Pakistan Economy - News & Updates - Archive

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Pakistan's foreign exchange reserves decline by five percent in one month ​

KARACHI (December 14 2007): Since the imposition of state of emergency on November 3, foreign exchange reserves have shown a significant decline of five percent. During the last one month, major outflows had been witnessed from the special convertible rupee account (SCRA), analyst said.

The State Bank of Pakistan's (SBP) statistics show that overall foreign reserves have registered some five percent declined during the last one month from November 10 to December 8. On Thursday, the country's overall foreign exchange reserves stood at 15.6225 billion dollar, coming down from 16.3875 billion dollars, a historical level during mid-November, indicating a dip of 765 million dollars.

A complete decline has been witnessed in the SBP reserves, which have been declined by 5.5 percent or 765.5 million dollar to 15.6225 billion dollars after the imposition of emergency. On November 10, it stood at 16.3875 billion dollars. While, the reserves held by the banks remain at 2.2048 billion dollars during week ended December 8, 2007 as compared to 2.2043 billion dollars on November 10.

An analyst attributed the decline in outflows from the SCRA account mainly to high payments of oil, and added the foreign investors had also withdrawn their amount from the stock market after the emergency and uncertainty in the country.

He said that some 300 million dollars outflow had been registered in the SCRA during the November, but after President Pervez Musharaf's announcement that emergency would be lifted on December 15, the foreign investors were again investing in the stock market.

Now it is expected that during the next few weeks, the SCRA would regain its previous position. Referring to the oil prices in the world market, which reached 99 dollars per barrel during November, had compelled the government to spend more for the import of oil, said he analyst.

"If the situation continues, it is expected that some 200-250 million dollars more will paid on the account of oil import," he added. Another reason which caused decline in foreign exchange was that no new privatisation had been done during the current fiscal year, he said.

Business Recorder [Pakistan's First Financial Daily]

 

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Road, rail networks being expanded for better trade: Musharraf ​

ISLAMABAD (December 14 2007): President Pervez Musharraf, emphasising the importance of communication network in national economic development, said on Thursday that a comprehensive plan was underway to provide efficient inter-country and trade linkages with regional countries.

Giving details of the communication infrastructure development projects on a local channel, the president said the North-South road and rail infrastructure was being developed at a fast pace and several projects would be completed in three to four years.

"The communication sector is vital for country's economic progress, development and improved market mechanism," he said and pointed that National Highway Authority was working on several major projects worth Rs 175 billion.

He said with a vibrant economy today the Public Sector Development Programme has risen from a meagre Rs 80 billion in the 90s, to a whooping Rs 520 billion, providing more funds for vital projects. The president mentioned Pakistan's strategic location in the centre of Gulf Central Asian Republics, the shortest route for China's access to the Gulf and India for trade and energy from the Central Asian Republics.

"Pakistan is a trade and energy corridor of this whole region," the president said. He mentioned about the progress on the RCD highway, linking M-1 to Torkham and Jalalabad in Afghanistan, besides the extension of Makran highway linking Gwadar to Iran.

President Musharraf said Pakistan was moving ahead under a comprehensive strategy of expanding its road and rail network. He said the Grand Trunk road, the Indus Highway the Motorways will provide efficient north-south linkage. He however mentioned the weakness in the East-West linkages and said several projects were being implemented to create new links between Balochistan and other provinces and mentioned the progress on the Quetta-Loralai-Multan road and Quetta-Zhob-D I Khan roads.

President Musharraf said the government was concentrating more on the less developed areas and emphasised that its development budget for Balochistan was far more than that of Punjab. He also pointed several farm-to-market roads completed recently were providing quicker mode of transport and yielding better profits for the farmers. He regretted the poor strategic vision of the governments in the past and said adequate resources have now been allocated to undo the neglects of the past.

President Musharraf said Gwadar was a strategic port and was being developed as a major container terminal. He said the 950-km long Gwadar-Turbat-Ratodero would link the port to the Indus Highway, while the Makran Coastal highway already links with Karachi.

