Pakistan Economy - News & Updates - Archive

[Neo]

Rs 64 billion spent on Punjab uplift projects: Elahi ​

LAHORE (August 07 2007): Chief Minister Chaudhry Pervaiz Elahi has said a strong Pakistan Muslim League is the guarantee of the country's solidarity and people will bring about a historic victory for the PML in the forthcoming general elections for the continuity of on-going development process in the country.

He was addressing the Punjab Assembly members, Nazims and PML office-bearers hailing from Vehari District here on Monday, disclosed an official. He said consultations had been completed in most of the districts of the province regarding the upcoming elections.

He also said the party leadership was dealing with all matters efficiently, yielding excellent results. "Alliance with other political parties will be considered after elections," he added. "The government has spent Rs 64 billion on development projects to remove poverty, backwardness and ignorance from Southern Punjab and more funds will be provided to the region.

Allocation of resources for backward areas on the instructions of President General Pervez Musharraf had resulted in raising the standard of living of the people, he asserted.

Up to Rs 4.5 billion had so far been spent on the development and uplift of district Vehari whereas development schemes worth Rs 1.5 billion were being implemented, he said. The Chief Minister said the PML would contest the elections on the basis of these development programmes and would win with a thumping majority.

"Rescue 1122 service is also being initiated in Southern Punjab for the relief of victims of accidents and calamities. An amount of Rs 55 million is being spent on the construction of a gymnasium in Vehari while Rs 85 million are being utilised on sewerage and sanitation schemes.

A sum of Rs 1 billion has been spent on the repair and construction of roads, which include 29km long Vehari-Multan road, 28km long Tibba Sultanpur-Makhdoom Rasheed road, 40km portion from Vehari to Tibba Sultanpur and repair and reconstruction of Vehari to Katcha Kho Road.

Girls colleges in Tibba Sultanpur, Gagu, Shaikh Fazal and Machhiwal while boys degree colleges in Tibba Sultanpur and Luddon at a cost of Rs 240 million were being established, he told the delegation.

Provision of additional resources for the uplift of remote areas is an important feature of the development strategy of the government," he added. He also said the Pakistan Muslim League would fight the People's Party hard from its own platform in the elections and meet a glorious success.

He said assembly members, Nazims and PML office-bearers should set aside their mutual difference and forge unity in their ranks in the interest of public service and development of the country as well as strengthening of the party. "Unity in the PML is necessary to defeat political opponents in the elections," he added.

Those who also attended were Minister of State for Information Technology Ishaq Khan Khaqwani, Punjab Ministers Haroon Sultan and Mohayyuddin Chishti, Vehari District Nazims Syed Shahid Naseem Mehdi, PML leaders Saeed Ahmed Khan Manais, Mumtaz Ahmed Khichi and President Muslim League Vehari, Chaudhry Nazir Ahmed Arain.

http://www.brecorder.com/index.php?id=602551&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Musharraf underscores need for private sector's involvement ​

KARACHI (August 07 2007): President General Pervez Musharraf has emphasised the need for acceleration of the process of industrialisation as it contributes towards poverty alleviation and reduction in unemployment. He expressed these views during briefing by Industries and Production Minister Jehangir Khan Tarin on 'Sindh Initiatives' at Chief Minister House here on Monday.

Sindh Governor Dr Ishrat-ul-Ibad Khan and Chief Minister Dr Arbab Ghulam Rahim were also present on the occasion. The President called for industrialisation to create more jobs, and urged that the setting up of industries must be facilitated.

He pointed out that for industrialisation the acquisition of land has remained a problem which should be resolved in an effective manner. Musharraf said that concentration on establishment of industry in Pakistan has been focused with the basic aim of poverty alleviation.

He said that this is the sector which creates most of the employment opportunities. The President emphasised that in the process of industrialisation, the private sector should be involved for provision of the required infrastructure.

He said that local as well as foreign investors should be fully encouraged.he highlighted the significance of the industrial areas such as Karachi, Lahore and Faisalabad with which "our future is linked". He referred to his meeting with Mahathir Muhammad, who informed him that in Malaysia free land was given to those who want to establish industry there.

The President pointed out that in the country there is a gap between policy formulation and implementation and said that what is discussed should also come on the ground and that there should be an effective monitoring. He said that the very purpose of devising the local government system was also to help bridge the gap between policy formulation and implementation.

