Pakistan Economy - News & Updates - Archive

[Neo]

KARACHI (May 12 2006): Port Qasim Authority (PQA) has received Expressions of Interest (EoIs) from more than 12 foreign investors for various projects costing around two billion dollars following floatation of tenders on its website and in foreign newspapers.

Incredible indeed, within a span of four months, January to April 2006, 11 foreign investors visited Port Qasim and desired to be involved in various projects launched by PQA.

Sources involved in ports and shipping business say that the turnaround is the result of the fast-track policy initiated by Federal Minister for Ports and Shipping, Babar Khan Ghouri and the vision envisaged by the new Chairman, PQA, Vice-Admiral, Asad Qureshi. The dynamism showed by the duo has generated a lot of interest among the foreign investors.

Mitsui and Co Ltd of Japan alone has shown interest in setting up a LNG terminal at a cost of One billion dollars. Among the other important projects include LNG terminal now being developed by Malaysian firm PROGAS on BOT basis at a cost of 25 million dollars. The terminal with handling capacity of 0.5 million tonnes per annum, will accommodate 30,000 DWT class vessels.

Setting up of a dedicated Liquid Cargo Terminal at an estimated cost of 11.4 million dollars by FQA Enterprises (Pvt) Ltd, a joint venture of Felda Malaysia and Westbury Pakistan. Since Qasim International Container Terminal (QICT) has reached the capacity mark of 0.5 million tonnes, second terminal at a cost of 211 million dollars with handling capacity of one million TEUs is planned in private sector on BOT basis to handle increased volume of container traffic.

To avoid huge recurrent maintenance and capital dredging, PQA plans to purchase a 6000 *** Suction Hopper Dredger. The project has approval of the Government of Pakistan. PQA is currently seeking soft loan through financial institutions for purchase of the dredger at an estimated cost of around Rs 2500 million.

Grain/Fertiliser Terminal with handling capacity of four million tonnes, on BOT basis, is planned to be developed at the Port at a cost of $50 million.

Two desalination plants at a cost of $160 million each with a capacity of 25 MGD are planned to be completed by the end of 2007. An agreement was signed in August 2005 with California Enviro-Management Inc, USA for allotment of 2x2 acres for the establishment of proposed plants.

The Textile City to be established in Eastern Zone of PQA will provide all infrastructure facilities necessary for optimal operations of textile companies. The expected project cost is Rs 3.6 billion excluding power plant & wastewater treatment plant that would cost Rs 5.1 billion.

The projects in the pipeline are: establishment of 2nd iron, ore and coal berth at an estimated cost of $50 million, 2nd oil jetty at an estimated cost of $20 million, Clinker/cement terminal at an estimated cost of $30 million, marine workshop and dry dock facilities at an estimated cost of $10 million. All these projects will be developed on BOT basis.

Some of the major establishments at the port are: Industries: ICI-PTA plant, Indus Motors, FJFC fertiliser plant, LPG & storage facilities, Engro Asahi, and BOC gases.

Terminals: FACTO, QICT, EVTL, IOCB, and MPT. Refinery: Awam Palm Oil Refinery. Container freight station: Shaheen freight station, Qasin Container Freight Station. Warehouses: Marine Pride, International House Limited, Fazal Sons, Transpak, Mansoor Jamal, etc Power plant: KESC thermal power plant, and University: National Textile University.

So far 91 units are operational while 49 units are under completion phase. PQA's mission statement is- to develop Port Qasim into premier port of Pakistan with integrated industrial and commercial facilities by being customer service oriented and financially healthy organisation operating under landlord concept.

 

[Neo]

FAISALABAD (May 12 2006): Punjab is home to more than 65 percent or 1.9 million businesses in Pakistan. According to the Smeda update report, this is even true that at the sub-sector level such as agriculture, mining, manufacturing, construction etc except for electricity, gas and water sector.

Where NWFP is leading with a share of 87 percent, Punjab is followed by Sindh, NWFP and Balochistan with a share of 18 percent, 14 percent and 2 percent respectively. Unlike large enterprises in the formal sector, small and medium enterprises are constrained by financial and other resources.

