Pakistan Economy - News & Updates - Archive

[Neo]

April 23, 2007
Power mess and energy conservation

By Dr Javaid Laghari

AS summer approaches and temperature sizzles, the people will find no respite and continue to endure longer hours of power failure due to failed policies of the present government over the last eight years.

Despite countless warnings, news reports and comments, the government, Wapda and the Kesc have failed to take notice and adopt measures to provide relief to the public at large.

With the power structure in a shambles, there has been no improvement in the networks, and no maintenance has been carried out during the last six months. There has also been no addition of power to the national grid. The result is that even in the winter months, the demand-supply gap has widened to 1300 MW, creating 11 per cent power shortage, and resulting in three to four hours of loadshedding in large cities, and upto six hours in the rural areas.

The situation is expected to worsen in the coming days with the rise in temperature. As the power demand increases, the demand-supply gap will widen to 3000 MW during the peak summer months, resulting in longer hours of unscheduled load-shedding and power failures, hitting hardest during the peak hours of evening.

The privatisation of Kesc was yet another fiasco like the Steel Mill, and a failed policy of the government. Despite tall claims of the government that Kesc would invest over $500 million during the next three years, including $75 million in 2005 – 2006 alone, none materialised.

The Kesc was handed over to a group which did not have any experience of running a large power utility. And Karachi is not only large, but the economic hub of Pakistan. Continued power failures will further cripple the national economy.. Industries are already agitating the high electricity tariffs. It will result in rising inflation, already above nine per cent. The agro-based industries will be hit harder by longer hours of power failure and load shedding.

Despite numerous solutions presented to the government through the press and seminars, the government has lent a deaf ear and has continued with expensive solutions, including setting up of rental power plants in the Punjab at much higher tariffs than conventional rates. The government continues to pursue expensive options as they lead to higher kickbacks. There are a number of low cost efficient solutions available, including converting the old fashioned conventional steam power plants to combined cycles. Yet another solution could have been to opt for co-generation in new power plants. Unfortunately, it is the people of Pakistan who will pay these high tariffs.

Wapda has already drained the government of Rs84 billion in the form of subsidies, deferred debts and equity injections. The oil shipment bill for 2007 is expected to exceed $8 billion (at the current oil prices). With the trade deficit exceeding $12 billion, and with the changing geopolitical scenario, there could be further increase in oil prices, and the economy could suffer further by the end of the year. Solutions are urgently needed to overcome power shortage.

The only option available to save the public at large, from the looming crisis, is conservation. Conservation will also contribute to climate control and lessen the stress on global warming. Each one of us must play a role in this direction.

Take the typical case of Karachi. Since privatisation, the breakdowns have become frequent from 4,000 to 6,000, some times exceeding 30 per day. Also at times, we have experienced power shortages of over 400MW last summer during peak hours as a result of breakdowns, load shedding and non-supply of electricity by Wapda. This is expected to worsen this year and may exceed 600 MW.

Consumers need to take remedial measures in their own hands by conserving power. This will reduce power failure and load-shedding. If the usage of individual air- conditioners in Karachi is reduced by one-third, about 200 MW alone would be saved. If all customers switch off only one 100W light bulb, 100 MW would be saved.

If all TV sets were not on standby, 20 MW would be saved. If the evening shops and commercial plazas were asked to cut down their lights to half as much as what they use, another 10 MW would be saved. By turning lights, fans and air-conditioners off while leaving a room or not in use, and such other conservation measures, will save yet another 30 – 40 MW.

One can easily conserve over 350 MW in Karachi alone by adopting these measures. Applied on a national scale, it may conserve up to 3000 MW nationwide. This can only be the first step so that this summer can pass comfortably for all of us. Beyond this we expect the government, Wapda and Kesc to have put in sound and inexpensive policies, and implement them successfully to fulfil the shortage of 3000 MW this year alone, and plan for an eight per cent growth every year beyond this.

Senator Dr Javaid R. Laghari is a member, Senate Standing Committee on Water & Power.

http://www.dawn.com/2007/04/23/ebr12.htm

 

[Neo]

April 23, 2007
A multi-dimensional approach to tackle inflation

The State Bank of Pakistan’s has made it quite clear that the tight monetary policy has helped in bringing down the non-food/non-oil inflation in recent months but it would be difficult to achieve the overall inflation target of 6.5 per cent set for 2006-07, because of the higher food inflation. The SBP estimate that the inflation rate to range between 6.7-7.5 per cent this year.

