Pakistan Economy - News & Updates - Archive

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wow only 3.3% internet penetration? That is lower than I would ever have guessed.

 

[Neo]

70 percent projects rated slow moving in first quarter ​

ISLAMABAD (October 04 2007): Around 40 percent of development projects in water sector and 20 to 30 percent schemes in social sector are rated slow moving in the first quarter of the current fiscal year. The Planning Commission has said that it would continue the policy of shifting funds to fast track from slow-moving projects, sources told Business Recorder on Wednesday.

The government has been giving top priority to the water sector and in the current fiscal year, there are 73 development projects, which are being executed in this sector with an allocation of Rs 63.5 billion.

According to Public Sector Development Programme (PSDP)- 2007-08, the number of new projects is 19 with allocation of Rs 1.23 billion. Even the Ministry of Food, Agriculture scheme of National Programme for Improvement in Watercourses, which is regarded as one of the fast moving projects was not progressing as planned for almost two years, the sources said.

Sources said the ongoing projects were not on track for the last two years, whereas the Planning and Development (P&D) Division comes up with figures of more than 95 percent utilisation of the PSDP allocation over the last two years. The total number of development projects is 2,111 in the current fiscal year against 1,444 last year.

There are some problems with implementation of communication sector projects especially the construction of motorways and highways. The NHA failed in meeting the extended deadlines regarding the completion of M-I (Islamabad-Peshawar Section of Motorway) and Noshera-Malakand road, according to the sources. Mangla dam raising is also a slow moving scheme and this will take six more months.

When contacted, Member Implementation and Monitoring, Planning Commission Lieutenant General Muhammad Zubair (retd) confirmed that around 40 percent of schemes in water sector are slow moving, saying that 20 to 30 percent of social sector projects are also delayed. However, he clarified the position is changing with the passage of each month.

He said the first quarter review of the current fiscal year will begin from October 4, and the progress made on the projects would be re-assessed. The review exercise will continue for over 10 days and projects execution will be scrutinised in detail.

Zubair admitted that by and large the specific projects in Balochistan are very slow moving. There is a serious problem of security in the province, which is causing delay in the implementation of various development schemes. Actually, the projects in Balochistan are the top priority of the government, but the security problems are hindering the development process, including establishment of cadet colleges and turning the B areas into A areas, he added.

Zubair said there are some positive aspects like awakening among the concerned people that this is government money and it should be spent judiciously and speedily so that the projects cost should not increase due to delay in execution.

He said the improvement in water courses programme is going well on the ground, adding the quality of work being done is outstanding, but due to the time lost at the outset, the scheme will be delayed for less than two years. "We have strengthened the monitoring system. Around 500 schemes were properly monitored during the last fiscal year. In this fiscal year, the number of projects to be monitored could be doubled," said Zubair.

Business Recorder [Pakistan's First Financial Daily]

 

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Proactive US role to be sought for investment ​

ISLAMABAD (October 04 2007): Pakistan is going to seek US more proactive role in public and private sector investment in Pak-US dialogue, commencing from October 21-22 in Washington.

Finance Special Secretary Dr Ashfaque Hasan Khan told Business Recorder that Pakistan's official delegation headed by PM's Adviser on finance Dr Salman Shah will hold dialogue with US authorities to find ways and means to strengthen Pak-US economic co-operation. Dr Ashfaque Hasan Khan will also be the part of the delegation.

He said: "We are going to Washington on October 17 to attend the World Bank and the IMF annual meeting scheduled for October 19 and 20. The donors meeting will be followed by Pak-US dialogue for economic co-operation. Other members of the delegation will be Finance Secretary Ahmed Waqar and State Bank of Pakistan (SBP) Governor Dr Shamshad Akhtar.

The Pak team will have bilateral meetings with the WB and the IMF to give them more specific views of Pak economy. Pakistan is working actively on a plan to build new water reservoirs to enhance electricity production and improve irrigation water supply in a judicious manner. The government had allocated few billion rupees in the budget for initial work such as land acquisition and technical survey. However, it depends heavily on international donors for financing construction of big dams.

Pakistan has identified at least seven big dams and set a specific target for completion. Each identified dam requires $6 billion to $7 billion. The World Bank being a consistent source for funding of the development projects Pakistan accords it the first priority for seeking funds for mega dams.

