Pakistan Economy - News & Updates - Archive

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Shell starts offshore drilling ​

ISLAMABAD (October 19 2007): Pakistan is on its way to make new history by hitting untapped potential for oil and gas production as the Shell-led consortium has started drilling in deep waters for offshore exploration project.

Sources said that Shell Pakistan, being operator of the project, has managed to bring 'Transocean', a ship-mounted rig, for exploration in Pakistan's deep waters.

Drilling started on October 1, and so far half of the drilling process has been completed. The concerned authorities are of the view that drilling process may take another 15 to 20 days. The project will cost roughly $ 46 million. The parties to the joint venture--OGDC, PPL and Government Holding (Pvt) Limited (GHPL)--are party to the project.

Experts hope for a positive outcome of the exploration since offshore block, being drilled, is believed to have very bright prospects. They believe that a discovery in deep waters will help Pakistan increase domestic oil and gas production share. The positive outcome can also help Pakistan secure more investment in its oil and gas sector.

Shell was granted a block in Pakistan's deep waters in 2005. Since then, it made several attempts to secure a rig for exploration. However, its initial efforts did not succeed. At one stage, it appeared that the project may not take off.

In response to the partners' queries, seeking reasons of delay in securing the rig and spudding the well, Shell informed them early this month that drill ship 'D534' was on its way, and ETA was September 15. It said that a helicopter to facilitate the operation has already arrived in Karachi and standby vessel Ocean Flower had arrived in Karachi on September 10.

Shell said: "We have been informed that the Sea Trout, our main supply vessel, that was to transport the casing, drill bits, offshore containers and other supplies from Dubai to Karachi, has suffered damage to a main engine and requires replacement of the crank shaft. These ongoing repairs in Dubai are anticipated to take until September 19 to complete. This would delay the arrival of the vessel in Pakistan until September 24 for customs clearance which could lead to a delay in spud date of around 10 days."

Business Recorder [Pakistan's First Financial Daily]

 

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Govt to take one more year to finalise transport policy ​

Saturday, October 20, 2007

ISLAMABAD: The government has failed to finalise the first-ever national transport policy within the stipulated time and will take one more year to complete the task.

Sources in the communication ministry told The News that the much-awaited transport policy was most likely to be finalised next year, an assignment which had to be completed in 2006. The transport sector currently accounts for 11 per cent of GDP, 16 per cent of fixed investment, 35 per cent of total annual energy use and about 15 per cent of the Public Sector Development Programme.

Although Pakistan retains a road network of 258,000km (including 9,500km national highway and motorways), the road density is low for a population of 156 million people and an area of 796,000km. The total public expenditure on roads is over Rs33 billion a year, with 65 per cent on national highways. There are also about seven million vehicles on road, which are projected to increase to 21 million by 2030. Pakistan Railways has about 10,000km of track network but it is performing below its commercial potential.

The two major ports handle over 41 million tonnes of cargo annually apart from container traffic. The Asian Development Bank (ADB) has been offering technical assistance for the formulation of a comprehensive and integrated transport policy to develop an efficient mode of communications by improving and developing existing rail and road infrastructure.

Sources said the draft of the national transport policy was still incomplete and scores of issues were yet to be resolved with the stakeholders. When contacted, Communications Minister Shamim Siddiqi conceded that there was a delay in finalization of the transport policy. He said the ADB wanted to take all the stakeholders on board which resulted in further delay.

Siddiqi said some stakeholders were earlier not part of the process but now the government has decided to take all of them on board. When asked, he hoped the policy would most probably be ready in next June after almost one year. Under the policy, he maintained better coordinated use of various modes of transport would be facilitated that includes road, rail, ports and air traffic.

On the other hand, the Planning Commission (PC) in Annual Plan 2007-08 feared that inefficient and outdated transport and communication infrastructure could not support 7 per cent growth the government is hoping to achieve.

The PC said the existing infrastructure, which is quite unsuitable even by present standards, will have to be updated to international standards in scale, quality and management efficiencies within the next five to six years so that it could be deployed optimally.

Govt to take one more year to finalise transport policy

 

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‘Agri growth precursor to industrial revolution’ ​

Saturday, October 20, 2007

LAHORE: Agricultural growth was the precursor to the industrial revolution that spread from England in the mid-18th century to Japan in the late 19th century. More recently, rapid agricultural growth in China, India and Vietnam was the precursor to the rise of the industry.