Musharraf said he was encouraged regarding the development work that has been undertaken, and added that "we have to work hard". He spoke of federal government's plan of setting up urban clinics, which would be on union council level.

The President said that doctors would be deployed there and selected medicines would be available, and remarked that this would be a real service to the poor. He said that fishermen should be provided with money for modification of their boats for having proper preservation facilities so that the fish that go waste after catch could be saved.

He said that the people in the rural areas should be provided with necessary information to help improve the yield of their crops, and there was need to convince the people to improve the quality of livestock.

The Minister for Industries in his briefing spoke of Karachi projects of Tools, Dies and Mould (TDM) Centre, Korangi Creek Industrial Park (KCIP), Bin Qasim Industrial Park (BQIP), Marble City on Northern Bypass and Rehabilitation of five industrial estates. He said that the objective of TDM Centre was to provide local TDM industry with the state-of-the-art design, development, training and consultancy services and to enhance the TDM skill pool and develop digital manufacturing environment besides upgrading local engineering industry towards world class design and manufacturing.

He said that PIDC has come up with a funding of Rs 515 million and that the project is ready for inauguration. The second TDM Centre would be established at Gujaranwala at a cost of Rs 980 million, he added. Tarin informed the President that KCIP is the first project of National Industrial Park on a plot of land of 250 acres. It is strategically located next to Pakistan Refinery and Korangi Industrial Zone. The project's commercial launch would be by the end of next month and the project would be completed by December next year.

He said that BQIP is being established on 930 acres land, adjacent to Pakistan Steel Mills, and the federal government would finance the project with a commercial loan of Rs 2 billion. The Minister said that the BQIP would create some 20,000 direct and 80,000 to 90,000 indirect jobs.

He said that Pakistan Stone Development Company would set up 'marble city' on 300 acres on Northern Bypass, Karachi, which includes industrial plots for the processing industry and marble and granite sector. There will be latest machinery for value-addition and upgradation of the skills of the workers. Tarin said that for the rehabilitation of five industrial estates of Karachi the federal government is to provide a grant of Rs 1 billion, to be matched by Sindh government.

He also spoke of his Ministry and Sindh government cooperation towards the white revolution and under this the provincial government would set up 23 milk colonies, and Pakistan Dairy Development Company (PDDC) would provide technical assistance to modern management practices. The Minister said that the PDDC plans to establish a total of four breeding and training farms in the country. There will be establishment of 'Salvage Farm' at Karachi for 'dry' cows and calves at Karachi cattle colonies.

The Minister also spoke about the Sindh component of President's Primary Healthcare Initiative (PPHI) and said that the Federal Government would provide funding for the provincial and district support units and would also provide Rs 0.1 million per BHU for urgent rehabilitation. The Provincial Support Unit of Sindh was established in November last year.

About the progress achieved, Jahangir said that all illegally occupied facilities had been retrieved, reopened, rehabilitated, and furnished and doctors have been employed. He said that all facilities without doctors have been converted into clusters of two or three facilities.

http://www.brecorder.com/index.php?id=602583&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Rs 50 billion to be invested in housing and construction sector ​

KARACHI (August 07 2007): More than Rs 50 billion will be invested in housing and construction sector, thus creating direct and indirect employment opportunities. This was stated by Chairman of Housing and Construction Sub-Committee of Karachi Chamber of Commerce and Industry (KCCI) Munir Sultan, while talking to newsmen here on Monday.

He further said that more than six foreign companies were making huge investments in construction projects in the metropolis. He appreciated the recently introduced government scheme, which provided incentives to small investors to invest in real estate and earn profit.

Before introducing this new scheme, only big investors could invest and make profit in real estate sector, he added. About Katchi Abadies, he said that due to negligence of governments in past and influx of around 0.7 million people, seeking jobs, per year around 1,475 Katchi Abides developed in the city.

He quoted the World Bank report, indicating that Pakistan faced 7.1 million houses shortage. Commenting on the government scheme of constructing 50,000 houses annually, he said that this target was too short to cater to the need for housing requirement in the country. At least 100,000 houses should be constructed annually, he suggested.

http://www.brecorder.com/index.php?id=602538&currPageNo=2&query=&search=&term=&supDate=

 

[Neo]

Karachi Port may have three-shift working system shortly ​

KARACHI (August 07 2007): The Karachi Port is soon likely to have the three-shift working system as a joint committee of the Karachi Dock Labour Board (KDLB) and the Stevedore Conference (SC) has been established to discuss the modalities.