The economic team will present Pakistan's achievements on economic front during the last five years besides, giving an outlook for the future. It will include steps taken for poverty reduction and reforms implementation.

The team will also apprise the World Bank about Pakistan's economic growth and its need to maintain the current pace. Pakistan has achieved over 7 percent growth rates. It faces a challenge of maintaining the current pace to achieve the future target.

The team will also apprise the World Bank authorities about its financing need as well as growing energy demand. It will also apprise the World Bank about rehabilitation and construction work done so far in October 8, 2005 deadly earthquake and seek support for early maturity of the donors and other countries pledges. It will be the first face-to-face meeting of Pak high-level economic manager with the new World Bank chief Robert Zoellick.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Transit trade with China, Kyrgyzstan and Kazakhstan proposed ​

ISLAMABAD (October 04 2007): Pakistan has proposed to launch an awareness campaign for the promotion of transit trade among the quadrilateral agreement signing countries which include Pakistan, China, Kyrgyzstan and Kazakhstan, Business Recorder learnt here on Wednesday.

Sources stated a 25-member delegation comprising all the singing countries will soon launch a road trip from Kazakhstan to Pakistan via China and Kyrgyzstan aiming at publicising the agreement in a bid to inculcate awareness among business community of these states.

Director Co-ordination, National Highway Authority, Chaudhry Khalid Naseem will reach Kazakhstan, the starting point, to join the campaign. Media men will also accompany the delegation.

Federal Minister for Communications Shamim Siddiqui, diplomats of the concerned countries based in Pakistan will receive the delegation at Sust Post, which will travel to Islamabad directly through Karakoram Highway. The delegation will also hold meetings with Federal Minister for Commerce and Prime Minister Shaukat Aziz, they added.

The delegation will also visit Gwadar Port, the nearest port to the Asian countries, to see the development work on the port. A proper security plan has been chalked out for the safety of the delegation, they said.

They observed the slow processing agreement for traffic in transit which took more than eight years to come into force was signed by Pakistan, China, Kyrgyzstan and Kazakhstan on March 9, 1995 and protocol on custom procedure for goods in transit and passport visa regime for the implementation of the agreement was signed on November 24, 1998, while the agreement finally came into force in May 2004.

As per contract, Pakistan and Kazakhstan agreed to grant one year multiple visas to the driver and crew (2 members) of the vehicles in transit for six trips, China agreed to provide six months multiple entry visa and Kyrgyzstan to grant one month single entry and up to one year multiple entry visas.

Transit time allowed for movements of goods from entry to the exit point is 30 days each in Pakistan and Kyrgyzstan, 180 days in China while 7 days in Kazakhstan, they informed.

They said foreign exchange rules and regulations of the contracting party will be applicable to the drivers and crew travelling with the vehicle engaged in traffic in transit. The traffic expenses (maintenance of road and toll tax etc) will be accepted in US dollars while Kazakhstan will get expenses in its local currency.

Only vehicles registered in the contracting parties are allowed to undertake the transit. The carriers holding valid international road transit permit can operate traffic in transit amongst the contracting parties. At present 200 permits are allocated to each contracting party for one calendar year, they added.

Business Recorder [Pakistan's First Financial Daily]

 

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Surgical goods, medical equipment exports up 11 percent ​

KARACHI (October 04 2007): Export of surgical goods and medical equipment has gone up by 11 percent during the first two months of the 2007 fiscal year, officials figures revealed.

In the first two months of the current fiscal year, ie July-August, the export of surgical items and medical equipment stood at 27.176 million dollars as against 24.545 million dollars during the same period of the last fiscal year, depicting an increase of 2.631 million dollars or 11 percent.

In August 2007, the country exported surgical and medical equipment worth 13.798 million dollars against 12.386 million dollars during August 2006 with an increase of 11.40 percent or 1.412 million dollars. Month on month basis, in August 2007, exports surged by 3.14 percent or 42 million dollars against 13.378 million dollars during July 2007.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Economic zones ​

Incentives may hamper local investment

Friday, October 05, 2007

LAHORE: Special facilities being provided for establishing economic zones including China-Pakistan Economic Zone (CPEZ) are feared to disturb ongoing investments by local private sector investors and encourage them to withdraw their money already invested in different projects.