Their capital base remains lean and nearly 100 percent of all reported business investment, excluding land and business, remained less than a million rupees. Sales data for businesses in Pakistan segregated on firm size was not available although according to the most recent economic census report, 84 percent of enterprises have sales below Rs 0.5 million and 93 percent report sales below Rs 1 million.

According to report, SME sector in Pakistan is primarily a less formally organised sector. More than 96 percent businesses are owned and managed by an individual as a sole proprietary concern.

While 2 percent are partnerships, there are hardly any corporate entities in the SME sector, implying that the inclusion of professional people in business management process is yet to be witnessed. SMEs in an ideal situation should serve as the breeding ground for future corporate sector but this really does not seem to be happening in Pakistan.

These characteristics of SME sector suggest that most of the businesses are in a low growth trap, dealing in traditional products and unable to climb up the technology ladder. They often become vulnerable to various shocks and disappear from the scene.

This view gets credence from the fact that 19 percent SMEs are less than 5 years old and only 4 percent are able to survive beyond 25 years. The encouraging sign however, is their mushroom growth, which makes it imperative that there should be a mechanism through which they could get support in terms of resources such as capital, finance, trained human resource or services like advice on technology up-gradation, marketing or quality management etc.

The Economic Census of Pakistan-2005 lists 3.2 million business enterprises nation-wide and SMEs constitute over 99 percent of all.

Their share in industrial employment according to an estimate is 78 percent and in value addition approximately 35 percent. Nearly 53 percent of all SME activity is in retail trade, wholesale, restaurants and the hotel business whereas the contribution of industrial establishments and those involved in service provision is 20 percent and 22 percent respectively.

Among the SMEs involved in retail, wholesale etc, 98 percent employ less than 5 persons and 99 percent less than 10 persons. Even within the manufacturing sector the trend is not different and nearly 87 percent employ less than 5 persons and 98 percent less than 10 persons.

Similar pattern of employment distribution can be traced among other sectors except for mining where SMEs tend to employ more people. In the mining sector, it averages around 56 percent employing between 6 to 50 persons. On the whole, the percentage of large firms is very small.

According to report, SMEs play a key role in providing additional employment and facilitating transformation of economy from low to middle income group. Their allocative efficiencies in resource utilisation such as labour, capital and technology synergies the economic development in a socially equitable manner. SMEs do allow a large number of entrepreneurs and self-employed to survive and exist.

It is also understood that sectors dominated by SMEs are better able to exploit dynamic economies of scale. More importantly there has been no successful transformation evidence available in the world without the active participation of SME sector in the economic development.

 

[Neo]

ISLAMABAD (May 12 2006): Minister for Labour, Manpower and Overseas Pakistanis, Ghulam Sarwar Khan on Thursday said the country has witnessed 1.2 percent decline in unemployment rate in the 1st half of the current fiscal year.

The minister revealed this while giving details of the labour survey for the current fiscal year 2005-06. He said a record increase of 5.49 million has been observed in labour force for the first half of current fiscal year as compared to the same period 2003-2004.

According to him, the share of increased labour force for rural population was recorded 4.35 million whereas urban areas contributed 1.14 million labour force.

He said that sustained efforts of the government have brought down unemployment level at 6.5 percent as compared to 7.7 percent for the last year. It shows the commitment on the part of the government to bring prosperity to the masses.

Ghulam Sarwar said that unemployed labour force was estimated 3.50 million in 2003-04, which has now decreased up to 3.33 million, so there has occurred 0.17 million reduction in the unemployed labour force.

 

[Neo]

KARACHI, May 10: Pakistan’s major summer crops, including cotton and rice, are expected to largely survive a drought scare, officials said.

The Meteorological Department said this week that water levels in major reservoirs were critically low as the country had received 40 per cent less winter rains than normal and up to 25 per cent less snowfall.

But Agriculture Minister Sikandar Hayat Khan Bosan said crops should largely come through. “We are definitely in a crisis, but we expect that none of our crops would face a major threat,” Mr Bosan told Reuters.

Shafqat Masood, chairman of the Indus River System Authority, which manages water distribution in the country, said water levels were improving and a shortage of water in irrigation canals was likely to ease.

“Water levels in the rivers are also improving,” Mr Masood said.

“We are very close to our estimate for this period as hot weather has started melting snow,” he said. “Soon there will be enough water to feed the irrigation canals.”

