Pakistan Economy - News & Updates - Archive

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KARACHI (April 27 2006): The KPT Board of Trustees, in a meeting on Wednesday, approved 15 percent reduction in KPT Port charges effective from July 1, 2006. The meeting, chaired by KPT Chairman Vice Admiral Ahmad Hayat, was attended by seven Trustees Vice Admiral S. Tauquir H. Naqvi, Farooq Rehmatullah, Iqbal Umer, Dewan, M. Ayub Khalid, Dr Arshad A. Vohra, Sohail Mansoor Khawaja, and Dr Fahimuddin Ansari.

The KPT earlier reduced 15 percent of its charges in FY04, which was first reduction in its history. The cumulative 30 pecent reduction in KPT's Wet Charges should benefit traders at large and make port more cost-effective.

This incentive should also result in more trade activities at the Karachi Port, which is premier port of Pakistan and handles almost 70 percent trade activities.

Wet charges as they are called pertain to ships calling at the Karachi Port and consist of charges like port dues, pilotage, berthing and use of KPT tugs. These dues are charged in US dollars and, therefore, constitute a major part of KPT's revenues.

Traditionally, wet charges have always gone up. It was for the first time in 2003, the KPT reduced its wet charges by 15 percent. The present 15 percent reduction is second in three years. After this revision charges paid by 20,000 Gross Registered Tonnage ship would reduce by 11.40 percent thus providing leverage to consignee and shippers for negotiating their freights. This loss of revenue would, however, be compensated by increasing number of ships and cargo volume at the Karachi Port. In the current financial year, 239 more ships have called at Karachi Port so far and dry cargo grown by 35 percent along with unprecedented container growth of 25 percent.

 

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KARACHI (April 27 2006): Exports during July-March 2005 stood at $12.073 billion as compared to $10.183 billion during the corresponding period of the last year, showing a rise of 18.56 percent.

According to the provisional figures compiled and released by the Federal Bureau of Statistics (FBS) here on Wednesday, exports in March 2006 increased by 19.33 percent to $1.521 billion as compared to $1.273 billion in February 2006 and by 12.94 percent as compared to $1.347 billion in March 2005.

Exports during March 2006 amounted to Rs 91.279 billion as against Rs 76.337 billion in February 2006 and Rs 79.938 billion during March 2005, showing an increase of 19.97 percent over February 2006 and of 14.19 percent over March 2005.

The exports during July-March amounted to Rs 721.799 billion as against Rs 603.548 billion during the corresponding period of the last year, showing an increase of 19.59 percent.

Main commodities of exports during March 2006 were cotton cloth (Rs 10,987 million), Bedwear (Rs 9,425 million), cotton yarn (Rs 8,465 million), Knitwear (Rs 8,324 million), readymade garments (Rs 6,962 million), petroleum products (Rs 4,836 million), rice basmati (Rs 4,092 million), towels (Rs 3,212 million), rice others (Rs 2,938 million), and leather garments (Rs 2,320 million).

Imports during July-March 2006 amounted to $20.693 billion against $14.446 billion during the corresponding period of the last year, showing an increase of 43.24 percent.

Imports into Pakistan during March 2006 amounted to Rs 161.134 billion as against Rs 132.376 billion in February 2006 and Rs 126.729 billion during March 2005, showing an increase of 21.72 percent over February 2006 and of 27.15 percent over March 2005.In March 2006, imports increased by 21.48 percent to $2.685 billion as compared to $2.211 billion in February 2006 and by 25.76 percent as compared to $2.136 billion in March 2005.

Imports during July-March 2005-06 amounted to Rs 1.237 trillion as against Rs 856.827 billion during the corresponding period of the last year, showing an increase of 44.40 percent.

Main commodities of imports during March 2006 were petroleum crude (Rs 19,195 million), petroleum products (Rs 17,031 million), road motor vehicles (Rs 9,762 million), iron and steel (Rs 8,241 million), plastic materials (Rs 4,711 million), textile machinery (Rs 4,143 million), palm oil (Rs 3,597 million), power generating machinery (Rs 3,034 million), sugar (Rs 3,027 million) and electrical machinery and apparatus (Rs 2,365 million).

The balance of trade during July-March was (-) 515.444 million in terms of rupees and (-) 8.620 billion in terms of dollars, while in March 2006 it was (-) 69.855 billion in terms of rupees and (-) 1.164 billion in terms of dollars.