Withdrawal of investments would lead to further unemployment and hamper the growth of the economy, which has already been disturbed by the political uncertainty.

These concerns were aired by both the government officials and private sector people in a meeting held at the Punjab Civil Secretariat to discuss a policy package prepared by the Board of Investment (BoI) for setting up economic zones including China-Pakistan Economic Zone (CPEZ).

Sources privy to the meeting told The News that all the stakeholders strongly criticised the BoI package during the talks. They said the package created worries and encouraged private sector investors to take out their money.

According to the policy package, the government will give full exemption from customs duties and taxes strictly on the import of capital equipment (plant, machinery, equipment and accessories) for the development of economic zones and for projects and not for raw material.

Chinese and other foreign investors would also enjoy corporate income tax holiday for a period of five years for projects in the zone from the date of starting commercial operations. This facility would also be available for the developers of the zone. Moreover, existing initial deprecation allowance of 50 per cent would be considered to be enhanced to 100 per cent.

Normal incentives for exports available to projects established elsewhere in the country shall be applicable to exports from the projects in the zone.

Under the policy package, the federal government/agencies will provide gas, electricity and other utilities at zero point of the zones while captive power generation would also be allowed to the developers of the zones.

The provincial government will construct approach roads up to the zero point of the zones. The BoI would provide one window facility within the zones for foreign investors. It would also provide services to complete required processing/procedures within the zones at the doorstep of investors.

The BoI would also provide free facilitation services and guidance to investors. Workers’ Training Centres would also be established in the zones for the upgradation of technical skills of labourers.

In the case of joint venture in the CPEZ, only such projects would be allowed to be set up which has at least 40 per cent equity from well-known Chinese companies.

Dry port facility would also be provided in the zones to facilitate imports and exports. It was also mentioned that the Punjab government would facilitate Haier-Ruba Group to acquire land for special economic zones.

According to the sources, all the stakeholders in the meeting said discrimination in the policy package between the local and foreign investors would ultimately hit the domestic industry. They argued that the local industry, which was already striving hard to fight the Chinese factor, would ultimately be wiped out after the Chinese manufacturers established their industry in Pakistan which would further cut their input cost.

The participants of the meeting cited the example of Hattar Trade Zone, which gave a deserted look since after the period of special facilities ended as the investors withdrew their investment.

The sources said the stakeholders also argued that the government had been encouraging joint ventures, which would not be possible as it was not easy to bring in well-known Chinese companies for joint projects. However, some companies were ready to come to Pakistan than only limited companies which would be able to make joint ventures, leading to closure of a large number of industries, they remarked.

An official of the Punjab government said on condition of anonymity a new zone took a minimum of 18 to 24 months for infrastructure development and a further similar time spent for the establishment of the industry. “So a minimum of four years are required for the development of a new zone if the land was already acquired,” he said.

“But for the establishment of these zones, acquisition of land would also take a minimum of 12 to 18 months,” the official remarked.

Economic zones

 

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Pakistan, EU sign 200m euros accord ​

Friday, October 05, 2007

ISLAMABAD: Pakistan and European Union here on Thursday signed a Memorandum of Understanding on Multi-Annual Indicative Programme (MIP) of 200 million euros.

M Akram Malik, Secretary Economic Affairs Division led the Pakistan side whereas Jan De Kok, head of delegation led the EC side.

The financing instrument EC is providing is meant for poverty alleviation in the context of sustainable development, including the pursuit of the Millennium Development Goals.

Cooperation under the instrument shall also encourage integration into the world economy, promotion of good governance and human rights and strengthening of relationship between the European Commission and Pakistan.

The EC strategy and the Multi-annual Indicative Programme 2007-2010 for Pakistan have been designed on the basis of such principles, the “European Consensus on Development,” and also the declaration on Aid Effectiveness adopted in Paris in 2005.

The memorandum reflects the indicative assistance priorities for the period 2007-2010 as outlined n the multi annual indicative programme 2007-2010.

