Pakistan Economy - News & Updates - Archive

[Neo]

Wednesday, February 07, 2007

:flag: Deal signed for rail link to Sino-Pak border :ChinaFlag:

* Tender for pre-feasibility report on Lahore-Rawalpindi bullet train to be given to Austrian and Spanish firms next week

LAHORE: The Pakistan Railways (PR) has signed an accord with Chinese firms for a pre-feasibility study – made ahead of the project concept (PC-I) report – on a rail link between Havelian in Pakistan and the Khunjrab Pass on the Pak-China border, said Federal Railways Minister Sheikh Rashid Ahmed at a press conference here on Tuesday.

The distance between Havelian and the Pak-China border pass is around 750 kilometres, and the link is expected to increase trade between the two countries.

Ahmed said the ministry had granted a tender for the report to the Dongfang Electric Corporation and Second Survey and Design Institute of China, on President Pervez Musharraf’s directive. “Both companies will prepare the pre-feasibility report within nine months at a cost of around Rs 700 million,” he said. “A tender for a pre-feasibility report on the Lahore-Rawalpindi bullet train project will be given to Austrian and Spanish firms next week. This report will be completed in nine months, and will cost Rs 250 million.”

He said the ministry would invite tenders for the privatisation of the Railways’ five power stations next week. He said it had also been planned to auction five more commercial plots of the Railways for five-star hotels, and the government was looking to investors from Dubai, Qatar and Saudi Arabia for participation in the bidding.

The minister said that the Indian Railways authorities had assured Pakistan that the Khokrapar-Munabao train service would be launched on February 17. He said Pakistan railways had spent a large sum on the track for this service.

Replying to a question, Ahmed said that a Bahawalpur incident in which six children were overrun by Karachi Express was a result of parents and locals’ negligence.

“To prevent such incidents, the authorities are planning to seek proposals on the construction of gates at 4,000 railway crossings. Proposals on the construction of 300 underpasses and fencing along railway tracks that pass through thickly populated areas will be presented at the next cabinet meeting,” he said.

“The ministry has directed all Railways staffers and policemen not to allow passengers to travel on roofs of trains.”

http://www.dailytimes.com.pk/default.asp?page=2007\02\07\story_7-2-2007_pg7_29

 

[Janbaz]

I have a question? How will they build the rail through Karakorams, they are inaccessable. Lots of live will be lost you know as the Korakoram Highway. The altitude is extremely high for Khunjerab.

 

[Janbaz]

Pak, Sri Lanka ink accord on trade and investment

HAQ NAWAZ
ISLAMABAD - To come out of the existing poor state of bilateral trade and investment situation, Pakistan and Sri Lanka Wednesday vowed to speed up process to initiate new joint ventures in different sectors including aviation, manufacturing, textile and tourism.
This was agreed between the senior investments officials of both the countries during a two-day (February 6-7) detail discussions held here. Secretary Board of Investment Pakistan Talat M Miyan and Chairman BOI Sri Lanka Prof. Lakshman R. Watawala have signed a Memorandum of Understanding (MoU) respectively on behalf of their governments. Dr Sarath Amunugama, Minister for Enterprise Development and Investment Promotion Sri Lanka was also present on occasion.
Other members of the Sri Lankan delegation are Mano Wijeratne, Minister of Enterprise Development, T Hewage, Secretary, Ministry of Enterprise Development and Investment Promotion, Prof. Lakshman R Watawala, Chairman BOI, Dr. Nihal Samarappuli, Executive Director (Research), BOI and Duminda Ariyasinghe (Promotion) BOI.
Both sides also agreed to further simplify the visa regime for the tourists and businessmen. They clarified that the visas to tourists are being issued on the demand and at the arrival at entry points for 3 months period.
Speaking on the occasion, Dr Sarath told reporters that both sides agreed on a various points to improve the bilateral trade and investment relations.
They decided, as the MOU reads, to exchange information on investment policies/projects, share information on investment related areas, cooperation in research and development, organize and conduct investment seminars and conferences in two countries.
He said both friendly countries want to improve and extend cooperation in opening aviation, agriculture, manufacturing, textile, hotel industry, tourism, and retail sectors etc.
“A leading Sri Lankan retail company- ARPCO, recently visited here, is interested to invest in this sector and it will visit again to formally submit its plant with the government of Pakistan,” he said.
The Sri Lankan Minister also informed that the mutual investment in the aviation sector was also needed to increase the number of flights of public-private sector between both the countries.
Both countries should allow wider access to the flights operations in almost all the major cities, he urged.
When he presented the statistics of bilateral trade between Pakistan Sri Lanka even having Free Trade Agreement (FTA), the picture emerged was very discouraging as the total trade volume had reached to only US $ 173 million. “Presently, the trade balance is in Pakistan’s favour with exports to Sri Lanka is US $ 115 million and flow from Sri Lanka at only US $ 58 million,” the visiting minister noted.
He also hoped that at least the capitals of the 7-member countries of SAARC should be well connected through one link, which has already been recommended by the Aviation Panel of SAARC.
Secretary BOI Talat M Miyan briefly expressed his comments on the occasion that Pakistan and Sri Lanka were good friendly countries and were committed to increase the level of bilateral trade and investment.
Chairman BOI Sri Lanka Prof. Lakshman R. Watawala during the press briefing invited Pakistani manufacturers especially in textile, fabric, garment, cement, hotel, education, Information Technology, software development and tourism sector to invest there and establish their units to help them improving the export side of Sri Lanka.
“Some 10 projects in different sectors worth US $ 11 million have been carried out by the Pakistani Investors and the investment from Pakistan may go up in near future. However, the FDI from Sri Lanka is very low and now the businessmen there want to invest in Pakistan,” he maintained.