The committee would submit its final report to KDLB Chairman Vice Admiral Ahmad Hayat by October-end this year, well-placed sources in the Board told Business Recorder on Monday.

Sources said the three-shift system would not only create more employment opportunities for the dockers, but also give a remarkable boost to cargo handling at the port. They said the committee would have four members, including Sabir Hasan and Mohammad Ali Rajpar representing the Conference and Mohammad Halal and S.M. Ejaz Bacha from the Karachi Harbour & Dock Worker's Union, Collective Bargaining Agents (KHDWU-CBA). Sabir Hasan would be acting as a convenor of the committee, sources added.

The system, which is already working at the Port Qasim, was first proposed by the stevedore companies, but later they kept mum on the topic due to unknown reasons, said the sources.

They said the new development surfaced after KHDWU-CBA demanded introduction of the three-shift system for loading and unloading at the port in the charter of demands which was finally ratified by the KDLB chairman, who is also the chairman of the Karachi Port Trust (KPT).

The KHDWU-CBA was favouring the new system because it has a surplus labours strength, which would get the job at port after the two-shift working system is upgraded to a three-shift system, sources said.

They, however, claimed that some stevedoring companies, which mainly use 'automated grippers' to handle the bulk cargo like cement, fertiliser, chemicals, etc are less interested in the new system.

In addition to this, sources said, the Pakistan International Container Terminal (PICT) and the Karachi International Container Terminal (KICT) are reluctant to introduce the new system in their jurisdictions due to the fact that they are less dependent on the manual work.

At present, the dockers at the Karachi Port work from 7:30 am to 4:30 pm and till 7:00 am in case of overtime in the first shift while the second shift working time stretches from 7:00 pm to 3:30 am which continues till 7:30 am if the overtime is needed.

Under the proposed three-shift system, sources said, the 24 hours would be divided into three working shifts with almost equal timing, which would certainly accelerate the process of cargo handling at the port.

http://www.brecorder.com/index.php?id=602535&currPageNo=2&query=&search=&term=&supDate=

 

[Neo]

President inaugurates Northern Bypass ​

KARACHI (August 07 2007): President Pervez Musharraf on Monday inaugurated the 56-km long mega Northern Bypass project, completed at a cost of Rs 3.5 billion, and said that it would not only help ease the traffic problem in Karachi but would also provide a boost to the already growing economy.

Addressing the ceremony on this occasion, he pointed out that the economy was growing satisfactorily, and this fact was reflective in public sector development projects costing Rs 520 billion against Rs 80 billion which used to be spent in the past on this count. "If this amount is utilised prudently, I see no reason why Pakistan should not progress and move forward", the President said.

He pointed out that if there would be destabilisation in the country, it could be because of extremism and terrorism, which should not take place while destabilisation on the political scene can create difficulties and economic surge can take a downward turn which, he said, he would not allow to occur. He announced in unequivocal terms that he would not allow destabilisation in the country.

"Democracy will continue to move forward, and elections are to take place; but there should not be destabilisation, and I would not allow it", he declared.

General Musharraf reiterated that the forthcoming elections would be fair and transparent, but whoever would attempt to create destability he would have to come across him first.

Congratulating NHA and NLC engineers and technicians on the successful accomplishment of the mega project, the President said that construction of Northern Bypass would ease traffic pressure within Karachi city.

He pointed out that Karachi has a unique position for its being the gateway of Pakistan and a link of Pakistan with the rest of the world and, therefore, it is most essential that the city should have an effective communication network within to facilitate South to North traffic movement.

"Whatever is done for Karachi will not be too much, particularly peace and harmony here is essential for economic growth of Pakistan and South to North traffic management".

http://www.brecorder.com/index.php?id=602466&currPageNo=3&query=&search=&term=&supDate=

 

[Neo]

Pakistan for more market access to US​

WASHINTONG, Aug 7: Access to US market is a key tool in Pakistan’s drive against extremism, said the federal commerce minister on Tuesday following talks with US officials on trade initiatives.

Mr Humayun Akhtar Khan said US authorities should take a strategic view of its economic ties with Pakistan to attain shared anti-terrorism goals.

“Economically, as well as strategically, to effectively address in a long-term manner, the problem of extremism in that region, it is important to enhance trade,” he told Reuters.

Foremost in Khan's talks with US Trade Representative Susan Schwab and other officials in Washington was promoting “reconstruction opportunity zones” under a plan agreed by Pakistan President Pervez Musharraf and US President George W. Bush in Islamabad in March 2006.