The overall objective of the Multi-Annual Indicative Programme (MIP) 2007-2010 is to fight poverty and help Pakistan follow a sustainable growth path, in line with Pakistan’s policy priorities outlined in the Medium-Term Development Framework and its Poverty Reduction Strategy Paper.

The programme concentrates on rural development and natural resources management in North West Frontier Province and Balochistan with a view to reducing regional disparities and promoting stability in provinces bordering Afghanistan.

Moreover, governance, education and human resources development are accorded priority for developing a well-trained work force and creating a moderate and stable Pakistan.

The program also underscores the trade development, democratisation and human rights and anti-money laundering.

Pakistan, EU sign 200m euros accord

 

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Telecom revolution to be broadened to remote areas: Awais ​

Friday, October 05, 2007

ISLAMABAD: Minister for Information Technology Awais Ahmad Khan Leghari on Thursday said the telecom revolution will now be broadened to far-flung areas of the country.

He was addressing the signing ceremony of Universal Service Contract awarded to Telenor Pakistan for provision of telecom facilities in Malakand division.

The contract was signed by CEO of Universal Service Fund (USF) Parvez Iftikhar and CEO Telenor Pakistan Tore Johnsen onbehalf of their respective institutions.

The minister said even with market liberalization and under strictly commercial considerations, there would always exist certain populations and geographic areas that remain un-served.

Leghari said the government had established USF in 2005 to ensure that these designated populations and geographic areas gradually receive defined adequate services in a sustainable manner. He said the success of telecom sector in Pakistanis now globally recognized and it has emerged as a role model for other emerging telecom markets.

“Combined teledensity figure has already reached up to 40 per cent in 2007 from just 4 per cent in 2003, with major contribution coming from mobile sector,” he said.

The minister said the primary goal of USF is to make available and affordable voice telephony to progressively greater proportions of population at their home locations.

Minister for Political Affairs Engr Amir Muqam said that the Malakand division has over 25 per cent of population with one-thirds of total area in the province. The minister said initiation of USF pilot project will go along way in enabling the people living in the area to seek benefits from the telecom revolution. USF CEO Parvez Iftikhar said access to abundant telecommunication services has led to economic progress during the last five years.

He said USF aims at bringing the focus of telecom operators towards rural population, improving broadband penetration and making significant advances both in rural and urban areas of the country.

Telecom revolution to be broadened to remote areas: Awais

 

[Neo]

Cement output increased by 22.5 per cent: LSM pattern unchanged​

KARACHI, Oct 3: The latest official data issued on Wednesday does not show any significant change in the pattern of economic growth recorded last year as well as the one prevailing for last five years.

The dominant textile sector still has the largest share in the economic growth while all other traditional sectors of the economy remained the part of the growth with slight changes in their growth pattern.

No new sector emerged during the year 2006-07 to become a key player in the growth of economy neither any traditional sector appeared with its extra ordinary performance.

However, the construction industry looked a major sector, which improved its performance comparatively better than previous year. The cement sector, which has a weight of 4.14 per cent in the economy, grew at the rate of 22.5 per cent.

The pig Iron grew at the rate of 31.4 per cent while the overall metal industry grew at a rate of 10.7 per cent.

The textile sector, which has a weight of 24.49 per cent in the economy, showed a production growth of 8.5 per cent. This was not an attractive growth to give a big push to the economy as expected by the government. It also showed dismal growth on the export front despite the recipient of the largest incentives provided by the government.

What is important for the country is the petroleum production, which instead of going up to bear the rising burden of the petroleum imports, showed a negative growth of 1.8 per cent. The country’s import bill carries the largest amount of petroleum products reaching almost $8 billion.

The most talked about automobile sector was another one, which showed a disappointing growth during the last fiscal. The government expects that the automobile sector would prove to be one of the pillars of the economy. The sector growth was just 3.8 per cent.

Cars and jeeps having largest share in the automobile sector could hardly retain their growth in positive number as this sub-sector grew by just 0.4 per cent. Motorcycles growth was 11.6pc but this sub-sector has just 0.137 per cent weigh in the economy.

Food, beverage and tobacco were the second biggest sector in terms of its weight in the economy, which was 14 per cent, showed a growth of 8 per cent. This traditional sector could only maintain its traditionally normal growth.