The Nation.
http://www.nation.com.pk/daily/feb-2007/8/bnews5.php

 

[Owais]

Pakistan to buy power from Iran for Gwadar port


LAHORE (updated on: February 07, 2007, 21:59 PST): Iran will provide electricity to Gwadar deep-sea port in Balochistan according to an agreement signed here on Wednesday.

The state-run Water and Power Development Authority (Wapda) inked an agreement with Iranian company Tanvair at Wapda House under which Pakistan will buy 100-megawatt power from Iran for Gwadar port.

Wapda member Anwar Khalid and head of the Iranian firm Mendies Ismail Mohsini signed the agreement.

Chairman Wapda Tariq Hameed giving details of the deal said that Iran will supply power to Gwadar port from January 2009 under the agreement.

The Iranian company will invest $26 million and the National Transmission and Dispatch Co. Wapda would provide $60 million for the project costing total 86 million dollars.

He said that tariff for one year has been fixed at 6.25 cent per unit. Tariff will be reviewed after one year.

He said that two grid stations of 220 KV will be installed, one in Gwadar and another in Iran's Polan area.

Wapda will lay 100 kilometres while Iran will lay 70 kilometre transmission line.

Mohsini said that Iran is already providing 35 megawatt to Pakistan and will now supply 100 megawatt more.

brecorder.com

 

[Owais]

UK termed world's best business partner for Pakistan

KARACHI (February 08 2007): United Kingdom is world's best business partner for Pakistan in the areas of financial services and business education. This was stated by the Lord Mayor of City of London, Alderman John Stuttard.

While speaking at a seminar on 'Education, training and qualifications in the financial services sector' held here at Institute of Chartered Accountants of Pakistan on Wednesday.

Lord Mayor who is the ambassador for UK financial, maritime and business services, said that London was the home of financial and business education adding that a large number of students from around the world were being benefited from the professional institutions of UK.

To a question, he said that "On getting back home, I will inform the financial institutions and business communities about my experience that would further improve the image of Pakistan and pave for investments," he maintained.

Lord Mayor, however, said that business ties were quite cordial between UK and Pakistan and referred to the acquisition of Union Bank by the Standard Chartered and listing of two Pakistani companies with the London Stock Exchange in this regard. "London possesses a very favourable environment for investors and businessmen from abroad particularly concerning equity capital and bond finance," he observed.

To a question pertaining to outsourcing of accounting services to Pakistan, he said that this issue could be taken up. Chairman City of London-City of Learning, Sir Paul Judge delivering his presentation on 'Getting the right skills' said that there has been a high expansion in the higher education sector in Pakistan.

He said that competitive firms needed international benchmarked business qualifications while Pakistan was a strong market for UK professional business qualifications. Kate Holroyd of Institute of Chartered Accountants of England and Wales (ICAEW) giving her presentation described the increased flexibility at ICAEW offering new qualification to the most ambitious and talented students. Michael Forbes of Chartered Institute of Arbitrators and others also spoke on the occasion.

http://brecorder.com/index.php?id=526340&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

I have a question? How will they build the rail through Karakorams, they are inaccessable. Lots of live will be lost you know as the Korakoram Highway. The altitude is extremely high for Khunjerab.

