Pakistan Economy - News & Updates - Archive

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ADB wants private sector director as Pepco chairman ​

ISLAMABAD (July 31 2007): The Asian Development Bank (ADB) has asked the government to appoint a private sector director as chairman of Pepco. At present Wapda chairman is also chairman Pepco. Sources said that four 'companies' have submitted their projects to ADB to receive the first tranche of the approved loans amounting to $800 million.

They said that the Bank was also of the view that there was clash of interests between private sector and government members of the Boards of Directors (BoD), which needed to be reviewed. Pepco, in its response to the ADB's aide-memoire, said that in all Boards of Discos, there are invariably three members from private sector.

"All chairmen of the boards are from private sector, but it is true that Wapda and Pepco Chairman is currently the head of the board of NTDC which is not the conflict of interest," was Wapda's response. Sources said that Wapda had also taken up the case with Finance Ministry to review lending rates for power distribution enhancement project of Discos, for which a separate case should be moved for approval of ECC to make this rate compatible with market rates.

They said that Pepco was coordinating with all Discos to develop/frame a comprehensive PC-1 for first tranche of the distribution enhancement project and it is hoped that the document would be submitted in August 2007 for approval of the government.

As discussed in the pre wrap-up and wrap-up meetings, the demand of ADB for acquisition of 'tower bases' (land under the towers) for every tower of the new lines needed to be reviewed as it is impracticable and is bound to jeopardise the whole project, sources quoted Wapda as conveying to the Bank.

Wapda also rejected a proposal of ADB regarding facilitation of independent power producers (IPPs), saying that promotion of IPPs "is not the mandate of Pepco" as this function is carried out by PPIB. On the other hand, as a result of de-regulation and unbundling of power wing of Wapda, the utility has been left with water wing and power wing, which will cater for development and operation of hydel power generation.

According to sources, grid system construction and the T&G stores along with manpower and T&P have been transferred from NTDC to Discos, as these are integral parts of the respective Discos' structures.

http://www.brecorder.com/index.php?id=598617&currPageNo=1&query=&search=&term=&supDate=

 

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'Pakistan wants increased trade ties with Uzbekistan' ​

LAHORE (July 31 2007): Provincial Minister for Industries Muhammad Ajmal Cheema has stressed that the investors of Pakistan and Uzbekistan would start joint ventures in leather sector that would help enhance the volume of trade between the two countries in leather and other sectors too.

He expressed these views while talking to a 7-member delegation led by Chairman, Leather Association of Uzbekistan Iskandar Attanof, here on Monday. "Pakistan and Uzbekistan have brotherly relations that would further cement in near future," the minister added. He said that investors of Uzbekistan should come forward and avail the opportunities being given by Pakistani government.

http://www.brecorder.com/index.php?id=598663&currPageNo=1&query=&search=&term=&supDate=

 

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'Work on development package in capital in progress' ​

ISLAMABAD (July 31 2007): The work on development package, worth of Rs 8.3 billion, on various projects, including to improve basic amenities of life like roads and other facilities in the federal capital is under progress, said President Pakistan Muslim League Federal Capital Dr Muhammad Amjad.

Talking to APP here on Monday, he said the Prime Minister Shaukat Aziz have already approved the development projects worth Rs 8.3 billion for rural and urban areas of the federal capital. He said the development package will bringing about improvement in the facilities of health, education, rural development and gas supply in the rural areas.

Dr Amjad said out of this Rs 8.3 billion, a sum of Rs 4 billion will be spent on the expansion of roads, the construction of an underpass and a Zero Point interchange. Islamabad development package also includes the construction of a sewerage treatment plant and the development of a solid waste management system. Dr Amjad said development package for Islamabad would improve the basic needs of life to the people.

He said under this package 19 water filter plants would be installed in different sectors of the federal capital to ensure better supply of clean drinking water. He said a public library, new working women hostel and day care canters for children would also be constructed.