The government had initially estimated a 10 to 15 per cent irrigation water shortage during the sowing period for cotton and rice summer crops, but the actual shortage was much higher.

“The next few weeks are very vital for the sugar cane and for preparing the ground for sowing cotton and rice crops,” Mr Bosan said.

“Sowing of cotton has just started and will continue for two more months and by the end of June a clear picture on the crop size will emerge.”

Pakistan expects its cotton crop to increase by over six per cent to 13.82 million bales in the 2006-07 crop year.—Reuters

 

[Neo]

ISLAMABAD, May 11: Pakistan has signed the New York Convention under which arbitration decisions of the courts of foreign countries in terms of investment disputes would be implemented by the Pakistan courts.

Water and power secretary Ashfaq Mahmood told participants of the Pakistan Development Forum on Thursday that Pakistan had recently signed and ratified the New York Convention to provide comfort level to foreign investors in case of any dispute with a local company or government entity.

He later explained to Dawn that a court in the United States or the United Kingdom or for that matter by any member country of the convention, or by the International Commission for Settlement of Investment Disputes (ICSID) would have to settle investment disputes in accordance with Pakistani laws.

The decisions of the foreign courts made under the Pakistani law would be required to be executed by the respective courts in Pakistan. When asked if the Pakistani courts would also enjoy similar jurisdiction over their counterpart courts abroad, he said it would depend on how “we proceed”, but added a clear comment on the subject should come from the ministry of law or the attorney general of Pakistan.

He said the New York Convention had already been signed by about 75-78 countries. The western countries have repeatedly been asking the Pakistan government to include the clause of international arbitration under their respective laws and courts in bilateral investment treaties but have so far been resisted by the successive governments.

In the past, many foreign investors had got decisions in their favour from the courts of their respective countries but they could not be implemented because of lack of their jurisdiction in Pakistan.

 

[Neo]

Friday May 12, 2006

ISLAMABAD: Federal Minister for Information Technology Awais Ahmad Khan Leghari Thursday said the government was committed to promoting a healthy competition in the domestic and international connectivity infrastructure so that the users can benefit from enhanced choice and better services.
He was talking to the senior management of Saif group, who are major partners in the consortium laying down Pakistan’s first private sector undersea cable from Karachi to the UAE, in his office here.

The submarine cable system called the TWA 1, expected to come into service in June 2006, will be the third such cable landing into the country and will supplement the SMW3 and the recently inaugurated SMW4 cable systems of PTCL.

He said that reliable and robust infrastructure for cost effective international and domestic connectivity plays a major role in strengthening the base of the market for software export, IT enabled services and business process outsourcing as well as the contemporary telecom services.

He said the commissioning of the new cable will not only improve the redundancy and reliability of international connectivity, it will also introduce competition in the market segment which was hitherto served only by PTCL, hence bringing down prices for high quality international bandwidth services.

The minister further said that the government was working on formulation of policy whereby all the submarine cables landing into the country will complement each other and provide restoration capabilities, through mutual interconnection, in case of failure of anyone cable.

Awais said that another key market segment which will directly benefit from improved international connectivity is the broadband industry. "The government is working on all the fronts to facilitate proliferation of broadband internet in the country and coordinating with PTA to remove further bring down bandwidth rates and improve quality of service and to remove barriers to market entry," he said.

He added that a process was also under way whereby PTA will work with incumbents to improve the quality of the last mile copper and formulate a roadmap for improving Quality of Service (QOS). PTA is also being asked to get the incumbent interconnect offer and have the co-location provisions revisited to facilitate Fiber based access to broadband services, he said.

Emerging wireless broadband technologies like WIMAX, he said, will play a major role in the proliferation of broadband in the country due to ease of deployment. In this regard work is underway and PTA and FAB are being asked to make the appropriate frequencies available, he added.

He clarified that the frequencies that have already been auctioned for the WLL/broadband services and have not been used until now for provision of any service even after passing of initial rollout deadline will be reclaimed after due process and made available for the purpose of broadband provisioning through a transparent mechanism.

Government is striving through a dynamic policy process to make improvements in all the segments of the Telecom and ICT value chain to ensure proportionate growth for consumer benefit as well as ensuring profitable business and increased opportunities for the players involved in provision of all ICT related services, he added.