This was observed in a World Bank development report for 2008 titled “Agriculture for Development.” According to the report, Pakistan has 22.11 million hectares of arable and permanent cropland. Average annual growth in its irrigated land during 1980-2004 was 09 per cent. Average use of fertiliser per hectare is limited to 167 kg while pesticide use is 6.1 kg per hectare.

Its annual renewal water resources per capita are 336 cubic meters, the lowest in the region. Agriculture consumes 96 per cent of this water resource. The rate of deforestation in the country is 1.6 per cent. Agriculture is based worldwide in rural areas. Sixty one per cent of Pakistan’s rural population has access to all season’s roads and 67 per cent enjoy the facility of electricity.

Cereal production in Pakistan is 203 kg per capita and has grown at a rate of 2.8 per cent during last decade. The yield of cereal per hectare is 2456 kg per hectare and has grown at rate of 0.9 per cent in last two decades.

Meat production is 13 kg per capita, fruits and vegetable production is 68 kg per capita. Import of agricultural commodities average $2,703 million during 2003-05 while exports averaged 41,666 million during same period. The share of agricultural exports in total exports of Pakistan stands at 12.1 per cent.

Access to water and irrigation is a major determinant of land productivity and the stability of yields. Irrigated land productivity is more than double that of rain-fed land. In Sub-Saharan Africa, only 4 percent of the area in production is under irrigation, compared with 39 percent in South Asia and 29 percent in East Asia.

The large and persistent gap between agriculture’s shares in GDP and employment suggests that poverty is concentrated in agriculture and rural areas and that as non-agricultural growth accelerates, many of the rural poor remain poor.

Pakistan is classified among countries where smaller farm size means more inequality. The Gini of land Distribution in Pakistan has increased from 53.5 per cent in 1990 to 4 per cent in 2000.

Average farm size in Pakistan has reduced from 3.8 hectares in 1990 to 3.1 hectares in 2000. The process has impacted 31 per cent of the farms during this period. Population pressures, unequal landholdings, and inheritance norms favouring fragmentation are leading to rapid declines in farm sizes in many parts of Asia and Africa, states the report. Increasing the productivity of small farms-through high-value crops or higher-yielding technologies for food crops- can increase the incomes from small farms, the report adds.

Pakistan reduced taxation of agriculture during the two decades ending in 2004 while India increased taxation on agriculture during this period. The report states that following complete trade liberalization the global rates of cotton would increase by 20.8 per cent, oilseeds by 15.1 per cent, dairy products by 11.9 per cent, wheat by 5 per cent and livestock by 2.5 per cent.

Trade liberalization would increase the global share of trade of developing countries for cotton by 27 per cent, oilseeds by 34 per cent, dairy products by 7 per cent, wheat by 21 per cent and livestock by 2 per cent.

With 55-60 percent of India’s irrigated land supplied by groundwater, electricity for tube well pumps is an important input. Most state governments provide electricity to farmers at a subsidized flat rate-often for free. But the quality of service is poor because of erratic and limited supply and voltage fluctuations, which can result in crop losses from forgone irrigation and damaged pumping equipment.

The electricity subsidies to agriculture are also fiscally draining and environmentally damaging. In Punjab electricity subsidies to agriculture in 2002/03 were 7 percent of state expenditures.

Fertilizer subsidies would have to be the most cost-effective option for achieving the desired, social objective, compared with such alternatives as food aid, food for work, and cash transfers.

‘Agri growth precursor to industrial revolution’

 

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Pak-German trade rises to $2bn per annum​

ISLAMABAD: Bilateral trade between Pakistan and Germany has the potential to grow further, which at the moment reaches to about $2 billion per annum.

President Islamabad Chamber of Commerce and Industry (ICCI), Nasir Khan, said on Friday that Pakistan economic indicators were healthy and the business community would encourage more trade and investment with Germany. At present Germany exports to Pakistan were $1.2 billion and Pakistan export to Germany was $800 million annually, the ICCI president said during a meeting with Counselor of Media and Public Diplomacy Mr Patric Hiens and Third Secretary of Commercial & Development Section Mr Andreas Dautch in ICCI office.

The German Counselor Patric Hiens said that presently Germany was focused on multilateralism but the government could review need for bilateral arrangements in view of the competitor. The EU assured the business community that Germany would continue to support Pakistan to further improve bilateral cooperation.

Germany also offered technical assistant with latest equipment for the growth of production.

Daily Times - Leading News Resource of Pakistan

 

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Saturday, October 20, 2007

‘Strong growth, aggressive privatisation boost FDI inflows’​

* World Investment Report 2007 points large merger and acquisition deals as successes in Pakistan’s privatisation process

ISLAMABAD: Pakistan’s performance in attracting foreign direct investment (FDI) worth $4.3 billion has been promising and it has been made possible due to strong economic growth and an aggressive privatisation programme, according to the World Investment Report 2007 released here on Friday.

