restricted to selected people and this rule was also being violated. They further said the fish should be brought only from the MFD's approved fishing boats in the K-1 hall.

Sources said the EU had tried many times to impose a complete ban on the Pakistani seafood due to unhygienic conditions but the MFD had given some guarantees due to which the union did not take any action. The MFD had given the EU some suggestions, including construction of a new auction hall like K-1. They said the K-1 hall was constructed on the recommendations of the EU but today the Sindh fisheries department, Karachi Fisheries Harbour Authority (KFHA) and the Fishermen's Co-operative Society (FCS) were not implementing the EU recommendations.

 

[Owais]

Barclays hiring experienced Pakistani bankers


KARACHI (October 13 2006): Britain's leading Barclays Bank has started hiring experienced bankers from Pakistan. All those who have been hired so far belonged to the Citibank Karachi. They include Ahmed Khizar Hayat, Salman Arshad, Farhan Waheed, Zeshan Salim and Saqib Cheema.

Although rumours are rife that Barclays Bank has an eye on some Pakistani banks, its activities in Karachi are being kept a closely guarded secret. The Citibankers who have been hired by the Barclays Bank have been initially posted in their Dubai office. Sources believed that ultimately these bankers would be brought back to Pakistan to look after Barclays' operations here, as and when the bank takes over some Pakistani banks.

The sources further informed that some of the new inductees have already been left for Dubai to assume their offices while some will be going within next few days. It may be mentioned here that a number of mergers and acquisitions of Pakistani banks are in the line of happening, as the State Bank of Pakistan (SBP) made it mandatory for a bank to have paid-up capital of Rs six billion to continue its operations.

After this condition many banks are in a fix because of their paid-up capital which is quite low than the requirement of the SBP. An analyst said that the profitable banks having lesser paid-up capital are being acquired by the foreign banks while the non-profitable local banks are lobbying for mergers, as foreign banks are not interested in them.

He further said that if Barclays acquires any of the banks in Pakistan, it is going to be another largest acquisition after the equitation of the Union Bank by the Standard Chartered Bank.

 

[Owais]

$57.6 million garments orders diverted to competitors
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KARACHI (October 13 2006): Over $57.6 million worth export orders for readymade and knitwear garments have been diverted from the country to the regional competitors during the last two months of the current fiscal year, trade sources told Business Recorder on Thursday.

Sources said that the country has been witnessing decline in its textile exports since the beginning of new financial year and the regional competitors like China, Bangladesh, India and Sri Lanka are aggressively marketing their products and price competitiveness in the world's markets. The statistics reveal that the country has exported around $229.15 million readymade garments during July and August, this year, as against its export of nearly $237.77 million during the same period last year, depicting a straight decline of $8.62 million or 9.5 percent.

Similarly, knitwear exports from the country was recorded at around $318.5 million during the said period (July-Aug06) as against $347.34 million during the same period last fiscal year, portraying a drastic downfall of $28.84 million.

Likewise, the number of exported readymade garments' units have also shed by 0.648 million dozen during the period under review as it has been recorded at 6.176 million dozen as compared to 6.824 million dozen units exported during the fiscal year 2005-06.

Besides this, the exported units of knitwear garments during July-Aug06 fell by 1.692 million dozen as the country had exported some 12.91 million dozen as against 14.602 million dozen units during the financial year (2005-06).

"Actually, the manufacturers of Bangladesh are getting Pakistani fabric at 3 percent lesser price than the local manufacturers due to 3 percent Research and Development (R&D) support enjoying by the local industry," said a leading readymade garment exporter.

He said that higher cost of production, increased wages of unskilled workers, rising international competition and pathetic infrastructure has let the local manufacturers and exporters price uncompetitive on the international front. "Bangladesh enjoys zero percent duty on its fabric import to European Union (EU) countries, while Pakistani exporters have to pay 10 percent import duty," said another exporter.

Commenting on the recent downward trend in country's textile exports, one exporter said: "This downward trend could continue as we have already missed a number of big export orders due to frequent and prolonged power failures across the port city."

He said there are one million garment workers in Bangladesh whose average wage is Rs 1400 (Pak rupees) while Pakistani workers get minimum wage of Rs 4,000.

On the contrary, some 800 members of Pakistan Readymade Garments Manufacturers and Exporters Association (Prgmea) across the country are engaged in exporting locally manufactured garments mainly to European Union (EU) countries followed by United States, Canada, United Arab Emirates (UAE), and Japan.

According to statistics, China enjoyed biggest (19 percent) share of United States market in 2004-05. India was 8th in ranking with 3.4 percent, followed by Bangladesh and Pakistan with ranking 10th and 21st and market share of 2.8 percent and 1.7 percent, respectively.

Similarly, regarding EU countries, major chunk of export was claimed by China (13.2 percent), followed by Bangladesh (3.8 percent market share) and ranked 5th, India (2.9 percent) 6th in ranking, and Pakistan stood 11th with 1.1 percent market chunk during 2004-05.

 

[Owais]

Oman Oil buys 49 percent stake in Orient Power
ISLAMABAD (October 13 2006): The Oman oil Company acquired a 49 percent stake in country's Orient Power Company. The 450MW power plant will be constructed in two phases at Balloki, just outside the city of Lahore.

Mulham Al Jarf deputy chief executive officer of Oman Oil Company and Nadeem Babar Chief Executive Officer of Orient Power Company signed the agreement in here on Thursday in the city.

This project represents a groundbreaking investment for Oman Oil Company in Pakistan especially when it meets our international investment guidelines, said Molham Al Jarf, deputy chief executive officer of Oman Oil.

'Phase I of the project is expected to cost around $181 million. The plant is designed as a combined cycle gas-fired project. The plant is scheduled to be completed in two years and is expected to be operational in late 2008,' said Nadeem Babar CEO of Orient Power Company.

Sui Northern Gas Pipeline will supply natural gas under a long-term supply contract and all the power produced will be sold to National Transmission and Dispatch Company under a long-term power sales agreement.

The project will be connected directly to the Lahore Grid, and on completion of both phases, it is expected to provide nearly 20 percent of the power requirements of Lahore, 'Times of Oman' reported.

 

[Owais]

HBL disallowed to operate in India
ISLAMABAD (October 13 2006): Reserve Bank of India (RBI) has denied permission to Habib Bank Ltd of Pakistan to operate in India. After refusal to HBL, National Bank of Pakistan-is only Pakistani bank likely to be permitted to operate in India initially.

Habib Bank along with the state-run National Bank of Pakistan had applied to RBI, India's banking regulator, for starting operations in India. On the other hand SBI, PNB and Bank of India had sought approval for operating their branches in Pakistan.

After rejection of HBL plea, the National Bank of Pakistan is likely to be allowed to enter India, and as such either SBI or PNB will be permitted entry into Pakistan on a reciprocal basis.