Its one of greatest construction works in modern history, most of the hard job was done by the military but ofcourse civilians were involved aswell.

Many lost their lives and you can see their graves alongsde the highway all over the place.

Here's a nice link with pics:

http://www.answers.com/topic/karakoram-highway

 

[Neo]

Publicity campaign insufficient for attracting foreign investment

KARACHI (February 08 2007): Pakistan's publicity campaign to attract foreign investment has been far from sufficient, in comparison with the East Asian countries. This has been stated in a report titled 'Towards A Vision 2030: Direction of Industrial Development in Pakistan', prepared by the Japan International Cooperation Agency (Jica) and International Development Centre of Japan.

The report says that development of industrial infrastructure and improvement of institutional setting for the investors should be given top priorities.

Commenting on auto vendor industry, the report noted that it was too easy to think that foreign vendors would inevitably start investing in Pakistan soon after the number of production reaches a specific volume. The auto industry in Pakistan does have advantage, in terms of technology up-gradation, as the biggest issue in the current industry is technology up-gradation. While technical collaboration with foreign companies and technical assistance from assemblers is effective, their level of technology is still behind the international standard.

There is not sufficient competition in the domestic market where the number of vendors, who can supply specific components, is limited, sometimes only one. The reject rate for Pakistani parts is generally high, and the quality of products is poorer than that of vendors in other countries.

The stagnated market had also retarded development of ventures and technology collaboration with foreign companies. Japanese vendors would not go into ventures with local vendors until the size of local automobile market reaches to the annual production of 500,000 units. Coupled with other factors, such as Japanese economic slump and the remote image of Pakistan, Japanese vendors were reluctant to collaborate with Pakistan vendors, even for technical collaboration, it said. Moreover, the influence of the tariff policy for auto parts is also considerable. After the tariff starts, it is possible for assemblers to obtain auto parts from around the world as long as they pay customs.

The report said that Indian government, for instance, introduced various non-tariff barriers before implementing the tariff of auto parts, and has shown reluctance in opening domestic auto part market.

However, in the case of Pakistan, the government has had no intention to protect domestic market of auto parts by any non-tariff barriers. The auto part market is open without any protection.

Domestic vendors have been forced to compete in the international market, and foreign vendors have become their competitors, including Japanese, Chinese and Thai vendors.

The report noted that at present around 200 Pakistani vendors supply auto parts to local assemblers, but this number is expected to be halved in the near future. The domestic vendors feel a sense of crisis, and start making utmost efforts to improve their technological capability.

As long as the country has fragile and fragmented auto parts industry, the automobile industry would never generate high-value-added and considerable employment. Strategic and continuous efforts are required for the vendors to improve their technical capability, the report added.

http://www.brecorder.com/index.php?id=526372&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Global banks acknowledge Pakistan's economic policy: Ashfaq

ISLAMABAD (February 08 2007): Advisor to the Finance Ministry, Dr Ashfaq Hassan on Wednesday said that Pakistan's economic performance in the past five years has been commendable and global investment banks acknowledged economic policy of the country.

Talking to a private TV news channel he said, international investment banks acknowledged that GDP growth is higher, poverty rates are down, inflation is lower, FDI is up and fiscal deficits are down and these are good comments which are being given by international investment banks. Now, they have such views about Pakistan, he said adding this is very encouraging for us in Pakistan.

He further said, "Our efforts are for the maintenance of the trend. We should continue to maintain this trend. This is the way forward. We are trying hard for fiscal, monetary or exchange rate policies, they should be aligned to achieve higher economic growth in a stable macro economic environment," he added.

He said, these are our objectives and, "We are working on it."

To a question, he said, core inflation has been controlled considerably. Presently, inflation being confronted in the country is food driven and particularly, it is of some perishable items like onion, tomato, potato, milk or pulses, he added.

These products have higher weight in consumer basket that is why higher inflation is being noticed in the country. But, now declining trend is being noticed in it, particularly from past few weeks.

To another question he said seasonal element is also involved especially in vegetable items availability which positively or negatively affect price. Now availability of food items has improved, he added.

He further said, "I think, monetary policy stance of State Bank should continue." State Bank has already issued a monetary policy statement under which existing monetary stance will continue. They have released statement for January to June.

He said, State Bank monitors things and result of measures taken by State Bank is being seen. Advisor to finance ministry said, "I think, monetary policy statement of State Bank is in the right direction and existing policy will continue."

http://www.brecorder.com/index.php?id=526358&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Salman sees growth rate exceeding 7pc

Lord Mayor of London lauds GDP ratio of Pakistan and brilliant performance of KSE; says more investors are coming.