The report titled ‘Transnational Corporations, Extractive Industries and Development’ has been prepared by the United Nation Conference on Trade and Development (UNCTAD).

The report highlights that after playing a leading role in a number of large merger and acquisition deals in Pakistan’s privatisation process, West Asian companies have announced a series of large Greenfield projects in the country.

The report further highlighted that FDI in Pakistan is increasing constantly, during the decade of 1990-2000 inflows of FDI in Pakistan averaged $463 million and outflows were recorded at $5 million.

Inflows of FDI rose to $534 million in the year 2003 with outflows of $19 million. However, FDI inflows crossed the $1 billion mark in 2004 and FDI inflows slowed to $1.18 million. Inflows of FDI in the year 2005 further increased to $2.201 billion in Pakistan with a FDI outflow of $44 million in the same year. FDI inflows during the year 2006 amounted to record $4.273 billion in Pakistan with FDI outflows of $107 from Pakistan in the year.

The report 2007 further reveals that inflows of FDI in Pakistan during the decade 1990-2000 were 3.8 percent of the gross fixed capital formation (GFCF). FDI inflows rose to 7.5 percent of GFCF in the year 2004, 13.1 percent in year 2005 and further rose to 24.1 percent in the year 2006.

In terms of source of FDI, there has been a shift from developed countries to West Asian countries, particularly the United Arab Emirates and Saudi Arabia. UNCTAD’s annual survey of global investment trends reported that FDI jumped sharply by 38 percent in 2006 to Rs 1,306 billion, nearly equaling the record set in year 2000. All three categories of countries developed, developing and transition showed significant gains.

The report states that the FDI inflow to South Asia surged by 126 percent amounting to $22 billion in 2006, mainly due to investment in India. The country received more FDI than ever before ($17 billion, 153 percent more than in 2005), equivalent to the total inflows to the country during the period 2003-2005. Rapid economic growth has led to improved investor confidence in the country.

According to the government of India, the country’s economy is expected to grow by 9.2 percent in the 2006-07 fiscal year. The sustained growth in income has made the country increasingly attractive to market-seeking FDI.

Daily Times - Leading News Resource of Pakistan

 

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Poland offers to develop Gwadar Port city​

QUETTA Oct 19: Poland has offered to set up industry in the port city of Gwadar besides developing infrastructure there. It has also extended cooperation in oil and gas, energy, maritime, engineering and food processing sectors in Pakistan.

The offer was made by Ireneusz Makles, Poland’s Consul-General in Karachi while addressing a conference on Poland-Pakistan economic relations with reference to Balochistan organised by the Balochistan Economic Forum here on Thursday.

The conference was attended by business leaders, industrialists and senior officials of the Balochistan government.

Poland is interested in helping Pakistan in different sectors. It can supply electrical and railway equipment, agricultural machinery and spare parts, heavy vehicles and marine and diesel engines, he added.The diplomat said that his country was also interested in cooperating with Pakistan in coal and mining industry. “It has great experience in this field”. He said that a delegation of Poland’s biggest mining corporation visited Quetta in April to acquaint itself about Balochistan’s requirements and plans for investment as well as scope of joint ventures.

Praising the rapid development taking place in Gwadar and the setting up of an economic free zone there, he said Gwadar would serve as an energy corridor for Central Asia, Middle East, South Asia and western Asia. The free zone would attract investment in many sectors, including power generation, manufacturing, hotel industry and tourism and water desalination.

Mr. Makles said that the Polish companies were awaiting the announcement of investment packages and incentives by the government. He would encourage Polish companies to take part in the development projects of Balochistan, including the Kachhi Canal, Gwadar Port, the coastal highway, and the railway line from Gwadar to Central Asian states.

The Polish diplomat said that there was also a possibility for Pakistani businessmen to export Polish products to Afghanistan, Central Asian states and also to Eastern regions of Iran.

He said that Poland was also interested in cooperating in mining, engineering, fisheries, food processing, gas, pharmaceuticals and textiles industry.

Inviting Pakistani investors, he said Poland was a paradise for foreign investors due to its political stability and its location in the centre of Europe. It can serve as a launching pad for businessmen to market their goods to the whole of Europe.

He said that a Polish trade delegation would soon visit Pakistan to discuss ways to boost two-way trade and investment opportunities.

He further said that his country would supply 300 bulldozers to Pakistan, of which 200 would be provided to Balochistan.