The package, he said, also include, expansion in Daman-e-Koh restaurant at cost of Rs 31 million, construction of Pir Sohawa Tourist Restaurant at cost of Rs 60 million, improvement of F-9 Park at a cost of Rs 3,333 million, improvement of Pir Sohawa Road at cost of Rs 30 million, construction of Arts and Craft Village near Said Pur at a cost of Rs 112 million, construction of Rawal Lake Recreational Spot at cost of Rs 112 million, redesigning and expansion of Zoo at a cost of Rs 100 million.

Said Pur Model Village project at a cost of Rs 400 million, redesigning of Melody Food Street at a cost of Rs 14 million, construction of Food Mall at Blue Area at a cost of Rs 17 million, construction of Weekly Bazars at G-6 and G-9 at cost of Rs 225 million, expansion and redesigning of highways, including 7th and 9th avenue at a cost of Rs 3 billion.

http://www.brecorder.com/index.php?id=598677&currPageNo=1&query=&search=&term=&supDate=

 

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Mega development projects launched in AJK: minister ​

MIRPUR (July 31 2007): Mega development projects have been launched by the government in various parts of AJK including Mirpur and Bhimbher districts in order to fulfil the local needs of food. This was disclosed by AJK Minister for Food Abdul Qayyum Khan Niazi, while addressing a development review meeting of the AJK Food Department, Mirpur division at the local rest house here on Monday.

The minister continued that the government was bent upon to make AJK self-sufficient in production of various edible items under a broad-based plan. Ongoing food projects have yielded positive results, he said adding in order to ensure the uninterrupted and bulk supply of flour to the masses in far flung areas, the government has established 26 new depots only during new fiscal year.

He said that earlier, only 60 depots could be established in AJK during last six decades. He said that the locally produced flour was available in required quantity at inexpensive and subsidised rates. The government had purchased 17 tons of wheat only from Iftikhar Abad and earned the profit of Rs three million.

The minister said that the government was taking all possible steps to ensure the supply of quality Atta to the consumers. Referring to the need of Atta in far-flung areas in AJK, the minister pointed out that the required stock of wheat and Atta was available for the period of next eight months in the Neelum valley.

Despite this, the food department was fully prepared to meet any shortage of this basic diet in remote and far-flung areas in any emergent situation during monsoon.

http://www.brecorder.com/index.php?id=598723&currPageNo=1&query=&search=&term=&supDate=

 

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Manpower export to Middle East, Malaysia: plumbers, masons, drivers, electricians still in demand ​

KARACHI (July 31 2007): The Federal government has intensified its efforts to export manpower to labour deficient countries in the Middle East, it was leant here on Monday. Sources said that the slow down in the process of recruitment of semi-skilled and skilled labour by Dubai, Oman, Sharjah, Saudi Arabia and Malaysia was badly affected after 9/11 incident and the recruiters had shifted their attention to India, Bangladesh and Sri Lanka.

The recruiters were reluctant to take initiative on the pretext of "fear of terrorist recruitment". They said that despite assurance from Malaysia that it would send its own teams to Pakistan for recruitment, and despite Pakistan's agreement to this condition, the process did not pick up.

"Malaysian streets are full of cheap labour from Indonesia, India, Philippines, Thailand and Bangladesh. Similar is the situation in the Middle East and elsewhere." Sources said that skilled plumbers, masons, drivers and electricians from Pakistan were still in demand in these countries.

Construction workers, mechanics and operators of heavy machinery and those who could bear scorching heat and dig roads were also needed abroad. "A few years back, it was announced that Malaysia will permit drivers from Pakistan to work in the transport sector, but the proposal did not materialise. We are partly responsible for missing out on this opportunity," they said.

Sindh has "exportable surplus" in these fields and efforts are afoot to encourage people to seek employment abroad. The Federal government has planned to encourage and facilitate people desirous of going abroad for gainful employment.

On Monday, Chairman of Policy Planning Cell of the Ministry of Labour and Manpower Dr Saboor Ghayour called on acting Sindh Governor Syed Muzaffar Hussein Shah and explained to him the prospects of the new plan the Labour Ministry had drawn and recruitment procedures for the intending candidates.

He said that the Federal government was encouraging people to go abroad. He said that the ministry would facilitate in the process of finding placements and process of recruitment. Now the system has changed as the government involves itself from the process of making application to recruitment and joining at the workplace by a candidate. A mechanism has also been evolved to safeguard the agreed remuneration of recruited labours.