KARACHI: Pakistan’s economic growth is excellent at present and it would exceed seven per cent this year, Adviser to the Prime Minister on Finance, Dr Salman Shah said on Wednesday.

He was talking to reporters after the inaugural session of a seminar on “Capital Markets - An international perspective” organised jointly by JS ABAMCO and KASB Securities in collaboration with British High Commission.

The seminar was organised on the occasion of visit of Lord Mayor of London Alderman John Stuttard and a financial, banking and educational delegation.

Responding on chances of huge trade deficit during the current financial year, Dr Shah said economic growth in the county remained enormous and was expected to cross set target of 7 per cent during the current fiscal year.

Dr Shah pointed out that foreign direct investment (FDI) was also very strong and in the first six months the FDI was to the tune of about $3.5 billion.

He said that the position of remittances was also very good. “Our financial flows and numbers are very healthy. The balance of payments surplus would also be healthy,” the Adviser remarked.

Replying to a question regarding the bond issues, he said “we go to the international capital markets every year under a long-term strategy.” Last year, “we had issued bonds for 10 and 30 years.”

Dr Shah further stated “we are also examining bond issuance this year. The size of the issue or terms are decided after roadshows.” He said that the bonds would also be issued this year as had been done last year.

Replying to a question whether there may be any downward revision of bonds by the rating agencies in the wake of coming general elections and some recent incidents of suicide bombings, the Adviser said that there could not be any such thing as the elections were a normal phenomenon and these were held in every country.

He said that the coming general elections in Pakistan would be held in a free and fair manner and that it would be a good thing for the country’s rating and would have a positive impact.

Dr Shah said that the bombing incidents were isolated ones. “Government obviously is concerned about these and these would be checked so that there may not be any impact on the country’s ratings.”

To another question, he stated that GDR issue of three banks and KAPCO was on target and would be completed within this fiscal year.

Shah said all provinces must develop broad consensus on NFC Award. He termed President Musharraf’s decision on new NFC award an optimal solution within the framework of the Constitution.

To another question, the Adviser said that the core inflation is quite less and under six percent. Food inflation is also coming down. The prices of perishable items have reduced substantially such as potatoes and onion etc.

He said that if the energy prices remained stable and the international oil prices come further down then we would be able to meet our inflationary targets as well.

The advisor said the seminar had shown that Pakistan was emerging as a dynamic international market and potential investors were showing great interest in investing here. He emphasized on imparting skill-based education especially in financial studies to create market leaders.

Lord Mayor John Stuttard said basic aim of his visit was to deepen existing relationship of London and Karachi.

He said 5-10 years before China and India emerged as fastest growing economies but now Pakistan and Gulf countries had emerged as strong economies.

Lauding growth in GDP ratio of Pakistan and brilliant performance of Karachi Stock Exchange, he said more and more investors were turning to Pakistan.

He said 40 per cent of GDP across globe, while 70 per cent in European Union, was based on capital markets. He noted main reason of making London the world’s leading international financial centre was openness of its market, which attracted investors from all parts of world.

He placed emphasis on skill-based education, saying there were about one million financial experts in London playing an important role in development of economy. He said good economy was linked to development good corporate governance system.

On occasion, he gave scholarship of Business School of Oxford University to a Pakistani student Asia Basher, as part of scholarship program of the Mansion House.

The delegation member gave presentations during seminar. Anthony Bellchambers, CEO Futures and Options Association, gave presentation on Regulatory Theme, Hugh Sandeman, Head of Business Development South Asia, London Stock Exchange, on Listing at London Stock Exchange, Najam Ali, Chairman Mutual Funds Association of Pakistan, on Pakistan’s Capital Market, and Dr Bishakha Mukherjee, Advisor Aureos Company, on Private Equity.

http://www.thenews.com.pk/daily_detail.asp?id=41921

 

[Neo]

Higher growth, lower sharing

By Sultan Ahmed

Dr Salman Shah, the vocal advisor to the prime minister on finance, says if the economic policies that are being followed by the government are sustained they will take the growth level to 10 per cent in the days to come.

Meanwhile, he says, the growth rate of 6-8 per cent fixed for the current year will not only be achieved but may be exceeded. These days, he says, during the first half of the current financial year $3.5 billion had come into the country and that may rise to $5-6 billion by the end of the financial year. That will largely be the result of the stepped up privatisation and the sale of the global depositary receipts of $ 800 million by the OGDC and more by the private sector MCB bank.