The plan would allow duty-free access to goods made in areas along the Pakistan-Afghanistan border, including tribal areas of Pakistan.

“Even trade should be strategically viewed because it addresses the main problem we are trying to face, which is curbing extremism,” Khan said.

Khan said the Musharraf government hopes to finish nearly three-year-old talks on a bilateral investment treaty with the US. This would add to foreign investment in the country, which drew $8.4 billion last year on the back of deregulation and fast growth.

Stimulating investment and trade would also help Islamabad and Kabul tackle the problem of increasing opium poppy production in Afghanistan.

“When you have young people out of jobs and economically deprived, certainly, whether they go towards terrorism or they go towards poppy growing, such economic measures are a big help,” Khan said.

While Pakistan awaits what it hopes will be swift moves by the US Congress to take up legislation to implement the reconstruction opportunity zones, Khan said he was actively pursuing multilateral and bilateral trade diplomacy.

Pakistan has signed free trade agreements with China and Sri Lanka and is negotiating such a pact with Bangladesh.

It is also seeking to expand trade with India, Khan said, adding “we are very conscious of the fact that our regional trade is much lower than other regions of the world.”

Pakistan is also looking to break deadlocks in the World Trade Organization's Doha round of trade talks, he said.

The WTO is “where we'll get relief and liberalisation in the agricultural trade and in the textile trade.—Reuters

http://www.dawn.com/2007/08/08/ebr6.htm

 

[Neo]

Economy stabilises, says prime minister​

ISLAMABAD, Aug 7: Prime Minister Shaukat Aziz said on Tuesday that the consistent and transparent policies had established the economy on solid foundation, which attracted substantial investment.

He stated this while talking to the delegation headed by Chairman of Merrill Lynch International Inc. Kevin Watts.

An official announcement said the record investment of $8.4 billion clearly indicated the trust of the investors in policies initiated by the present government.

He said that now Pakistan stood on a solid footing and had strong fundamentals as well as substantive structural reforms to attract more investment in days to come. He, however, emphasised the need for continuity and consistency of policies to further boost the economic activities in the country. Several sectors represent attractive investment opportunities, including telecom, IT, financial services, engineering, agribusiness and real estate, he added.

Mr. Kevin Watts appreciated the government's policies regarding the protection of investment in different sectors. Merrill Lynch has worked with the government on promoting investments, privatisation and share issues for Pakistan in global markets. — Our Reporter

http://www.dawn.com/2007/08/08/ebr16.htm

 

[Neo]

IT export figures under-reported ​

Out of 140 software firms, only 17 share data with authorities

KARACHI: Out of the total 140 software companies exporting different products to various parts of the world, only 17 share their annual export figures with the relevant authorities, which is considered the major reason for lower than official export figures.

Figures compiled by the Pakistan Software Export Board (PSEB show the country has 380 registered companies, including 140 software houses, which are serving foreign clients with services in different categories.

“We have been trying to net each and every company while compiling export figures in coordination with the State Bank,” said Yusuf Hussain, PSEB Managing Director. “Unfortunately, now only 17 companies report their export figures to the institutions concerned, which is seen as total software and IT exports from the country.”

He said the mechanism to register export data also mattered when the total cost of services was calculated by the end of a fiscal in June every year. The State Bank of Pakistan, however, he added, was making efforts to make the figures authentic with a true picture of the industry’s capability.

The country’s exports of software and information technology and IT-enabled services rose to $116 million in 2006-07 from $72 million a year before, against the target of $108 million set by PSEB. The IT industry emerged the fastest growing sector a few years ago mainly supported by a phenomenal jump in call centre operations during the past two years.

Both the authorities and software companies fly high eyeing $10 billion by 2010 on higher demand from the outer world of Pakistani skills and effective image-building campaign. However, the PSEB chief says the country still owes a larger size of IT industry, which is much more skilled and in demand compared with other competing countries.

“In fact we follow the 1992 Economic Act, which suggests a way whereby we can count the size of our industry and of export figures,” he said. “In fact we have an industry of the size of $2 billion, which is not small in any sense and is growing at a staggering pace.”

He said the State Bank registered the export figures under the BPM 5 Reporting system, which restricted the number to $116 million by the end of 2006-07. However, he added, such practice was not followed in India, which was considered the largest exporters of software and IT products.