Mentioning the rich tourism potential of country's scenic northern areas, the President said several new road links were being carved out of the treacherous mountains to open up remote areas and increase tourism in the country, a sector that has been ignored for decades.

He said the funds for the development of northern areas has risen by 1500 percent to Rs 7.5 billion from Rs 0.5 billion in five years. The president said a road over the Babusar pass will link the Kaghan valley with the Karakoram Highway, while the Chitral valley would remain open around the year with the completion of the Lowari tunnel while also connecting it with Gilgit through the Shandur pass.

He said Gilgit and Skardu were being connected through another road passing through Astore. The president said the NHA was constructing bypass roads for all major cities including Karachi, Lahore, Peshawar, Rawalpindi and working on eight bridges over the Indus river.

President Musharraf also pointed at the importance of railways as an efficient and cheap mode of transportation. He said in the past few years the Pakistan Railways has improved significantly, with several new trains that were transporting people and cargo swiftly.

He however said there was still room for improvement as this vital sector was neglected in the past and said 1500 wagons and 150 locomotives were added to the fleet. The president said work on the new airports at Islamabad, Gwadar and Skardu was underway.

The president to a question agreed that there was a need for more improvement of inter city roads and said the provincial and district governments need to look into this important aspect and address the complaints of the people.

Business Recorder [Pakistan's First Financial Daily]

 

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Government offers skilled manpower to Brunei ​

ISLAMABAD (December 14 2007): Caretaker Minister for Labour, Manpower and Overseas Pakistanis Nisar Ahmed Ghuman on Thursday offered Brunei Darussalam for the export of professionals and skilled workers from Pakistan.

Talking to the High Commissioner of Brunei Darussalam, Pehin Colonel Abdul Jalil Ahmad (retd) here, the minister said that "Pakistan has sufficient doctors, paramedics, engineers, teachers, IT specialists, skilled and semi-skilled workforce and farmers."

Pakistan can also provide trained workers for services sector, he added. Managing Director, Overseas Employment Corporation (OEC), S M Janaid was also present in the meeting. The minister assured the High Commissioner that Pakistan has introduced computerised identity card and Machine Readable passport to check the persons involved in any crime.

He said Pakistan has been providing skilled persons having good character to various countries of the world particularly Middle East and Gulf states. He hoped that the bilateral relations between Pakistan and Brunei would grow in future.

Business Recorder [Pakistan's First Financial Daily]

 

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SNGPL to invest over Rs 50 billion in five years ​

ISLAMABAD (December 14 2007): The Sui Northern Gas Pipeline Limited (SNGPL) has finalised a plan to inject Rs 10 to Rs 12 billion annually in the system over the next five years to expand the base and improve the services. This was stated by SNGPL Managing Director Abdul Rashid Lon while talking to a private TV channel.

He said that 24 inches pipeline was being replaced with 36 inches from Multan to Sahiwal at a cost of Rs 12 billion to meet the needs of power houses and industrial areas near Lahore. Moreover, Kohat to Peshawar pipeline of 24 inches would be completed in June 2008 at a cost of Rs 3 billion.

He said currently 20 companies, including locals are busy in exploring gas and oil all over the country. The country has resources of around 33 trillion cubic feet of gas sufficient for next 23 years. The biggest reserve of around 10.3 trillion cubic feet gas is at Sui (Balochistan).

In Gurgery field located at Karak (NWFP), the reserves are also significant perhaps second largest after Sui, he added. Efforts are under way to provide maximum population the gas facility. So far, only 23 percent population was enjoying the facility.

Regarding mushroom growth of compressed natural gas (CNG) stations, he said the government was considering restricting it. In future, gas would be provided to CNG stations in areas where pipeline of six inches passes. The SNGPL has devised a plan to gradually reduce line losses up to 6 percent. Whereas Ogra has given the target to restrict the line losses to 5.4 percent. Last year, the company's line losses were 6.7 percent, he said.