Earlier Sardar Shaukat Aziz of Balochistan Economic Forum said that Poland had agreed to set up a warehouse in Warsaw for precious stones exported from Balochistan.

Poland offers to develop Gwadar Port city -DAWN - Business; October 20, 2007

 

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India virtually out: IPI gas line rendered two-nation project ​

ISLAMABAD (October 20 2007): Iran-Pakistan-India (IPI) gas pipeline has literally turned into Iran-Pakistan (IP) gas pipeline as Tehran and Islamabad entered into bilateral technical discussions without waiting any more for India to make the project a reality.

A visiting Iran delegation, headed by Dr Ghamini, Chief of Iranian Natural Resources Ministry, held discussions with Pakistan officials on the project. The discussions covered wide-ranging issues, including gas pricing formula, size and route of the pipeline, taxation and other facilities to be accorded by the two governments to make the project a reality.

The two sides will have another round of talks on October 20. This is expected to be followed by a joint announcement here on the outcome of discussions. Sources said that during the first round of talks the two sides were unanimous that the preparatory work for the gas line should be completed on top priority to bring it on ground as early as possible.

They also discussed the nature of the back-up facility to ensure continuous supply of gas for the project. A senior Petroleum Ministry official told Business Recorder on Friday that keeping in mind unresponsive attitude of the Indian side, Islamabad and Tehran decided to go for the project without New Delhi. He said that discussions for gas line were primarily on bilateral basis. The official said: "We are not considering Indian participation in the project any more."

However, the official did not rule out the possibility of India's coming in as third party to the project at any later stage. He said: "One can not rule out Indian participation in the project at any later stage, but at present our (Iran and Pakistan) priority is to make sure that the project does not face inordinate delay in execution."

Business Recorder [Pakistan's First Financial Daily]

 

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Kabul angry over not facilitating its exports ​

ISLAMABAD (October 20 2007): Kabul is angry with Islamabad for not facilitating export of its goods to Pakistan under the Afghan Transit Trade Agreement (ATTA) which the former feels necessary to improve the balance of trade, sources told Business Recorder here on Friday.

These concerns were expressed in the Pak-Afghan Joint Economic Commission (JEC) meeting and joint Jirga held a couple of months ago. Pakistan's formal exports to Afghanistan have crossed $2 billion mark per annum but the share of Afghan exports to Pakistan is far less.

Both sides had agreed that Pak-Afghan Joint Business Council should be made more effective and active to identify areas of co-operation between the private sectors of the two countries, sources said, adding that the council would report its activities to the JEC for making it more effective.

Sources said that both sides had also agreed to take steps for increasing Afghan exports to Pakistan, and the former was given responsibility to identify exportable items for launching potential joint ventures so that the private sectors of both countries could be encouraged to invest in export-oriented industries.

"Though both sides were in agreement that export of goods from Afghanistan to Pakistan will be encouraged, nothing has been done so far, which has irritated Kabul," sources added.

They said that the JEC was scheduled to meet in October but its meeting was cancelled for reasons unknown. They said that Afghan authorities were also concerned over Pakistan's consistent resistance to facilitate transit trade and when the issue was raised in the Joint Pak-Afghan Jirga a couple of months ago, Pakistan assured Afghanistan that it would fully cooperate in this regard.

Sources said that Pakistan has already approached the Afghan customs authorities to encourage import/export of containerised cargo under the ATTA to ensure proper documentation and to curb smuggling. The Federal Board of Revenue (FBR) has also asked Commerce Ministry and Afghanistan government to facilitate the containerised cargo movement for encouraging documentation and discouraging smuggling.

Pakistan Customs would demand only those documents from the Afghan businessmen, which are specified under the ATTA Protocol. Pakistan customs authorities would only verify the seals of the containers carrying ATT cargo at the entry and exit points. Checking of the seals at specific points would put in place an effective transit regime for the benefit of both Pakistan and Afghanistan.

Business Recorder [Pakistan's First Financial Daily]

 

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'Rs 3.83 billion projects for Rahim Yar Khan to be inaugurated' ​

RAHIM YAR KHAN (October 20 2007): Mega projects estimated to cost some Rs 3.83 billion will be inaugurated here in the city soon, said Minister of State for Foreign Affairs Makhdoom Khusro Bakhtiar.

Addressing a gathering here on Thursday evening, the minister said a bridge over Indus River, which would substantially reduce the travelling time between Rajanpur and Rahim Yar Khan districts, would be constructed with Rs 2.5 billion. Another mega project of a modern stadium-cum-sports complex in RYK would also be built at the estimated cost of Rs 200 million.

