Pakistan Economy - News & Updates - Archive

[Neo]

More reservoirs needed to meet power demand: Wapda ​

LAHORE (August 30 2007): Pakistan needs construction of more than one mega water reservoirs to meet rapidly increasing demand of electricity and have sufficient water available for its agriculture sector. This was stated by Wapda Member (water) Muhammad Mushtaq Chaudhry while briefing a delegation of the second senior management course of the National Management College in Lahore here at Wapda House on Wednesday.

Wapda Member (finance) Chaudhry Abdul Qadeer and other Authority senior officers were also present. Addressing the delegation, Mushtaq said that increasing population and depleting storage capacity of the water reservoirs in Pakistan call for constructing more than one mega dams. He said that another 22.5 million acres of virgin land could be brought under plough in the country if new mega dams are constructed.

He said Pakistan had already lost water storage capacity by 28 percent, which has now come down to 13.17 million acres feet (MAF) from 18.37 MAF. He said that an average of 32.81 MAF of water escapes downstream Kotri Barrage annually since 1976.

Mushtaq informed the audience that Pakistan is heading towards a situation of being water-strapped country, as per capita water availability has already reduced to an alarming figure of 1100 cubic meters in 2006.

Referring to the development projects being executed by Wapda in the water sector, Mushtaq said water filling in the raised Mangla Dam would start from April 2008. On completion of raising, additional 2.9 MAF of water would be made available to the country.

He hoped that Phase-I of Greater Thal Canal and Kachhi Canal projects would be completed by December 2008. Responding to a question, he said that Wapda is vigorously carrying out studies of as many as 11 mega hydropower projects with a total capacity of more than 10,000 MW of electricity.

He said that contract for construction of 969-MW Neelum-Jhelum Hydropower Project has been awarded while Kohala and Golen Gol Hydropower projects with the generation capacity of 1100 MW and 106 MW respectively will soon be available for implementation.

Business Recorder [Pakistan's First Financial Daily]

 

[Introvert]

118,000 tons of mangoes exported​

By Our Staff Reporter

LAHORE, Aug 30: Pakistan has so far exported 118,000 tons of mangoes, 18,000 tons more than its original target of 100,000 tons and only 2,000 tons less than enhanced target of 120,000 tons.

According to sources in the Customs, the export is still in full swing and, if present pace is something to go by, it may cross 140,000 tons. The exports have mainly gone to the UAE, Saudi Arabia and other Gulf and Far Eastern countries and the European markets.

The mango export formally started on May 20 this year and may extend to mid-September. That means there are still over two weeks to go, and may cross 140,000 tons.

Commenting on the situation, officials of Pakistan Horticulture Development and Export Board (PHDEB) say that 118,000 tons could have fetched around $38 million. The total export of 120,000 tons is expected to bring around $40 million. If figures crosses 140,000 tons, another $7 to $8 million could be added to the tally.

118,000 tons of mangoes exported -DAWN - Business; August 31, 2007

 

[Moin91]

Work on new steel mill starts


Friday, August 31, 2007
By our correspondent

KARACHI: Steel production is vital for the development of Pakistan, said Governor Sindh, Dr Ishrat-ul-Ibad at the ground breaking ceremony of Aisha Steel Mills on Thursday.

The project will provide 1500 direct and indirect jobs and will help reduce steel imports of the country, said Hasib Rehman, CEO Aisha Steel Mills Limited.

Aisha Steel Mills was incorporated in May 2005 at Bin Qasim at a cost of US $100m to manufacture cold rolled coils for automobiles, engineering and domestic appliances industries. The initial capacity of the project is 220,000 tonnes which will be expanded to 350,000 tonnes in the second phase.

The sponsors of the projects are a mix of foreign and local financial group namely Universal Metal Corp (UMC), Japan, Metal One Corp, Japan (a subsidiary of Mitsubishi Corp & Sojitz Corp, Japan) and Arif Habib Securities Limited (AHS).

UMC, MOC, AHS will invest 49 per cent, 26 per cent and 25 per cent equity in the equity of the company.

Japanese Ambassador, Seiji Kojima speaking on the occasion said “the corporate sector in Pakistan must come up with the latest technology; we are ready to do more joint ventures with Pakistan.”

Earlier Japanese investment was restricted to automobiles and financial sectors but now new investment in the steel sector are being explored, there is much to gain by bilateral trade ventures between Japan and Pakistan, he added.