The main factor behind the current stubborn inflationary trend is the food inflation which has been running into double digits. However now the prices of some food items such as sugar, potato, onion, wheat flour and certain varieties of pulses have, registered some decline due to improvement in their supply position. But prices of some other items namely rice and vegetable ghee have risen sharply in recent weeks, thus maintaining the pressure on family budget. The government hopes that food prices may decelerate in the coming months due to increase in agricultural production including a bumper wheat crop of 23 million tons and a 76 per cent increase in grams production. That has yet to be seen.

Recent increases in food prices were attributed to a host of factors such as decline in the production of certain items, misleading estimates about agricultural production, delay in import of items in short supply, smuggling, speculative hoarding and profiteering, upward revision of procurement prices of agricultural crops, increase in import value of certain raw materials and finished products, increase in demand due to increase in population as well as increase in incomes and impact of taxes and duties levied on food products. It can not be denied that unfair trade practices namely speculative hoarding and profiteering figured prominently in the list of factors pushing up the prices.

The producers, wholesale and retail markets, dealing in food items act like a cartel or oligopoly. They fix their prices at a level which would give them maximum profits. Besides charging higher prices, wholesalers and retailers also create an artificial shortage in order to earn as much as possible on their investment.

First of all, an effort has to be made to achieve self-sufficiency not only in wheat, rice and sugar but also in pulses and all sorts of vegetables such as potato, onion, garlic and ginger etc. Pakistan has a population of more than 160 million people, which continues to increase and the demand for all food items is growing accordingly.

In such a scenario, to meet the local demand through imports of items such as pulses, on a regular basis, is not advisable. Pakistan is predominantly an agricultural country and we can easily increase production of pulses and vegetables manifold if sincere efforts are made in that direction. Only a breakthrough in local production can ensure abundant supplies of these items and their availability to consumers at reasonable prices.

It would be equally important to improve the distribution system and make it consumer-friendly, by injecting competition into wholesale/retail markets. Competition not only helps in bringing down prices but also results in improvement in quality. In the telecom sector, for instance, competition has helped in bringing down the international call charges to as low as Rs2 per minute and the caller can now make an international call directly without involving the telephone exchange. Similarly, prices of many other items such as motorcycles, footwear and certain medicines have registered marked decline due to imports from China.

How can we inject competition into the wholesale and retail markets, in particular food markets? The government has already been trying to do this through procurement of wheat etc. The government is planning to procure five million tons of wheat, while it has directed PASSCO to buy 200,000 tons of grams during the grams season. This will help the government to guard against gram hoarding. The government may also ask PASSCO and the Utilty Stores Corporation (USC) to procure masoor during the season. According to an estimate, the production of masoor has gone up by about 50 per cent.

The provincial governments, PASSCO and the USC should, in the meantime, take appropriate measures to improve storage facilities, on scientific basis, at their disposal so that wheat, grams etc. stored therein do not get damaged.

All possible efforts may be made to increase the number of utility stores as quickly as possible. The objective can be achieved by encouraging borrowers under the President’s Rozgar scheme to open franchise utility stores throughout the country. To facilitate this, the government/NBP may consider simplifying the procedure.

In addition, the use of a tight monetary policy by the SBP may continue, for the time being, in order to check on the demand-pull inflation. At the same time, the fiscal policy needs to be pro-poor and consumer-friendly. As the revenue collection grows, the government may consider withdrawing/reducing taxes and duties levied on consumer goods of daily use to provide relief to the common man.

Also, there is a need to make consumer protection laws more effective. Simultaneously, the authorities entrusted with the task of consumer protection should also be fully equipped and empowered to deal with monopolies and cartels and protect the consumers against all unfair trade practices. The anti-competitive law should be promulgated and enforced as soon as possible.

Any counter-inflationary strategy would be incomplete if it does not include consumer’s resistance. Economists have called it, ‘the most powerful weapon to combat inflation’. Consumer’s resistance can be particularly effective in averting undue increase in the prices of perishable commodities. By giving up the use of an item for a short time or cutting its demand, consumers can force dealers to charge reasonable prices.

