Pakistan Economy - News & Updates - Archive

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7.2 percent GDP likely in fiscal year 2008 ​

FAISALABAD (September 29 2007): Economic Adviser's Wing of Finance Division has observed that the day is not far when Pakistan will be on the top rung of the ladder of prosperity and will become an economic power to reckon with.

In an Update Economic Performance Report, released here on Friday, Economic Adviser's Wing stated that "Economic Outlook/Forecast" for the current financial year 2007-08 on the basis of healthy macro-economic indicators remains extremely favourable.

Building on the same positive trajectory as last year, real GDP growth is expected to increase to 7.2 percent in 2007-08 ably supported by agriculture (4.8 percent) and large scale manufacturing (10.5 percent). Last year over all CPI based inflation averaged 7.8 percent, however inflation for this year has been targeted at 6.5 percent.

Investment has also been forecasted to increase to 23.5 percent of GDP as compared to last fiscal year's figure of 23.0 percent of GDP. On the external side of the accounts, current account was enumerated at 4.9 percent of GDP in 2006-07, this year it has been projected to decline to 4.7 percent of GDP.

Fiscal deficit on the other hand has been targeted to decline to 4.0 percent of GDP in the ongoing financial year as against 4.3 percent in 2006-07. As regards financing of budget deficit is concerned, the Government is expecting Rs 29 billion as grants.

Therefore, total financing requirements will be Rs 370 billion, of which Rs 220 billion will come from external sources. Within external financing Rs 113 billion is expected as privatisation proceeds. However, remaining Rs 147 billion will come from domestic sources, mentioned Economic Adviser's Wing Report.

According to EAW report, Pakistan's economy continues to gain traction as it experiences the longest spell of its strongest growth in years. The outcomes of the recently concluded fiscal year indicate that Pakistan's upbeat economic momentum remains on track. Economic growth accelerates to 7.0 percent in 2006-07 at the back of robust growth in agriculture, manufacturing and services. Economic growth has been notably stable and resilient.

With economic growth at 7.0 percent in 2006-07, Pakistan's real GDP has grown at an average rate of 7.0 percent per annum during the last five years (2003-07) and over 7.5 percent in the last four years (2004-07) in running. Compared with other emerging economies in Asia, this puts Pakistan as one of the fastest growing economies in the region along with China, India, and Vietnam.

The good performance has resulted from a combination of generally sound economic policies, on-going structural reforms and a benign international economic environment.

Based on the performance of half-a-decade of strong, stable, resilient and broad-based economic growth it appears that Pakistan's economy will continue to be a high mean, low variance economy over the medium-term. Pakistan is in the midst of its strongest economic expansion phase and its growth momentum is broad based. EAW report mentioned that all the three major sectors, namely, agriculture, industry and services have provided support to strong economic growth.

The commodity-producing sectors (agriculture and industry) contributed 2/5th and services sectors contributed remaining 3/5th to the real GDP growth of 7.0 percent in 2006-07. Within the commodity-producing sectors, the contribution of agriculture alone has been 15 percent (or 1.1 percentage point) while 25 percent (or 1.8 percentage point) contribution to 2006-07 growth came from industry.

Services sectors as a whole contributed almost 60 percent (or 4.2 percentage points) to FY07's strong economic growth. Current economic growth is mainly driven by strong domestic demand with investment taking lead over consumption for the first time in the last three years.

Net exports appear to have been a drag on overall growth in 2006-07. Almost 53 percent contribution to 2006-07's growth came from investment while consumption contributed 50 percent. Net exports contributed negatively to the extent of 3.0 percent. The last fiscal year's economic growth has benefited from higher consumption and investment demand owing to a growing middle class and favourable demographics.

Increased contribution of investment to growth is a healthy development as it will engender employment growth, which will support consumption demand and together they will play an important role in sustaining strong growth momentum in the medium-term.

Needless to say Pakistan's economy continues to maintain a solid pace of expansion since the fiscal year 2002-03. This recovery has been strong, rapid and sustained. During the fiscal year 2006-07, Pakistan's economy continues to perform impressively and its economic fundamentals have gained further strength.