About Iran-Pakistan-India (IPI) gas pipeline project, he said price mechanism has already been fixed. He said SNGPL has decided to urge domestic consumers to ensure judicious use of gas aimed at ensuring maximum supply of gas to industries. Domestic consumers have been urged to avoid or restrict use of gas heaters and geysers.

The people should use gas only for cooking purposes and conserve this precious national asset. Responding to a question, he said the Company was self-sufficient and meeting its expenditures by generating resources. It has not borrowed a single penny from the World Bank for the last six years. It has invested about $600 million through its own resources and local borrowing.

Business Recorder [Pakistan's First Financial Daily]

 

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Fierce competition with neighbours ​

Pakistan’s exportsto Japan falling

Saturday, December 15, 2007
By Mehtab Haider

ISLAMABAD: Pakistan’s exports to Japan have been on the decline owing to stiff competition from neighbouring countries especially China, as exports of Pak made-ups stood at $208 million in 2006 compared to $650 million in 1991.

The bilateral trade between Pakistan and Japan is heavily in favour of Tokyo and the gap is widening every year. Japan’s exports to Pakistan were $1.76 billion during 2006 against Islamabad’s exports of only $208 million in the same period.

Tokyo’s exports witnessed a three-time increase in the last few years as its exports went up to $1.76 billion in 2006 against $501 million in 2001. Japanese Embassy’s head of economic and development section, Shu Nakagawa, in an exclusive interview with The News said that overall trade volume has been increasing between the two nations since the 1950s.

The major items of Japan’s exports to Pakistan were automobiles, engineering goods, chemicals, metal related products, clothes etc.

The share of transport machinery in Japan’s exports to Pakistan stands at 40 per cent, he added. Pakistan’s exports, he said, are mainly relied upon textile with share of 37 per cent, oil and oil products 32 per cent and the remaining share will consist of food stuff and chemicals.

“The tough competition posed by China is resulting into creating difficult for Islamabad’s made-ups to boost its exports,” he said and added Pakistani exporters must focus on quality and pricing for penetrating into Tokyo’s markets.

Nakagawa was of the view that there was huge potential for increasing Japanese investments into Pakistan with large population of 160 million. Suzuki, Honda and other automobile companies have invested in Pakistan, which are renowned for providing quality products in the market, he added.

Japan’s investors, he said, have invested $160 million during 2004 to 2006 period. The Foreign Direct Investment (FDI) from Japan stood at $64 million during the last fiscal year 2006-07.

Japan had invested over one billion dollars in many parts of the world during the last year, he said and added Pakistan’s share in such a huge pie could be increased manifold. He said the major investment has been done in automobile sector during the previous years and a company YKK made investment in Pakistan during the fiscal year 2006-07.

Answering a query regarding Official Development Assistance (ODA) being provided by Japan to Pakistan for economic cooperation, he said that Tokyo was set to provide approximately $400 million to Islamabad during the current fiscal year 2007-08.

He said Japan wants to see utilization of its assistance efficiently, properly and fairly for all economic sectors. The main areas of economic assistance, he said, would be social sectors including health and education, infrastructure, regional development and assisting people at gross roots level.

Dwelling upon the existing economic assistance for Pakistan, Japan’s head of economic and development section said that Tokyo provided $600 million for construction of Indus Highway and almost 90 per cent amount of the committed assistance had already been provided to Pakistan.

For Kohat Tunnel, he said, Japan had provided $100 million for its construction. Recently the Japan government has provided $4 million for polio eradication, he maintained. He said that the government provided assistance to Pakistan in shape of project loans; grant aid, technical assistance under the umbrella of economic cooperation.

Usually, Japan does not provide budgetary support to the recipient country through ODA. In 2005, he said Japan provided Rs10 billion in shape of economic assistance, grant aid Rs5 billion and another Rs13 billion. The ODA stood at Rs20 billion in 1997 which reduced substantially in 1998 when Pakistan opted to go for nuclear explosion in a tit for tat with its neighboring India.