“The Reserve Bank of India actually registers the figures under the BPM 6 Reporting System, which jacks up its exports to billions of dollars,” added the PSEB MD. He said under such system, India reported $1.4 billion software exports by March 2006-07 and if the same formula was applied for exports, the country’s exports could reach $1.4 billion by the fiscal end.

Among other facilities call centre operations have played a vital role in our export figures. Defined as a unit, the call centres have adequate telecom facilities, trained manpower and access to database providing information to customers.

The progress in telecom technology has made it possible that the person handling a call could be anywhere provided that communication and interaction is properly handled. Growth in business from Western companies has inspired local investors to explore new opportunities.

http://www.thenews.com.pk/daily_detail.asp?id=67369

 

[Neo]

$8.4bn investment shows investor trust: PM ​

ISLAMABAD: Prime Minister Shaukat Aziz Tuesday said consistent and transparent policies of the government have established the economy on solid foundation which attracted substantial investment in the country.

Record investment of $8.4 billion in Pakistan clearly indicates the trust of investors in its policies, he said while talking to a delegation headed by Kevin Watts, Chairman Merrill Lynch International, which called on him here at Prime Minister’s House.

The Prime Minister said Pakistan has strong fundamentals to attract investments in days to come. Several sectors represent attractive investment opportunities including telecom, IT, financial services, engineering, agribusiness and real estate, he added.

Kevin Watts apprised the Prime Minister about Merrill Lynch activities in Pakistan and expressed confidence in country’s economy which, he said, is based on strong fundamentals and would attract more foreign investment.

http://www.thenews.com.pk/daily_detail.asp?id=67377

 

[Neo]

Mineral sector ​

LAHORE: Provincial Minister for Mines and Minerals, Muhammad Sibtain Khan on Tuesday said there were vast opportunities of collaboration between Pakistan and China in the mineral sector.

Talking to a delegation of mine-owners belonging to various parts of the province, the minister said open trade between the two countries would increase after the implementation of the trade agreement.

“Bilateral cooperation will be further cemented in the mineral sector, especially in areas like rock salt, coal, iron, cooper and gypsum,” he added. The minister said the government was launching a comprehensive programme for the progress of the mineral sector in the province, which would help in accommodating thousands of jobless people.

He said vast reserves of iron had been discovered in Punjab and negotiations with multinational companies were in final stages for their exploration. During the meeting, the delegation members apprised the minister of their problems.

http://www.thenews.com.pk/daily_detail.asp?id=67382

 

[Neo]

Investment target set at 23.8% of GDP​

By Ijaz Kakakhel

ISLAMABAD: Keeping in view strong economic performance over the last few years, the government has projected investment target of Rs 2381.6 billion for the year 2007-08 up from the level of Rs 2003.6 billion reflecting an increase of 19.2 percent over the investment level of last year.

Overall, projected target of investment is set to be 23.8 percent as a ratio of GDP for the current fiscal year.

Fixed investment foe the current year is planned to reach Rs 2221.5 billion reflecting an increase of 19.2 percent over the investment level of last year.

According to the annual plan of planning commission, the prospects for sustained high economic growth in 2007-08 remain excellent with the heavy increase in domestic and foreign investment and strong performance by agriculture, manufacturing and services sector.

The government is trying its level best to facilitate both local and foreigner investors with initiatives, like tax exemption, tariff reduction and loan facility to investors.

The private investment sector is however taking the lead and public sector investment would mainly be on developing the physical as well as scientific and technological infrastructure.

The investment climate in the country improved significantly during the year 2006-07 with all time increase of Rs 2 trillion (23.0 percent of GDP) in 2006-07.

Impressive growth of the Pakistan’s economy is attributed to the continuity and consistency of policies, which are initiated by the present regime within the overall framework of deregulation, privatization and liberalization.

The national savings as a ratio to GDP (Gross Domestic product) are projected at 19.8 percent to reach a level of Rs 1882.8 billion for the year 2007-08.

In the current year the emphasis will be on macroeconomic stability so as to keep a balance among internal and external accounts.

As far as financing of the targeted investment is concerned, it projected that about 79 percent will be financed through national savings and 21 percent through foreign savings.

The foreign private investment without privatization during July-April 2006-07 has increased by 179 percent to $5.2 billion (FDI $4.0 billion). The countries contributing to FDI are:

USA ($ 676.7 million), UK ($ 724.4 million), UAE ($ 364.2 million), Switzerland ($ 157.8 million) , Netherlands ($ 753.4 million).