 

[Neo]

Friday, May 12, 2006

*Electricity demand will increase to 50,505 MWs in 16 years

By Sajid Chaudhry

ISLAMABAD: The government on Thursday informed all donors that the country required $25 billion to secure its energy requirements in the next 10 years.

Pakistan needs $18.45 billion to construct five big dams by 2016, including Kalabagh Dam, to ensure a water storage capacity of 20.7 million acres feet (MAF), Water and Power Ministry Secretary Ashfaq Mehmood told participants at the 5th Pakistan Development Forum (PDF) on Thursday.

“However, the total requirement for agriculture and generating electricity is $25 million in the next 10 years,” said Mehmood. The overall investment of $25 billion would be required for constructing new big dams, canals, drainage system, flood control programme and improvements in the water and electricity sector, he added.

The secretary said the country’s installed capacity in electricity stood at 19,590 megawatts (MWs) and total demand was 14,091 MWs. “Demand will rise to 20,161 MWs by 2010, 44,653 MWs by 2020 and 64,595 MWs by 2025,” he said. Pakistan falls short by nine MAF water for its current agriculture needs, the shortage would increase to 20 MAF by year 2020 and 25 MAF by 2025, he added. “The country needs to irrigate an additional 18 million acres of land to produce sufficient food.”

“The government is also constructing three medium-sized dams (Mirani Dam, Subak Zai Dam and Gomal Zam Dam) and 35 small dams,” said Mehmood. The Mangla Dam would improve the country’s water storage capacity by 2.9 MAF on completion, he said. “All documentation for the constriction of Kalabagh Dam has been completed and the dam’s construction will be started after the provinces reach a consensus, he added.

The secretary told donors that the Economic Internal Rate of Return upon investment in Kalabagh Dam was the highest, standing at 23.6 percent as compared to 23.4 percent in Bhasha Dam. He said the country would be able to store water for the Rabi season from 80 percent river flows of the Kharif season after the five major dams were constructed. He added that water seepage level was between 40 to 45 percent and needed to be reduced through the construction and maintenance of the canal system.

 

[Neo]

Friday, May 12, 2006

By Sajid Chaudhry

ISLAMABAD: Pakistan has asked the donor community that it requires foreign direct investment in oil and gas sector, project financing for major gas pipelines and technical assistance to ensure its energy security.

Ahmad Waqar, Secretary Petroleum and Natural Resources, in his presentation at the Pakistan Development Forum (PDF) 2006 on future requirement of energy by 2030, explained on Thursday the share of sources in energy mix as 18.5% in oil, 45% in gas, 19% in coal, 10.8% in hydro electricity and 4.2% in nuclear energy and renewable energy 2.5%.

The country requires 55.5 million tons of oil and petroleum products each year and rising oil prices in the international market are leaving negative effects on our foreign exchange reserves, he added.

He said to maintain 6% -8% GDP growth rate in the next five years Pakistan will face acute energy shortages by 2010-2012 and wants to exercise immediately one of the gas import options available with the country that include Iran-Pakistan-India Gas Pipeline (IPI), Turkmenistan-Afghanistan-Pakistan (TAP) and Qatar Gas Pipeline (GUSA).

The negotiations on IPI are at an advanced stage and if India does not join, then Pakistan and Iran will execute this project. India is expected to join the TAP project, and if it joins the project, then the project would be called (TAPI). The Qatar Gas Pipeline is also one of the options and negotiations are under way. A trilateral meeting on the IPI project is scheduled on May 22-24 at Islamabad. This project will be completed in four years after reaching an agreement.

He, however, said that the state of negotiations with Iran on IPI cannot be disclosed due to national interests. He made it clear that at the end of day Pakistan will have to exercise all these gas import options for its energy security.

He said the strategy that the government is pursuing at the moment is to increase oil, gas and coal exploration and production activities, develop more hydropower, increase the share of coal and alternative energy in the energy mix, promote private sector investment and develop regional cooperation and strategic partnership.

He informed the donors that this year oil import bill is expected to reach $6.5 billion against $4.6 billion in the last fiscal year.

He said the government is doing its best to enhance oil and gas production. The government cannot achieve this task alone, so the private sector is being encouraged to complete the task.