The only significant growth in this sector was of beverages, which shot up by 34 per cent.

Pharmaceutical products, which has a weight of over 5 per cent in the economy, moved up with a significant growth of 12.2 per cent and this growth was led by 47 per cent growth in the injections.

Chemicals having a weight of 4.8 per cent, showed a growth of 11.7 per cent. Electronics sector grew by 9.4 per cent led by 20.4 per cent growth of electric transformers.

However, the sub-sector television, registered a sharp decline with a negative production of 35.9 per cent.

Engineering items having a weight of 0.44 per cent showed a growth of 28.8 per cent led by sewing machines and diesel engines with a growth of 33.7 per cent and 37.1 per cent, respectively.

Cement output increased by 22.5 per cent: LSM pattern unchanged -DAWN - Business; October 04, 2007

 

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ADB to give $510m for renewable energy project​

ISLAMABAD, Oct 3: The Asian Development Bank (ADB) will provide $510 million to Pakistan to fund its $2.2 billion renewable energy development sector investment programme, envisaging development of low-head hydropower projects in Punjab and NWFP provinces.

A formal agreement to this effect will be signed here on Friday by the representatives of ADB and the government.

The total investment requirement for renewable energy development to reach 3.5 per cent target by 2015 is estimated as $2.2 billion. The ADB loan facility will cover up to $510 million. The rest will have to be found from various sources such as private sector, multi-lateral and bi-lateral agencies, or through public-private partnership.

The programme is part of an initiative to help meet power shortages and diversify electricity sources. Under the first set of sub-projects, the NWFP will develop a cluster of small hydropower from perennial high-head rivers that are abundant in the province.

Punjab province will also develop a cluster of low-head, high-volume small hydropower stations that can be installed in the existing irrigation canal system with perennial water flows.

Pakistan is a water rich country, offering a total hydropower potential of more than 45,000MW. Hydropower resources are located mainly in the northern and central parts of the country. The total installed capacity of the hydropower stations in the country is 6,595MW.

The ADB financing will be used to develop feasibility studies of new sites for future renewable energy investments by the public sector, bi-lateral and multi-lateral financial institutions, and the private sector and for promoting enhanced social and environmental safeguards.

It is estimated that about $900 million investment will be made by the private sector, $400 million by other lending agencies and about $390 million by the federal government. A number of incentives and concession would be made available for development of projects under the public-private partnership scheme.

Under the agreement, the ADB will have the discretion to deny any financing request made by Pakistan, cancel the uncommitted portion of the facility, and withdraw Pakistan’s right to request any financing tranche under the facility.

The ADB financing will be in two parts. The $500 million assistance will be under the Ordinary Capital Resources and $10 million from ADB’s Special Funds Resources for Capacity Development of related agreements. The ADB programme would be completed by December 2017.

ADB to give $510m for renewable energy project -DAWN - Business; October 04, 2007

 

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KSE index crosses 14,000-point barrier​

KARACHI, Oct 3: The KSE 100-share index on Wednesday breached through the psychological barrier of 14,000 points at 14,046.01 for the second time in the stock trading history as investors continued to build-up long positions on selected counters aided by some positive developments, including top military appointments.

It had already broke this barrier some time in March this year at 14,236 points and indications are that it may surpass its previous all-time record during the current run-up, analysts said.

The net rise over the day was 123.93 points adding Rs32 billion to the market capital at Rs4,303 billion. The KSE 30-share index rose by 210.48 points at 17,258.86 to close at its new career-best level.

Fresh massive covering purchases in the leading bank and oil shares, OGDC, Pakistan Petroleum, National Bank, Attock Refinery and some others was said to be the chief inspiring factor behind the index’s meteoric rise.

The share market, therefore, maintained its winning streak for the fifth session in a row as investors were not inclined to take even technical breather despite two opinions about the presidential election on Oct 6.

The appointments of Joint chief of staff and Vice Chief of Army Staff, who eventually would take charge of the top army posts after Gen. Musharraf retires after being re-elected president has, analysts said, reinforced the investors’ perception that political wind is blowing toward sanity ending the protracted state of uncertainty.

“There are, however, still two opinions about the possible apex court ruling on the review petitions seeking that President Musharraf is not eligible as candidate for the presidential election on Oct 6 in uniform,” they

added.