Business Recorder [Pakistan's First Financial Daily]

 

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SME industrial estates to be set up in Punjab ​

SIALKOT (September 28 2007): Punjab government has evolved a strategy for the establishment of SME industrial estates in the Punjab. Official sources told Business Recorder here on Thursday that under the plan SME industrial estates would be set up in major industrial towns including Sialkot. The work on the plan would be executed in near future.

The step was being taken to redress problems being faced by the SME sector, which is the backbone of the national economy of the country. All basic facilities would be ensured to the SMEs in these proposed SME estates, sources added.

Special attention was also being accorded on the development of industrial sector on modern and scientific lines aimed at enhancing export volume and to bring industrial revolution through setting up large-scale industries including agro-based industries in the province.

Under the programme government has introduced certain schemes for the development of small and medium industries besides loan facilities was being extended to the small and medium businessmen enabling them to upgrade their industrial units and for setting up new industrial projects in the Punjab.

More than Rs one billion had been set aside for overcoming the financial problems being faced by the businessmen engaged with small and medium industries as well as for removing the hitches which were hindering the process of setting up of new industrial projects.

Apart from this, government was also providing loan facilities for the advancement and expansion of agro-based industries and dairy development, engineering and information technology in the Punjab.

The prime aim of setting up of large-scale industries was to ensure strong industrial base and to keep the economic wheel into gear in the Punjab. The maximum establishment of industries will not only help in doubling the export volume but also create wide job opportunities for the jobless educated, skilled and unskilled labour sources added.

Business Recorder [Pakistan's First Financial Daily]

 

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Siemens to construct 220kv sub-station for KESC: contract signed ​

KARACHI (September 29 2007): The Karachi Electric Supply Corporation (KESC) and Siemens signed a contract for equivalent of Rs 885 million for the construction of a 220kV GIS substation at Korangi.

This substation will connect the under-construction 220MW gas turbine power station to KESC network, and is required to be completed on a fast track to ease the current power supply situation in Karachi. Siemens will supply, 220 kV state-of-the-art gas insulated switchgear (GIS) with digital control system which will ensure reliable transmission of power to the network.

The contract was signed on Friday in Islamabad by Mohammed Amjad, Managing Director, and Mohammed Asghar, Chief Financial Officer from KESC and Suhail Anwer and Samiullah Siddiqui Divisional Directors from Siemens.

Business Recorder [Pakistan's First Financial Daily]

 

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Malakand-III hydropower project to be functional from 2008 ​

PESHAWAR (September 29 2007): Malakand-III hydropower project is near completion and would be functional by January 2008, SHYDO sources said here Friday. The mega hydel power project is being completed at a cost of six billion rupees, he said, adding, 97 percent works on the project has been completed.

It would generate 81 megawatt electricity of which 10 percent of which would be used for the local industries in the area. Apart from generating employment opportunities, it would also generate an income of Rs 15 million annually for the province. The agriculture sector would benefit from it as well and the problems of load shedding and low voltage would be addressed to a great extent.

It would also give boost to the industries in the area, the source added. The SHYDO sources said that Pakistan has capacity to generate 40,000 megawatt hydel power and NWFP alone can produce 25,000 megawatt electricity.

Business Recorder [Pakistan's First Financial Daily]

 

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SPP signs 134 megawatts project agreement with PPIB ​

ISLAMABAD (September 28 2007): The Implementation Agreement for 134 MW Star Power Project (SPP) was signed Thursday at the Private Power and Infrastructure Board (PPIB). Muhammad Yousuf Memon, Managing Director PPIB and Musarrat Zuberi, CEO Star Power Project signed the agreement, says a press release.

The power plant costing US $100 million will be located at Dharki, District Ghotki, Sindh, and will use low BTU gas from Mari Deep reserves. The power plant will apply combined cycle technology. The sponsors of the project are ETA-ASCON (Al-Ghurair Group, UAE). It is expected that the power complex will start supplying power to the national grid by July 2010.

Business Recorder [Pakistan's First Financial Daily]

 

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World Bank to provide $200 million for power uplift projects ​

KARACHI (September 28 2007): The World Bank (WB) will provide 200 million dollars to Pakistan for the electricity distribution and transmission improvement project mainly in rural areas of the country. The World Bank, in a recent development, agreed to extend financing facility in line with its lending programme to Pakistan for 2007-08, official sources told Business Recorder on Thursday.