Of course he’s calculating without counting the deterrent particularly the shortfall of power by 2000 MW, shortage of water and other infrastructural bottlenecks, which may become more acute in summer. The weather is warming up much earlier than usual. For comparison, India achieved a growth rate of 9.2 per cent last year and China 10.4 per cent. India may this year do better than China as Beijing is holding back the growth rate to prevent overheating of the economy.

While the officials are talking glibly of the great times to come with the high growth rate, the prices of essential items are going up all around. The 16 items whose prices have gone up include milk, pulses, chicken and vegetable oil. The sensitive price index which covers 53 essential items shows a rise of 12.55 per cent last year with a higher rate for larger income group. The rise in pulse prices is indeed stiff along with the increase in sugar prices in the retail by two rupees per kilo.

India has reduced import duty on palm oil as world prices have shot up. There has been a demand in Pakistan for a substantial price reduction. In fact, the government will not lose revenues by reducing the import duty, but only forfeit the extra gain from the rise in duty in monetary terms. But the government does not want to forfeit that despite the vast improvements in the revenue collection between July and January of this financial year. The government should now reduce the import duty on palm oil as it has nothing to lose by that.

The World Bank has alerted the government against an alarming and sustained fall in the share of major crops in the GDP and suggested it should go for high value crops and livestock to increase the rural earnings and for a quick U-turn in this area. Meanwhile, there is a great deal of Euphoria in official circles and in some commercial quarters over the scheduled commencement of operations by the Gwadar port from March 23 following its inauguration by President Musharraf. It has been described a free port in the sense the operators and managers of the port, the port of Singapore authority, will enjoy tax exemption for 40 years.

The PSA will invest 550 million dollars in five years and erect 14 berths to add to the three already there. Minister for Ports and Shipping Baber Ghauri expects a contribution of $40 billion to the economy when the port is fully developed.

A free port usually means one in which the users do not pay duties and not necessarily one where the management does not pay taxes. Such exemption had to be given to make a new port popular particularly in view of the political uncertainties in Balochistan and the competition between ports in the area. The government has grandiose plans for Gwadar and it really has to interest its users in the port on the basis of commercial merit.

Meanwhile, Dubai next door is opting for an economic growth target of 11 per cent and a per capital income of $44,000 by 2015 compared to $31,000 in 2005. Its 2010 planned targets have already been exceeded so Dubai needs a new development plan, says its ruler. Dubai’s economy grew by 16 per cent in 2005 according to figures not adjusted for inflation. So 11 per cent growth is not too difficult to achieve and sustain for a while.

Pakistan with its per capita income of $800 has a long way to go to catch up with its Arab neighbours. Dubai’s population is too small compared to Pakistan’s 160 million which makes its per capita income very small, though it is far better than $500 a few years ago.

While foreign investment flows are rising, the State Bank of Pakistan is trying to curtail the bank credit for the private sector to keep check on inflation. But it had no impact on the rising inflation of 8.9 per cent as the supply side of the economy is not organized enough to hold down the prices. Cement prices have risen by eight rupees per bag in spite of the rise in output. Minister for industries says he will not allow cement prices to rise to Rs300 per bag. Meanwhile the cement manufacturers are trying to raise the price to rupees 280 per bag.

If as the minister says cement exports will rise to 2.5 million tones, prices of cement will rise further particularly when the government does not follow up its strong words with adequate or timely action. Another area of official failure is the unwillingness of the banks to pay fair returns to their savings depositors.

Despite frantic appeals of the governor of the State Bank Dr Shamshad Akhtar and her warning to the delinquent banks not to withhold fair returns to the depositors, the banks have not done that. In fact, the difference between the banks’ high lending rate and the low deposit rate rose by 110 basis points in 2006 to 7.4 per cent. This gap in 2005 was 6.3. With the understated inflation at 8.9 per cent the depositor is the loser when he gets 2 or 3 per cent on his savings with a good many deductions. He would only be a nominal gainer if he gets a 10 per cent return on his deposits.

With the banks too openly defiant and giving better dividends to only long term depositors -- up to 5 years, what is the State Bank going to do to make the banks fall in line. Basel II which is being enforced now cannot take care of such wronged depositors.

With the banks playing such negative roles, how can savings in a country which are too low rise high enough to finance the large development projects. Giving a fair return to the savers will also reduce inflation. The State Bank should hence act positively to help the depositors and make its threats to the erring banks real.