The hearing on the issue, which resumed yesterday, may not end before the deadline of Oct 6, and there are doubts in investors’ minds whether the apex court orders stay pending the decision or allow the election on the fixed date, some others said.Buying support was largely selective as investors were not inclined to take risks until the apex court ruling on the presidential election. As a result, there was a lot of profit-selling on some other counters.

Leading gainers were led by Siemens Pakistan and Unilever Pak Foods,

were quoted further higher by Rs34 and 30, followed by Pakistan Resource Co, Fazal Textiles, Pakistan Petroleum, Engro Chemicals, Shezan International, Hino Pak Motors, Attock Refinery, and Nestle Pakistan, which posted gains ranging from Rs9 to 29. There were several others, which rose by Rs5 to 8.50.

Colgate Pakistan and National Foods were leading among the losers, off Rs19.95 and 16. Other prominent losers were JS Global, JS & Co, EFU Life, Central Insurance, Dawood Hercules, New Jubilee Insurance and Lakson Tobacco, off by Rs4 to 10.50.

Trading volume rose further to 379m shares from the previous 355m shares as gainers held a slight edge over the losers at 159 to 157, with 52 shares holding on to the last levels.

OGDC again topped the list of actives, up by Rs4.25 at Rs125.50 on 57m shares, followed by Pakistan Petroleum, higher by Rs10 at Rs285 on 28m shares, Bank AlFalah, higher by Rs2.60 at Rs55.40 on 24m shares, D.G.Khan Cement, off 70 paisa at Rs113.40 on 19m shares, Engro Chemical, up Rs13.45 at Rs282.95 on 18m shares, National Bank, higher by Rs2.40 at Rs263.35 on 16m shares and Attock Refinery, higher by Rs12.35 at Rs259.85 on 12m shares.

Other actives were led by TRG Pakistan, steady by five paisa on 14m shares followed by Fauji Fertiliser Bin Qasim, up 45 paisa on 17m shares, and Lucky Cement, higher by 95 paisa on 13m shares.

FORWARD COUNTER: OGDC also led the list of actives on the cleared list and was quoted higher by Rs4.25 at Rs136 on 8m shares followed by D.G.Khan Cement, lower by Rs1.20 at Rs112.30 on 6m shares and Lucky Cement, firm by 80 paisa at Rs135.55 on 5m shares.Pakistan Petroleum after being ex-dividend and ex-bonus was quoted higher by Rs9.30 at Rs255.90 on 5m shares and National Bank rose by Rs2.50 at Rs264.50 on 4m shares.

DEFAULTER COS: Barring a large turnover of 3.485m shares in Zeal Pak Cement on selling, lower by 10 paisa at 4.55, trading activity on this counter was relatively slow. Nimir Chemical followed it, easy 10 paisa at Rs3.90 on 0.504m shares and Japan Power, off 25 paisa at Rs9.10 on 0.221m shares. Others were modestly traded.

DIVIDEND: Pak Elektron, bonus shares at the rate of 25 per cent, Sazgar Engineering, cash 10 per cent plus bonus shares of the same amount, Saudi Pak Leasing co, cash 10 per cent, bonus shares five per cent, KASB Bank, right shares 26 per cent.

KSE index crosses 14,000-point barrier -DAWN - Business; October 04, 2007

 

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Mining and quarrying sector registers 5.6% growth​

ISLAMABAD: The government is fully committed to making the mineral sector in Pakistan one of the most profitable for the country as during the current fiscal year the mining and quarrying sector has registered a growth rate of 5.6 percent as against 4.58 percent last year.

According to the official sources the increased growth was propelled by strong growths recorded in magnetite (30 percent), dolomite (26.1 percent), Limestone (25.2 percent) and chromites.

To make this sector thrive further, the government has already started various initiatives, which is evident from the discovery and development of world-class copper-gold deposits in Chagai, Balochsitan by Australian Firms that would fetch $500 million to $600 million per year during the lives of these mines.

The sources said that successful up gradation studies being carried out by German Consultants on Dilband iron ores Balochsitan would, to large extent, minimise importation of Iron Ores 1.7 million tonnes iron ores costing about Rs 3.2 billion per year.