"The government itself has asked the World Bank to include the project in its lending programme for 2007-08," said an official in the ministry of water and power. "The Discos (distribution companies) have requested and obtained approvals from their respective board of directors to pursue the World Bank financing in their investment programmes", he added.

He said the distribution firms had prepared a number of investment projects, which had been approved by the government and from which the components for the project would be selected.

The designed lending programme of the World Bank for the project suggests 130 million dollars for electricity distribution, 55 million dollars for transmission and 15 million dollars would be provided for technical assistance.

It says the project will be financed by the World Bank loan and by the companies themselves but insists that the indicated size and the allocation of the bank loan are preliminary and could change.

"The distribution, which is the key segment of the power industry for restoring its financial performance, is responsible for the largest technical and commercial losses in the electricity supply chain in Pakistan," said an official of the project. Similarly, he said the fast growing demand required continuos strengthening and expansion of the already stressed transmission network.

World Bank high officials visited Pakistan in the start of current year and announced that the bank's overall lending to Pakistan would be increased to 1.5 billion dollars a year over the next three years. During their visit to Pakistan as members of the global development institution, they met the country's leadership, and briefed them about the World Bank's planned projects in the region.

The official said that under technical assistance for electricity transmission and distribution project, the World Bank would provide support in various areas. "It would focus project implementation, capacity building for the various corporate functions in the project companies and investment planning and financing strategies, including attracting private investment," he added.

He said the objective of the project was to help increase the efficiency, reliability, and quality of electricity supply by supporting reductions in overall technical and commercial losses, increased availability of electricity and improved voltage profile. "The project also aims to support power sector reform and investment planning and financing through technical assistance," added the official.

Business Recorder [Pakistan's First Financial Daily]

 

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‘Pakistan should trim current account deficit’ ​

WASHINGTON: Pakistan should be able to maintain high growth this year and next but it ought to reduce the current account deficit by targeting spending, the International Monetary Fund said on Wednesday.

“Further fiscal consolidation, starting in 2007/08, would contribute significantly to reducing the external current deficit while lessening pressures on real interest rates,” the IMF said in a statement after a mission to Pakistan.

Pakistan’s current account deficit mounted to 4.9 per cent of GDP (gross domestic product) in 2006/2007, the IMF said, blaming slower export growth. The economy grew 7 per cent in 2007/2008 and the IMF expected this pace to be kept up.

Inflation has slowed on a year-on-year basis to 6-1/2 per cent in recent months and the IMF said that steps to reduce the role of the State Bank of Pakistan in financing the government and providing export finance would help. “(The IMF mission) recommended a flexible approach to the determination of interest rates to help achieve the inflation objective and reduce import growth,” it said.

http://www.thenews.com.pk/arc_news.asp?id=3

 

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PM approves BoI restructuring plan: Investment division to work to bring FDI in Pakistan

* Foreign direct investment worth $10 billion to $15 billion per year targeted​

By Sajid Chaudhry

ISLAMABAD: Prime Minister Shaukat Aziz on Thursday approved in principle the creation of investment division by restructuring the Board of Investment (BoI) to achieve $10 billion to $15 billion in foreign direct investment (FDI) per year by 2010, a senior government official told Daily Times.

The prime minister was chairing a meeting on the restructuring of BoI here at the PM House on Thursday afternoon.

According to the official, the restructuring of BoI would enable it to get its investment related proposals, plans and other issues approved directly from the prime minister, federal cabinet or its economic coordination committee (ECC), without approaching the ministry of privatisation. The restructured BoI is expected to be headed by a federal minister for investment instead of minister of state for investment.

The restructuring would transform BoI into a more vibrant organisation providing one window operation for expeditious finalisation of local and foreign investment projects.

Federal secretary investment division would be exercising full powers to facilitate the investment related proposals or projects. This would result in early finalisation and implementation of the much-needed investment projects that would result in job creation and strengthen the country’s economy, the official added.