Ghayour told the governor that the ministry was keen in encouraging people from Sindh to go abroad and take benefits from the opportunities. In this respect, the ministry would help the intending candidates and provide them complete assistance from the beginning of the process to the end of the process. Remittances through protected channels would also be provided.

He said that a comprehensive plan for overseas employment had been drawn and sent to different government departments in the four provincial governments for feedback on the plan.

Ghayour said that on Tuesday representatives of different departments of the Sindh government would meet and submit their recommendation about the procedure of recruitment that they would like to adopt. Their suggestions to make the entire process simple would be incorporated into the plan.

He said that the purpose of this meeting was to sensitise different department on the kind of manpower they would be able to prepare for overseas employment. The governor, on this occasion, said that the overseas employment opportunities would be helpful in solving unemployment problem in Pakistan. "It would be one step forward in poverty alleviation," he added. According to the Ministry of Labour, Pakistan has skilled and semi-skilled manpower suitable for overseas employment. According to a conservative estimate, the Federal Labour Ministry is capable of arranging 300,000 skilled and semi-skilled manpower by the end of this calendar year.

http://www.brecorder.com/index.php?id=598700&currPageNo=1&query=&search=&term=&supDate=

 

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FTAs with Asean states to hit exports: industrialists ​

KARACHI (July 31 2007): Signing of the free trade agreements (FTAs) with member countries of the Association of Southeast Asian Nations (Asean) will reduce the country's exports in the world market due to high cost of production and weak marketing plans by the government, said industry sources on Monday.

"Countries in the Asean block are more competitive in terms of value-addition of readymade textile, producing at lower costs than the same quality of Pakistani products, which will only help them occupy our local market and create stiff competition for us in the world market," they added.

The FTAs will help the other countries as compared to Pakistan because local manufacturers were not able to beat products of these countries in the world market, let alone, occupying their respective domestic markets, they said.

They said the government should enable first its local industries before signing the FTAs, as announced in the 2007-08 trade policy with countries like Thailand, Singapore, Malaysia and Indonesia with a view to competing their products in the world market, but also in the local markets of these countries.

"The government should evolve a policy of protectionism for the local industries against the Asean and other regional countries as products from these countries are expected to glut the local markets soon after the signing of FTAs," they added.

Country's imports were already higher than its exports, of which textile products' share was about 60 percent, whereas textile products of the Asean countries, lower in prices and better in quality, could cause heavy losses to local industries, they feared. Trade with China was already in deficit, they pointed out, and said that the FTAs would further give rise to imports also from the Asean countries, as the country's exporters were already striving to compete with these countries in the world markets.

They said that the next fiscal year's export target would not be achievable in the prevailing circumstances, as the cost of production was increasing, turning away the international buyers toward China, India and Bangladesh.

The continued power outages in the country had put a severe negative impact on the industrial production, which made the commodities costlier and delayed their arrival in the world market, as a result, the exporters faced huge financial losses, they said.

They demanded of the government to chalk out a special plan to sort out electricity problems on priority basis, and added that the government should also support small medium and enterprises (SMEs) to enhance export-oriented production, besides generating employment opportunities in the country.

The biggest challenge to the government was to resolve the electricity crisis, develop basic infrastructure for industries and reduce cost of production before signing any pact with other countries so that the local industries could be protected from oversupply of imports, they suggested.

http://www.brecorder.com/index.php?id=598630&currPageNo=1&query=&search=&term=&supDate=

 

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Pakistan keen to export cement to India, trade talks today: foreign office ​

ISLAMABAD (July 31 2007): Pakistan is keen to export cement to India and it will take up the issue of having more access to the Indian market during the commerce secretary level trade talks being held from Tuesday, July 31 in Delhi.

A Foreign Office spokesperson Tasnim Aslam, speaking at a weekly press briefing on Monday, said the issue of including more items in positive list and host of other issues would be taken up by the two sides during the meeting, which would be followed by the Joint Working Group meeting.