Consumer’s societies/groups can also decide to purchase in bulk from wholesale markets if the retail prices in their areas are not fair. The government should, therefore, make an effort to develop consumer’s resistance.

Since inflation can cause considerable harm to the economy by reducing savings and exports and eroding the purchasing power of a large segment of population belonging to the fixed income groups and lower income categories, it needs to be dealt with on a top-priority basis.

http://www.dawn.com/2007/04/23/ebr13.htm

 

[Neo]

April 23, 2007
Plan to revive old power projects

THE government has directed Wapda officials to overcome the existing 1247MW power shortfall by rehabilitating old power projects on "fast track basis". They have also been asked to line up considerable funding from local banks as it might take time to seek any financial support from the World Bank, the Asian Development Bank or any other agency for the rehabilitation of these projects.

At the same time an "action plan" has been envisaged for the removal of power shortages which need expansion in the supply of hydropower by undertaking short- and medium-term development projects. The plan is expected to be considered in the next cabinet meeting likely to be held after the arrival of Prime Minister Shaukat Aziz from China next week.

A senior government official told Dawn that the action plan also sought to reinvigorate the engineering and industrial sectors, besides offering suggestions how to overcome the growing power crisis. He said availability of alternative sources of energy like nuclear, wind and solar were also critical for providing sustainable power to remote areas. The cost of power generation was very high and with the rising price of furnace oil, it might not be possible to supply power at a lower cost. As coal was an important input in the process, its beneficiary should reduce the cost, he added.

Nuclear power, he said, was another source in power supply which was expensive in installation, but the generation cost was low and declining gradually. Currently expansion in this area required technologies in all segments of nuclear fuel cycle such as mining/processing of uranium, its conversion into fuel bundles, production of heavy water and design and manufacturing of reactors, he added.

At present total installed capacity of the system is 17,400MW. The maximum available capacity recorded ending June 2005-2006 was 13,847MW. Thus there was a deficit of 1247MW which is being met by load shedding and load management.

Another concerned official said that a capacity in power generation was urgently required, besides construction/up-gradation of transmission system in order to overcome the shortfall.

The future loads of all types of categories were calculated on the basis of present pattern of power consumption, taking into consideration industrial and agricultural development programmes, future GDP growth and other economic factors. As a first step, he said, Wapda had been asked to rehabilitate the Jabban Hydroelectric Power Station in the NWFP on fast track basis. The Jabban station had become redundant due to a fire on December 11, 2006. It will cost little over Rs1 billion.

This power station is considered highly beneficial due to less project cost as the existing civil works are being reused. Moreover, the capacity of the plant is being increased from 19.6MW to 22MW, having an annul energy output of 122GWh due to the new electro-mechanical equipment of better efficiency.

The calculated financial benefits over the project life of 30 years depict an internal Financial Rate of Return (IFRR) at 21.53 per cent which makes the project viable. The generation cost worked at Rs0.72/KWh (1.201 US cents) over the useful life of the project and cost per KW installed capacity being Rs47,275 ($788) are also very attractive to reflect the financial benefits of the project. It will help reduce load shedding and will generate revenue of Rs.269.121 million annually.

Construction of the project would likely take 36 months, including designing, preparation of tender documents, awarding of contract, construction and testing and commissioning of the plant.

All the four turbines inlet valves, governors, generators, control panels, instrumentation and control, and all other related accessories will have to be replaced. Emergency values will be replaced by spool pieces of equal dimensions.

The Jabban Hydroelectric Power Station is located in District Malakand, NWFP at a distance of 45 km from the city of Mardan and 7 km upstream of 20MW Dargai Hydroelectric Power Station. The Jabban Station since its commissioning in 1937 and addition of two units in 1952 has been playing a vital role in providing low cost energy to the national grid. The plant has already outlived its useful life and needs rehabilitation.

The 70-year-old power station was badly damaged in a fire incident. The extent of damages is such that it is not possible to restore operation of the existing units. The situation has necessitated carrying out its rehabilitation on fast track basis by installation of new machines of higher efficiency at the same site. After its rehabilitation, it would be in a position to supply consistent power to the National Gird for at least for another 50 years.

WAPDA officials have also started construction of another hydropower station called as Malakand-3 on the Upper Swat Canal which will be fed from auxiliary tunnel. The water of the upper Swat canal will be shared between the Jabban/Dargai hydroelectric stations and the incoming Malakand-3 hydropower station, according to the water share agreement between Wapda and the NWFP government.