Third major project that will be inaugurated here is a sewerage scheme and water treatment plant planned to meet the needs of next 100 years. "All these initiatives would improve living standard and bring development in these areas", Khusro Bakhtiar said.

Business Recorder [Pakistan's First Financial Daily]

 

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Institutional, foreign buying place KSE on record high ​

Sunday, October 21, 2007

KARACHI: Politically motivated bulls won the show at the Karachi bourse this week despite the law and order situation declining to worst. Significant institutional and foreign buying helped benchmark KSE 100-Index breach through 14,500 points for this first time this week to close at 14,787 points all time high record.

KSE 100-share Index managed to post another smart rise of 323.77 points (i.e. 2.2 per cent) on week-on-week basis and closed at 14,787.55 points the ever-highest historical level. It was the eighth consecutive week that continued to perform under the authoritative control of might bulls.

The week placed ready market turnover to nine-month high at 431.5 million shares; overall market capitalisation at Rs4.512 trillion and foreign portfolio investment at US$157.6 million this fiscal. These all records were on their historical high, analysts said.

They added: “Market started swelling on the strong assumption of power-sharing deal done between Benazir Bhutto and President Gen. Musharraf almost two-month ago. This trend kept market continued to perform unprecedented this week following good, better and the best business deals done respectively at KSE earlier.”

Friday twin-trading session might have shed some points due to tense situation in the city following Thursday night bloodbath. But all day-long sessions of the week closed with extended gains.

Market resumed business activity only for three days, as it remained closed on Monday and Tuesday on account of Eid-ul-Fitr. Experts see the attack on Benazir’s procession separate from the political scene and give more importance to the ongoing political reconciliation in the country and National Reconciliation Ordinance (NRO) in place.

Until and unless the county fails to formulate the highly assumed political set up, following general elections in the country sometime in January 2008, the market would continue to perform on its course, they added.

Experts see the BB-Musharraf political patch up as good for Pakistan’s economy. Formation of a political government means consistency in the current economic policies that was growing on reusable pace, they added.

“We measure the trickledown affect of good economic growth at the Karachi bourse,” they further said. “In the coming week, several companies are to announce their quarterly financial result for the period ending on september 30, 2007. We expect most of them to show handsome earning growth in this season that would have positive impact on the market next week,” Sana Faisal of JS Research commented.

Investors are much confident of receiving smart payouts this quarter. It is evident with rising foreign portfolio investment in the bourses and government securities everyday. The SCRA balance further surged to US$157.6 million for this fiscal year (2008) to date from US$151 a day earlier, according to SBP website.

“This week rally was broad-based and was mainly driven by refinery, auto, cement, OMCs and insurance sectors. Refinery outperformed market by 7.6 per cent, whereas automobile & insurance outperformed the market by 3.8 per cent and 2.4 per cent, respectively,” Sana added.

Faraz Farooq of First Capital Equity said, “Global oil prices are identified as one of the strong factor that has an effect on the market sentiments since the three listed E&P companies (OGDCL, PPL, & POL) accounts for 22 per cent of KSE Index. As per his brokerage house analysis, a US$1/barrel rise/decline in international oil price caused the earnings of PPL, OGDCL & POL to increase/decrease by Rs0.1, Rs0.2 and Rs0.6 respectively on per share basis that is around 0.3 per cent to 2.0 per cent.

Average daily volume in the week reached its nine-month high and stood at 432 million shares versus 334 million shares last week. Therefore the overall market capitalisation further surged Rs85 billion to Rs4.512 trillion.

On week-on-week basis, majority of the blue chips managed to stay in the green territory including Oil and Gas Development Company, Pakistan State Oil Company, Pakistan Oilfields, Pakistan Petroleum Limited, Lucky Cement, DG Khan Cement, Pakistan Telecommunication Company, Bank of Punjab and MCB Bank.

However, three major banks i.e. National Bank, United Bank and Habib Bank closed in negative column. During the week, CFS investment maintained its position and stood at Rs54.6 billion, close to its upper limit. In the previous week, CFS investment stood at Rs54.5 billion. CFS rate in the current week stood at 11.45%, versus 11.06% last week, JS Research reported.

Institutional, foreign buying place KSE on record high

 

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Govt to promote coal as alternate energy source​

* Coal policy aims to attract FDI in the sector to rid the economy of expensive oil burden

ISLAMABAD: A National Coal Policy of Pakistan is under-preparation by the Ministry of Petroleum and Natural Resources that aims to attract much needed foreign direct investment in transfer of technology and alternate energy source through coal reserves in Sindh.