However, in the aftermath of 9/11 scenario in 2001, he said Japan decided to resume Islamabad’s assistance through ODA when the Musharraf government decided to stand with USA in its war against terrorism.

Fierce competition with neighbours

 

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Govt urged to bridge revenue gap ​

Saturday, December 15, 2007

LAHORE: Economists have advised the government to take immediate steps to fill the revenue gap caused by freezing of petroleum products’ prices as inaction in this regard is creating distortion in economy.

They said instead of taking measures to widen its revenue base the caretaker government had temporarily eased the pressure on its finances by arranging payment of Rs20 billion to the oil marketing companies.

Economic experts in fact expressed concern over huge liabilities of Rs100 billion the government had accumulated to keep the prices of petroleum products unchanged. They said the petrol price stood at Rs57.80 per litre when global crude oil rates hovered around $65 to $70 per barrel. Then the petroleum rates were reduced under public pressure to the current level when international crude oil prices went down to below $60 per barrel.

But now, they said, crude oil prices ranged from $90 to $100 per barrel, but the government had not even raised the domestic petrol price to Rs57.80 per litre. “High petroleum prices are a global reality. The only thing that the government can do in this regard is to abolish all petroleum levies. But even then the rates would have to be increased,” an economist said.

The economists said a better alternative for keeping petroleum products’ prices stable was to generate matching revenues from other avenues. Tax-to-GDP ratio in Pakistan was below 10 per cent, the lowest among all economies of Pakistan’s size, they said, adding the ratio was 13.5 per cent when the Nawaz government was ousted in 1999.

The economists suggested that an increase of one per cent in the tax-to-GDP ratio would almost wipe out Rs100 billion payments that the government had to make to the oil marketing companies for keeping the petroleum products’ prices stable.

Total gross domestic product (GDP) of Pakistan, according to Finance Minister Dr Salman Shah, stands at $160 billion. One per cent increase in the tax-to-GDP ratio would fetch the government $1.6 billion, equivalent to Rs90 billion at current dollar rate, they pointed out.

However, the economists warned that keeping petrol prices pegged without enhancing revenues from other sources would widen the budget deficit. That would spark more inflationary pressures than increase in petroleum prices.

They said deficit financing created distortion in economy similar to the one witnessed in 1999 when the military took over power from Nawaz Sharif. They said the macro-economic stability achieved during the past eight years was under pressure as yawning trade deficit coupled with huge budget deficit would have a big inflationary impact.

The central bank would not be able to control inflation if the government deviated from parameters set in the last budget, they warned and said the weakening macro-economic stability was eroding competitiveness of the industries.

The experts were surprised over indecision or hesitance on the part of caretaker government to take necessary corrective but painful measures. They said the caretakers were supposed to be apolitical who could take steps that the political governments avoided due to fear of political backlash.

Govt urged to bridge revenue gap

 

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‘Over 212,000 jobs generated in telecom sector’ ​

Saturday, December 15, 2007

ISLAMABAD: Over 212,000 employment opportunities have been generated countrywide in the telecom sector only by the cellular mobile operators.

A study conducted by Deloitte this year revealed that over one million job opportunities have been created since the liberalisation of the sector in 2003. It said that cellular operators alone had over 9,500 employees which was 20 per cent higher than the last year.

The telecom sector (mobile and fixed line) has about 84,000 employees directly on their payroll in 2007. However, the sectors has vast linkages with all other sectors where it was producing large employment opportunities such as civil work for installation of towers, support service providers, Airtime, SIM and handset retailers, jobs in fixed line and network equipment suppliers.

Retailers related to the telecom sector have generated about 300,000 jobs opportunities which include direct, indirect and induced employments in linked sectors of economy. A PTA official said the sector has undergone a considerable transformation following the award of two new mobile licenses FLL, WLL and the privatisation of PTCL. He said that stiff competition among operators to grab market share has compelled operators to roll out their respective infrastructure rapidly which has created huge employment opportunities.