During lean water months, water supply to the Jabban station will reduce considerably due to the allocated share of Malakand-3, resulting in reduced generation of both the Jabban and Dargai.

The NWFP government has agreed to compensate Wapda for the loss of generation of the Dargai and Jabban power stations after operation of Malakand-3 hydropower station project and 59 MKWh energy will be supplied free of cost to Wapda every year as compensation out of which 29 MKWh will be for Jabban.

http://www.dawn.com/2007/04/23/ebr15.htm

 

[Neo]

Pakistan's Warid Telecom Gets $240 Million Via IFC, Syndicated Loans

ISLAMABAD -(Dow Jones)- The International Finance Corporation, the World Bank's private sector investment arm, will extend a $100 million loan and arrange a syndicated loan of $140 million for Pakistan's Warid Telecom.

According to an IFC document seen by Dow Jones Newswires on Saturday, Warid Telecom is seeking the loans to finance the construction, expansion and operation of a nationwide mobile telecommunications network employing GSM technology.

The project, which began in June 2006, is estimated to cost $1.4 billion. The targeted completion date is June 2009.

The document said Warid Telecom would provide the rest of the funding through equity contributions, local finance and an export credit agency's guaranteed international loan facility.

Warid Telecom signed the $500 million export credit facility in November 2006 to pay for the services of Sweden's Telefon AB LM Ericsson in building and operating the nationwide network. Exportkreditnämnden of Sweden was a major contributor to the facility.

Lahore-based Warid Telecom, part of the Abu Dhabi group, has a 16% share of Pakistan's 52 million mobile phone subscribers.

http://www.nasdaq.com/aspxcontent/N...CQDJON200704230237DOWJONESDJONLINE000049.htm&

 

[Introvert]

Japanese overseas Pakistani to invest $ 20 billion​

LAHORE (updated on: April 24, 2007, 22:24 PST): Japanese Overseas Pakistani will make an investment of $ 20 billion in the country and the government will provide all the facilities to these investors in launching their projects.

Punjab Minister for Trade and Investment, Dr. Zafar Suhail Cheema expressed these views while talking to a delegation of overseas Pakistani here Tuesday.

He said that the industrial sector has witnessed a remarkable progress due to the investors friendly policies of the government and added the big multi national companies of the world are making investment in the country.

He told the delegation that in next three years foreign investors will make an investment of $ 25 billion in the Punjab ,particularly in Lahore. Due to this, not only the economy of the province will improve but also thousands of people get job, he added.

He said that inauguration of the first store of German company Metro Cash and Carry will be held in next two months,whereas Makro,a Holland based company has already established its store here.

He said that the government is also paying attention on the uplifting of infrastructure besides provision of other facilities to the foreign investors
www.brecorder.com

 

[Introvert]

Pakistan-Iran Bilateral Trade to achieve Target of US$ 1 Billion​

ISLAMABAD: Chairman Pakistan Iran Business Council Tariq Sayeed has expressed optimism that Pakistan and Iran will achieve the target of bilateral trade of one billion dollar by end of this year. He was speaking at a meeting with Ahmad Fasihi, Commercial Attache of Iran in Karachi.

Tariq Sayeed said that the present volume of bilateral trade of 638 million $ between Pakistan and Iran should be further enhanced between the two countries.

To achieve the set target of bilateral trade, Tariq Sayeed suggested that Pakistan and Iran should encourage border trade by establishing customs ports at borders.

He further suggested that Pakistan and Iran should also establish banks in each other countries to facilitate operating of LCs.

Tariq Sayeed said that Pakistan Single Country Exhibition in Iran is overdue and added that with the help of Commercial Attache’ FPCCI will organize Pakistan Single Country in Tehran in the last quarter of 2007.

Sayeed appreciated the role of the Commercial Section and Commercial Attached of Iran Consulate particularly in terms of facilitating the business community of pakistan having 350 meeting with them during 5 months.

He said that the opening of Commercial Attache office in Karachi was a positive steps in promotion of bilateral trade and Pakistan should also open a separate Commercial Attache Office Tehran which is an international policy being adopted by all Embassies and High Commissions.

While making the suggestions for the promotion of bilateral trade Tariq Sayeed emphasized on the need of exchange of information between the business community of the two countries.