When asked about the bill passed by US Congress linking Pakistan's assistance with its performance to eradicate terrorism, she said the bill, if signed by the US president, would undermine the US interest in the region.

"The bill, which is yet to be signed by President Bush, will not only be harmful for Pakistan, but it will be dangerous for the US interests in the region, as well," she said. However, the spokesperson said that the bill would not affect the Pakistan-US strategic relations.

"Pakistan will continue its efforts to eliminate terrorism in its own national interest," she said. "In the past, the sanctions, which came in the form of Pressler Amendment, did not really work. The new bill though does not spell out any sanction, will meet the same end. We are fighting terrorism in our own national interest, and would continue with our comprehensive counter-terrorism strategy," she added.

At the same time, she said that Pakistan would also continue its position on the bill. "By now, the US Congress would have understood our position," Aslam said. We will continue to interact with the US government on the issue. In reply to another question, she said the bill would have no negative impact on the second round of Pak-US strategic dialogue to be held later this year.

Responding to a question, she said, certainly, Balochistan Liberation Army (BLA) was a terrorist organisation and definitely Pakistan is against it. "The BLA leadership is living in different countries. We have conveyed our message regarding this to the Afghan government." Afghanistan denies that any BLA leader is living there.

Pakistan recognises Taiwan as an integral part of China. The issue of Taiwan is an internal issue of Chinese government. In the past, we opposed UN efforts to separate Taiwan from China and in the future, we would do the same, she said.

"I don't think that Saudi Arabia had any nuclear programme. The media reports suggesting that Pakistan is assisting Saudi Arabia in building nuclear programme are absurd. Such reports don't deserve to be commented," she added.

She said Pakistan was more than ready to speed up dialogue process with India. The composite dialogue process is well on track, though a bit slow. But India is, actually, responsible for this delay. Pakistan wants to shift from conflict management to conflict resolution including the core issue of Kashmir, she added.

On the issue of Siachen, she said it was India, which did not respond positively to Pakistan. In secretary level talks, which would begin today, the two countries would discuss issues like opening bank branches in each other countries, non-tariff barriers, laying of new optic fiber link, relaxation in business visa rules and host of others. Pakistan minister of state for foreign affairs Khusro Bakhtiar will attend Asean Regional Forum (ARF) to be held next month.

http://www.brecorder.com/index.php?id=598689&currPageNo=2&query=&search=&term=&supDate=

 

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Inter-Continental to open in 2010: agreement signed ​

LAHORE (July 31 2007): The Inter-Continental Hotels Group will manage a 200-room hotel in Lahore as part of a spectacular mixed-use development by the Centaur Pvt Ltd. The Centaur and the group signed an agreement at the group's Asia Pacific head office in Singapore in July.

Centaur is part of the diversified Rockville Group of Companies, also known for the prestigious Froebel's International School network in Islamabad and Rawalpindi and soon in Lahore. The Inter-Continental Lahore, scheduled to open in late 2010, will offer the luxurious facilities associated with the Inter-Continental brand including meeting rooms, ballrooms, signature restaurants, fitness centre and spa.

http://www.brecorder.com/index.php?id=598665&currPageNo=2&query=&search=&term=&supDate=

 

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Pakistan to become world’s number two: Use of CNG in vehicles​

KARACHI, July 30: Pakistan is likely to outclass Brazil and Argentina in population of CNG vehicles and may emerge world’s number two in August this year by surpassing Argentina in number of CNG vehicles.

Pakistani roads are now flooded with 1.21m of CNG vehicles while Argentina has 1.243 million vehicles on roads. Brazil has 1.315 million CNG converted vehicles.

“We will leave Argentina behind next month in view of the rising demand of CNG-fitted cars and other vehicles. Pakistan has already emerged as the CNG leader in Asia,” CNG Station Owners Association (CNGSOA) Malik Khuda Bux told Dawn on Monday.

Currently, over 1,400 stations are in operation in 85 towns and cities of the country and an investment of Rs46 billion has so far been made. More than 60,000 new jobs have been created.