‘Over 212,000 jobs generated in telecom sector’

 

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Shortage of trucks hits exports​

KARACHI, Dec 14: Shortage of trucks and lorries, which are mostly engaged in transporting sacrificial animals, is jeopardising export of many seasonal produces. The worst affected are exporters dealing in rice, molasses, fresh fruits and vegetables as they regularly need trucks and bowsers for the haulage from hinterland to port city of Karachi.

Due to pressing demand, the transporters have doubled their charges which is also causing anxiety among exporters who in order to meet their export commitments are bound to bear extra cost.

There is a shortage of all sorts of transport, including trucks, lorries and bowsers.

Major crops of the country are harvested in Rabi season which also include cotton, rice, sugarcane and there is always great demand for trucks and lorries, as well as bowsers to carry these produces from farm to processing mills and then to domestic markets as well as to port city for export markets.However, as Ziqa’ad and Zilhaj have fallen at such a time when these major crops are also being harvested and have to be transported from farm to processing units, like ginneries, sugar mills and rice processing units and then onward to market places, but transporters are engaged in carrying animals to cities from rural areas. Consequently, export trade of such produce has been affected badly and many exporters are faced with cancellation of their export contracts on expiry of their Letters of Credit (L/Cs).

Another major item of the season is kinoo which is largely exported to Middle East and European market and earns a great deal of foreign exchange.

The rice crop, whose harvesting also started about two months back is in full bloom because paddy is being transported from fields to processing mills and then to market places for domestic consumption. However, larger quantities of Irri-6 and Basmati have to be exported.

But in the absence of adequate transport facilities, many small and medium-sized rice exporters are in a quandary as they could not get any transport to haulage their produce from interior of Sindh and Punjab to port city of Karachi.

It is being feared many exporters may lose their export contracts if no immediate corrective measures are taken.

Another compelling pressure on transport industry due to winter season is the great demand for bowsers which are mostly used for carrying furnace oil from Karachi to thermal power stations located in different parts of the country.

This creates shortage of bowsers for carrying molasses and alcohol from interior of NWFP, Punjab and Sindh.

During initial crushing season which normally starts in the month of November, there is a great demand from foreign buyers for molasses because of being of prime quality.

However, due to shortage of bowsers, the haulage of molasses and alcohol from sugar mills and distilleries has slowed down and many exporters have to pay demurrage of around $20,000 per day for keeping a vessel at port over and above its normal waiting time.

A spokesman for transporters Tariq Afridi told Dawn that presently around 600 bowsers are detained at the thermal power station located at Muzaffarghar because one of the contracting companies on charges of adulteration is not allowing them to discharge their furnace oil.

He further said this was not only causing shortage of bowsers in the market but was also creating harassment as owners are reluctant to enter into furnace oil haulage contract fearing heavy penalties and long delays in unloading of furnace oil.

Mr Afridi said those who give illegal gratification to the management of the thermal power station get away with everything and are accommodated at the earliest for unloading.

Though cotton crop has mostly found its way to spinners and the export market, a fairly a large quantity of phutti is yet to arrive to ginneries and from there to spinning industry.

Spinners also complain that due to shortage of trucks and lorries and high charges being demand, their stocks of cotton are dwindling fast.

Zulfikar Thaver, president Union of Small and Medium Enterprises (Unisame), told Dawn that the government should come out with permanent solution for such a situation, and suggested that the National Logistic Cell (NLC) would be the best to fill in the gap for a short period and help country’s export trade from being ruined or damaged.

Shortage of trucks hits exports -DAWN - Business; December 15, 2007

 

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US aid to Pakistan to become conditional, but no financial cuts​

WASHINGTON: US Congress is almost certain to place some conditions on assistance to Pakistan but without slashing any of the funding.