Work on new steel mill starts

 

[Neo]

Government reluctant to release household integrated economic survey ​

ISLAMABAD (August 31 2007): The government is reluctant to release Household Integrated Economic Survey (HIES), an indicator showing impact of on-going government polices on the masses particularly the poor, sources told Business Recorder on Thursday.

It was learnt that the Federal Bureau of Statistics has stopped printing of the survey, which had to be released along with Pakistan Social and Living Standards Measurement survey (PSLM) in July 2007. At the time of releasing PSLM it was said that HIES would be released shortly but is yet to be released after elapsing one and half month.

When asked, a Director in the FBS did not deny rather said Khalid Mehmood, Deputy Director General is the right person to be asked such questions. This scribe failed to get in touch with the DDG despite many attempts. The delay in releasing survey was creating doubts, as it would provide important data on household income, consumption expenditure and consumption pattern at national and provincial level with urban/rural breakdown.

Sources said that the survey would reveal consumption patterns among different income classes and would have given details that how the lowest income group was grappling to meet both the ends at a time of double digit inflation.

It would have also given details that whether poor are left with some amount to pay for their children education after spending on food items, they added. It would have showed that how much the poor spend on their income on food expenditure vis-à-vis to the rich.

The FBS had released the PSLM excluding income and expenditure report showing poverty trend with the objectives to provide detailed outcome indicators of the government programs on social sector as well as income and expenditure for future policies.

The data of the PSLM has been released on education, health, immunisation, pre and post-natal care and population welfare in 2005-06, which is the second round of a series of surveys planned to be conducted up to 2009.

The PSLM as well as HIES are the main tools used for monitoring the implementation of the PRSP and MDGs. These provide population-based estimates of social indicators and their progress under Poverty Reduction Strategy Paper (PRSP).

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

China - specific economic zones to attract FDI: PM​

Saturday, September 01, 2007

ISLAMABAD: Prime Minister Shaukat Aziz Friday said the establishment of China-specific Special Economic Zones (SEZs) would attract substantial Foreign Direct Investment (FDI) in the manufacturing sector and help enhance exports from Pakistan.

He was chairing a high level meeting which approved in principle the exemption of duties on the import of machinery for SEZs here at Prime Minister House.

The Prime Minister said the setting up of China Specific SEZs would usher in a new era of economic activities in the country and help generate thousands of new jobs and improve living standards of people.

The Prime Minister said both Pakistan and China are working actively to expand their trade and economic ties for which all the required ingredients to achieve this objective are in place.

He said China Specific Economic Zone is an important initiative of the leadership of the two countries.

Prime Minister said Pakistan and China are strategic partners and enjoy a multifaceted relationship, which covers a broad spectrum of areas including trade, investment, security defence, health and education.

There are yet numerous opportunities to further enhance the economic and trade relations between the two countries.

Earlier, Secretary Commerce in his presentation highlighted the salient features of SEZs and briefed the meeting that these economic zones are being established under the Free Trade Agreement (FTA) between Pakistan and China and all goods manufactured in these zones will have tariff free entry into Chinese market.

He also mentioned that the business ventures would be based on partnerships with the Pakistani businessmen.

The meeting was attended by the Minister for Commerce Humayun Akhtar Khan, Deputy Chairman Planning Commission, Dr. Akram Sheikh, Chairman CBR, Abdullah Yousaf, concerned Federal Secretaries and senior officials.

China - specific economic zones to attract FDI: PM

 

[Neo]

Pakistan-Bangladesh trade to be raised to $1 billion ​

DHAKA (August 31 2007): Pakistan has agreed to sell rice to Bangladesh as part of efforts to raise annual bilateral trade to $1.0 billion, officials of the two countries said on Thursday, after a two-day meeting in Dhaka. But the meeting made no headway on the repatriation of around 300,000 Urdu-speaking Pakistanis stranded in Bangladesh for 36 years.

"We export 1.5 million tonnes of rice annually," said Pakistan foreign secretary Riaz Mohammad Khan. "We can sell coarse rice to Bangladesh to meet its immediate import requirements and also to boost trade between us," he told reporters. Current annual trade between the two countries totals around $350 million, officials said.