 

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ISLAMABAD (April 27 2006): The Pakistan Telecommunication Company (PTCL) on Wednesday announced its un-audited nine months' accounts for the period ended March 31, 2006. The Company earned Rs 15.3 billion net profit during this period.

The results were presented to the Board of Directors in a meeting held on Wednesday, at PTCL Headquarters. It was the first Board meeting after Etisalat's taking over of management control of PTCL.

PTCL's domestic revenue for the reporting period continued to show growth, mainly due to expansion in domestic leased lines, interconnect and value-added services. The international incoming revenue, however, decreased due to aggressive competition from newly licensed Long Distance and International (LDI) operators, carving out a share of the market. Furthermore, during the nine months period, the Pakistan Telecommunication Authority (PTA) had twice reduced the settlement rates, by a total of 21 percent. International incoming revenue has been further reduced with the imposition of Universal Service Fund (USF)/Access Promotion Contribution (APC) which has affected the overall revenue receipts of the company.

The operating profit for the period is lower than last year, mainly due to reduced revenue and increase in operating cost. Profit before tax, and profit after tax, amounting to Rs 23.7 billion and Rs 15.3 billion, respectively, were 26.6 percent and 28.3 percent lower.

During the nine months, PTCL substantially expanded its capacity by adding 1,182,000 lines including 811,000 lines on Wireless Local Loop (WLL). PTCL is now the largest WLL CDMA operator in Pakistan with the potential of greatly increasing its market share.

The Board expressed satisfaction over the successful privatisation of PTCL and the transfer of the management control of company to Etisalat International Pakistan (EIP) L.L.C. It may be mentioned here that the new Board of Directors consists of 9 directors, five of them representing EIP, and four, including the Chairman, representing the Government of Pakistan. The new management of the company has requested Junaid Khan to continue as CEO of PTCL.-PR

 

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ISLAMABAD (April 27 2006): US-Pakistan Business Council on Wednesday said Islamabad and Washington should show flexibility to materialise Bilateral Investment Treaty (BIT) for encouraging private and public sectors of both the countries to take benefit of each other's potential.

The Council's chairman Jay Collins CEO of Citigroup told a luncheon meeting organised by his Pakistani counterpart and former FPCCI president Iftikhar Ali Malik that the America was major trade partner of Pakistan and also the single largest investor. It was a well-attended function. The representatives of all trade and industries bodies were present on the occasion.

He said that US-Pakistan Business Council was pushing Bush administration for giving more access to Pakistani exporters to enable them increase export to the US market. He noted that Pakistan's progress in trade and industrialisation was a highly encouraging and it will pay it good dividend in coming years.

Jay said that American companies huge investment in Pakistan negates the impression that it was not a safe place for foreign direct investment. He was of the view that the situation on ground in Pakistan was totally different than the image that was being portrayed by the international media.

A 12-business executives US-Pakistan Business Council visited Islamabad from April 24-26. The council was formed in 2002 by the then FPCCI president Iftikhar Ali Malik. Prime Minister Shaukat Aziz had also travelled to US to participate the first meeting of the council held in USA.

The delegation met with President Pervez Musharraf, Prime Minister Shaukat Aziz, Minister of State for Foreign Affairs Makhdum Khusro Bakhtyar, Secretary of Commerce Syed Asif Shah, Secretary of Information Technology Farrakh Qayyum, Secretary of the Board of Investment Muhammad Jehangir Bashir, and Director General of the Intellectual Property Organisation Yasin Tahir. The delegates also met with officials of the US embassy in Islamabad. The delegation also met with the members of the Federation of Pakistani Chambers of Commerce and Industry.

The delegation was of the view that BIT was a necessary building block in order to move forward with discussions on US-Pakistan free trade agreement (FTA).

The council also appreciated the idea of setting up free trade and industrial zone on Pak-Afghan border. It was of the view the industrial activity in these areas will create jobs for depressed people and will help fight terrorism.

The delegation expressed optimism that US companies already operating in Pakistan will continue to grow their investments in the country based on their positive experience and profitability in the local market. However, the perception of Pakistan in the US lacks reality and is often dominated by issues surrounding security and terrorism. As a partner of the US in the war on terrorism, Pakistan continues to place a high priority on security.

 

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KARACHI (April 27 2006): Tariq Kirmani, Chairman & CEO PIA in his address to the shareholders at 49th annual general meeting expressed his endeavour to increase the profitability of the corporation and improve the services of the airline.