The conditions will be meant to ensure that Pakistan plays its assigned and promised role in the US-led war against terrorism. The November 3 emergency has loomed large on the Capitol Hill, but since it is going to be lifted in the next 24 hours, it is not going to be the stumbling block it would have been otherwise. The return of democracy and free and fair elections will also figure among the conditions imposed.

Congress is expected to require the administration to formally certify that Pakistan is doing its bit and that US assistance is being used for the purpose for which it is being extended.

All this will be finalised before Congress goes into its Christmas recess next week. In practical terms, the congressional move will not make any difference to Pakistan. As long as relations between the two countries remain stable, the administration will continue to supply the certification required of it, as in the past.

However, if the relationship takes a nosedive or the US no longer feels it needs Pakistan to the extent that it does today, the guillotine will come down, as has happened more than once in the past.

Daily Times - Leading News Resource of Pakistan

 

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National Trade corridor to cost $5.36 billion ​

FAISALABAD (December 15 2007): The total investment cost of National Trade Corridor (NTC) highway investment plan for 2007-2014 is estimated at $5.36 billion, while Asian Development Bank (ADB) has announced that the maximum financing amount of $900 million will be available under Multitranche Financing Facility (MFF) for the programme.

According to final project updates of ADB released here on Friday the MFF comprises $890 million from OCR and $10 million equivalent from ADF resources. ADB observed that the programme is derived from Pakistan's long-term transportation strategy and is an integral part of the NTCIP.

The impact of the program will be trade growth and the outcome will be a more efficient NTC highway network and it will improve Pakistan's competitiveness and link the country more effectively to the outside world and also provide trade routes for others in the region.

The MFF is designed to finance part of the NTC highway investment plan through individual loans. The first tranche will be funded from OCR resources, and the ADF loan will also be provided to address non physical investment needs and the support component. Financing from OCR resources will be subject to interest to be determined in accordance with ADB's London interbank offered rate (LIBOR)-based lending facility.

ADB report stated that Government of Pakistan will make the proceeds of the loans available to NHA according to terms and conditions satisfactory to ADB. According to ADB Project Update Report, under the strategic framework "Vision 2030" the Pakistan Government plans to raise the trade to gross domestic product (GDP) ratio from 30 per cent to about 60 per cent.

This would be equivalent to $600 billion by 2030. To achieve this target, key actions under the strategy will be improving trade competitiveness and export diversification. Logistics are currently seen as a key constraint to raising competitiveness and attracting private sector investment.

They are also a bottleneck to increasing productivity as well as to deepening and diversifying the industrial base, both of which are necessary to provide sustainable jobs for a growing population. The National Highway Authority (NHA) is responsible for the operation, maintenance, and development of the national highway system

As a core component of NTCIP, NHA has developed the National Trade Corridor highway investment plan (NTC highway investment plan). It covers the corridor backbone from Peshawar to Karachi and the outlying links that connect Pakistan to China and Gwadar Port in Balochistan.

The initiative includes not only new road construction but also the improvement of over 3,500 km of roads, national highways, expressways, and motorways. The Asian Development Bank (ADB) is an active partner of the Government in the road sector and is involved in policy formulation including the National Transport Policy.

Business Recorder [Pakistan's First Financial Daily]

 

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Sale of all thermal, hydel generation facilities planned ​

ISLAMABAD (December 15 2007): The federal government is planning to sell all the existing thermal power plants and hydel generation facilities of Water and Power Development Authority (Wapda), official sources told Business Recorder here on Friday.

The utility submitted this information to the President Secretariat in response to a letter on the subject 'private power concept to solve electricity problem'.

"Transformation of the power sector into a privatised, competitive electricity industry is an evolutionary process that occurs over a certain period of time. Eventually, GoP would privatise all of Wapda's existing thermal generation and mini hydel generation facilities," the sources added.

The sources said that Wapda's strategic plan for the privatisation of power sector, prepared in 1992 to meet the cornerstone goal, power sector was being reformed/ restructured and was presently in a transitional phase. Previously there existed two vertically integrated public sector power utilities, Wapda and KESC.