Bangladesh will import 450,000 tonnes of rice and 350,000 tonnes of wheat the 2007-08 fiscal year (July-June) to meet domestic demands, partly pushed up by recent floods that damaged rice and other crops with $500 million, officials said.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

PIA losses up 20pc in first half ​

Saturday, September 01, 2007

KARACHI: Pakistan International Airlines (PIA) on Friday reported an after-tax loss of Rs7.7 billion in first half of 2007 up 20 per cent from Rs6.7 billion incurred in same period of last year.

Total sales revenue increase by 4 per cent supported by passenger revenue growth of 7.1 per cent, which was partially offset by a 12.6 per cent drop in cargo revenue, the airline said.

An operating loss of Rs4.3 billion up 3 per cent than last year was incurred as operating costs excluding fuel increased by 17 per cent primarily reflecting the impact of 2006 salary hike, the increase in depreciation and lease rentals of new aircraft, it added.

While the share of PIA in the domestic market remained unchanged at 69 per cent, share in the international market declined 3 per cent to 46 per cent due to intense competition from regional airlines and some capacity limitations on account of EU action.

Total fuel cost showed a 13 per cent decline due to lower quantities consumed in part due to utilization of newer fuel-efficient aircraft.

The airline said fuel-hedging arrangements have been finalized with two international banks, which would be undertaken as soon as a sensible price opportunity arises.

PIA is already engaged in cost-cutting steps including the closure of lost-making routes. It said the restructuring plan envisaging rescheduling of debt is progressing on schedule and completion is expected before yearend.

PIA losses up 20pc in first half

 

[Neo]

Advantage of globalisation: Pakistan needs to act towards good governance ​

ISLAMABAD (August 31 2007): Inaamul Haq, a former Federal Secretary, has said that poverty could not be attacked without eliminating injustices and inequalities. "Poverty is intimately connected with tyranny; once you give people the exercise of freedom and equal opportunities, poverty would gradually go down the hill," he stressed.

We can attack poverty only when we learn to prioritise the principles of development economics, he added. Inaamul Haque, who has been associated with development policy formulation for 40 years, held that in the past the government had given priority to growth economics, which is necessary but not sufficient. There were rapid inequalities during period of rapid growth."

Speaking on the international implications of globalisation, which is irreversible, Inaamul Haq opined that "to take advantage of globalisation, Pakistan needs to act towards good governance instead of making speeches."

Inaamul Haque referred to the message implicit in a recent study said that Pakistan must do more for 80 percent or more of our working women who lived below the poverty line.

Inaamul Haq who was a former chairman of Export Promotion Board and also did a stint at the World Bank, was speaking in a seminar on 'Globalisation and International Dimensions of Development' held at the Pakistan Institute for Development Economics on Thursday. Dr Rehana Siddiqui, Director of PIDE, chaired the seminar held in the series 'Nurturing Our Minds.' Globalisation, which he said had become irreversible, has made underdeveloped countries conscious of dichotomies in the world.

An example of this could be sought in goods that were not manufactured at one place now. Instead, a number of components of the same goods were fabricated in several different countries.

The country has some responsibility to proceed with globalisation. 'You could not any thing substantial in the process without adopting good governance, or without fighting corruption. The state has to become a regulatory body. Inaamul Haque also gave tips for making substantial gain in the globalisation process, such as increase private capital inflows, take measures toward achieving national and international financial stability and improve investment climate to attract substantial international foreign investment.

As an illustration he referred to the case of IPPs. They were charging high cost for electricity because of faulty mechanism and also because investment climate was bad at that time.

In this regard he questioned foreign investment of the type of MacDonalds' and KFC,' which he pointed out was not the ideal type of investment. In this regard he cited the case of import of computers when the late Ghulam Ishaque Khan was the finance minister because the country was short of foreign exchange at that time and we had to import main frame of computers. Besides, GIK thought computers would increase unemployment.

Inaamul Haque thought trade was a key factor in poverty reduction and therefore, he put a lot of emphasis on Pakistan increasing trade, rather than depending on foreign aid.

However, Pakistan must fight high tariff barriers. Helpful laws were available to combat selective trade indulged in by the developed countries which charge a lot of tariff while exporting but give less to developing countries.

However, the Doha development agenda has at least given developing countries a sense of the lack of balance perpetrated in international trade imports by the developed countries. In conclusion, Inamul Haque suggested that the country needed autonomy in shaping a strong monetary policy and giving independent status to the State Bank.