He said that Pakistan and Iran should make a joint study on their bilateral trade relations and their share in global trade. He suggested that both the countries should identify the potential items of import and exportable between the two countries and give it wide publicity.

He further suggested that both the countries should also identify potential ares of joint ventures particularly in ares where they can complement each other.

He said that according to the agreement between the two countries Iran has reduced import duty on 339 items while Pakistan has reciprocated the same on 309 items.

Ahmad Fasihi Commercial Attache welcomed the proposals made by the Chairman Pakistan Iran Business Council.

He said that the Pakistan Single Country Exhibition in Iran will go a long way in promotion of bilateral trade and economic relations.
http://www.pakistantimes.net/2007/04/25/business1.htm

 

[Neo]

Foreign investment reaches $5.56 billion in nine months

KARACHI (April 24 2007): For the first time in Pakistan's history, Foreign Investment (FI) has crossed five billion dollar to $5.56 billion during the first nine moths of the current fiscal year, statistics revealed on Monday. According to the central bank statistics, during the first nine months (July-March) of the current financial year.

The total FI has increased by 67 percent to $5.5609 billion against $3.3201 billion during the same period of the last fiscal, denoting an increase of $2.2408 billion.

Total FI compiled on $1.7018 billion portfolio investment (including $675 million of OGDC GDRs) and $3.8591 billion foreign direct investment (FDI) including 133.2 million privatisation proceeds. Government has set target of $6 billion foreign investment for the current fiscal year 2007 and after $5.5 billion investment during nine months, now it is expected that current fiscal target would be achieved next month.

"Foreign investment, that is coming to Pakistan is not quality investment and it would not benefit the economy," said Dr Shahid Hassan Siddique an expert on political economics. He said that foreign investment is mostly coming in telecom and banking sector and rates of profit offered by Pakistan are the highest in the banking sector, while the return is also 34 percent annually on equity.

He said that another cause is that although investors is investing one time and income in these sectors would be in Pak rupee, but the rate of profit will be high, which will be remitted in foreign currency year after year. As a result, there will be serious pressure on current account deficit and foreign exchange reserve, he cautioned.

Statistics show that portfolio investment (PI) has crossed one billion marks and now it has reached $1.7018 billion during July-March of fiscal year 2007 as compared to $1.0774 billion during the same period of last fiscal.

Communication sector has attracted $1.053 billion foreign investment, while financial business with $265 million, power sector with $304 million, oil and gas sector with $217 million are leading sectors in foreign investment.

Exclusive of privatisation proceeds FDI shows an increase of 72 percent to $3.8591 billion during July-March of current fiscal as previously stood at $2.2427 billion during corresponding period last fiscal, depicting an increase of $1.6164 billion.

During March 2007, net foreign investment has recorded $934 million including $888.3 million FDI and $45.7 million portfolio investment. Dr Shahid Hasan said that this is fact that such investments neither enhance export nor reduce imports, these investments can not be termed as quality investment and are worrisome investment.

He said that due to deteriorating law and order situation, political concentration, on going protest on the streets, unannounced loadshedding, poor infrastructure and corruption at high levels are the chief hurdles in foreign investment. The negative attitude of bureaucracy and high cost of doing business in Pakistan are some other factors that discourage quality investment in Pakistan, he added.

http://www.brecorder.com/index.php?id=555213&currPageNo=2&query=&search=&term=&supDate=

 

[Neo]

Pakistan now Rs 90 billion pharmaceutical market

KARACHI (April 25 2007): The country has become Rs 90 billion pharmaceutical market and about 85 percent of the business is concentrated amongst 50 companies. Haseeb Ahmed Khan, former chairman Pakistan Pharmaceutical Manufacturers Association (PPMA), stated this while inaugurating a three-day Pak Pharma Expo, jointly organised by PPMA and Prime Corporation, here on Tuesday.

Haseeb said that among 50 pharmaceutical companies about half of them were multi-national and the remaining 25 are local. He said that Karachi has become the hub of pharmaceutical business as 40 largest firms were operating from the metropolis and has grip on over 78.5 percent business.

Former vice chairman PPMA Zahid Saeed said that export of pharmaceutical products had shown significant growth and currently it surged at 25 to 30 percent.