The major sectors which are attracting FDI in the country are telecommunications with $1360 million, financial business with $871 million, oil & gas explorations with $449 million, trade sector with $134 million, thermal power with $134 million, petroleum refining with $115 million and construction with $117 million.

http://www.dailytimes.com.pk/default.asp?page=2007\08\08\story_8-8-2007_pg5_1

 

[Neo]

Pakistani Kinoo exports to Russia: Annual export of $20.68 million could be saved​

KARACHI: In order to save annual export of $20.68 million worth of Kinno to Russia, an eight member high-powered delegation from Pakistan, comprising representatives of public and private sectors, is proceeding to the country to remove apprehensions and fears in this regard.

The ban on import of Pakistani fruits and rice was placed by the Russian government on March 19, after discovery of a copper bug from a Pakistani rice shipment which also prompted them to place immediate ban on import of all kinds of fruits besides rice.

Talking to Daily Times, Chairman All Pakistan Fruit Exporters Association (APFEA) Abdul Wahid said since placement of the import ban from Pakistan, exporters have suffered colossal financial losses in terms of foreign currency, which also proved disastrous for the national exchequer.

The decision was unjustified as the ban should have been limited to rice only, but without any valid rationale, they also included Kinoo in the prohibited import item list.

Replying to a question, he claimed that Kinoo exports to Russia started in 2003-04 season and initially export volume stood at 25 containers but in the next three years, it made an enormous jump to 1,400 containers during the peak season worth $20.68 million.

He attributed the popularity of the Pakistani fruit in Russia in short period of time due to its high nutrition and sweetness besides export of quality products, which are unmatchable across the world.

We had planned to boost up the exports of Kinoo to Russia in next three years, up to 2,000 containers, however imposition of import ban, has shattered all future planning and the country’s export is currently facing consternation as far as this particular fruit is concerned.

Abdul Wahid further told that the eight-member delegation would be headed by Salim Jhangra, Commissioner Minor Crop and Chairman REAP, Quarantine Officer and representatives of growers association.

Members of the delegation during the two-day visit to Russia, would strive to allay apprehension of the Russian government relating quality of Pakistani fruits, rice and quarantine system in Pakistan.

They would also ensure that standard of Pakistani products conforms to the standard of Geneva convention regarding exports besides in compliance of WTO standards and pursuing Sanitary Phytosanitary Certificates which lays special emphasis on maintenance of quality of the exported material.

http://www.dailytimes.com.pk/default.asp?page=2007\08\08\story_8-8-2007_pg5_10

 

[Neo]

KESC to buy power plants from Russia ​

KARACHI (August 09 2007): Karachi Electric Supply Corporation (KESC) has decided to purchase ten 100-MW power plants worth billions of rupees from Russia to generate an additional 1000-MW supply to overcome a serious loadshedding crisis in the city, sources told Business Recorder on Wednesday.

"KESC would be able to overcome power shortage after the installation of these power plants in different areas," sources said. The Board of Directors of KESC in its last meeting recommended to the corporation to make a deal with a Russian-based company to acquire the plants.

Sources said that KESC administration was under severe criticism while the Supreme Court had also given clear-cut directives to the utility agency to improve its performance. "It was decided in the meeting that immediate steps would be taken in this regard to seek an end to power crisis," they said. A proposal, which was approved and highly appreciated in the board's meeting that 10 power plants, each plant of 100-MW capacity, would be obtained from Russia.

Karachi will get a total of 1000-MW power supply from these power plants and it is hoped that with the installation of these plants the power crisis would end. KESC is evaluating and collecting data required for the installation of power plants from different parts of city in which Bin Qasim, Malir and Gadap are included.

Sources said an agreement would be signed soon to make payment of these power plants. "Since KESC cannot pay the full amount, there are different options under consideration. These options include profit sharing with the concerned firm and purchase of plants on instalments," they added.

Sources said a highly questionable performance of Siemens, the Management and Operation partner of KESC, had prompted KESC Corporate Management to explore other options.

It may be noted that power requirement of the city is over 2400-MW. At present, KESC has failed to fulfil the demand despite the fact that Wapda and Kanupp are providing to it 750-MW and 75-MW, respectively.

There are only two power plants in the city of which Bin Qasim power plant, consisting of six units, is providing about 900-MW to the city while Korangi Thermal power plant, consisting of four units, is supplying only 60-MW which is 190-MW less than its original capacity of 250-MW.