'Things are changing now for the better, but there was a time when the State Bank Governor would be tied up with attending government meetings. He was also of the view that the financial position of the country had improved in the last ten years.

His concluding message to economists who were in the audience: Pakistan must step up its trade and do its best in removing trade barriers, and must adopt a vision, improve implementation gap to take advantage of the age of globalisation. 'To take advantage of globalisation Pakistan needs to act towards good governance instead of making speeches'.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

‘Pak farm produce among best in world’ ​

Saturday, September 01, 2007

LAHORE: Agriculture is a very strong area for collaboration between Pakistan and France as Pakistan’s agricultural products are among the best in the world and it deserves to be one of the top exporting countries of agriculture, horticulture, dairy, livestock and food products.

This was stated by the French Commercial Consular Madam Brigitte Bouvet while speaking at the Lahore Chamber of Commerce and Industry on Friday. LCCI President Shahid Hassan Sheikh, former presidents Ilyas M Chaudhry, Mian Misbah-ur-Rehman and head of the LCCI delegation to France Kashif Younas Mehar also spoke on the occasion.

The French commercial consular said that there were a number of other sectors where both sides could initiate joint ventures to take the existing volume of bilateral trade to new heights.

She said that French technology and equipment would help exploit Pakistan’s full potential in agriculture, dairy and food processing sectors. The diplomat also appreciated the Lahore Chamber of Commerce and Industry for its efforts aimed at increasing collaboration between the business communities of the two countries. Speaking on the occasion, LCCI President Shahid Hassan Sheikh urged the French diplomat to consider increasing imports from Pakistan as Pakistan has a traditional edge in textiles, sports goods, leather products, carpets, cereals (rice), fruits and vegetables over a number of other countries. He said French multinationals have maintained a visible presence in Pakistan in various sectors like pharmaceuticals and chemicals, telecommunication equipment, oil marketing textiles and food processing.

The LCCI President said that the Lahore Chamber of Commerce and Industry was ready to ink a Memorandum of Understanding with the Chamber of Commerce in France to increase the level of information exchange between the two countries. He also informed the French diplomat that Pakistan presently is running short of electricity and French companies could benefit by availing opportunities in this sector.

He said that major areas where France and Pakistan can work together include telecommunication, automobiles, shipbuilding and automotive parts, defence equipment, oil and gas exploration, infrastructure, textiles, garments, leather products, electrical and electronics appliances, fruits and vegetables, livestock and dairy, fisheries, horticulture, storage facilities for agro-products and cool chains.

Any investment made in Pakistan will find ready markets not only in Pakistan but Central Asian States, China and other regional countries too. Pakistan Railways also intends to lease out facilities to the private sector. France may be interested in this offer also.

He said that although Pakistan is the 5th largest producer of milk in the world, the current industry is inadequate to meet the growing demand for milk and other dairy related products.

ADEPTA (French Association for the Development of International Exchanges of Food, Agricultural products and Technologies) can play a crucial role in this regard.

The LCCI President informed the diplomat that Investment cycle is gaining momentum. Foreign investment has almost tripled. Pakistan’s stock market is one of the best performing markets of the world. It has outperformed the markets of Malaysia, India, Indonesia, Egypt and Turkey. The openness of Government’s policies and transparency in transactions is attracting higher investments and Pakistan is geared to become a regional hub for trade and manufacturing. Pakistan is also destined to serve as an energy and trade corridor for Central Asian States and China.

‘Pak farm produce among best in world’

 

[Neo]

Fundamentals of economy strong: report ​

Saturday, September 01, 2007

KARACHI: The fundamentals of the Pakistan economy are now strong enough to be backtracked by any changes in future political set-up in the country, stated Ovais Siddiqui, head of Research at JS Global Capital, in his report.

Pakistan is in the midst of a political crisis. Restoration of the Chief Justice of Pakistan last month caught General Musharraf off guard and now he is in a tight corner against the backdrop of upcoming presidential elections. We feel that the next few weeks are very crucial and would set the stage for some major changes in the post-election political set-up in the country.

Economic benefits of several years of structural reforms and successful privatisation program are not likely to fade away in the face of this crisis.

In fact, the hallmarks of economic policies under Musharraf rule more or less mirror the broad economic objectives of previous governments led by Benazir Bhutto and Nawaz Sharif. So, if these leaders come into power, there is a strong likelihood that there would be no major change in the current economic policies.

Currently, Musharraf does not enjoy the luxury of having many options to get himself out of this problem.