An official of the ministry told Daily Times on Saturday, “the step is being taken to shield the economy from the adverse effects of surging oil prices (currently at $90 per barrel) in the future.”

The government has allocated Rs 23 million for policy preparation and consultation with stakeholders, in the Public Sector Development Programme for this fiscal year.

The ministry has also decided to establish Thar Coal Mining Company and has allocated Rs 241 million for this purpose.

The Central Development Working Party (CDWP) has already approved initial feasibility study on gasification of Thar coal with an allocation of Rs 126.649 million and work on this study is being finalised.

According to a study initiated by the Sindh Coal Authority, the Thar coal deposits are sufficient to meet fuel requirements of the country for centuries and would generate about 100,000 mega watt (MW) of electricity. Only 200 million tonnes Thar coal (lignite) can produce 1000 MW electricity power up to 40 years in the country.

In Pakistan, share of coal in energy mix during decades has declined from 68 percent to 35 percent and specifically 5 percent in 2002 due to the increase share of natural gas and cheaper oil in the power generation of the country.

Presently the scenario has changed, gas reserves of the country are depleting and continue to deplete as it has other important uses, such as fertiliser and other. Oil reserves of the country are limited with high cost of production, which is increasing day by day and would continue to increase in foreign exchange with uncertain conditions.

Renewable energy such as wind and solar produce high cost energy. Nuclear energy requires public acceptance with safety issues and disposal of waste cycle. Hydel power generation is seasonal with environmental problems and displacement of population and rehabilitation. New power plants on coal are to be installed on affordable cost.

The government is emphasising on development thermal power generation on indigenous resources, including coal (lignite) for power generation and other industrial use keeping in view some important factors.

Elaborating these factors, the study reveals that, share of coal in country’s energy mix is to be increased at least 19 percent by 2030 and 50 percent by year 2050. Sindh lignite reserves are huge and suitable for power generation as compared to lignite being sued in the world for electricity generation. It is a cheap dependable energy source and would meet countries energy requirements for centuries.

Thar coalfield is spread over an area of 9000 sq kilometer, which consists over 175 billion tonnes with proved coal reserves over 12 billion tonnes of six delineated blocks over an area of 500-kilo metres.

Indigenous resources are free from uncertainties of fuel supply and associated danger of dictation of oil prices by oil suppliers. Coal drive much of current global economic development and providing 23 percent of global primary energy needs and generates about 39 percent of the world energy. Global primary coal consumption would rise at an average annual rate of 1.4 percent up to 2030. In all regions, coal use would become increasingly concentrated in power generation, which would account for almost 90 percent of the increase in demand during 2000 to 2030, according to World Energy Outlook 2002.

Coal is to play integral role in the economic development of many countries and it can play a major role in addressing sustainable development in the filed of economic, social and environment. Pakistan coals are mostly lignite and Thar coal (lignite) with proved reserves of 12 billion tonnes has over burden ratio 5 to 7, which can be economically mined. Clean coal technology is available, which has made possible to use lignite with zero emission.

Thar Coalfield: Geological Survey of Pakistan (GSP), discovered huge deposits of coals in 1992 at Thar during the research program, assisted by United States Geological Survey (USGS). Spread over an area of more than 9000 square kilometres with dimensions of 140 kilometres north south and 65 kilometres in the east-west possess 175.506 billion tonnes of coal.

Coal mining cost suggested by coal feasibility studies conducted in 1994 at Thar by John T. Boyd of United States, revealed that in case of annual production comes to 2.5 million tonnes, the estimated realisation cost would be $88 per tonne. Incase of the annual production comes to 3.5 million tonnes the estimated realisation cost to be $68.50 per tonne and if the production level comes to 7 million tonnes annually the estimated cost would come down to $40.60 per tonne. Another study done by RWE of Germany in the year 2003 highlighted that 6 million tonnes of annual production with shovel trucks, the estimated realisation cost to be $36.50 per tonne and electricity generation value to be 6.9 cents per KW/h. Same production level is achieved with bucket wheal excavator the estimated realisation cost to be $42.50 per ton with specific value US Cents 7.18 KW/h.

Daily Times - Leading News Resource of Pakistan

 

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Cargo handling rises by 3.52% to 281,241 containers​

KARACHI: Cargo handling at the Karachi Port Trust rose by 3.52 percent to 281,241 containers during the first quarter of this fiscal, higher from 271,656 containers handled in the same period of last year.