The meeting was told that an efficient and effective BoI is critical for increased foreign investment because it links macroeconomic stability to GDP growth, foreign reserves, balance of payments, current account deficit management and competitiveness indicators. BoI performance is critical meeting FY 2007-10 FDI targets of $10 - $15 billion and BoI is not geared for meeting these targets unless restructured

Whilst economic affairs division is a government-to-government debt generating division ($2-$3 billion), therefore BoI also needs to be an administrative division to generate more than $10 billion (non-debt) private investment under the medium term development framework (MTDF).

The meeting was also informed about the new organisational structure according to which BoI to be a division on the pattern of FBR/PC board to be chaired by the federal minister and a summary in this regard has been sent to the prime minister through the finance and cabinet divisions for approval, the official informed.

During the meeting the prime minister said that an effective and efficient BoI is critical for macroeconomic stability and growth of FDI. He stressed the need for international benchmarking of BoI to make it a viable organisation to attract more investment for Pakistan.

The PM said that continuous flow of FDI to Pakistan indicates the strength of the economy as well as the confidence of investors in the economic future of the country. This is due to strong macroeconomic growth, attractive demographics and continuous structural reforms based on liberalisation, deregulation and privatisation, he added.

The prime minister said that BoI should develop a marketing plan, which should be dovetailed with the overall investment and reform strategy of the government. The marketing plan should clearly identify the potential areas of investment and the incentives provided by the government, he said.

The prime minister said that the marketing plan should also include a clear and comprehensive strategy to achieve the targets, create awareness at local and foreign level about the investment potential of Pakistan and to sell the investment potential of the country more effectively.

Noting that different parts of the world have different requirements, the prime minister asked the BoI to develop geographical expertise. They should conduct research about the interests of investors in Pakistan and prepare country-specific plans and policies to guide different categories of investors more effectively, he said.

The prime minister asked BoI to consistently guide the foreign missions, federal and provincial government departments about investment policies and potential areas of investment.

While identifying major potential areas for investment including IT & Telecom, real estate and construction, engineering, agri-business and manufacturing, the Prime Minister asked BoI to focus more on preparation of promotional and marketing material for the guidance and facilitation of potential investors.

Earlier, the meeting was told that restructuring of BoI would help boost local and foreign investment as well as improving the working environment of BoI.

BoI, after restructuring will be working under the name of Investment Division and will thus help further simplify the procedure for investment.

Daily Times - Leading News Resource of Pakistan

 

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Finance ministry’s economic outlook: GDP to grow by targeted 7.2%​

ISLAMABAD: The GDP of the country is expected to grow as per its target of 7.2 percent in 2007-08 ably supported by agriculture growth at 4.8 percent and large scale manufacturing growth of 10.5 percent, according to the economic outlook released by the ministry of finance on Friday for the current fiscal year 2007-08.

As regards financing the budget deficit for the current fiscal year 2007-08 is concerned, the government is expecting Rs 29 billion in grants. Therefore, total financing requirement would be Rs 370 billion, of which Rs 220 billion will come from external sources. Within external financing Rs 113 billion is expected as privatisation proceeds. However, remaining Rs 147 billion will come from domestic sources as borrowing.

This economic forecast has not taken into account the political scenario especially the controversy over presidential election, resignation by opposition parties, and worsening law and order situation in the country right from the start of this fiscal year.

In its Asian Development Outlook 2007 Update released last week, the Asian Develo-pment Bank has pointed out that the fundamental issue confronting the economy is the resolution of the current political uncertainty in Pakistan. The bank suggests that the forthcoming presidential and parliamentary elections must be seen by the population as fair, and the continuity and coherence of economic policy should be ensured, so as to sustain economic and governance reforms.

The ADB has projected that GDP growth of the country to be around 6.5 percent against the target of 7.2 percent for the current fiscal year.

“On the basis of strong demand, bolstered by increased private and public investment, the economy is seen keeping most of its momentum and will achieve 6.5 percent growth in FY08.

The slight deceleration reflects several factors: the tightening of the monetary policy stance to contain consumer demand; the impact of high international oil prices; continued slow growth in exports, due mainly to greater international competition in the textile sector; and expected slow growth in the US economy (Pakistan’s largest trading partner) in July–December 2007,” the ADB points out.