He expressed his confidence in the management and the employees of the airline and assured that with their team effort, the airline will be able to meet the challenges faced by the aviation industry.

While speaking to the shareholders, he said the airline was able to achieve revenue of Rs 64.07 billion indicating an increase of Rs 6.2 billion in 2005 over 2004, which translates into a growth of 11 percent. Moreover, PIA experienced improvements in all key performance indicators including yield, market share, and number of passengers, aircraft utilisation, service standards and market value of share. The financial results for the year ended December 31, 2005 still reflect a change of colour although it conceals more than it reveals.

The otherwise profitable bottom-line was dented by an impact of Rs 7.8 billion on account of increase in the price of fuel alone and had the fuel prices remained the same at last years level, there would have been a pre-tax profit of Rs 3.328 billion in FY-2005, as against a loss before tax of 4.513 billion, as per financial results for the year 2005.

Fuel prices continued to rock the entire airline industry, as it impacted the budget and projections of most airlines and as per statistics, Iata carriers collectively recorded a loss of over US $7.5 billion. The fuel cost constitutes 43 percent of PIA's total cost of service, however the present management is undertaking a lot of corrective measures in marketing, operation and human resource areas to face the challenge.

In order to promote tourism, the airline has embarked on a strategy to introduce a newly designed product line, PIA holidays. PIA has entered into a code sharing agreement with Turkish airlines for flights on Istanbul-Karachi-Istanbul sector and Islamabad-Istanbul-Islamabad sector. PIA's Umrah 2005 operation was a roaring success. It operated 222 extra flights besides normal scheduled flights to Jeddah carrying 151,000 pilgrims this year. PIA transported 124,000 Haj pilgrims to Saudi Arabia through 349 flights to the Holy Land from the four provincial capitals and Islamabad, he added.

He said the airline inducted three B-777-200 ER in the year 2004 and in the beginning of the current year, two B 777-200LR, world's longest-range aircraft have joined the PIA fleet. The airline has also signed an agreement for acquisition of ATR aircraft, which will replace PIA's ageing F-27 aircraft fleet operated on socio-economic routes. The present management strongly believes in transparency and a MoU was signed between PIA and Transparency International last year for the implementation of transparency in the airline's procurement system.-PR

 

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Thursday, April 27, 2006

ISLAMABAD: The Central Board of Revenue (CBR) has directed the sales tax collectors to conduct a sectoral study in the areas of their respective collectorates to identify the sectors, which have the potential to pay more taxes.

The services sector would be brought in the sales tax net and it will be the major sector for revenue generation in the next fiscal year. Identification of services, personal services and institutional services to be brought under tax net that would be finalized in consultation with the ministry of finance, an official said after the conference.

CBR Chairman Abdullah Yusuf presided over the Quarterly Conference of Collectors of Sales Tax & Federal Excise here on Wednesday.

Member (Sales Tax & Federal Excise), CBR, Shahid Ahmed informed the conference that as against Rs 165.379 billion sales tax collected in the first nine of the last financial year, the collection of sales tax in the same period this year stood at Rs 202.452 billion, showing an increase of 22.4 %. Similarly, the collection of excise duty has also shown an increase of 3.3% when compared with the last financial year.

The growth recorded in major revenue spinners in sales tax were POL products (10%) telecommunication (36%), sugar (6%), etc. and in federal excise were cigarettes (12%), cement (13%) POL products (–11.7%), beverages (28.4%), etc.

Mr Yusuf said that our major thrust should be on the expansion of the tax base in order to generate more revenue. This can only happen through concerted efforts by improving the tax collection system and bringing all the potential taxpayers in the tax net.

He said the revenue so generated would be utilized by the government for the development of the country and improving the lot of the common man.

Expressing satisfaction with the achievement of the targets of sales tax and federal excise collections set for the first three quarters of the current financial year, the CBR chairman hoped that this trend will continue in all the federal taxes in the last quarter as well. He said overall revenue collection in the first nine months stood at Rs 490 billion and hoped that the annual collection will be around Rs 708 billion against the target of Rs 690 billion.

Stressing the improvement and upgradation of the sales tax system of processing and refunds, Mr Yusuf said that we have to deal with all relevant issues in a professional manner.

He called upon the officials concerned to immediately plug all the weaknesses of STARR and STREAM systems to address the concerns of the taxpayers. He asked the officials to ensure that the new automated system does not allow manipulated tactics to stay that were used in the past. “ The new system must ensure equity, transparency and efficiency”, he added.