Some 400 new stations will be added in the new fiscal 2007-08 and number of vehicles will touch 1.4 million, he said adding that the 7,000-8,000 vehicles are being converted into CNG every month while some 3,000 new factory fitted CNG cars are finding their way to the roads from the local assembly plants.

Despite phenomenal growth in the CNG sector, consumers continue to face inordinate delays due to long queues at the CNG stations of the drivers to get their cylinder filled.

Less than 10 CNG stations out of over 100 stations in Karachi are getting gas pressure at 15 psi (per square inch) as against low pressure of eight psi. As a result, consumers have to wait for long at the CNG pumps. In the peak hours (after 10:pm) the eight psi reduces to 4-6 psi, thus taking 15-20 minutes to get the gas cylinder of a car filled.

In sharp contract, the Sui Northern Gas Pipeline Limited (SNGPL) offers 15 psi to the CNG stations. Dealers said that more than 90pc of pumps are getting 15 psi pressure. The CNG stations are now handling consumers numbering more than double compared to last year. Because of the low pressure of eight psi, the capacity of the compressor fails and the dispenser takes time to fill CNG especially in peak hours.

Chairman CNG Dealers Association (CNGDA) Abdul Sami Khan along with other members told Dawn in his office that one and a half years back, the SSGCL had agreed to offer 15 psi pressure but their charges were very high. As a result, only few investors have so far afforded to get the 15 psi for their stations.

He said that the SSGCL should follow the policy of SNGPL in offering 15 psi with low charges. But so far the utility company despite repeated attempts and requests is not ready to take the matter seriously.

Because of phenomenal increase in petrol prices, a number of consumers had installed CNG kits and cylinder in their vehicles in a bid to cut the cost of transportation. CNG still costs 40-50 per cent cheaper than petrol in cars.

The CNG dealers had also discussed the draft CNG Policy, 2007, which the petroleum ministry had dispatched to the associations for comments and inputs.

On the government’s plan that no new CNG pump will be set up in residential area, Abdul Sami Khan said that the government should exempt those investors, who had already made investment by purchasing land and equipment and also those who had received license.

For example, he said that in Karachi alone, there are 100 pumps situated in residential areas while 35 new stations have also been approved.

http://www.dawn.com/2007/07/31/ebr1.htm

 

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Economy adds 730,000 new jobs​

ISLAMABAD, July 30: The government has claimed to have created 730,000 new jobs during the July-December period of 2006-07. The ministry of finance in a report released here on Monday said the number of employed people rose to 48.09 million during the period under review from 47.36 million in July-December 2005-06.

According to Labour Force Survey July-December 2006-07, the overall unemployment rate had declined to 5.3 per cent from 6.5 per cent in July-December 2005-06. In rural areas it declined from 5.7 per cent to 4.6, while for urban areas to 6.8 per cent from 8.4 per cent.

Both male and female unemployment rates have declined both in rural and urban areas. However, the female unemployment is very high, which declined to 14.5 per cent in urban areas from 15.9 per cent, while it stood at 6.8 per cent in rural areas dipped from 8.2 per cent.

The decline in female unemployment in both rural and urban areas can be attributed to two factors. Firstly, it has been observed in many developing countries including Pakistan that females would not enter the job markets due to perceived or otherwise discriminatory factors.

In recent years, in Pakistan, it is now being observed that such impression is being dispelled as female participation rate is on the rise, as female labour force participation rate was 11.1 per cent in 2003-04, which increased to 14.1 per cent during July-December 2005-06 and further to 14.5 per cent in July-December 2006-07.

This trend is due to the increased job opportunities. Secondly, the availability of micro finance facilities focusing on women particularly in rural areas has created new opportunities for women entrepreneurs.

Unemployment is defined as all persons 10 years of age and above who during the reference period were without work i.e., were neither in paid or self-employment nor employed as unpaid family helpers, currently available for work i.e., were available for paid employment or self-employment, and seeking work i.e., had taken specific steps in a specified period to seek paid or self-employment.

Sustaining economic growth is expected to further generate employment opportunities. This is likely to reduce overall unemployment to 4 per cent by 2009-10 under the Medium Term Development Framework (MTDF) 2005-10.