Later, the participants visited the stalls where companies from China, India, Germany, Korea and other countries have set up their stalls.

http://www.brecorder.com/index.php?id=555630&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Chinese seeks investment in plastic and pharmacy sectors

LAHORE (April 25 2007): The Chinese investors have shown interest in initiating joint ventures with Pakistani businessmen in plastic and pharmaceutical sectors. Vice-President Lahore Chamber of Commerce and Industry (LCCI) and head of 12-member LCCI delegation, Mubasher Sheikh revealed this on his return from a seven-day tour to China and Thailand.

He said that the Chinese investors were ready to make investment in Pakistan because of its business-friendly policies. He hoped that in the result of his delegation's visit to China and Thailand, the level of foreign investment from these countries would touch new peaks. The delegation, besides holding one-to-one meetings with their counterparts in both the countries, also visited various government departments in China and Thailand.

The main objective of the visit was to attract foreign investment and seeking joint ventures with businessmen in China and Thailand besides highlighting the soft image of the country.

http://www.brecorder.com/index.php?id=555680&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

NWFP reactivates two emerald mines in Swat

PESHAWAR (April 25 2007): The Directorate of Mine and Minerals NWFP has reactivated mining in two emerald mines in the province after 10 years. The two emerald areas at Gujjar Killi and Shamozai in district Swat were auctioned in February 2007 for Rs 44million and Rs 95 million respectively. The third most prominent area for emerald at Fiza Gat, Mingora is being auctioned shortly.

Talking to Business Recorder, Director General (DG) Mines and Minerals NWFP Engineer Mian Farooq Iqbal said that during the last fours years the exploration promotion division (EPD) of the DGMM has completed the first pass exploration coverage of northern part of NWFP over an area of 40,000 square kilometer for gold and base metals anomalies. The project, he said, have identified 34 targets areas for follow-up exploration to attract investment.

Exploration of Swat emerald belt by identifying additional emerald prospects along the belt in the vicinity of known deposits and exploration of gemstones in Chitral and project has made new discoveries of gemstones (aquamarine and tourmaline) in Garam Chashma, Kalash and Darosh localities.

The project also includes evaluation of marble and granite potential in the NWFP and has estimated the marble resources to the tune of 3 billion tones in addition to their dimensional stone resources ie granite etc of abundant occurrence.

The directorate has also established Gem Testing Section in MTL to facilitate the exploration, mining and trading of gemstone in the province, strengthening of mineral processing section in MTL to facilitate the studies on processing of metallic minerals.

Similarly, it has also established resource mapping section and information services and promotion by acquiring the latest techniques of GIS and RS techniques. This will strengthen the EPD for systematic exploration and assessment of mineral resources in the province with a view to facilitate the regulation of mineral development and private investment (local, international and multinational.

The provincial government, he said, has also notified the NWFP Mining Concession Rules 2005 entrusting the Directorate General of Mines and Minerals with responsibilities of granting mining concessions for Minor Minerals. A separate wing has been established to deal the affairs of Minor Minerals to facilitate the process of expedient grant of minor mineral cases.

The wing is imparting commendable results besides being severely deficient with support staff. "The directorate has effectively achieved the fiscal targets and the wing is poised to given better results provided, it is strengthened accordingly," the DG MM added.

The Safety Division of DGMM has initiated a scheme in the year 2004-05 for establishment of a Mines Rescue, Safety & Training Station in Jalozai, District Nowshera at a cost of Rs 34.2725 million to fulfil the requirements of the availability of skilled and trained mining crew.

The scheme, he said, would serve effectively in providing training facilities on modern and safe mining methods, mine ventilation, mine support, short firing, rescue operations and first aid to supervisors/miners for safe mining in the underground mines.

The facility, he added would impart training to 200 miners annually. The Directorate of the Mines and Minerals, he said on the directives of the provincial government while considering the peculiar strategic location, traditional environment and immense mineral potential framed new rules in line with the NMP-1995 through notifying the NWFP Mining Concession Rules-2005.

http://www.brecorder.com/index.php?id=555652&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Inefficient water use may cause Rs70bn loss

ISLAMABAD: The inefficient use of water is estimated to cause a loss of Rs70 billion to the national kitty, which is 1.5 per cent of the GDP and 6.8 per cent of the agricultural GDP.