The most likely future scenario (70 per cent probability) is an agreement of Musharraf with Bhutto, leading to re-elect Musharraf as civilian President. He would be sharing power with Bhutto who would likely be the next Prime Minister.

In the second scenario (probability 15 per cent), he could go for imposing emergency on the country. This may lead to martial law, if the Supreme Court annuls emergency for its no solid justification.

In the third scenario (probability 15 per cent), there would be no deal and Musharraf would proceed with his original plan to get himself re-elected with uniform.

However, this would be challenged in the Supreme Court, which would give decision against him, forcing him to resign from the post of President and Army Chief positions.

Later on, general elections would be held and either Bhutto’s PPP or Sharif’s PML-N would win elections.

In the most likely scenario where an agreement is struck between Musharraf and Bhutto, investors would be very excited, leading to even re-rating of the Pakistan market on the back of possible reduction of Pakistan’s political risk premium. In the second scenario, the market is likely to initially react negatively to the imposition of emergency and martial law.

However, considering the economic out-performance under previous military rules, it is expected that the market may start rallying once the dust settles down.

In the third scenario, the stock market is likely to initially react negatively to any indication of Musharraf’s leaving and would remain shaky as long as the structure of future government remains unclear. Since either Bhutto or Sharif is likely to win the elections, and the market is expected to welcome the change.

He added that Pakistan is now at deeper discount. Pakistan is currently trading at FY08F PE of 9.2x, which is 13 per cent and 41 per cent discount to its historical average of 10.6x and to average 2008F PE of 15.6x of Asian emerging markets, respectively. We expect JS Universe companies’ earnings to grow by 17 per cent in FY08 on the back of good recovery in energy and cement sectors.

Fundamentals of economy strong: report

 

[Neo]

Cathay increases flight services ​

KARACHI (August 31 2007): The Cathay Pacific Airways today announced that it will further increase its services to Pakistan by adding frequencies on its routes from Karachi to Bangkok and Hong Kong. The airline took this step in lieu to the importance of Cathay Pacific places in Pakistani market.

The service from Karachi to these two cities will be increased from three flights a week to four flights a week effect from October 7, 2007. New flight would depart on every Sunday at 0025 of the morning. The flight will not only meet the domestic demand by the businessmen but will also cater to the requirement of leisure market.

Airline's Country Manager in Pakistan, Feroze Jamall said, "Karachi is an important market for Cathay Pacific and we are pleased to be able to further strengthen our presence in the region through this additional flight. The Cathay Pacific enjoys good reputation in Pakistan and we believe the enhanced services to Hong Kong and Mainland of China will help us to meet the demands in great extent ". "Together with our sister airline Dragonair, we operate a fleet of 144 aircrafts serving over 120 destinations world-wide, " said Jamall.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

500 megawatts power project: Wapda being forced to accept QIA proposal ​

ISLAMABAD (August 31 2007): The Board of Investment (BoI) is being accused of forcing Wapda to accept Qatar Investment Authority's (QIA) proposal for setting up 500 MW thermal power project at Chichoki Mallian with 33 per cent inflated cost, well informed sources told Business Recorder.

Both the GoP and QIA signed an MoU during the visit of Qatari Minister for Finance to Islamabad on May 31, at the Prime Minister House, but it expired on July 31, as the sponsors did not finalise negotiations with the EPC contractors ie Alstom Marubeni.

The company which is being assisted by Saif-ur-Rehman, former Chairman Ehtsab Bureau, had quoted $350 million project cost a couple of months ago but BoI claimed that it has been enhanced to $525 million without giving any justification.

Rehman, who was very close to former Prime Minister Mian Nawaz Sharif, was seen in the Prime Minister House at the time of MoU signing ceremony between the GoP and QIA. The sources said that a two-member team of QIA is in the capital for holding negotiations with the officials of Ministry of Water and Power on Friday (today) to finalise the proposal.

" It is premature to predict if the project will materialise or not as the revised project cost as mentioned by the BoI is unacceptable," said an official on the request not to be quoted. The official was of the view that with the increase in project cost, tariff would increase automatically, which Nepra may not allow.

The official said that Private Power Infrastructure Board (PPIB) had blocked the signing agreement between the QIA and GoP, saying that some of its clauses were not acceptable. PPIB was also of the view that it was not being properly consulted on the QIA proposed financing. The sources further said that Wapda's Advisor (thermal) visited London from July 19-24 to discuss technical issues with the QIA and HSBC.