While reviewing the goals/targets set for sales tax registration, he advised that all problems in this regard be dealt on a priority basis to achieve the desired result. On payment of refunds issue, Mr Yusuf directed the collectors to keep a strict vigilance over the claimants of refunds on fake and bogus invoices.

The conference considered, in detail, a number of proposals for formulation of the next federal budget. The proposals will be finalized in consultation with all the stakeholders.

Later, Member (Tax Policy & Reforms) CBR, Tanvir Ahmed briefed the participants on the progress made so far on the opening of 12 Regional Tax Offices and one LTU in the financial year 2006-07. He said four RTOs at Abbottabad, Peshawar, Rawalpindi and Hyderabad would become fully operational by December this year. All necessary administrative formalities are being completed in this regard, he added.

 

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Thursday, April 27, 2006javascript:; http://www.dailytimes.com.pk/print.asp?page=2006\04\27\story_27-4-2006_pg5_14



ISLAMABAD: Prime Minister Shaukat Aziz has said that to meet the challenge of competitiveness posed by technological advancements and rapid improvements in production technologies the government is reorienting the education system to enhance skills development, productivity and employment.

He said to bridge the skills gap the government has established the National Technical and Vocational Training Authority, has consistently increased expenditure on education, including technical education, from Rs 56 billion in 2000-01 to Rs 120 billion in 2005-06 and it is implementing plans to increase vocational and technical training facilities from the existing 150,000 to one million by 2010.

Talking to Jose Emanuel Salazar, Executive Director, Employment Sector, International Labour Organization (ILO), Geneva, at the Prime Minister’s House on Wednesday, the prime minister said that the ILO needs to work to change the mindset of people around the world about the importance of competitiveness and the vital role played by innovations and skills upgradation in industrial development.

“The ILO can work as a catalyst to change the mindsets for better productivity and growth”, he observed.

He said that globalization is fast becoming a way of life. Integration into the global economy poses both a competitive challenge and a tremendous opportunity. Countries that prepared themselves for globalization are benefiting from the opportunities it has unleashed.

Realizing this the governments’ reforms agenda focused on competitiveness, openness and improving governance. The political stability achieved by the country is another positive factor, the prime minister added. He said that realizing the vital role played by revolutionary technological advancement in industrial development, the government is focusing on the engineering and technical education and six new engineering universities are being set up.

“The government is pursuing upgradation of industry, absorption of the revolution in technology and seeking expansion of our value-added sector”, he said.

The prime minister said that in addition to developing physical infrastructure the government is also working to bring change in the outlook, thought process and on increasing professionalism among entrepreneurs and workers, which is important for rapid industrial development. “Innovative and highly skilled workforce provides the economic and competitive edge. Therefore, it is imperative for workers of today and tomorrow to continuously polish their skills and adopt a professional approach to work,” he said.

The prime minister said that as a result of the several measures taken by the government, the relationship between labour and management has matured. There is better understanding and harmony and cooperation in the industrial sector and there have been no significant disruptions or dispute in any major industries. Most disputes between workers’ unions and management are mutually resolved in a spirit of give and take without taking recourse to courts of law that exist to protect the rights of all parties.

He said the government is fully committed to safeguarding the legitimate rights of the workers as enunciated in the labour laws or stipulated in the international conventions. Our country programme for decent work aims at achieving four strategic objectives which are: fundamental principles and rights at work, employment and income opportunities, social protection, social security and social dialogue and tripartism.

The meeting was attended, among others, by Federal Minister for Labour, Manpower and Overseas Pakistani Ghulam Sarwar Khan and senior officials. staff report

 

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Thursday, April 27, 2006

ISLAMABAD: Nokia will set up a centre of expertise in Pakistan to develop a pool of professional human resource for Middle Eastern and African regions and Afghanistan.

This was announced at a press conference by Dr Walid Moneimne, Nokia’s central vice president for Central Europe, Middle East and Africa here on Wednesday. He was accompanied by Syed Veqar ul Islam, the country director Nokia Networks Pakistan.

The centre of expertise will hire and train local talent. “The initiative is in line with the company’s ongoing commitment to play an important role in the development of telecom professionals in Pakistan,” said the company vice- president.

 

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By Aamir Shafaat Khan

KARACHI, April 26: Pakistan’s poultry industry is estimated to have suffered Rs9 to 10 billion loss in the last two months on account of declining sales due to the outbreak of bird flu in some farms in Northern Areas in February followed by detection of the virus in poultry farms in Islamabad last week.