It shows that cargo handling of the port has not been hurt by the collapse of berths. KPT’s berths no 10 and 14 had collapsed in early August this year, which created fears that KPT would be unable to keep its cargo handling business from declining. However, the port managed to accommodate 483 ships, higher by 8.05 percent from 447 ships berthed last year.

The port handled a total of 5.763 million tonnes dry cargo, higher by 13.66 percent from 5.070 million tonnes handled last year. It also handled 2.705 million tonnes liquid bulk cargo, up by 14.13 percent from 2.370 million tonnes liquid bulk cargo handled in the same period of last year.

The port handled 4.029 million tonnes dry import cargo and 2.269 million tonnes liquid bulk import cargo in the first three months. Last year it had handled 4.022 million tonnes dry import cargo and 2.041 million tonnes liquid bulk import cargo in the same period.

The port also handled 1.734 million tonnes dry export cargo and 0.435 million liquid bulk export cargo from July to September this year. It had handled 1.048 million tonnes dry export cargo and 0.329 million tonnes liquid bulk export cargo.

Daily Times - Leading News Resource of Pakistan

 

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New rice target to be at 5.5m tonnes for 2007-08​

KARACHI: The government has set rice production target for the year 2007-08 at 5.7 million tonnes as against 5.4 million tonnes last year, while sources in the ministry told Daily Times on condition of anonymity Saturday that on October 23 (Monday) the target will be revised to 5.5 million tonnes.

On Monday Federal Committee on Agriculture (FCA) will meet with the Federal Minister for Food, Agriculture and Livestock (MINFAL) Sikandar Hayat Khan Bosan to fix the rice production target.

Although the government has set a rice production target of 5.7 million tonnes but it is expected that in the next meeting the officials will revise their decision and set a new target of 5.5 million tonnes. The reason to revise the decision is due to the recent floods and damaged crop in Sindh and Punjab belts, which are under pest attack and it is already expected that this year’s production will not increase, sources said.

When Daily Times approached Chairman of the Rice Exporters Association of Pakistan (REAP) Aziz Maniya on this issue, he said a decrease in rice production is expected this year and looking at the current circumstances Ministry of Food Agriculture and Life Stock (MINFAL) should fix the current target with the previous year’s target of 5.4 million tonnes as half of the production is exported while the rest of the half is used for local consumption, he added.

Mr Maniya said from last two to three years rice shortage has been recorded worldwide. Last year a six percent shortage has been recorded in rice production globally. Since November 2006, the international prices of basmati rice have surged by 35 to 40 percent due to crop shortage in leading rice-producing countries and in this season China, Thailand, Vietnam, India and Sri Lanka have reported crop shortages.

Giving the reason of this shortage he said every year population is increasing while the production is not flourishing as it is used to be every year. Therefore there is a need to increase the production of rice and government should take constructive steps to deal with this issue to meet the demand of local market and the export target, he added.

On the other hand few exporters told Daily Times that due to the global shortage the price of rice is rapidly increasing in the international market and to earn more local exporters are exporting those stocks as well that should have been sold locally, which is why the local prices are rising.

According to a leading rice exporter, the country’s rice production was badly effected due to some reasons, which include poor shelling and milling, defective harvesting, deteriorating quality of seed and cultivation of different un-approved varieties of seeds.

Daily Times - Leading News Resource of Pakistan

 

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Week-long closure incurs Rs120bn loss​

KARACHI, Oct 20: Businessmen and economists conservatively estimate a total loss of over $2 billion (Rs120 billion) because of a virtual business closure in Karachi for more than a week that came to a close on Saturday.

The businesses were closed early this week because of the Eid and then a bloodbath in the early hours of Friday which claimed 140 lives and left as many as many 500 injured, many of them maimed for life, and plunged the city in a state of mourning and also brought the entire business life to a standstill.

During this week, banks remained closed on Monday and Tuesday, and when bank branches opened on Wednesday, they did a small amount of business because trade and industry did not open. On Thursday, the government closed the educational institutions.

The city, except for Sharea Faisal, was functional, but economic activity remained suspended.

“People of the city unilaterally decided to treat Oct 18 as a public holiday on their own; otherwise there was no tension or disruption of any sort anywhere during the day,” a lady who travelled through the city on the day told Dawn.

Most of shopping centres pulled down shutters and hardly any public transport was seen on the roads.

Friday dawn saw a trail of blood on the road which connects airport with the metropolis, and most of the people preferred staying indoors.

The city was in a state of shock; and a pall of gloom eclipsed areas where bodies of victims came for burial.