KESC has already been privatised whereas the restructuring/ privatisation of Wapda was underway. By virtue of the plan, Wapda has been unbundled into generation, distribution and transmission companies.

Through implementation of the plan, GoP aims at providing for the greatest possible role for the private sector and the movement over time towards full competitive market regime, the sources quoted Wapda as conveying to the President secretariat.

"The ultimate of the power sector is envisaged to be such that a number of private generation companies would operate under free market competition," Wapda further elaborated to the presidency.

The sources said that all new thermal generation projects would be solicited through competitive process, offering power purchase contracts that would ultimately be transferred to the distribution companies, retailers or final consumers as they develop the capability to handle such contracts.

According to sources, Presidency has been apprised of Pakistan's power sector privatisation and was presently undergoing 'single buyer' phase as such the proposal like competitive market could not be implemented.

Nevertheless, GoP and its concerned entities like Water and Power ministry, PPIB and Wapda etc were fully committed to reach the stage of competitive market regime as soon as possible, where consumers would have the option of procuring economical electricity from the provided of their own choice, the sources quoted Wapda as promising presidency.

Business Recorder [Pakistan's First Financial Daily]

 

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US energy firm gets exploration licence​

ISLAMABAD, Dec 15: The government on Saturday granted an exploration licence to Hydcarbex Energy Inc. of USA over block no. 2667-8, covering an area of 1,229 sq km, located in Dadu and Nawabshah districts, Sindh.The US firm would invest $6.30 million in the block to carry out geo/technical studies, acquisition, processing and drilling three exploratory wells during next three years.

Hycarbex is engaged in petroleum exploration activities in Pakistan since 1995. As operator of Yasin Block in Sindh with an investment of over $25m, it has carried out extensive seismic surveys and has established a data bank comprising about 700, 2d line km.

Besides, seismic work, it has drilled six exploratory wells and has recently made a gas discovery of commercial standing at Haseeb structure in the block.

The licence and the petroleum concession agreement were signed by Secretary Petroleum and Natural Resources Farrakh Qayyum and Director General Petroleum Concessions Mohammad Naeem Malik and President and Chief Executive Officer of Hycarbex Inc Dr Iftikhar Zahid.

Federal Minister for Petroleum and Natural Resources Absan Ullah Khan attended the signing ceremony.

US energy firm gets exploration licence -DAWN - Business; December 16, 2007

 

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Egypt keen to boost trade with Pakistan​

ISLAMABAD, Dec 15: Acting Deputy Head of Mission, Embassy of Egypt, Ayman Tharwaf said on Saturday that his country had great potential in LPG, pharmaceutical, fertilisers and petroleum products and was keen to enhance trade links with Pakistan.

Talking to President, Islamabad Chamber of Commerce and Industry (ICCI), Nasir Khan, he said that the current trade volume between Pakistan and Egypt was very low and it should be enhanced through active involvement of the chambers of commerce of the two countries.

He said that private sectors of both the countries should come forward for joint ventures and cooperation to help boost the trade activities. He said that Egypt was at number six in production of LPG and Pakistan could import it on comparative rates.

He also invited the ICCI delegation for attending trade expo, to be held in Cairo in March, next year.

President of ICCI, while assuring full cooperation for the promotion of two-way trade, said that Egyptian companies should take advantage of lucrative investment opportunities in Pakistan.

Egypt keen to boost trade with Pakistan -DAWN - Business; December 16, 2007

 

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Making exports feasible: Textile sector pleads for reduction in cost of production​

By Tanveer Ahmed

KARACHI: The textile sector has geared up its efforts to secure immediate relief from the government as in a recent move it directly pleaded before the highest office of the government for remedial steps for bringing down the cost of production to make the products competitive for export purposes.