The entire industry has been in the grip of crisis for the last two months and the sales of live bird, though much below average, have been fluctuating owing to change in consumers’ behaviour vacillating between their confidence in white meat and the bird flu scare.

In the middle of last month, poultry traders were hopeful as the consumers started showing signs of confidence again. The sector at that point decided to raise the price by Rs12 per kg owing to rising demand but the detection of virus in poultry farms around the federal capital and reports about shifting of three persons infected by the virus to the hospital have reverted the situation.

Central Chairman Pakistan Poultry Association (PPA), Raza Mehmood Khursan told Dawn from Lahore that the losses to the industry had been rising with every passing day.

The report about the outbreak of bird flu in Islamabad has virtually plunged the white meat sales by 50 per cent. Ahead of Islamabad incidence, poultry sales had either been recovering or showing mixed trends.

He said that the people in the industry had virtually stopped keeping day old chicks in their poultry farms. Many small and medium sized farmers have either switched over to other businesses after selling their farms or have gone into real estate business.

He said the central executive committee of the PPA met on Wednesday in Lahore to ascertain the situation arising out from the bird flu virus besides, chalking out a strategy to prevent the outbreak in other parts of the country.

Khursan said that the government had been too lethargic in releasing the vaccines to the farmers. The government has pledged to provide vaccines by May 5, to the farmers so that birds available in the farms in the vicinity of five km around Islamabad could be vaccinated in order to prevent the outbreak of bird flu in other farms.

The industry is facing problems due to the looming panic and fear among consumers over the use of white meat, although the WHO report clearly indicates safety measures for consuming chicken.

He said that government should come out with a rescue plan for the poultry industry by allowing one dish at the wedding parties so that people could freely consume white meat.

General Secretary Karachi Wholesale Poultry Association (KWPA), Kamal Akhtar Siddiqui, said that the poultry meat was selling under cost by Rs15 per kg due to the persistent decline in demand from the consumers. Even in Karachi, around 200,000 broiler live birds are being slaughtered daily as compared to 350,000-400,000 birds earlier.

He added that the poultry price had been slashed by Rs10 to Rs44 on April 24 from Rs54 on April 20 last week owing to the thin demand. He said in many areas retailers were now offering discount in order to lure more consumers besides recovering their past losses.

By April 13, poultry bird was selling at Rs48 per kg and farmers raised the prices to Rs58 on April 17 owing to rising demand from the consumers.

He said that birds’ sales to hotels and restaurants had also been hit but the owners of hotels had not passed the benefit of the reduced price on to the consumers. They are charging higher prices which were prevailing ahead of bird flu scare.

To a query how many farmers have packed up their business, he said he could not give the exact numbers but people in this industry had started switching to other businesses after sustaining huge losses.

The industry has suffered Rs5 to 7 billion losses from February 22 to the last week of March, but it has gained pace further in the next one month, he added.

He said the day old chicks’ price had also fallen to Rs2 to 3 from Rs11 prior to the virus outbreak in various farms near Islamabad. Many farm owners have suspended putting the new chicks in their farms.

 

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KARACHI, April 26: The import of automobiles exceeded $1 billion mark during the first nine months (July-March) and market sources predicted that it would be in close vicinity of $1.5 billion at the end of the current fiscal year.

Auto import now constitutes almost 20 per cent of the machinery import group which claimed $5.33 billion during July-March 2005-06. Textile machinery import maintained a rising tempo for last few years has now started showing a declining trend. As summer sets in and brings with it the long periods of power breakdown, the demand for electric power generators is on rise. Rise in import of electric power generators is one indicator of this mounting demand and it has so far claimed about $400 million.

“Bulk of auto import is CKD (Completely Knock Down) and CBU (completely built units) comprise a small part,” a very highly-placed source in federal commerce ministry tried to explain the journalists sometimes ago. But there is no break down of the auto import.

Market sources say that the number of reconditioned cars that are coming as accompanied baggage has increased considerably in last more than one year which has caused considerable discomfort to less than half a dozen auto assemblers who are sending an SOS every day to the government as the date of budget draws closer.

Driven by generous bank loans, the number of cars coming on roads is increasing every day and roughly half a million have been added in last two years aggravating pollution, increasing gas and fuel consumption, making roads more dense and traffic unmanageable. One of the immediate impacts of increase in automobile population is increase in demand of wages by the professional drivers.