Meanwhile, the banks are showing very large profits. A 100 per cent profit is nothing exceptional. Not only have the prices of their shares been going up, but foreign banks are too keen to take them over as they are making large profits.

Following the take-over of the Union Bank by Standard Chartered bank a good many foreign banks are showing interest in taking over Pakistani banks. The Citibank for example is supposed be taking over the Soneri Bank. There is a great deal of domestic takeover of banks as well. Mr. Shaukat Tarin who sold off Union Bank, which he founded, is now trying to buy over “My Bank”. If the banks will not give a fair return on savings in a period of substantial inflation, how can savings, investment and development be promoted despite the urgings of the World Bank, IMF and other donors to make use of more of the local resources for development.

Excessive dependence on foreign direct investment is not desirable or safe particularly when the foreign investors make very large profits and remit most of that home aggravating the large current account deficit. Unilever for example has declared a final dividend of 114.

The IMF says the external trade deficit in this financial year would ultimately be $ 8.8 billion which is high but only slightly higher than the 2005-06 deficit of $ 8.44 billion.

Exports this year would be $ 18.82 billion and imports $ 27.467 billion leaving behind a record deficit of $ 8.8 billion. The final figure would depend on the world oil prices which are rising again.

Meanwhile, the parleys among Iran, Pakistan, and India for the seven billion dollar gas pipeline from Iran have continued smoothly after Pakistan and India received the undisclosed price formula. While Pakistan has accepted the formula, India says it needs more time to study the formula because of its implications.

There are now reports that the Pakistan government has put off disinvesting Sui northern and Sui Southern gas companies as it wants all the details of the sale to be studied in full, and not make the kind of haste the privatization commission showed in the aborted Pakistan steel mills sale.

Meanwhile OGRA has raised the price of LPG by 12 per cent which is not acceptable to its distributors but eventually the will fall in line. Arrangements are also being made for large scale imports of LPG as that makes driving of cars far cheaper than by petrol in a period of high world price of oil. We should use far more of LPG for a variety of good reasons. LPG, it has been demonstrated, is far less offensive to the environment than petrol or diesel oil.

It has also been proved by the UN agencies that human beings contributed to the increase in heat in the atmosphere. We have 160 million people and we add to that 2.1 per cent or more each year and when our cities have clogged drains and broken waste water pipes and Katchi Abadis galore, the environment is outraged further. So the developing countries which have too many people and too much of violation of the environment have to assert themselves far more to clean up their system than the advanced countries. And they must opt for the alternative energy in a big way instead of using more of fossil fuel or other elements which violate the environment.

http://www.dawn.com/2007/02/08/ed.htm#4

 

[Neo]

Injaz Mena makes USD250 million dollar investment in Pakistan

Injaz Mena Investment Company PSC has joined with UK-based Global Haly Investment Limited to develop a landmark USD250-plus million shopping mall and office complex in Defence, a prime area of Karachi, Pakistan's largest city.

United Arab Emirates: 8 Feb, 2007:
Mr Shariq Azhar (Director-General of Injaz Mena), Mr Ahmed Al Dhahry (CEO of Injaz Mena), Mr Shahid Choudri (President of Global Haly Investment Ltd), HH Dr Sheikh Sultan Bin Khalifa Bin Zayed Al Nahyan, Mr Elahi Baksh Baluch (Global Haly Investment Ltd) and Mr Mubarak Bin Fahad (Chairman and CEO of Global Haly Development (Pvt) Ltd) pictured, from left, to mark the occasion of the signing of a joint venture contract for a US$250 million-plus shopping mall and office complex in Karachi, Pakistan.

The complex will be situated next to the Creek Golf Club along the Arabian Sea coastline. The project was awarded by the Defence Housing Authority, Karachi, to Global Haly Investment Ltd, which was the highest bidder among seven international consortia that participated in the bidding.

The joint venture project was officially announced this week under the key sponsorship of HH Dr Sheikh Sultan Bin Khalifa Bin Zayed Al Nahyan.

Injaz Mena CEO Mr Ahmed Al Dhahry said that 'with a projected IRR well in excess of 35%, the project was in high demand with investors'. He added that commitments from investors exceeding the offered subscription amount for this unique opportunity were received within a week as a result.

The planned complex will provide high quality shopping as well as premium office space on 5.3 acres of land. It will have a total built-up area of about 1.7 million sq ft of which some 600,000 sq ft will be saleable space. The complex will have three basement levels for parking, ground floor, mezzanine and five upper floors, offering approximately 350,000 sq ft of dedicated retail space and the balance of the area will be for offices.