He informed that to encourage the private sector in oil and gas sector, a paper on LPG Policy will be submitted for approval before the ECC at its next meeting, summary for approval of the CNG Policy will be submitted before the federal cabinet at its next meeting and the government is also in the process of revising Oil and Gas Exploration and Production Policy by hiring a consultant of international repute.

 

[Neo]

RAWALPINDI (May 13 2006): President General Pervez Musharraf has directed the Petroleum and Natural Resources Ministry to ensure supply of natural gas to most districts and Tehsils across the country by December 2007 with the help of private sector as part of a strategy to meet domestic and industrial energy requirements.

He asked the ministry at a meeting on Friday to encourage private sector's participation in the supply of gas to far-flung and hilly areas, where laying long pipelines is difficult and expensive.

The private sector should be facilitated in transporting energy through liquefied natural gas (LNG) projects and alternative sources like windmill, solar, etc, he said. He particularly directed that work on projects like LNG in Karachi be accelerated so that industry gets continuous supply of fuel for sustained higher growth.

"The people should get gas easily. The provision of gas in hilly areas will stem deforestation and help in improving environment," he said at a meeting that reviewed progress in the goals set out on March 22. President Musharraf said Pakistan would also import gas from regional countries to meet its galloping energy needs in the industrial and agricultural sectors.

He expressed satisfaction over the progress vis-à-vis projects for import of gas from Iran and Turkmenistan. Pakistan, he said, would encourage exploration in oil and gas sectors and asked the ministry to tap maximum available energy resources.

The meeting was informed that Pakistan expects about $1 billion investment in the oil and gas exploration sector in the next few years. Later, Petroleum and Natural Resources Minister Amanullah Khan Jadoon expressed the hope that gas supply would be increased from the current 22 percent to maximum population in a few years.

"We embarked upon a roadmap under the president's vision to take gas to all districts and Tehsil headquarters across the country," he told newsmen.

The Sui Southern Gas Company (SSGC) informed the meeting that over 500 towns and villages in Sindh and Balochistan would be supplied gas in a couple of years.

The Sui Northern Gas Pipelines Limited (SNGPL) said that barring a few remote districts, all districts of Punjab and NWFP would be provided natural gas by 2007 with an investment of Rs 15 billion.

The two companies, in line with the directives of the president, also expressed the resolve to improve their customer services and minimise possibility of dispatching inflated bills.

 

[Neo]

ISLAMABAD (May 13 2006): Pakistan has racked up a record high foreign trade deficit of $9.427 billion for 10 months of the current fiscal year, which is about 8.6 percent of the country's gross domestic product (GDP), and a steep increase over 4.86 percent of GDP just a year ago.

This huge deficit during July-April 2005-06, according to Federal Bureau of Statistics (FBS) release on Friday, is a 93.65 percent higher than 2005 record deficit of $4.868 billion, and the gap is still widening steadily.

During this period, the country's total imports and exports stood at $22.95 billion and $13.52 billion, respectively, which indicate that Pakistan spent more on importing petroleum products, machinery, sugar, raw material and other goods and services. Everybody paid more for oil, while Pakistan's businesses sold far less exportable products overseas.

The alarming gap has forced many economists to trash their forecasts and pencil in lower estimates of the economy's strength in the coming months.

More worrisome, several economists say, is the possibility that the swelling trade deficit will eventually cause a steep drop in rupee value against dollar and other currencies. Local importers would demand more for dollars in the coming months to finance their surplus imports. It would also bring a rapid rise in interest rates and lower the living standards.

The government has projected exports at $17 billion, and imports at $21 billion, allowing a trade deficit of $4 billion for the FY 2005-06. However, the figures show that trade deficit has surpassed the target by 135.6 percent (or $5.427 billion) in just ten months.

Besides, the data show that in ten months, total imports exeeded the government's expectations by $1.95 billion. However, in achieving exports target it still lags behind.

President Pervez Musharraf recently claimed that by the end of the fiscal year, Pakistan would achieve export target of $18 billion. Here the question arise: how it is possible, as in ten months the country's total exports have reached only $13.52 billion and, most importantly, it also shows a negative growth of 4.62 percent in April 2006 as compared to previous month.