Most of the public transport was off the roads; offices and business centres were closed and even vegetables and fruits were not available on streets.

Then came the last day of the week, Saturday, when the city started limping back to normalcy. Public transport made some appearance, shopkeepers were seen opening their shops and the city started receiving some vegetable supplies from the Punjab and Balochistan, but not from Sindh according to leaders of the wholesale market on Superhighway.

Quantification of the spill-over effect of Karachi’s business closure to other parts of the country is difficult, but a rough estimate puts it anywhere from four to five billion dollars.

The overall economic loss from a full week business closure in Karachi comes to six to seven billion dollars (Rs360 to Rs420 billion).

“The most hard hit are the poorer sections of the city,’’ a market analyst said. Those who suffer are farmers and small traders who supply vegetables and fruits regularly from all the three provinces to this huge market of almost 20 million.

“The week-long suspension in supplies means building up of a huge inventory of “perishables’’ in the fields for which small farmers do not have storage facilities. Then port operations also suffered and many traders and industrialists were not able to get their export orders served in time. They also failed to get their imported consignments in time which disturbed their production and delivery schedule.

“About 250 to 300 trucks of vegetables have come from Punjab and Balochistan,’’ said Haji Shahjehan who pointed out that daily arrival on a normal day is 800 to 1,000 trucks.

He warned that tomatoes will continue to be costly at Rs75 to Rs80 a kg for consumers as these are being imported from India via the Punjab. Tomato harvest in Sindh is still two weeks away.

Leaders of the main vegetable and fruit market on Superhighway are worried over reports of continued disturbances in Sindh hinterland where reports of Friday bloodbath reminded many people, particularly the political activists of the 1983 army crackdown in rural areas.

Traders in Karachi and other parts of the country look with fear and suspicion the coming days and weeks.

They are more worried after former Prime Minister Benazir Bhutto expressed apprehensions in a press conference on Friday of more attacks on her life in the coming days.

Business leadership took prompt notice of the Friday blasts that turned a carnival of hundreds and thousands of political supporters of a reception rally into a mob of angry mourners.

The leaders of the Federation of Pakistan Chambers of Commerce and Industry “deplored the worst terrorist attack in the history of the country.’’

“Such acts of brutal terrorism in Karachi are bound to create a sense of insecurity and uncertainty, which will adversely affect business and investment climate, not only in the city, but all over the country as a whole,’’ said Tanvir Ahmad Sheikh, President of the FPCCI with his seven vice presidents in a joint statement.

The FPCCI president’s advice is that police personnel and security system needed urgent modernisation and “re-organisation.’’

Also to take notice of the ugly incident are Karachi business leaders Siraj Kassim Teli, Tahir Khaliq, Haroon Farooki, M. Zubair Motiwala, Anjum Nisar, Shamim Shamsi, Iftikhar Sheikh and Haroon Agar who called attack on Benazir Bhutto “a conspiracy against democracy.”

Karachi Stock Exchange is the only business house that remained unaffected by the early Friday morning bomb blast and killing of 140 persons.

Stock brokers showed more than 32 per cent growth in business on Friday when the entire business of the country was either closed or was in a state of shock. No plausible explanation was given by any businessman on this odd behaviour of the stock brokers.

A market analyst, however, said that stock market operations are manipulated by hardly a dozen persons. There are stock brokers who have interests in banking, financial services, real estate and commodity business. Their job is to keep the government and international bankers in a good mood by showing positive results even on a day when 160 million people were in a state of shock and mourning.

Week-long closure incurs Rs120bn loss -DAWN - Business; October 21, 2007

 

[Neo]

Services sector exports up by 12.25pc​

ISLAMABAD, Oct 20: The services sector exports increased by 12.25 per cent in the first two months (July-August) of the fiscal year 2007-08 over the same months last year, the Federal Bureau of Statistics (FBS) said on Saturday.

The services export proceeds reached $481.496m as against $428.946 million last year.

In August, services exports witnessed a robust growth of 14.82 per cent to $260.188 million as against the $226.613 million recorded last year.

The statistics showed that the services sector exports were steadily on the rise for the last two years following having preferential market access.

On the other hand, import of services rose by 20.09 per cent to $1.623 billion in July-August period of the current fiscal year as against $1.351 billion over the same period last year.

Imports of services rose by 38.04 per cent to $854.019 million in August 2007 as against $618.658 million over the same month last year.

The deficit in trade in services widened by 23.73 per cent to $1.141 billion during the first two months of the current fiscal year as against $922.841 million over the same period last year.

Services sector exports up by 12.25pc -DAWN - Business; October 21, 2007