During the meeting, all technical issues were amicably resolved and stood settled, claimed Fazal Ahmad Khan, Member Power, Wapda. Regarding updated progress on the project, he was of the view that QIA was negotiating the price with EPC contractor on its own and the utility was unaware of any progress.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Govt decides not to allow import of sugar: Record cane crop likely​

ISLAMABAD, Aug 30: With a record 58 million tons of estimated sugarcane crop, the government has decided not to allow import of sugar this season, it is learnt.Informed sources told Dawn on Thursday that the government and the sugar industry had reached an understanding about the start of crushing season and ensuring sufficient buffer sugar stocks for carryover into the next season.

Dr Ashfaque Hassan Khan, Special Secretary, Ministry of Finance, said the government had decided to ensure about 400,000 tons of sugar stocks in reserve for market stabilisation. In addition, if sugar industry starts crushing on Nov 1 in Sindh and on 15 in Punjab and NWFP, there would be no need for sugar import.

However, the government will hold consultations with the industry and examine stock position and the crushing situation to ensure these objectives. If a gap was found between demand and supply, the government would allow sugar imports to meet the deficit, he told Dawn.

A meeting of the sugar industry and a secretaries’ committee - that was convened on Thursday to finalise minute details of the agreement and formally announce the decision - was postponed until Sept 11 because of engagements of Dr Salman Shah, adviser to the prime minister on finance.

Secretary General, Pakistan Sugar Mills Association, K. Ali Qazilbash, said the government and the industry had already agreed on the basic objectives.

He said the millers had already decided to start crushing in the first week of November in Sindh and second/third week of November in Punjab and NWFP, respectively, and hence they would have no problem to accept official demands.

He said the country’s current sugar stocks of 1,175,000 tons were sufficient for until end of November because monthly consumption ranged between 350,000-375,000 tons.

With the start of crushing in early part of November, the new production would also be available in November that would reach about two million tons by March.

Mr Qazilbash said a record production of 4.2 million tons of sugar was expected next season because of a historic 58 million tons of estimated sugarcane crop.

Pakistan produced about 55 million tons of sugarcane in 1998-99 that too was a record. Last year, the country had a 50.6 million tons of sugarcane crop.

Under a long-term understanding between the PSMA and a committee on core inflation, led by Minister for Industries Jahangir Khan Tarin, the sugar mills would start crushing on Oct 15 in Sindh and Nov 1 in Punjab and NWFP from next year but provincial governments would be flexible in start of crushing in case of later maturity due to weather.

The federal and provincial governments would formulate sugarcane/sugar policy in consultation with stakeholders by Sept 15 every year.

The policy will envisage that sugar should not be imported until the size of sugar season is determined by the end of March except in case of very abnormally high sugar prices.

The government would build up a buffer stock of 400,000 tons for price intervention through import or local purchases in staggered intervals during December to April.

The Trading Corporation of Pakistan should buy sugar through open tenders.

In has also been decided that millers would pay the cost of storage and replace it with new stocks every year in case buffer stock remains unsold and is purchased from them.

The committee suggested that sugarcane support prices should not be raised from existing levels in 2007-08.

Govt decides not to allow import of sugar: Record cane crop likely -DAWN - Business; August 31, 2007

 

[Neo]

Tarbela hydropower project expansion approved ​

ISLAMABAD (August 31 2007): The Private Power Infrastructure Board (PPIB) has approved expansion of Tarbela dam power project that would generate 960 MW costing $500 million. This will be fourth extension of Tarbela hydropower project, which will be completed within shortest possible time.

The Board also approved that feasibility study of the 960 MW expansion project to be carried out by the Tarbela Hydro Limited and the Associates, said an official statement.

The decision has been taken at the 72nd meeting of the PPIB board held here on Thursday under the chairmanship of Water and Power Minister Liaquat Ali Jatoi. PM's Adviser on energy Mukhtar Ahmad also attended the meeting.

The PPIB board also approved setting up of hydropower project of 139 MW of Chakotti Hattian Hydropower project located in Azad Jammu and Kashmir (AJK) expected to start commercial operation by 2015. The meeting was informed that the PPIB has recently signed/initialled Implementation Agreements (IAs) with five companies totalling 992 MW, while four IAs totalling 715 MW are ready for initialling.