"If the government is unable to give something substantive for the sector, then an honourable exit strategy for companies without dragging them through Courts in Civil and Criminal cases be provided," All Pakistan Textile Association (APTA), mostly comprising spinners asserted in a letter to Caretaker Prime Minister Mohammadmian Soomro.

Drawing a terrible scenario for the country's export sector because of struggling textile products in case government did not come up with relief package for the sector, the association said that country's textile business in general and the textile and spinning sectors in particular are undergoing severe crisis.

"Our industry had not been able to convince the previous government that the crisis is growing and causing, possibly irreversible damage, which could render the closed and sick industry un-revivable," it pointed out.

The disturbing trend of decreasing textile exports, drastic reduction in imports of textile machinery, decrease in private sector industrial borrowing and increasing trend of NPL's, it added are all providing clear proof of the negative trend.

For the last two years our textile manufacturing industry, especially the spinning sector, has been in deep crisis, due to the disproportionate increases in our costs of production. Gas prices have increased by 38 percent in two years and a further 6.38 percent has been approved by OGRA. It includes electricity cost increased recently by 10 percent with constant load shedding and banks have raised mark-up rates to 14 percent, an increase of 300 percent since 2004.

On the other hand, our regional competitors China, India and Bangladesh have given massive subsidies to their industries besides getting tariff incentives in the form of FTA's and LDC status, APTA mentioned.

It deplored that the textile spinning sector has been labeled as inefficient by the government, whereas international consultants, hired by the Ministry of Commerce, have specifically stated that Pakistan's spinning sector is one of the better equipped and efficient sector among our neighbouring countries. However, inconsistent government policies and related inefficiencies are the main issues, which need to be looked into and corrected, the association stated.

It feared that export target of $19.2 billion set for the current fiscal year is unrealistic in the present circumstances when textile exports are meeting stiff resistances from its competitors due to high prices of our products.

Listing a number of demands, textile body called for bringing down the mark up rates to 7.5 percent for all outstanding short and long-term loans with a payment period of seven years as this alone is making a bigger part in overall cost of production.

Also, removal of 6.5 percent on import of polyester fibre for sufficient availability of raw materials is also demanded.

"Exports are critical and are the only reliable source to fund the country's foreign exchange requirements besides workers remittances. Mass closure of this industry will result in mass unemployment besides retarding exports," the letter concluded.

Daily Times - Leading News Resource of Pakistan

 

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WAPDA, ALEL sign PPA for Lakhra Power Plant​

LAHORE: Associated Lakhra Energy Limited (ALEL) and National Transmission and Dispatch Company Limited (NTDC) signed the Power Purchase Agreement (PPA) for the 3x50MW coal-fired Lakhra Power Plant here on Saturday.

The plant, set up by WAPDA in 1996 is Pakistan’s only coal-fired power plant and is currently producing about 30MW of power from Lakhra coal. ALEL had been awarded the project through a competitive bidding process and has undertaken to rehabilitate the plant and ramp up production to at least 102MW within nine months. ALEL has been leased out the plant for 20 years.

Speaking at the signing ceremony, Federal Minister for Water and Power Tariq Hameed stressed the need for Pakistan to broaden its energy mix and capitalise on coal for cheap power generation.

“This is the first time we are leasing out a power plant to the private sector and I am very pleased that this project will be completed and brought to the highest international standards within 2008,” he said.

Managing Director PEPCO Munawar B. Ahmad said that while 74 percent of China’s, 55 percent of India’s and 22 percent of America’s energy mix are coal-based, in Pakistan coal-based power generation represents less than 0.5 percent of the energy mix. “We went terribly wrong in planning and implementing coal-based power and the projects such as this one are essential for Pakistan,” he said adding that Pakistan has the second largest reserves of coal in the world that were enough to last us 500 years.

ALEL Chairman Iqbal Z Ahmed said the coal-based power generation is essential for Pakistan to ensure quick and affordable electricity. “The successful rehabilitation of the Lakhra Power Plant will encourage local and foreign investors to look to coal for power generations,” he said.

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