The ministry has said that economic outlook for the current financial year 2007-08 has been prepared on the basis of healthy macroeconomic indicators, which remain extremely favorable. Building on the same positive trajectory as last year, real GDP growth is expected to increase to 7.2 percent in 2007-08 ably supported by agriculture (4.8 percent) and large scale manufacturing (10.5 percent). Last year overall CPI based inflation averaged 7.8 percent, however inflation for this year has been targeted at 6.5 percent. Investment has also been forecasted to increase to 23.5 percent of GDP as compared to last fiscal year’s figure of 23.0 percent of GDP. On the external side, current account was enumerated at 4.9 percent of GDP in 2006-07, this year it has been projected to decline to 4.7 percent of GDP. Fiscal deficit on the other hand has been targeted to decline to 4.0 percent of GDP in the ongoing financial year as against 4.3 percent in 2006-07.

The International Monetary Fund (IMF) mission, who concluded its Pakistan’s annual Article IV Consultations on September 20, 2007, has projected that “the prospects for sustained high growth in 2007-08 and over the medium term remain favorable, as macroeconomic stability and market-oriented reforms further take hold.”

In light of current uncertainties in global financial markets, the IMF mission stressed the need for very prudent macroeconomic policies in 2007-08.

Daily Times - Leading News Resource of Pakistan

 

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SPI up by 10.09 percent ​

ISLAMABAD (September 30 2007): The SPI-based inflation was 10.09 percent up during the week ending on September 27 against the same period of last year, with 12 percent dearness for the low income group. The data released by Federal Bureau of Statistics on Saturday showed no respite for the poor as prices of kitchen items kept going up regularly without an iota of relief.

Persistent increase in essential kitchen items' prices has been eroding the budget of those who are earning between Rs 3000 and Rs 5000. The SPI inflation was recorded at 161.68 percent on September 27 with a 0.69 percent decline from 162.81 percent of previous week.

The low-income group was more affected by the price hike, as inflation was recorded 12 percent for earners of Rs 3000 pm as against 7.58 percent for those earning above Rs 12000 pm. The week under review showed that price hike was 11.89 percent for people earning Rs 3000 to Rs 5000 and 10.91 percent for those earning between Rs 5001 and Rs 12000.

The SPI bulletin, based on data collected for about 53 items from 17 centres showed increase in 17 items, decline in 13 whereas 23 remained unchanged. However, the prices of tomatoes, onion, wheat flour, bananas, garlic, potatoes, moong pulse washed, gram pulse washed, mash pulse washed, lawn red chilli and sugar declined during the week but were still much higher when compared to the same period of last year.

Business Recorder [Pakistan's First Financial Daily]

 

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'80 percent Fata uplift budget misappropriated' ​

PESHAWAR (September 30 2007): The speakers here in a dialogue on development and law & order situation in Fata rejected the tall claims of federal government regarding progress and development of the tribal region as farce, saying 80 percent of the development budget has been misappropriated.

The speakers in the Dialogue, organised under the auspices of Journalists Helpline, Pakistan, were: former MNA Sahibzada Haroon Rasheed, Jamaat-i-Islami (JI) Deputy General Secretary Zar Noor Afridi, Shahid-ur-Rehman of the Tribal Area Chamber of Commerce & Industry (TACCI) and Khyber Union of Journalists (KhUJ) General Secretary Nasir Hussain.

They said the people would react to working on the completion of the US agenda and imposition of Western culture, adding that campaign against CDs shops and music centers is being run with the support of the tribesmen.

They acknowledged that lawlessness and terrorism had badly affected the business activities in the tribal belt. They called for the utilisation of the vast mineral reserves of the tribal area for the development of the people.

The speakers were of the view that institutions have become weakened in the impoverished tribal region, saying that tribesmen are being deprived of their basic rights in the garb of the black law of the Frontier Crimes Regulations (FCR) even in the present modern era.

They expressed concern over the prevailing situation in Fata, saying the violation of Pakistani frontiers and killing of innocent tribesmen are very serious matters. Such kind of incidents prove that the tribesmen have been even deprived of the right to call themselves Pakistani citizens, they added.

They said for lack of health and education facilities have kept tribal belt backward and far away from the progress and development of the modern era. The lack of employment is also pushing them towards backwardness with each passing day.