Since approximately 1.0 million people enter the job market each year, creating jobs for them is the key to reducing poverty and thus leading the country towards new heights of economic and social prosperity, added the report.

http://www.dawn.com/2007/07/31/ebr4.htm

 

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Exports of rice, carpet, sports goods drop by 20pc​

ISLAMABAD, July 30: Exports of traditional products — rice, carpets, sports, surgical, leather, and footwear have recorded more than 20 per cent decline during the year 2006-07 over the last year.

Official figures compiled by the commerce ministry reveals that export of other commodities like cement, gur and gur products, jewellery, gems, and engineering goods have recorded a tangible growth during the year under review over the last year.

The traditional products’ export once known for its quality in international market like footballs, surgical goods and leather products has been witnessing decline during the last couple of years. As the government policies are only focusing on textile based industries at the cost of others.

The overall export of non-textile products stood at $6.25 billion in the year 2006-07 as against $6.233 billion over the previous year, indicating a nominal growth of 0.33 per cent.

Product-wise details showed export of rice dipped by 3.11 per cent during the year 2006-07 to $1.121 billion as against $1.157 billion over the last year. Of these export of basmati was up 16.96 per cent during the year under review. However, export of other rice declined by 17.31 per cent during the same period. This is the only traditional commodity, which crossed the billion dollar mark otherwise export of other products remained in millions.

The export of sport goods declined by 16.14 per cent during the year 2006-07 as against the same period of last year. Of these export of footballs declined by 27.30 per cent. However, export of gloves rose by 214.93 per cent during the same period.

The carpets, rugs and mats exports recorded a negative growth of 9.38 per cent; and leather goods (garments and gloves) by 24.42 per cent during the fiscal year under review over last year. Of the leather goods export of leather garments declined by 22.72pc, leather gloves 17.07pc and other leather manufacturers 52.79pc.

The export of footwear declined by 21.44 per cent during the months of June-July 2007 over the same months of the last year. Of these export of leather footwear dipped 16.64 per cent canvas footwear 46.76 and other footwear 38.43 per cent. Molasses export declined by 35.57 per cent.

Further analysis showed that export of surgical instruments and medical equipment increased by 13.06 per cent, engineering goods 8.07 per cent auto parts 24.80 per cent, cement 34.74 per cent, gems 19.45 per cent, jewellery 130.69 per cent, gur and gur products 18.42 per cent.

Among the primary commodities, export of fish products declined by 3.01 per cent, fruits 9.94 per cent, leguminous vegetables 90 per cent, and sugar 100 per cent. However, export of vegetables up by 80.35 per cent, tobacco 46.56 per cent, wheat 100 per cent, spices 0.36 per cent, meat products 120.17 per cent and all other food items 21.11 per cent.

http://www.dawn.com/2007/07/31/ebr6.htm

 

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Drilling of exploratory wells in Khairpur​

ISLAMABAD, July 30: The Petroleum Exploration Limited (PEL) will drill 16 exploratory wells in Kandra Block in Khairpur district in the next three years. The PEL has completed 350 kms of 2-D seismic survey of Kandra mining lease located in Kharpur District in upper Sindh in collaborating with a renowned Chinese firm, Sichuan Petroleum.

This was stated by chairman of PEL Zaheerudin during a meeting with federal minister for petroleum Amanullah Khan Jadoon here.

An official announcement issued here stated that the PEL chairman told the minister that specialised drilling equipment was imported from China and most modern field units would be utilised in Kandra Block. He informed that newly acquired seismic data had been sent to a renowned US spectrum company for evaluation.

He said that to expedite the spade work for oil and gas search, the PEL had tasked the Sichuan Petroleum to carry out seismic survey in its other blocks.

The joint venture partners in these blocks were Frontier Holdings of Canada and Government Holding.

http://www.dawn.com/2007/07/31/ebr12.htm

 

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Import bill of eatables shrinks​

ISLAMABAD, July 30: The import bill of eatables recorded a marginal decline of 3.98 per cent to $2.711 billion in 2006-07 as against $2.824 billion the last year. The decrease in the imports of food items occurred mainly due to decrease in import of wheat, tea and sugar. However, import of milk products, spices, pulses and edible oil increased during the year under review.