A glance at the trade data shows consistent rise in the country's imports, which is disturbing for the trade officials, as the exports-imports gap would be much wider than the estimated $4 billion.

Independent economists observe that if this trend sustains, it would be hard for the government to check the soaring deficit from crossing $12 billion mark by the end the year.

They fear, and expect, weaker economic growth in the coming months as trade provides an additional drag on recovery that may be faltering under the weight of high energy prices, stalling job creation and tepid consumer spending. According to government, this imbalance was caused by the sharp rise in imported petroleum products (in quantity and price), machinery, manufactured goods and food.

The data show that Pakistan's economy pulled in 40.38 percent more imports during ten months of the current fiscal year than $16.35 billion recorded during the same period of last year. However, the exports of Pakistani goods showed an increase of 17.80 percent against $11.48 billion of last year.

The burgeoning deficit has put pressure on the rupee, which could also create inflationary pressure, as Pakistan pays more for imported goods. It suggests that the rupee may still need a fall to help the narrowing the gap. But, there is a risk of pushing higher the inflation, if it does.

The FBS trade bulletin further depicts that during April 2006, goods worth $1.45 billion were exported, recording an increase of 11.79 percent against $1.29 billion of last year. Imports have been recorded at $2.26 billion during April 2006, which reflect a growth of 18.73 percent as compared to $1.90 billion in April 2005.

The figures show that the trade deficit in April has widened by $807.92 million, or 33.61 percent, against $604.67 million of April 2005. However, comparing exports of April 2006 with March, the bulletin says the figures registered a decline of 4.62 percent, which stood at $1.52 billion. The imports during the same month were also down by 15.88 percent as compared to $2.68 billion in March.

 

[Neo]

ISLAMABAD (May 13 2006): The 'Fuhralander' of Germany and 'Access Energy Inc' of US have signed an agreement to manufacture wind turbines in Pakistan to help establish wind power projects.

Under the Memorandum of Understanding (MoU) signed by the two companies, the US-based Access Energy who would set up a 50 MW wind power plant along the general wind corridor in Gharo, would finance the project, whereas the German Company, Fuhrlander, would transfer the technology to Pakistan for manufacturing of wind turbines along with its accessories to set up a minimum of 1000 mega watts (MW) power plants.

Sources said the government has already issued Letter of Intent (LOI) to the investors to start projects for producing alternative energy through wind.

These projects would be set up between Garo and Keti Bandar, for which the Sindh government has promised 1,000 acres land for each project. The provincial government has already allotted 10,000 acres, whereas the allotment for remaining 20,000 is under process.

Speaking on the occasion, AEDB Chairman Air Marshal Shahid Hamid said that the signing of the MoU was a big step towards manufacturing wind turbines locally.

He reiterated AEDB's commitment to promote alternative renewable energy in the country and assured full facilitation to all those interested in undertaking alternative renewable energy projects in Pakistan.

Shahid said that in pursuance to the mandate of the Alternative Energy Development Board (AEDB), the Board had been able to bring together the German wind turbine manufacturers and American investor to produce these turbines in Pakistan.

 

[Neo]

ISLAMABAD (May 13 2006): With an increase of 15 percent over last year, total outlay of the federal budget for 2006-07 would be around Rs 1.159 trillion, against Rs 1.009 trillion of 2005-06.

Sources said that total outlay and sector-wise allocations of the next budget was discussed at a meeting held at the Prime Minister Secretariat the other day. Prime Minister Shaukat Aziz was in the chair. It was the first meeting on the forthcoming budget at this level.

Sources said that the Prime Minister was given a detailed presentation on revenue target, social sector spending, defence budget and other major heads, for which the funds would be allocated in the 2006-07 budget.

They said that the meeting was informed that, on the basis of substantial increase in collection in the current fiscal year, the government is likely to fix revenue target for Central Board of Revenue (CBR) at around Rs 860 billion, against the current fiscal year's target of Rs 690 billion. The meeting noted with satisfaction that revenue collection was exceeding the target this year.

The meeting was told that the government would make substantial increase in the allocations for the social sector in the next fiscal year to expedite work on people-centric development schemes and programmes.