Coupled with rising trend in the international prices of oil and increase in the number of automobiles and private electric generators, the oil import bill in the last nine months rose by more than 64 per cent to $4.62 billion as against $2.80 billion the same period last year.

As international oil prices touch $75 a barrel and indications are there that there could be a further rise, the total oil import bill could be in close vicinity of $6 billion.

Worsening conditions of roads in the cities and mounting gasoline prices can force a large number of middle income group people to dump their cars in the garages. Banks are not reporting recovery position of the auto loans advanced so far but may start sharing this information by next year.

An almost 36 per cent increase in food bill import is another worrisome factor for the economic managers of the country. Food import bill in last nine months amounted to $1.34 billion as against $990 million last year. Sugar import claimed more than $275 million, showing a phenomenal growth over last year. Edible oil, milk, pulses, wheat, spices and tea are now the permanent items on Pakistan’s import list.

About 62 per cent growth in iron and steel group import costing $1.40 billion indicate growing demand for the housing and construction industry and in capital goods.

 

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ISLAMABAD, April 26: A delegation of US businessmen currently visiting Pakistan has termed the business environment in Pakistan friendly and conducive to foreign investment.

The delegation, headed by Jay Collins, Chief Executive Officer of Public Sector Group, Citigroup, and Chairman of the US-Pakistan Business Council, expressed these views in a meeting with Jehangir Bashar, Secretary of the Board of Investment, here on Wednesday.

The BoI secretary pointed out that due to liberal policies and economic reforms foreign investors found Pakistan a safe place for investment. He said that more than 600 foreign companies were operating in Pakistan and were reaping high interests.

Foreign direct investment, he added, was an indicator of the success of foreign investments in any country and in the first nine months of this financial year, Pakistan had received a record FDI of over $2bn, with three months still to go. “All economic indicators have shown an upward trend which add to the investors confidence.

Jay Collins said more foreign businessmen were keen to invest in Pakistan. “This is a compliment to the liberal economic regime introduced by the government for foreign investors.”

 

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KARACHI (updated on: April 28, 2006, 11:42 PST): State-run Pakistan Petroleum Ltd. (PPL) on Friday reported a 41.7 percent rise in nine-month net profit, thanks to rising oil and gas production and higher prices.

PPL, which operates Pakistan's largest gas field at Sui in Balochistan, earned a net profit of 9.59 billion rupees ($159.7 million) in the nine months to March 31, it said in a statement to the Karachi Stock Exchange.

This compared with a net profit of 6.77 billion rupees for the corresponding year-ago period.

Analysts had forecast a net profit of between 8.5 and 9.6 billion rupees for the nine-month period.

The Sui field produces more than a third of Pakistan's gas. PPL also has five smaller fields in Balochistan and the southern province of Sindh.

"The profitability growth arrives from the phased increase in wellhead gas prices of the company's major fields, Sui and Kandhkot," said Faraz Farooq, analyst at brokers Jahangir Siddiqui Capital Markets.

These two fields constitute around 80 percent share of PPL's gas production, and their gas wellhead prices were raised by 20 percent from Jan. 1.

In addition, the wellhead price of Qadirpur filed, where PPL has a 7 percent share, was raised by 39 percent, while those for Sawan and Miano gas fields were increased by 10-14 percent.

Gas prices in Pakistan are revised every January and July. Under a government pricing formula, PPL tariffs are expected to be increased by an average of 25 to 26 percent annually until 2007.

Analysts said that rising oil prices also had a positive impact on PPL's profits. But it was very small compared with the impact of gas price rises, as only 2 percent of PPL's revenue was contributed by oil.

PPL did not release production figures with the financial results, but analysts said the company's oil and gas production was expected to have grown by 17 and 7 percent, respectively, in July-March.

But they added that it needed to further increase production before the guaranteed price hikes end in 2007. "PPL has a field portfolio including Sawan, Miano, Manzalai and Makori besides the declining Sui reserves, with balance recoverable reserves of approximately 4.5 TCF gas and 20.8 million barrels of oil," said Saad Bin Ahmed, analyst at Capital One Equities.

"PPL requires an uphill battle to attain volumetric growth and for that the company would seek avenues beyond its easy reach," he said.

PPL, which is high on the government's sell-off agenda, was part-privatised in July 2004, when the government sold 102.8 million shares to the public at 55 rupees each.