Development of Thar coalfield, one of the largest good quality lignite deposits in the world, on completion, would provide additional source of energy.

Moreover development of abundantly available high quality industrial minerals and natural stones has bright prospects for exports, import substitution and local consumption, the sources added.

The confidence of foreign investors, developers and consultants repose in Pakistan, clearly demonstrate the successful implementation of investment-oriented policies initiated by the present regime, the sources maintained.

The minerals described below are under various phases of exploration, development and utilisation in Pakistan, which includes energy minerals (coal), agriculture minerals (rock phosphate, gypsum), metallic minerals (iron ores, copper, gold, zinc-lead, chromite, antimony), refractory minerals (refractory clays, magnesite, chromite, silica sand, dolomite) and glass and ceramic minerals (kaolinchina clay, nephyeline syenite, silica sand).

The sources said that Pakistan has a widely varied geological framework, ranging from pre-Cambrian to the Present that includes a number of zones hosting several metallic minerals, industrial minerals, precious and semi-precious stones.

Although many efforts have been made in developing geological products, institutional, academic and research and development (R&D) infrastructure, much remains to be done to enable this sector to take full advantage of its endowment, they added.

Daily Times - Leading News Resource of Pakistan

 

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More tax exemptions needed to save Gwadar port deal​

ISLAMABAD: The fulfillment of additional three tax exemptions would help save the agreement signed with the Port of Singapore Authority International (PSAI) for operations of the Gwadar Port, a senior government official told Daily Times on Wednesday.

PSAI has demanded from the government of Pakistan to also allow tax holiday for concession holder and operating companies from corporate income taxes for a period of 25 years, exemption of the lenders from income tax on interest and stamp duties in the respect of financing agreement and exemption of the operating companies from sales tax.

The ministry of ports and shipping has informed the finance ministry that in pursuance of approval by the cabinet’s economic coordination committee (ECC) accorded in its meeting held on February 1, 2007, certain tax exemptions were notified under SRO 327 (i) 2007 and SRO 755 (i) 2007 issued by the revenue division.

The ECC had accorded approval to concession agreement for 40 years for operation of Gwadar Port Authority (GPA) with PSAI/AKD. Subsequent to the ECC approval, the concession holder had demanded additional exemptions, which were included in the concession agreement signed by GPA with the port operator.

The GPA has now initiated a case for allowing the additional exemptions for the approval of the ECC. Tax holiday for the concession holder and operating companies from corporate income taxes for a period of 25 years, exemption of the lenders from income tax on interest and stamp duties in respect of financing agreement, and exemption of the operating companies from sales tax.

The ministry of ports and shipping reviewed the matter in consultation with the GPA and found that subsequent to the draft concession agreement submitted by the PSAI in December, 2006, the new draft agreement was tabled by them demanding additional exemptions and was contested by the negotiating team to the extent that PSAI walked out of the negotiations, the official added.

With the agreement signing date approaching near and with a view to salvaging the agreement, there was no alternative for GPA but to accept the demands of PSAI regarding additional exemptions from sales tax.

In view of the position explained, the ministry of ports and shipping has said that there is no alternative but to accept to fulfill the contractual obligations. In the event of default, PSAI may invoke articles 1.3.8.1 and 7.5.2 of the concession agreement, which may adversely affect the operation of the port.

The article 1.3.8.1 of the concession agreement signed with PSAI states that parties acknowledge and confirm that the conditions precedent are fundamental to the fulfillment of the obligations under and exercise of rights vested by this agreement. Consequently, the party who is to fulfil the condition undertakes that it shall make best effort to fulfil or cause to be fulfilled these conditions precedent (except for the conditions precedent that relates to the free zone business and which shall be fulfilled as and when GPA acquire the required land for this purpose in terms of this agreement) no later than the long-stop-date.