The meeting was also informed that the government was considering to enhance the amount of Public Sector Development Programme (PSDP) to around Rs 342 billion. The government had allocated Rs 304 billion for PSDP this year, and undertook a number of mega schemes and programmes of general public importance.

According to sources, the provinces would have around 50 percent increase in their share in PSDP under the 7th NFC award. This would provide Rs 34 billion extra, over last year's allocations, to take the provinces net share in PSDP to Rs 102 billion. This share was Rs 68 billion in the outgoing year.

Sources said the meeting was also informed that in terms of GDP-to-income ratio the government would keep the defence budget unchanged. However, in terms of total volume it would increase by 10 percent. The increase in total defence budget would cover inflationary effect as well as extra spending in the forces' expenditures.

Sources said the Prime Minister directed the officials engaged in budgetary work that they should give top priority to those schemes and programmes which would directly benefit the people, and improve their living standard.

 

[Neo]

ISLAMABAD (May 13 2006): In a bid to develop public-private partnership culture and accelerate the process of second-generation reforms in the country, the Asian Development Bank (ADB) on Friday agreed to provide $600 million loan to Pakistan.

The bank would provide $300 million programme loan for second-generation reforms in infrastructure, utilities and basic public sector services and $300 million multi-tranche financing facility for public-private infrastructure projects.

The donors on Thursday during deliberations of the Pakistan Development Forum (PDF) also called for greater role of the private sector in economic development, in general, and infrastructure, in particular, through public-private partnership and cautioned that without augmenting share of private sector in the economic activities, it will be difficult to sustain high economic growth.

The understanding was reached at a meeting held between, Central and West Asia Department of the ADB Director General Juan Miranda and Adviser to the Prime Minister on Finance and Revenue Dr Salman Shah here, on Friday.

The ADB team included Noy Siackhachanh, Director, Governance, Finance and Trade Division, Peter Feldon, Country Director and Rainer Hartel, Senior Finance and Infrastructure Specialist. Aijaz Ahmad, Chief Executive Officer (CEO), Infrastructure Project Development Facility and representatives from the Economic Affairs Division (EAD) accompanied Salman Shah.

Two special purpose vehicles will undertake the implementation. The first vehicle is the recently incorporated Infrastructure Project Development Facility (IPDF) that will serve as the Co-ordination Cell for the public-private partnership.

The second vehicle, the Infrastructure Project Financing Facility (IPFF), will provide "viability gap financing" as explicit targeted subsidy for capital or operational expenses to the projects where cost recovery tariffs may not be affordable for certain segments of the population.

 

[Spring Onion]

Good work Neo.
Hey Mods Neo is doing great work by updating economy news daily as i had noted it so why not you people think over making him the incharge of the economy thread as no one else bother to post or comment,its only him who daily update it.
Sorry Neo i havnt asked u but i said whatever i felt is right.
Jana

 

[Neo]

KARACHI (May 13 2006): Teamwork together with dedication and commitment of all employees will further take PIA to new heights. PIA Chairman and CEO Tariq Kirmani stated this, while addressing the cockpit crew at the PIA Head Office in continuation of a series of communication meetings with the airline employees.

He said that the initiatives taken so far have resulted in accomplishing remarkable progress in the airline and it has registered a growth and upward trend in all areas of its operations.

The performance indicators of the airline such as seat factor, yield, passenger traffic, market share, aircraft utilisation and share values have shown a significant increase in 2005.

The seat factor increased to 73.1 percent in 2005 as compared to 69.1 percent in 2004. With a 10 percent growth in passenger traffic, the share of domestic market was up by 65.6 percent and international market share was up by 50 percent in March 2006. Fleet utilisation was higher than in 2004 and even better than the industry average. PIA recorded the highest punctuality rate in the last 26 years of its history that averaged 87 percent. In fact, on May 8, 2006, punctuality of the airline touched 100 percent, an event unprecedented in the history of the airline.

Emphasising upon the importance of service standards, he said that the airline's focus must be on customer satisfaction as a single disgruntled passenger can shun away 20 passengers.

Appreciating the improvement in service standards, he said, the feedback received from the passengers in 2004 was 160 per week and out of this number of complaints were a massive 43 percent. The situation has totally changed and the PIA is now receiving around 1,600 inputs with a decline in number of complaints.-PR