The state still holds a 78.4 percent stake in the firm, while 6 percent is held by the World Bank's private sector arm, International Finance Corp. The public holds 15 percent.

The government is yet to announce a bidding date for the sale of a 51 percent stake in PPL, but has pre-qualified four companies to enter the race.

PPL's stock carries a weighting of 6.57 percent on the KSE's benchmark 100-share index. At 0500 GMT, PPL shares were down 1.45 rupees at 281.05 rupees in a broader market that was down 0.69 percent.

 

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WASHINGTON (April 28 2006): The United States wants to spearhead a mammoth project transmitting electricity from Central Asia across Afghanistan to Pakistan and India, a senior State Department official said on Wednesday.

Under the plan, a regional power grid stretching from Almaty to New Delhi will be fed by oil and gas from Kazakhstan and Turkmenistan and hydropower from Tajikistan and Kyrgyzstan.

"This vision is within our grasp," Assistant Secretary of State for South and Central Asian Affairs Richard Boucher told a Congressional hearing.

"Within the next few years, we expect to see private investment lead to the establishment of a 500 kilovolt power line transmitting much-needed electricity from Central Asia across Afghanistan to Pakistan and India," he said.

The United States, he said, would like to have a strategic dialogue with the countries of the region to advance regional economic development and integration, of which the high-voltage power project was a critical component.

Central Asia has an abundance of existing and potential oil, gas, and electricity sources that the growing economies of South Asia need.

"Together with other donors, we are exploring ways to export electricity from Central Asia to Afghanistan, Pakistan, and India," Boucher said.

Boucher said that in partnership with multilateral development banks and other donors, the United States wanted to help "build new links" among the countries of the broader region and connect them more closely to the rest of the world.

"One of our leading objectives is to fund a greatly expanded Afghan power grid, with connections to energy sources in Central Asia.

"It's a winning solution for both the sides, providing much-needed energy to Afghanistan and serving as a major source of future revenue for countries like Tajikistan and Kyrgyzstan," he said.

New energy routes, Boucher said, would ensure that the next generation of South and Central Asian entrepreneurs had access to the resources they needed to prosper.

"We want to give South Asians access to the vast and rapidly-growing energy resources in Central Asia, whether they are oil and gas in Kazakhstan and Turkmenistan, thermal power in Uzbekistan, or hydropower in Tajikistan and Kyrgyzstan," he said. Boucher said that the 'opening' of Afghanistan had transformed it from an 'obstacle' separating Central from South Asia into a 'bridge' connecting the two. "And this in turn opens exciting new possibilities."

The US and Russian companies are now the major players in the contest to develop and export energy resources in Central Asia, but Chinese and Indian entities have become increasingly competitive in recent months.

Moscow has long considered Central Asian states to be Russia's sphere of influence and has viewed with alarm Washington's rising profile in the region, especially since the 2001 overthrow of Afghanistan's Taleban leadership.

Boucher said the United States supported establishing "multiple, commercially viable" pipelines and other new energy transportation routes.

The United States "believes that diversification of energy transport routes to and from Central Asia increases stability and energy security, not just regionally but throughout the world," he said.

In June, the US Trade and Development Agency will host a forum on the Central Asian electricity sector, which Washington hopes will spur investment and promote further regional co-operation, Boucher said.

"We are also funding feasibility studies in energy, transportation, and telecommunications, and co-ordinating with the International Financial Institutions and other donors," he said.

 

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RAWALPINDI (April 28 2006): President General Pervez Musharraf on Thursday encouraged adoption of modern methods and techniques in farming to increase agricultural yield which would help alleviate poverty, particularly in the rural areas.

Inaugurating first-ever Hydroponics Greenhouse in Pakistan near Rawat set up by 'Bioblitz - Farmers Market,' he said the new ideas and methods would bolster the economy through the development of the agriculture sector.

The Hydroponics, which means process of growing plants in water or sand rather than in soil, is a modern technique widely used in Holland and is becoming popular in other countries. The method results in an increased yield while using less water and space.

President Musharraf lauded the company and Chief Executive Officer Safdar K. Akhtar for the pioneering effort in Pakistan and said the government would encourage and support modern ideas and methods to promote the agriculture sector.

Underscoring the importance of gradually shifting towards industry and engineering, the President said the government's emphasis remains on the agriculture as it remains the backbone of the country's economy for the near future. And, he added that related to the development of agriculture was the issue of poverty alleviation.