The land has already been acquired by Global Haly Development (Pvt) Limited, a joint venture company that was established in Pakistan to develop the project.

The Board of Directors of Global Haly Development (Pvt) Ltd comprises Mr Mubarak Bin Fahad, who will also serve as Chairman and CEO, Mr Shariq Azhar, Director General of Injaz Mena, Mr Shahid Choudri, President of Global Haly Investment Ltd and Mr Elahi Baksh Baluch.
Development of the complex will be managed by Injaz Mena through an off-shore special purpose subsidiary, Injaz Pakistan Development Company I Ltd.

Project plans and architectural design for the complex are presently at the initiation stage. Construction of the complex is expected to commence around mid 2007, while its completion is scheduled to take approximately three years.
Deutsche Bank will perform the fiduciary functions on behalf of investors as the Custodian and Administrator of Injaz Pakistan Development Company I ltd.

http://www.ameinfo.com/110155.html

 

[Owais]

Petrobras joins OGDCL in offshore venture


KARACHI (updated on: February 09, 2007, 19:46 PST): Brazilian Petrobras Oil and Gas B.V has joined Oil and Gas Development Co. Ltd. (OGDCL) to explore for oil and gas off the country's coast, latter said on Friday.

Petrobras had acquired 50 percent of OGDCL's working interest in Block 2265-1 Offshore Indus G, a deep water exploration licence in the Indus basin of Arabian Sea, it said.

"The execution of the agreement with Petrobras forms an integral part of the government's drive to attract foreign investment in the oil and gas sector," OGDCL said in a statement.

The company did not say how much OGDCL and Petrobras would invest to explore the 7,466 sq km (2,883 sq mile) block.

The country's liberal exploration policy has attracted interest from foreign firms in recent years, making oil and gas one of the largest foreign investment areas, though most offshore wells drilled by local and foreign firms have turned out dry.

French oil major Total, Pakistan's Petroleum Ltd. and Premier Oil Pakistan made unsuccessful attempts in the past few years to find hydrocarbons in deep water off Karachi.

Pakistan imports 85 percent of its energy needs, including about $6.5 billion worth of oil in the fiscal 2005/06 (July/June), and is struggling to increase domestic oil production of about 65,000 barrels a day.

It hopes to produce 100,000 barrels a day within five years.

brecorder.com

 

[Owais]

Issuance of LoIs for seven hydropower projects approved

ISLAMABAD (February 09 2007): The Private Power Infrastructure Board (PPIB) held a meeting with the Minister for Water and Power Liaquat Ali Jatoi, in the chair on Thursday and approved issuance of Letters of Interest (LoI) to seven hydropower projects with a cumulative capacity of 1,620 MW.

The projects include 197 MW Kalam-Asrit Hydropower Project, and 209 MW Asrit-Kedam Hydropower Project to be located in district Swat. The 548 MW Kaigah Hydropower Project to be located in district Kohistan. The 240 MW Karot Hydropower Project at district Kotli, AJK, 65 MW Sehra Hydropower Project at District Poonch AJK, 222 MW Azad Pattan Hydropower Project at Sudhnoti, AJK and 139 MW Chakothi -Hattian Hydropower Project at Muzzaffarabad, AJK.

Additionally, the board approved issuance of LoIs to two companies for establishing 1,000-1,200 MW power projects each based on imported coal near Karachi. The issuance of LoIs to these projects had been submitted to the PPIB after proper evaluation.

The board also announced to relocate 450 MW Uch-II Power project in Balochistan for the development of the province and catering for its much-required power needs. However, it was not clear if the project would be awarded on International Competitive Bidding (ICB) or negotiated deal as there were divergent views on this issue.

Keeping in view the energy requirements of the province, Wapda was directed to install 100 MW power plant on fast-track basis at Khuzdar to improve supply situation in the remote area. The board also directed Wapda to prepare long- term demand supply projection and submit it to the next meeting of PPIB.

Jatoi also held a meeting with a business delegation from London which expressed its strong desire to invest in the power sector through public-private partnership to further boost the economic ties between the two countries. The delegation led by Lord Mayor of London, Honourable Alderman John Stuttard, expressed interest to invest in hydro, wind, solar and thermal power projects.

Discussing the carbon credit through renewable energy projects, the delegation said that most of the trading of carbon credit is being made by London Stock Exchange (LSE) and offered to arrange equity financing both for Pakistani and foreign investors.