“Current pattern of water use is resulting not only in significant environmental degradation, but also causes a loss of soil fertility, which is mainly due to soil salinity and erosion,” says a World Bank report released here the other day.

The inefficiencies in water allocation had reduced the crop productivity both at the head-end due to over-use of water and water-logging and tail-end due to water shortages, the report added.

The report suggested that shifting of 60 per cent sugarcane-cultivated area to a wheat-maize rotation or shifting of one quarter of rice land to maize would save enough water to meet the current needs of Karachi city.

“Water-use efficiency can be improved by making investments to improve water delivery, better water management and efficient use of water at farm level,” it said, adding “this can be achieved by drainage, control structure, conveyance mechanism and adaptation of water-saving technology.”

It also suggested that water-use efficiency could be improved by reviewing charges for canal water (abiana) and developing markets for tradable water rights. This could be implemented by passing laws and strengthening local markets.

http://www.thenews.com.pk/daily_detail.asp?id=52760

 

[Neo]

Pak engineering potential surprises Germans

HANOVER, Germany: The German entrepreneurs of small and medium enterprises in the engineering sector who participated in the biggest industrial exhibition of Europe have discovered Pakistan’s potential here at Hanover, saying they have come to know for the first time that the country is making sizeable engineering products.

“Earlier I was not aware of the fact that Pakistan’s SMEs are manufacturing very important engineering products because of no coordination among the concerned entrepreneurs, but when I came here and observed the country’s engineering products displayed at various stalls, then got elated at discovering Pakistan in the exhibition,” Rumi Moiz, Managing Director, Research and Development Engineering Company, told The News.

The Ministry of Industries and Engineering Development Board had taken the initiative of participating in the Hanover exhibition in 2005 to get Pakistan a substantial share in global industrial sector. Under this initiative Pakistan participated in the Hanover Messe 2007. Many of the companies which are persistently participating in the exhibition have managed to get orders from serious buyers which have helped increase businesses of the said companies by 20 to 30 per cent.

Faish H Agha, Director of Transmission Engineering Industries Ltd was the only Pakistani entrepreneur who successfully managed to allure the attention of most of the international participants and visitors as he displayed at his stall a Bay Delivery Van ñ 100 per cent indigenously manufactured in Pakistan.

He made this very unique product for delivery of goods within the city at the cost of 2,040 Euro. Many people showed keen interest in the product. He expressed his optimisim saying that he will be able to get a substantial order of his product.

He said at present he is in trade with USA on gearing industry. Agha said he got tremendous exposure in the exhibition and this practice should continue as this is the only way to increase the exports of Pakistani industrial products. He said it is the high time for policy makers to make coherent policies for paying more heeds to the development of Industrial sector.

Furrukh Jamal, Group Director of Aftab Companies and MD of SimCon, said his company is IT based and operational at Karachi that provides solutions to SMEs from concept to manufacturing stage. “In addition, our company has expertise in making dies and molds.”

Jamal said this is his second participation in the Hanover industrial exhibition and a German team has shown keen interest for training from SimCon on engineering solution products. He said: “However, we have not managed to strike a deal with regard to exporting our products, but we have received tremendous response over the products that we have displayed and made new and precious contacts with international buyers.”

“We have got exposure owing to which we have decided to introduce in house changes to improve the efficiency of the company at part with international standards,” he added.

Abbas Mooraj, Chairman of Nazer and Co, known for making machinery for textile, jute, synthetic and knitted fabrics industry, told The News he got international exposure and have obtained opportunity to mingle with people concerned with the focused approach.

He said Pakistan's engineering development is based on the focus by the government which is not being paid as all the focus exists on textile products

http://www.thenews.com.pk/daily_detail.asp?id=52765

 

[Neo]

April 25, 2007
Financing for 225-mw power plant

KARACHI, April 24: The Halmore Power Generation Company has mandated the HSBC Bank Plc, Czech Export Bank and Askari Commercial Bank Limited to arrange a comprehensive debt financing package for a power plant.

The proposed 225-mw combined cycle power plant to be set up near the town of Bhikki, Sheikhupura.

The Halmore Power is owned by a London-based Pakistani businessman and real estate developer Dr Mian M. Sharif.

Enerpro (Private) Limited, a specialised Consulting Company for Energy Projects had been engaged for developing the project. HPGCL has recently signed an engineering, procurement and construction contract for the project with Kodaexport Company Ltd of the Czech Republic, says a press release of HSBC Holdings.