Of the four units of power plant in Korangi, two units were declared retired while third is not working due to technical faults and only one unit of 60-MW is supplying power to the metropolis.

According to an agreement, installation of two power plants of 488-MW should have been completed in August 2007. Board of Directors of KESC scraped this agreement in December 2006, due to allegations of corruption and bribe.

http://www.brecorder.com/index.php?id=603189&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Wapda sees worst power shortfall in next summer

ISLAMABAD (August 09 2007): The Water and Power Development Authority (Wapda) has projected worst ever power shortfall in next summer which is expected to cross 3000MW, official sources told Business Recorder.

These figures were presented by Wapda Chairman Tariq Hamid at a meeting of the Private Power Infrastructure Board (PPIB) chaired by Minister for Water and Power Liaquat Ali Jatoi here on Wednesday.

Sources said that Wapda also placed the recovery figures before the meeting, according to which the government owes Rs 98 billion, including Rs 64 billion of Federally Administrated Tribal Areas (FATA). The industrial, commercial, agriculture and domestic consumers were also defaulters of Rs 48 billion, which is far less than government departments.

They said that representatives of some IPPs, who were invited to attend the meeting, complained of non-cooperation by the concerned ministries and departments. However, the Minister instructed PPIB, Nepra, Wapda and asked the Ministry of Petroleum to facilitate them and resolve their issues within one week.

Sources said that some new IPPs said that Nepra for not giving them tariff expeditiously which is one of the reasons of delay in signing Implementation Agreements, while others complained against Petroleum Ministry.

"Power demand is increasing tremendously in the coming years, and we should be geared up to face the challenges. The government will provide maximum facilities to investors to put their investment in the energy sector," Jatoi said.

The IPPs also assured the meeting that the projects were being developed as per schedule and would be completed within the prescribed timeframe, a press release said.

According to the press release, Wapda Chairman informed the meeting that during the past five years of the present government since 2003-04, Wapda had electrified 43,670 villages while before 2003-04, since the creation of Pakistan, 73,829 villages had electricity. Wapda had added four new 500KV transformers valuing Rs 5960 million and 220 KV transformers valuing Rs 3292 million on the national transmission system, he added.

He said that during last five years, distribution losses of Wapda have been reduced from 24.4 percent to 21.5 percent, thereby reducing 2.9 percent. One percent losses reduction on Wapda system means Rs 1 billion in financial terms. In 2006-07, Wapda recovered revenues amounting to Rs 274.5 billion against Rs 193.9 billion in 2002-03, thereby an increase of 41.5 percent in the revenue had been achieved, he added.

The Minister directed that Wapda should immediately resolve the issues pertaining to transmission lines for import of power from Iran and gear up the projects, especially those relating to reduction in energy loss, Discos transmission lines and grid station projects.

He further directed that immediate measures should be taken for meeting the power shortage in the next summer season. In this regard fast track projects should be closely monitored, he added. He also directed to monitor the measure to mitigate the shortage of power.

Besides the officials, the meeting was attended by CEOs/representatives of Attock General Ltd (165 MW), Engro Power Project (150 MW), Nishat Chunian Power Project (200 MW), Eastern (EPCO) Power Project (150 MW), Sheikhupura (Atlas) Power Project (225 MW) and Japan Power Project (expansion project) (156 MW).

http://www.brecorder.com/index.php?id=603192&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Assets at Rs 4.2828 trillion cross two-year high level: Banks profits exceed Rs 100 million mark ​

KARACHI (August 09 2007): The financial performance of the country's banking sector remained outstanding and continued to grow for yet another year, as its balance-sheet size crossed the highest ever level of rupees four trillion and profit has crossed Rs 100 billion-mark during the 2006 calendar year.

These tremendous achievements in the profit and assets growth has placed Pakistan among the top half in a group of 44 emerging economies in terms of capital adequacy and asset quality, while in terms of profits, Pakistani banking system ranked among the top 10.

The central bank said that during 2006, overall banking sector assets grew by 17 percent or Rs 622 billion to all time high level of Rs 4.2828, previously stood at Rs 3.66 trillion in 2005. The pace of growth of total assets was 17 percent, mainly funded by continued inflows of deposits, borrowings and equity of the banking system.

Deposits, being the main funding source, contributed around 60 percent of the growth in total assets whereas equity and borrowings jointly accounted for 32 percent, said the central bank. Besides strong growth, the share of local private banks (LPBs) in total assets has further increased due to shift of couple of foreign banks (FBs), as a result of merger and acquisition of the LPBs.