Official figures compiled by the Federal Bureau of Statistics (FBS) showed that the import bill of wheat un-milled declined by 68.70pc to $41.550 million as against $132.750 million, tea by 4.03pc to $213.815 million as against $222.782 million and sugar by 58.23pc to $260.364 million as against $623.287 million.

On the other hand, the import of milk products surged by 37.06pc to $84.146 million as against $61.394 million the last year and dry fruits and nuts up 20.67pc to $69.724 million as against $57.779 million.

An increase of 40.29pc was witnessed in import of pulses to $243.838 million as against $173.814 million and an increase of 24.33pc was recorded in palm oil $891.785 million as against $717.273 million.

Import of soyabean increased by 89.33pc to $40.646 million during the period under review as against $21.468 million, 2.10pc increase was witnessed in spices to $53.879 million as against $52.770 million and 6.74pc increase was seen in import of all other food items to $812 million as against $760.754 million.

http://www.dawn.com/2007/07/31/ebr13.htm

 

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Energy security plan may be altered​

ISLAMABAD, July 30: Pakistan’s 25-year energy security plan (2005-30) is expected to be substantially altered in about a year’s time with the help of international consultants as some key targets proposed under the existing plan seem unachievable, it is learnt.

Sources in the government told Dawn that a new 20-year ‘Pakistan Strategic Energy Plan 2009-29’ would replace the existing plan. With the funding and technical guidance of the Asian Development Bank (ADB), the government would establish within 45 days a new planning unit comprising five or six international experts.

The government is anticipating the energy crisis to worsen in the next two years due to a 50 per cent increase in demand. The power shortage that had been estimated to remain in the range of 1000-2000MW this year in fact crossed 2,900MW a few months back. The shortfall is likely to reach about 5,300MW by 2010. Overall, Pakistan’s total energy requirement is expected to be around 80 million tons of oil equivalents (MTOE) in 2010, up by about 50 per cent from the current year’s 54 MTOE.

“Since four out of five major initiatives originally planned for meeting this demand are uncertain at present, the shortage could be anybody’s guess,” said a senior government official. Hence, the need for a professional review of the energy security plan based on ground realities was felt instead of relying on mere wishlists, he added.

The Energy Planning Unit would develop the strategic energy plan in one year after reviewing all existing policies.

“Natural gas, power, and oil shortages were all posing risks to the economic growth in medium to long term period,” said an official who would be closely working with the planning unit.

The main focus of the policy review is to examine in detail the long term cost of each effort and source of energy in terms of financial, economic, energy supply and various uses, domestic resources, and long term political costs.

The demand for natural gas, having about 50 per cent share in the country’s energy consumption, would increase by 44 per cent to 39MTOE from 27MTOE currently, an official said. The government had planned to add an overall power generation capacity of about 7,880MW by 2010. Of this, about 4,860MW was to be based on natural gas, accounting for 61 per cent of the capacity expansion. However, the gas-based power expansion of about 4,860MW would remain in doubt since these estimates are based on three gas import options for completion in 2010, 2015 and 2020.

This means that the major part of about 4,860 gas-based plants would not be available and the difference would be met through other costly options. “Even if the physical work is started today, it will take at least seven years to complete a pipeline project,” said a senior petroleum ministry official. The fifth initiative of the Liquefied Natural Gas (LNG) import is expected to remain on schedule and start delivering about 0.3 billion cubic feet of gas (BCFD) by 2009-10 and another 0.5 BCFD by 2015.

http://www.dawn.com/2007/07/31/top13.htm

 

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India opens market for Pakistani cement​

KARACHI, July 31: Bureau of Indian Standards (BIS) has given three Pakistani cement companies — Lucky, Maple Leaf and Pakistan Cement - permission to dispatch consignments to India for five months, newspaper ‘The Hindu’ stated on Tuesday, quoting senior government officials.

Under the head, “Pakistani firms to sell cement in India”, the paper also wrote that four other (unnamed) companies were in the process of registering online for provisional permission to enter the Indian market.