"Nearly 70 percent of the population lives in rural areas and they look at agriculture for sustenance," he said and underlined the need of increasing their earnings to alleviate poverty from the rural areas.

"That can be done only by increasing (agricultural) yield and giving them more jobs," he said, adding that more jobs could be created by developing agro-based industry.

He said the government was going for yield-intensification and area-intensification by bringing more land under cultivation. In this respect, he referred to his "Water Vision 2016" that encompasses a complete concept of water conservation, management and building of major water reservoirs.

President Musharraf said the country had a great potential to boost agro-based industry as it had the best of fruits and vegetables in the world. Similarly, he said that despite being the 5th largest milk producer, Pakistan was not producing enough dairy products even to meet its domestic requirements.

The Bioblitz has set up its first hydroponics greenhouse covering five acres of land and will grow as much tomatoes which, its CEO said, are normally grown on an area of 100 acres through traditional methods.

The President appreciated the hydroponics techniques but asked for expanding the concept to whole of Pakistan to benefit the people and create more job opportunities. He added that there was a need to develop an entire chain of transport and storage for the produce to reach markets.

Minister of Food and Agriculture Sikandar Hayat Bosan said the government was giving high priority to developing the agricultural sector, which was the main driving force behind the economy. He said agriculture contributes 24 percent of the GDP and employs 42 percent of the total labour force and accounts for two-third of the country's total export earning.

The minister stated that the country's agricultural growth posted 7.5 increase in 2004-05 and expressed the confidence to sustain 5 percent growth every year.

Bosan however said that there was not much importance given to horticulture in Pakistan. He informed that the government, with the help of the Asian Development Bank (ADB), is working on a programme to harness full potential of horticulture in Pakistan.

The CEO Bioblitz, Akhtar said that he plans to expand the hydroponics greenhouse as Pakistan provide an ideal climate and land for such a modern technique to be used for increasing yield.

Earlier, the President unveiled the plaque to inaugurate the greenhouse and also took a round of the facility.

 

[Neo]

ISLAMABAD (April 28 2006): The total outstanding domestic debt rose from Rs 2.133 trillion at the end of June 2005 to Rs 2.264 trillion at the end of January 2006, showing an increase of Rs 131.02 billion (6.14 percent), the provisional data issued by the State Bank of Pakistan (SBP) here on Thursday said.

The increase in the domestic debt during the first seven months (July-January) of the fiscal 2005-06 was mostly from rise in the stocks of floating and un-funded debt. However, the permanent debt declined during the period under review. During the first seven months of the fiscal year, the floating debt increased by Rs 145.282 billion and un-funded debt by Rs 2.074 billion, whereas permanent debt declined by Rs 16.33 billion.

The permanent domestic debt comprising medium- and long-term market loans, federal government loans, special government loans, federal instruments and prize bonds, stands at Rs 484.54 billion, which was Rs 500.87 billion at the end of 2004-05.

The floating domestic debt, mainly comprising short-term debt instruments and market treasury bills, maintaining a climbing trend, stood at Rs 778.16 billion at the end of June 2005. And, during the following seven months, it went up to Rs 923.45 billion.

The data also showed that the un-funded domestic debt comprising National Saving Schemes (NSS) stands at Rs 856.12 billion, grew by Rs 2.08 billion from Rs 854.04 billion at the end of June 2005.

However, it said that net mobilisation under all instruments of the NSS, except relatively new instruments, ie, Bahbood Saving Certificates, Postal Life Insurance and Pension Benefit Accounts and Mahana Amdani accounts, remained negative during the period under review.

Net investment in NSS fell primarily because their rates of return had become too low for the investors to make fresh investment as a result of gradual cut in profit during the last few years.

From these three most popular instruments of the NSS, ie, 10-year Defence Saving Certificates (DSCs), five-year Regular Income Certificates (RICs) and three-year Special Saving Certificates (SSCs), net withdrawals stood at Rs 51.191 billion in the seven months of this fiscal year. The data revealed that the previously popular instruments, DSCs, SSCs, and RICs, seem to have become less attractive for the investors.

Besides, withdrawals from saving accounts, special saving accounts, saving accounts and general prevalent (GP) fund during the period under review stood at Rs 1.932 billion, Rs 1.332 billion and Rs 566 million, respectively.

The SBP data also showed that Bahbood Saving Certificates, Pensioners Benefit Accounts and Postal Life Insurance attracted fresh net investment of Rs 40.486 billion, Rs 11.472 billion and Rs 5.131 billion, respectively.