Replying the question of journalists' panel, they said that tribesmen would not tolerate to sacrifice their autonomy just for seeking economic and employment benefits from the United States. They said that peace in tribal belt of Pakistan was linked with situation in Afghanistan.

"Till the withdrawal of foreign forces from Afghanistan and their interference in the tribal areas of Pakistan, the restoration of peace to Fata are looking impossible. The withdrawal of foreign forces from Afghanistan is inevitable for restoration of peace to tribal areas of Pakistan," the speakers stressed.

Business Recorder [Pakistan's First Financial Daily]

 

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Ship breaking industry imported 26 vessels for $67.7 million during January-September ​

KARACHI (September 30 2007): The country's ship breaking industry imported 26 scrap vessels during nine months from January to September 26, 2007, costing $67.7425 million. This comprised around 135,485 light displacement tonnage (LDT) at a cost of $500, or about Rs 37,000, per LDT.

This was stated by Azam Malik, Chairman, Pakistan Ship Breakers' Association (PSBA) on Saturday. He said that during this period the industry created employment opportunities for nearly 15,000 people. He said that the ship were purchased from international ship sellers in Japan, France, Germany, United States, Italy, United Kingdom, Belgium, Canada, Poland, and others.

Imports of scrap ships declined to $16.028 million marking a decrease of 65.17 percent during July-August 2007 as compared to $46.021 million in the corresponding period of last year, official statistics showed. Imports dipped due to higher demand for steel in Bangladesh where the importers were offering attractive prices to the sellers for the scrap ships, Azam said.

He said the ever-increasing international demand for steel was also an attributing factor as the international market forces attract most of the sellers of scrap ships. In addition to this, he said, the dollar factor was also prominent in this regard as a US dollar accounts for around 39 Indian rupees while it accounts for around 60 to 61 Pakistani rupees.

"Ship sellers get more attractive dividends from the Indian market due to a remarkable difference in the value of money", he added. He said that the climate was now favourable for local ship breakers to enable Pakistan regain the status of world's top ship breaking industry.

"As ship industries of India and Bangladesh are experiencing some internal problems we have a fascinating opportunity to make extensive buyings and we are very much doing it", he said. He said that ship sellers would certainly turn to Pakistan once they face a quota system in BD and India, which are the major competitors of Pakistan in this industry.

On the matter of price, Azam said that rates for breakable vessels range from $324 to $500 (Rs 33000 to 35000) per LDT. He said that the industry feared a setback when taxes on the ship breakers were increased to Rs 5600 per ton in the 2007-08 budget. This amounted to 107 percent increase from the pre-budget Rs 2700 per ton. But, after repeated appeals to the President and Prime Minister this has been revised to Rs 3,660 per ton general sales tax (GST), and one percent income tax.

About pricing of ship Azam said that oil tanker is the most expensive vessel which costs around $525 per LDT, while passenger ships normally cost $425 per LDT.

He said that prices were fixed after evaluation of various factors like 'made-in' (country of manufacture) of the vessel, taxes structure, local and international rates, wastage etc. "We keep our profit margin from 4 to 5 percent in the purchase of a scrap vessel", he added.

He appealed to the government for developing the basic infrastructure like roads, electricity, gas etc in Gadani, which is teh hub of the country's ship breaking industry.

However, he added that "Balochistan Chief Secretary after a meeting with us had issued directives to develop the road infrastructure in Gadani." "We are set to hold another meeting with him (chief secretary) which would be crucial in terms of government's compliance with our demands and bring fruitful results", he hoped.

It is interesting to note that the industry, which was once the world's top ship breaking industry and is a major source of quality raw material to the country's steel sector, has been working without proper arrangements for water, electricity and fuel ever since it was established almost 40 years ago.

Business Recorder [Pakistan's First Financial Daily]

 

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First passenger flight lands at Sialkot International Airport ​

SIALKOT (September 30 2007): The first passenger flight landed at Sialkot International Airport on Saturday with 32 passengers including Chief Executive Airblue Shahid Khaqan Abbasi and Khawaja Muhammad Asif Member National Assembly.

Chairman Sialkot International Airport Baber Iqbal, Chief Executive of Sialkot International Airport Khawar Anwar Khawaja, Provincial Industries Minister Muhammad Ajmal Cheema, Chairman Task Force on Trade and Industry, District Co-ordination Officer and District Police Officer Sialkot received the passengers in a simple but impressive ceremony.