Article 7.5.2 of the concession agreement signed with PSAI relates to the termination of the agreement by concession holder. This article states that concession holder may give notice of the intent to terminate this agreement in accordance with article 7.6 upon the occurrence on any of the events (each a “GPA event of default”) unless an event has occurred as consequence of a concession holder event of default or a force majeure event: (a) GPA’s failure to perform or discharge any of its obligations in accordance with the provisions of this agreement which failure shall have material adverse effect on the rights of the concession holder under this agreement and which failure is not remedied within 180 days of the concession holder’s written request to do; or (b) any representation or warranty made or given by GPA under this agreement found to be false, misleading or incorrect, provided that this causes a material adverse effect on the rights of the concession holder under this agreement and that the reasons rendering the representation or warranty false, misleading or incorrect are not rectified or caused to rectified by GPA within a reasonable time.

Daily Times - Leading News Resource of Pakistan

 

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Multi-Annual Indicative Programme: Pakistan and EC sign MoU worth euros 200 million ​

ISLAMABAD (October 05 2007): Pakistan and European Commission here on Thursday signed a Memorandum of Understanding on Multi-Annual Indicative Programme (MIP) 2007-2010 worth Euros 200 million to help sustainable development and effectively pursue the Millennium Development Goals.

The MoU was formally signed by Secretary, Economic Affairs Division, M Akram Malik and Jan De Kok, Head of Delegation, European Commission. The European Commission's strategy and the MIP 2007-2010 is focused on to fight poverty and help Pakistan follow a sustainable growth path, in line with its policy priorities outlined in the Medium-Term Development Framework and its Poverty Reduction Strategy Paper.

Speaking on the occasion, M Akram Malik said that the MoU would further strengthen relations between Pakistan and European Union. He said that the MIP would concentrate on rural development and natural resources management in North-West Frontier Province (NWFP and Balochistan with a view to reduce regional disparities and promote stability in Pakistan's sensitive provinces bordering Afghanistan.

Moreover, he added, governance, education and human resources development are the second focal objectives for developing a well-trained work force and creating a moderate and stable Pakistan. The Programme also underscores the need for taking concrete measures for trade development, democratisation, human rights and anti-money laundering, he added.

Speaking on the occasion, Jan De Kok, Head of Delegation, European Commission said that Pakistan and EU were committed to strengthening their relationship under this new MIP.

He said that since the beginning of its co-operation with Pakistan in 1976, the EU has committed more than Euros 500 million in grants to projects and programmes in Pakistan. It may be recalled that the financing instrument for development co-operation under which EC development assistance to Pakistan is provided for poverty alleviation in the context of sustainable development, including pursuit of MDGs.

Business Recorder [Pakistan's First Financial Daily]

 

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WB provides $150.2m to improve irrigation system in Sindh ​

ISLAMABAD (updated on: October 05, 2007, 19:47 PST): Pakistan and World Bank here on Friday signed an agreement of $ 150.2 million under Sindh Water Sector Improvement Project to improve effectiveness and operational efficiency of irrigation system by ensuring safety of canal network in various areas of Sindh province.

The project would be executed by the government of Sindh's Irrigation and Power department, Sindh Irrigation and Drainage Authority, Area Water Boards of Ghotki, NARA and Left Bank, and farmer organizations.

The agreement was signed by M. Akram Malik Secretary Economic Affairs Division, Yahya Waliullah, Secretary P&D Department, Government of Sindh and Youspha B. Crooks, Country Director World Bank on behalf of Federal government, government of Sindh and WB respectively.

The objective of the project is to improve the effectiveness and operational efficiency of irrigation system by ensuring safety of canal network in Ghotki, Nara and Left bank areas. It would help ensure deliver due share of water to the farmers at the tail end with adequate drainage.

Speaking on the occasion, Secretary Economic Affairs, M. Akram Malik said that the objective would be achieved by deepening and broadening the already initiated institutional reforms, improving the irrigation system and by enhancing sustainability of the systems through maintenance and cost recoveries.

Speaking on the occasion, World Bank Country Director, Youspha B. Crooks described the agreement as very crucial in terms of rehabilitating the existing canal system to enhance its effectiveness.

He said, this would help irrigate more areas in the province by ensuring proper distribution of water and thereby increase incomes of the people.

The terms and conditions of the US$ 150.2 million credit are standard. It would have maturity period of 35 years having a grace period of 10 years with service charges on the withdrawn balance _ of 1 per cent per annum and the maximum commitment charge rate on the withdrawn financing balance shall be of 1 per cent.

WB provides $150.2m to improve irrigation system in Sindh