The central bank has issued Banking System Review (BSR) for the 2006 calendar year, in which it has presented overall performance of banking sector. Accordingly, their share in total assets of the banking system surged to 72.4 percent in 2006 from 67.8 percent in 2005.

On the other hand, all the remaining groups witnessed further squeeze in their shares, as share of public sector commercial banks (PSCBs), specialised banks (SBs) and foreign banks (FBs) stood at 19.5 percent, 2.8 percent and 5.2 percent respectively.

The central banks said that the pre-tax profit of banking sector had set another milestone by crossing Rs 100 billion marks during 2006. During the year under review, pre-tax and after-tax profit of the banking system was raised to Rs 123.6 billion from 93.8 billion and Rs 84.1 billion from Rs 63.3 billion in 2005 respectively.

During 2006 as well, deposits of the banking system grew strongly. However, the pace of growth remained a bit slower at 13.1 percent against 18.3 percent in 2005. Banking sector deposits reached Rs 3.202 trillion in 2006 from Rs 2.832 trillion during 2005, depicting an increase of Rs 370 billion during 2006.

The factors contributed towards sustained deposits' growth also included the higher foreign inflow in the form of workers' remittances and FDI, expanding branch network, product innovation and enhanced marketing efforts, the central bank added.

The robust profitability, strong solvency profile, managed asset quality, better risk management practices and ongoing consolidation of banking system have witnessed further improvement in almost all the key financial performance and soundness indicators, the central bank said in the BSR.

The banking system continued to invite the foreign investors' interest in Pakistan and attract significant share of direct foreign investment on the back of excellent results.

Return on assets (RoA) of the banking system has further improved to 2.1 percent. Return on equity (RoE), however, slightly dropped to 24.2 percent from 25.6 percent over the year due to proportionately greater increase in the banks' equity base as a result of high retention of profits and fresh capital injections.

The recent upward movement in cost of deposits put some pressure on growing net interest income (NII) as the interest rate variance on deposits of the commercial banks has increased to Rs 39.3 billion as against Rs 26.3 billion in 2005.

On the income side, the contribution of interest rate variance on loans decreased to Rs 36.2 billion as compared to Rs 50.2 billion in 2005. Total NPLs of the banking system declined to Rs 175 billion from Rs 177 billion in 2006. However, the commercial banks (CBs) witnessed an increase in their NPLs by around rupees two billion to Rs 138 billion during 2006.

NPLs to loans and net NPLs to net loans ratio of all banks remained in the vicinity of seven percent and two percent respectively. As compared to the last year, the loan portfolio of the banking system grew at a relatively lower rate of 18.8 percent against the 24 percent growth in 2005.

The share of fixed investment loans decreased to 21 percent from 23.2 percent in 2005, whereas share of working capital loans increased to 35.3 percent from 33.2 percent in 2005.

The interest rate spread determined on the basis of weighted average rates on outstanding loans, and the deposits had been hovering around 7.3 to 7.5 percent during 2006. However, the spread on gross disbursements and fresh deposits remained lower in the range of 5.1 to 6.5 percent.

Besides conventional banking, growth in Islamic banking also remained encouraging. Growing at the higher pace, the number of branches increased to 150 from 70 in 2005.

With the entry of three more conventional banks, the total number of conventional banks' offering Islamic banking increased to 13, whereas the full-fledged Islamic banks have increased to six from two in 2005. Besides expansion, key performance indicators also witnessed healthy trends during the year, auguring well for the future growth prospects.

Total assets of this segment grew by almost 67 percent to Rs 119 billion, thus increasing its share in the overall banking system to 2.9 percent from two percent in 2005.

Microfinance also witnessed growth in its market share and added to the access to finance as both the depositors and borrowers of this sector recorded healthy growth during 2006. The total number of microfinance institutions increased to six from five, whereas the number of branches increased to 145 from 91 in 2005. The share of advances also increased to 33 percent from 27 percent in 2006, whereas the infection ratio of the loans stayed below two percent.

However, these banks need to enhance their focus on scaling up their core business activities, improving operational efficiencies and building professional expertise. The rural areas, despite having two-third share in population, have only one-third of the bank branches, catering to their needs. Realising the importance of access to financial services, the SBP is making it the cornerstone of its future strategy.

http://www.brecorder.com/index.php?id=603163&currPageNo=1&query=&search=&term=&supDate=