Speaking on this historic occasion Chief Executive Sialkot International Airport Khawar Anwar Khawaja said that President Pervez Musharraf would perform formal inauguration of the Sialkot airport in near future. It was President Pervez Musharraf who approved the project of Sialkot international airport and help fulfilling dream of the business community of this export-oriented city and hub of cottage industry of the country, Khawar Khawaja said.

He said that business community of Sialkot had played a dominated role in undertaking the mega project elegantly on self-reliance basis for fulfilling their dream.

The mega project of Sialkot international airport costing more than Rs two billion, had a great significance because it was totally financed by the private sector and so far the private sector had not built a project of this magnitude and size in the country, and not even in South Asia Khawar Khawaja said.

Speaking on the occasion Chief Executive Airblue Shahid Khaqan Abbasi said that Airblue would extend full support and co-operation to the management of Sialkot airport for making the project a complete success. He said that it was heartening that Sialkoties had set a role model by constructing most modern airport with longest international runway.

It may be mentioned that most modern Apron having the parking capacity for six wide-bodies aircraft or three airbus plus F-27 aircraft had been constructed at the airport. Besides 3,600 meter long, 45-meter wide taxiway had been constructed.

The longest international runway of the country measuring 3.6 Km had been constructed and it will cater the requirements of all aircraft used for international and domestic cargo and passenger traffic. The work on main passenger terminal was in full swing however temporary arrangements had been made accommodating the passengers at the airport.

The project had been undertaken on Build, Own and Operate (BOO) basis and this modern and professionally designed international airport has been developed over 1,004 acres of land and fully equipped for handling B-747-400, A300 and 737 aircraft.

The airport will not only cater the needs of golden industrial triangle of Sialkot, Gujranwala and Gujrat but also generate thousands employment opportunities besides bring a revolutionary change in the socio-economic development of the region.

With the merging of Dry Port, Export Processing Zone and Airport at Sialkot, the importance of the area will further enhance which will ultimately help substantial increase in the exports from the area in future. Besides, the construction of mega project of Sialkot-Lahore motorway and setting up of an engineering university and industrial zone in the area has further increased the importance of the airport.

In the absence of airport, the exporters of Sialkot were confronting with multifarious problems because the air cargo from the area was sent via Lahore and Islamabad airports. But due the support and co-operation of the government the construction of airport has been given practical shape, which would ultimately help reduce the logistic problems of exporters of Sialkot, Gujranwala and Gujrat areas.

The potential traffic forecast for Sialkot international airport is scaled down at the time of opening to 530,339 passengers a year while estimated cargo tonnage at the time of opening is expected to be 28,515 tons. This means that by the end of year 2012 about 53,000 tones of cargo will be lifted from Sialkot International Airport. Due to the provision of passenger facilities at Sialkot International Airport, it was estimated that the general public would benefit to the tune of over Rs two billion in terms of time and money savings.

Business Recorder [Pakistan's First Financial Daily]

 

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Pakistan and Iran agree over gas sales sans India ​

TEHRAN (September 30 2007): Pakistan has agreed to details of a deal for buying gas from Iran, officials from both sides said on Friday, adding that the proposed tri-nation pipeline would be viable even if India, the third party, walked out.

India stayed away from this week's talks in Tehran on the proposed $7 billion pipeline, saying it wanted to agree transit costs through Pakistan on a bilateral basis first, an Iranian official said. But he said India had not said it was quitting.

"The economics of the project will improve with Indian participation but ... the project is economically viable as a bilateral project also," PM's Adviser on energy Mukhtar Ahmed told reporters in Tehran.

National Iranian Oil Company (NIOC) International Affairs Director Hojjatollah Ghanimifard said the three sides had previously planned for gas sales and purchase agreements (GSPAs) to be negotiated separately by India and Pakistan. "So far, the information formally we have from the authorities of India is that they are willing to join us. They have just their internal problems, including that they need to finalise the transit fee with our good Pakistani friends," said Ghanimifard after talks late on Friday.