The major portion of the $150 million project debt was expected to be supported by the Export Guarantee and Insurance Corporation, the official export credit agency of the Czech Republic. The remaining debt requirement will be provided by a syndicated term loan facility denominated in local currency.

This project will be the first under the 2002 power policy to be financed with ECA supported foreign debt and the successful conclusion of the financing will define the level of future interest in the sector from the international project finance community.

http://www.dawn.com/2007/04/25/ebr9.htm

 

[Neo]

April 24, 2007
Non-textile products export declining

ISLAMABAD, April 23: The export of non-textile products dipped by 2.32 per cent to $4.407 billion during the first nine months (July-March) of the current fiscal as against $4.512bn the same period last year.

The government policies are focused at promoting export of textile products have resulted into substantial reduction in export potential of the traditional products like carpets, leather, sports, surgical and other primary commodities.

However, the growth in export of non-textile products was more than 17 per cent during the same period last year. This showed that lack of any subsidy or any other financial assistance had rendered the traditional products less competitive with those coming from China, India etc., in international market.

Products wise analysis showed that the export of rice declined by 3.31 per cent to $818.157 million as against $846.164 million in the corresponding period last year. However, the export of basmati rise rose by 20.04 per cent.

The export of sport goods recorded a fall of 16.41pc to $193.901 million during July-March as against $231.956m the same period last year. Of these, export of footballs declined by 23.26pc while gloves rose by 182.96pc during the period.

The export of footwear products dipped 21.18 per cent to $83.373 million as against $105.783 million the same period last year. Of these, the export of leather footwear decreased by 19.50pc followed by 39.87pc in canvas footwear and 27.17pc in other footwears.

The export of leather products plunged 33.64pc to $369.296 million as against $556.474m last year. Of these, exports of leather garments fell 32.61 per cent, leather gloves 31.85pc and other leather products 45.26pc.

Exports of surgical goods and medicinal instruments declined 27.32 per cent to $86.595 million during the nine months of this fiscal as against $119.153 million over the corresponding period last year. The export of carpets, rugs and mat reached to $168.067 million, down 13.01pc from $193.210m the same period last year.

The commodities which recorded a negative growth in their export during the period under review included: furniture (9.73pc), molasses (14.39pc), handicrafts (63.46pc), fruits (8.55pc), sugar (100pc), etc.

There were few products which witnessed a marginal growth in their export including auto parts (18.50pc), engineering goods (6.14pc), meat (113.80pc), jewellery (82.89pc), gems (24.92pc), wheat (100pc), etc.

http://www.dawn.com/2007/04/24/ebr11.htm

 

[Neo]

Govt to welcome Kuwaiti Midrock $2 billion investment in Lube Refinery, Naptha Cracker projects: Jadoon
Wednesday April 25, 2007

ISLAMABAD: President of Kuwait Midrock Tussanina Company Sheikh Humoud Al Sabah called on Federal Minister for Petroleum and Natural Resources Amanullah Khan Jadoon here on Tuesday and briefed about his company's $2 billion Petrochemical Complex at Port Qasim Karachi.
During the meeting, President of Midrock informed the minister that the government of Sindh had allocated 500 acres of land at Port Qasim for the proposed Lube Oil Refinery, Naptha Cracker and petrochemical complex. He said Midrock was also looking to invest in Oil Refinery and LPG terminal projects at Gwadar.

Welcoming the Kuwaiti Midrock delegation, the minister said that there existed a lot of potential for the investors in oil and gas projects and the government would facilitate them in this regard.

He said that the government was exploiting the untapped hydrocarbon deposits and alternate energy resources to sustain the GDP growth rate of above 7 percent per annum of the country, which was paving way to uplift the socio-economic conditions of the masses.

He said that President Musharraf's visit to Kuwait in December 2005 had opened up new avenues of multi faceted cooperation between the two brotherly Muslim countries. The minister said that the government would welcome the Midrock investment in the petroleum projects and assured his cooperation in this regard.

Ambassador of Kuwait Faisal A Mulafi, Additional Secretary Petroleum Shaukat Hayat Durrani and members of Midrock delegation were also present during the meeting.

http://www.paktribune.com/news/index.shtml?176167