Cement sector analysts here thought the move to let the concrete bags roll in, even while complete procedures for the final stamp of approval from quality-control authority was still awaited, was a manifestation of desperation of cement-hungry India.

The Indian demand for cement next year has been projected at 180 million tons against the installed capacity of 132 million tons, reflecting a huge shortfall.

‘The Hindu’ quoted officials at the Indian High Commission in Mumbai as saying that earlier this month inspectors of the BIS had visited three companies (in Pakistan) and took back product samples for testing. The testing process was expected to take about four weeks.

Chief Financial Officer (CFO) at one of the three companies who have been given the nod to enter Indian market confirmed the arrival and departure of those officials with the samples in tow.

“The cement is tested for compressive strength and the process takes a minimum of 25 days, but the officials said BIS was fast-tracking the process at the intervention of the (Indian) Prime Minister’s Office”, wrote ‘The Hindu’.

The paper also observed that (Pakistan’s) Foreign Ministry spokesperson Tasnim Aslam had said the problems for Pakistani cement exports to India were likely to be discussed at the two-day meeting of Commerce Secretaries, scheduled to begin in New Delhi on Tuesday, and at an August 2 Joint Working Group meeting that would focus, among other issues, on non-tariff barriers.

The BIS requirements have thrown a spanner in the works since the Pakistani companies first tapped the Indian market, but New Delhi insists that BIS requirements were not Pakistan-specific but applied to all cement imports. Three Chinese cement firms were also reported to be waiting for BIS certification.

Analysts here said that the opening up of huge Indian market would take care of both the falling local prices as well as optimum utilisation of upcoming expansion capacities. But companies were not about to rush to cross the border in order to hunt out buyers on the other side of the fence.

“We would wait for the all clear signal from our agent in India so as to protect pricing and more importantly the assurance of no blockage of dispatches,” says the CFO of a local cement company.

Meanwhile, on Tuesday the Board of Directors of Lucky Cement, the largest producer of concrete in the country, announced results for the financial year 2006-07, which the market pundits termed as “better-than-expected”.

The company posted after tax profit at Rs2.55 billion translating into earnings per share (eps) at Rs9.67. Most analysts’ estimates fell far below that mark. Some of the eps predictions included Rs7.80 by First Capital; Rs7.27 by InvestCap; Rs6.63 by Taurus Securities; Rs7.88 by AKD Securities; Rs7.91 by Khoja Capital Markets; Rs9.47 by Atlas Capital Markets and slightly over Rs9 by JS Global.

But in all fairness it has to be stated that the actual earnings had varied from the estimates not as much by the misjudgement by analysts but because the “other income” included a ‘one-time’, excise duty refund of Rs539m, which was recorded by the company on the back of favourable decision by the Supreme Court regarding the long pending issue of federal duties that the company had contended it need not pay.

“If the one-time other income is excluded, the company’s eps will be lower by 24pc to Rs7.77,” calculates Yasir A. Syed, Investment Analyst at AKD Securities.

Lucky’s PAT for the year ended June 30, 2007 stood at Rs2.55bn (eps of Rs9.7), which compared with Rs1.94bn (eps of Rs7.4) the year ago, representing a massive growth of 32pc.

In FY07, local cement dispatches of the company grew by 71pc to 3.2m tons compared to 1.9m tons in FY06, whereas exports rose by a staggering 335pc to 1.5m tons. That was attributed mainly to the fact that during the year new expansion capacity of the company had come online, which boosted both local and export sales.

“Alone in 4QFY07, the company took full advantage of the favorable export scenario and dispatched a record 540,000 tons cement in 4QFY07 which was up by a massive 611pc versus just 76,000 tons exported in same time last year,c2 says analyst Haris Dagia at JS Global, adding: c2Similarly, local dispatches were recorded at 793,000 tons in 4QFY07 – up by 28pcc2.

At the stock market on Tuesday, the share in Lucky gained 70 paisa to close at Rs130.20 with the highest volume of 25.869 million shares traded in any one stock. In the meeting on Tuesday, the Board also recommended cash dividend at Rs1.25 per share, representing improvement over Re1 per share distributed last year.

http://www.dawn.com/2007/08/01/ebr1.htm