The Iran's oil minister said on Wednesday his country would still sign a deal with Pakistan if India decided not to join. Mukhtar said Pakistan and India had agreed in principle how to tackle issues like transportation tariffs and transit fees.

"We don't see transit through Pakistan as a problem. We've had bilateral discussions with India on this subject," he said, although he said more talks were needed.

Speaking of Pakistan's talks with Iran, Mukhtar said: "We have agreed upon everything that we needed to agree on with regard to the gas sales and purchase agreement and the inter-governmental framework agreement." He said the details would be drawn up in final documents to be examined at bilateral talks in Islamabad on October 15-19.

Mukhtar did not give details for the price of the gas agreed, but said it would be linked to the price of oil. He as well as they agreed on a price review clause - an issue that had been pending - but he did not elaborate. In July, Ghanimifard said India and Pakistan had accepted Iran's demand for gas price reviews based on market changes. He denied reports by some Indian newspapers that the pipeline talks had failed after Iran demanded a review every three years.

The pipeline would initially carry 60 million cubic metres of gas daily to Pakistan and India, half for each country. The pipeline's capacity would later rise to 150 million cubic metres. Pakistan says it could want 60 million cubic metres for itself in the future.

Iran says it has completed 18 percent of the work for the pipeline to bring gas from its South Parts field up to Iran-Pakistan border. Pakistan has yet to begin work on a 1,000-km stretch of the pipeline to link Iran with India.

Iran has the world's second-largest gas reserves after Russia. But sanctions, politics and construction delays have slowed its gas development, and analysts say Iran is unlikely to become a major exporter for a decade.

Business Recorder [Pakistan's First Financial Daily]

 

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$400 million coal-based power plants planned ​

KARACHI (September 30 2007): Two coal-fired power plants of total capacity of 250 mega watts would be established in Sindh by Descon Engineering and Descon Minex (Pvt) Limited with an estimated investment of around $400 million.

Sindh Coal Authority, Sindh Mines and Mineral Development Department in this regard signed two memorandum of understandings (MoUs) on Saturday for conducting feasibility study separately for the establishment of two 250 MW capacity coal-based power plants and integrated coal mining at South-east of Naukot, District Tharparkar and Golarchi, District Badin.

The MoUs were signed by Syed Abbas Ali Shah, Director General, Sindh Coal Authority (SCA) and the representatives of Descon Limited. As per MoUs details, SCA will allocate an area of 100 Square Kilometers to the firm to carry out feasibility study, undertake development of identified coal mines and commissioning and operation of mine mouth coal-fired power plants with capacity of 125 MW each at Golarchi and South-east of Naukot ie integrated fired power station.

The Descon Engineering and Descon Minex (Pvt) Limited will apply for letter of intent to Private Power and Infrastructure Board (PPIB), Water & Power Development Authority (WAPDA), for establishment of mine-mouth indigenous coal-fired power stations with total capacity of 125 MW each. If the power project is found feasible, SCA would support and assist in obtaining the same.

Sindh Coal Authority will allocate coal field area for a period of 18 months from the date of demarcation of the area for exploration license which would take place within 15 days after signing of MoUs. Descon Engineering will carry out survey and exploration and investigation at its own cost and risk for completion of a bankable feasibility study report.

The demarcation of the coal field area would be done by a joint survey team comprising the technical personnel of Descon Engineering, DG SCA, DG Mines and Mineral Development Department and Sindh Revenue department.

The purpose of investigation is to determine suitable quality and quantity of coal which could be economically and safely mined, handled and transported to the power plant in order to provide at least one million tonnes of coal or more annually for 30 years period.

The signing ceremony was attended by Sindh Mines and Mineral Development Minister Irfanullah Khan Marwat, Tufail Ahmed Jumani, Additional Secretary Mines and Mineral, Muhammad Khalid Mirza, DG Mines, Mineral Development, Abdul Razak Dawood, Chairman Descon Engineering and representatives of the firm.

Speaking on the occasion, Irfan Marwat termed fixation of upfront tariff rate on coal-based power project crucial for completion of the ongoing projects. He hoped that the upfront tariff would be finalised on electricity generated through coal of Sindh as President Pervez Musharraf was personally taking interest in the matter.

Business Recorder [Pakistan's First Financial Daily]