The IAs initialled include 165 MW Attock General by Attock Group of companies, 225 MW Atlas Power of Shirazi Group, 202 MW Foundation Power a company of Fauji Foundation, and 200 MW Nishat Chunian and 200 MW Nishat Power by Nishat Group.

The PPIB's major role is to facilitate power sector investors for establishing IPPs in the country, and enter into Implementation Agreements (IAs) with them, it was further informed. Currently, the portfolio of projects being processed by the PPIB includes 59 power projects totalling 15,000 MW with an investment outlay of $13.8 billion. Of the 15,000 MW, 5,138 MW will be hydel, 4603 MW will use oil/bagasse, 1600 MW will be based on pipeline gas/oil/LNG, 1174 MW will be generated from dedicated gas while 2,550 MW will be generated from coal. As per estimated schedules, 831 MW will be available to the national grid by 2008, while another 2,627 MW and 3734 MW by 2009 and 2010, respectively.

The system will be having a total capacity of 7192 MW by 2010. All milestones to achieve the targeted Commercial Operation Dates (COD) of the projects are being achieved in timely manner, while the PPIB has issued letters of interest (LoIs) to 32 projects totalling 8,276 MW and letters of support (LoSs) to 14 projects with a cumulative capacity of 2,590 MW, the Implementation Agreements of nine projects for 1700 MW are either signed/initialled or ready for signature, the meeting noted.

Jatoi advised that all fast track projects should be dealt with diligently and project sponsors should be given maximum facilitation. Power is a prime mover of the economy, and we should put in all our sincere efforts to develop the power sector of the country. He appreciated the efforts of the PPIB, which played a pivotal role in concluding the agreements with the sponsors in an efficient and speedy manner.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Plan to set up textile machinery base: Policy being finalised​

KARACHI, Aug 30: The long-term textile policy proposes to set up a textile machinery manufacturing base in Pakistan to support and sustain textile industry that should attract investment from home and abroad and push up export of all products to $24 billion plus by the next five years.

For this purpose, all rebate incentives being offered to the textile sector in the name of research and development at the rate of three, five and six per cent are being integrated in the long-term textile policy.

The policy is being given final touches by the textile ministry, in consultation with the finance ministry and is expected to be handed to the federal cabinet sometime next week for approval.

A well-placed source said that textile machinery manufacturers in many parts of the world are on the lookout for relocation of their facilities.

’’Pakistan is one such place with cotton production, a mature textile industry and an attractive place for investment,’’ an official said.

He disclosed that the some segment of spinning that could not be accommodated in concession rate lending will be given a three per cent relief in the interest rate.

“This will cost anywhere up to one billion rupees plus a year to the State Bank,’’ he said.

’’The focus is on developing infrastructure facilities and emphasis is on setting up self-contained textile cities and garment cities to attract investment,’’ the source pointed out while informing that work on construction of textile and garment cities in Karachi, Lahore and Faisalabad is in full swing.

’’The problem of missing and weak links in the textile chain has also been addressed in

the new policy,’’ the source said, and expressed the hope that in the next few years processing, dyeing and finishing segments of textile industry will be developed to its full potential.

’’We want to have a fully self-sustained and self-serving textile industry where all segments are inter-linked and end products secure good prices.

“The Planning Commission has proposed an investment of more than Rs500 million for textile projects in the current fiscal year,’’ the official disclosed who revealed that a sum of Rs22 billion will be invested in the next five years to upgrade textile industry.

At present, the Federal Board of Revenue and the finance ministry are giving a close look to the policy to ensure cost-effectiveness of money to be invested and proper utilisation of rebates being offered to exporters.

A textile machinery complex was set up in the public sector about 30 years ago in Pakistan which failed to attract customers simply because sponsors of textile projects were interested in import of plant and machinery rather than buying from local company.

Market sources said sponsors obtained bank loans on the basis of highly inflated cost of project designed on imported machinery.

Import helped sponsors to siphon off a big chunk of money and the project went in loss before its completion. In the decade of 80s, textile barons were the biggest beneficiary of loan write-offs.

Developing facilities of textile machinery and equipment manufacturing in Pakistan will be another attempt in Pakistan.

But this time attempt is being made by offering investment opportunities to private sector and integrating this project with all segments of the industry.

Plan to set up textile machinery base: Policy being finalised -DAWN - Business; August 31, 2007