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[Owais]

Forex reserves hit record $13.254 billion, FDI increases 67 percent


KARACHI (updated on: February 09, 2007, 16:22 PST): The foreign exchange reserves hit a new high of $13.254 billion in the week ending on Feb. 3, thanks to higher remittances from Pakistanis abroad and rising foreign investment, the central bank said on Friday.

Reserves held by the State Bank of Pakistan (SBP) jumped to $10.845 billion from $10.579 billion a week earlier, while those held by commercial banks rose to $2.409 billion from $2.378 billion, the central bank said in a statement.

The previous all-time high level of reserves was $13.137 billion, reached in June last year.

"Foreign exchange inflows have been robust in recent times due to healthy remittances from overseas Pakistanis, as well as a substantial rise in foreign direct investment," said chief central bank spokesman Syed Wasimuddin.

Foreign direct investment rose 67 percent to $1.87 billion in the first half of the 2006/07 fiscal year, led by inflows into the communications, energy, and banking and financial services sectors, official figures show.

Inflows from foreign portfolio investment during the six months were $627 million, up from $359 million in the corresponding period last year.

During the period, remittances sent by Pakistanis abroad were recorded at $2.57 billion, up from $2.05 billion in the year-ago period.

Wasimuddin said a fall in international oil prices had also resulted in some reduction in the country's oil import bill, thus strengthening reserves.

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[Owais]

Foriegn investment increased to 1200pc in Pakistan: Musharraf

KARACHI: President Pervez Musharraf said here on Thursday that Pakistan offers the best investment environment of high profitability in the region.

“The investment has grown by 1,200 percent since 1999 and this will cross $4 billion this year,” the president told a select gathering at the ground-breaking ceremony of Rs 11 billion twin-tower building Karachi Financial Tower (KFT), being built by Enshaa NLC, a joint venture between UAE Enshaa Holding Ltd and National Logistic Cell (NLC) at the Governor House.

Sindh Governor Dr Ishrat-ul- Ebad Khan, Chief Minister Dr Arbab Ghulam Rahim, Federal Ministers Sheikh Rashid Ahmed and Babar Khan Ghauri were also present on the occasion. The president said investment was the cornerstone of economic growth in Pakistan and it has grown in four digits. He was of the opinion that investment will keep coming with the continuation of existing government policies of deregulation, liberalisation and privatisation of the economy.

“We have created an investment-friendly environment in Pakistan. We have changed our rules and regulations to suit the investors coming to Pakistan. We have created more comfort so that he (investor) feels confidence that Pakistan is a venue for investment to earn money,” Musharraf added. He said the investors will have a maximum profitability with the economic upsurge in Pakistan which raised the growth and doubled the per capita income of its people. Pakistan is now categorised as a middle income country, he added. President Musharraf noted that profitability increases due to increase in the purchasing power and also due to a supply and demand gap.

He pointed out that Pakistan with a big market of 160 million people is the hub of this entire region of South Asia and Central Asia. Therefore, Pakistan should to be seen as hub and not as a standalone country, he added.

He said the government was trying to project Pakistan in its correct perspective. He said the tremendous amount of interest is shown internationally and there is a tremendous amount of influx of investors in Pakistan.

The president said hotel occupancy in Pakistan was more than 90 percent and most of them are foreign investors. He expressed his pleasure over maturing of Pakistan’s policies and producing results to attract investors and sustain the economic growth in Pakistan and then in turn benefitting the people of Pakistan.

Musharraf pointed out that building and construction activity was being specially emphasised in Pakistan in our planning because this is labour intensive activity. It generates economic activity as well as maximum number of jobs for skilled and unskilled labour, he added. This industry encourages 50 down-stream industries and thereforethe government was facilitating this sector to the maximum.

Musharraf noted that tremendous amount of construction activity was going on in Karachi, Lahore and Islamabad where five 5-star hotels would be coming up in the forthcoming years alone. He said the Railways was launching 55 hotels of 3-4 stars dimension all over Pakistan. He invited the investors to come to Pakistan and said there will be a win-win situation for both investors as well as Pakistan.

The president said the government was encouraging skill development through triangular synergy between the industry, universities and technical institutions.

Referring to the land allotted to Enshaa-NLC joint venture, the president said the government had resolved this matter through a sharing formula where the Railways will get 60 per cent of the value while the Sindh government will take 40 per cent. Earlier, Railways Minister Sheikh Rashid Ahmed said the Railways has provided land to the project in accordance with the vision of President Musharraf to grant surplus land of the Railways for development purposes.
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