Pakistan Economy - News & Updates - Archive

[Neo]

Three-hour loadshedding from today: minister​

LAHORE, Jan 6: Power load-shedding will be reduced to three hours every day by Monday evening with power outages lasting half an hour every four hours, says caretaker minister for water and power Tariq Hameed.

“Oil supply to Kapco has been restored and thermal power plants in Lahore and Faisalabad will be functional by Monday morning and by the evening the situation will considerably normalise,” Mr Hameed told media personnel after briefing caretaker Prime Minister Mohammadmian Somroo about the power crisis on Sunday.

“Kapco generates 1,450 megawatts of electricity while thermal plants near Lahore and at Faisalabad produce 150MW and 100MW, respectively. Wapda officials are working on the Balochistan towers (that were blown up a few days ago). By Jan 12, some 300MW power could be restored,” said Mr Hameed.

The Indus River System Authority (Irsa) had decided to increase releases from water reservoirs for power generation from Jan 25 that would also improve the situation.

“Twelve hydroelectric projects with 1,700MW capacity are on the drawing board. The next government will decide their fates,” said Mr Hameed, who was the chairman of the Water and Power Authority (Wapda) during the last government.

Three-hour loadshedding from today: minister -DAWN - Top Stories; January 07, 2008

 

[Neo]

Pakistan will hit economic goals, says minister​

* Shah says consensus among political parties can help in achieving all targets

ISLAMABAD: Pakistan will still hit its economic targets this year despite a wave of unrest and turmoil following the assassination of former premier Benazir Bhutto, caretaker Finance Minister Salman Shah told AFP on Sunday.

Pakistan’s central bank, in its first quarter report released on Saturday, said economic growth “is expected to remain below the annual target of 7.2 percent”.

Shah, however, said the bank had pushed its growth estimates down and he remained sure original targets could be reached.

“Pakistan can achieve the 7.2 percent economic growth target if elections are held in a smooth manner,” he said.

Pakistan’s financial year begins on July 1, while elections are scheduled for February 18.

“If there is any risk to the economy, it is the political risk,” Shah said.

Consensus can help: “If there is reconciliation and consensus on promoting the economy among political parties, we can achieve all economic targets,” he added. An increase in global oil prices up to $100 per barrel, which has jacked up costs in Pakistan, has not yet been passed on to consumers but the government will be unable to maintain the current price indefinitely.

“We are giving a subsidy of Rs 14 billion on oil prices, but we will now have to gradually pass the cost on to the consumers,” Shah said. afp

Daily Times - Leading News Resource of Pakistan

 

[Neo]

‘Pakistan, Iran to finalise gas pipeline project by 25th’​

* Iranian envoy says the two countries cementing economic ties

ISLAMABAD: Pakistan and Iran are set to finalise an agreement on a multi-billion gas pipeline project by January 25 this year, Iranian Ambassador to Pakistan Mashallah Shakeri said on Sunday.

“The Iran-Pakistan-India (IPI) gas pipeline project is one of the most important economic projects in the region, which will bring extensive benefits for the three countries,” the envoy said in an interview.

He said the measures taken by Pakistan and Iran showed the two countries’ firm will for executing the project. He said Iran had started executing the project by laying the pipeline from its gas reserves to its border with Pakistan. He hoped that India would also join the project and the project would be pursued trilaterally.

Answering a question about Iran’s apprehensions on the political unrest in Pakistan, he said, “Iran wants a peaceful, developed, independent and stable Pakistan, and it will leave no stone unturned to extend every essential assistance that its brotherly neighbouring country needs.” He hoped that the current political crisis in Pakistan would soon be resolved and the country be put on the track of progress and prosperity.

Economic ties: Talking about the economic relations between Pakistan and Iran, the Iranian diplomat said the two countries were enhancing their economic relations.

He said both countries had increased their target of the volume of commercial exchanges to $1 billion in one year.

He was optimistic that the official trade volume — which now stands at $ 650 million — would soon reach the newly set target. Mashallah Shakeri said Iran was pursuing multilateral talks with the international community for its “peaceful nuclear programme”.

He said his country was cooperating with international groups, including the International Atomic Energy Agency, on its nuclear programme, by going “even beyond its legal obligations”.

He said Iran would continue the dialogue process with the international community for confidence building and to allay their concerns on Iran’s nuclear programme. He said the international groups had welcomed Iran’s cooperation and transparency.

He said the National Intelligence Estimate report released in the US last year confirmed that Iran’s nuclear programme was for peaceful purposes. nni

Daily Times - Leading News Resource of Pakistan

 

[solid snake]

I am very concerned about the economy. Especially the sliding Rupee since it directly affects me.

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Economy in trouble​

THE State Bank’s First Quarterly Report for fiscal year 2008 underscores the shifting of the economy into a slower gear. This is perhaps the first public admission by a government agency that all is not well with the national economy — something independent experts have emphasised for many months now. The document will come as a rude shock to the country’s economic managers who would have us believe that the economy is on the path of sustainable growth. True, we should not sound alarmist but neither must we forget that the slowdown could tip the economy into recession if the current account deficit becomes unmanageable, inflation gets out of hand and investors’ and consumers’ confidence hits rock bottom. The forecast of a global economic downturn on the back of an international credit crunch and high oil prices, and the possibility of serious political turmoil at home, could complicate matters. The ongoing energy crisis, especially the power cuts, could also paralyse the economy.

The report says the economy did “reasonably well” in the first quarter but admits that the risks are increasing because of an unfavourable global and domestic economic environment. The nation will miss its GDP growth target of 7.2 per cent. The current account deficit, which is predicted to expand to 5.2 per cent of GDP from 4.9 per cent last year on account of high crude prices and a slowdown in exports, is the major threat to economic stability. Foreign exchange reserves are under pressure and depleting. The rupee is weakening against the dollar. The fiscal imbalance has led to government borrowings from the central bank rising to over Rs191bn between July and November, exceeding both quarterly and annual ceilings as well as the preceding year’s trend and fuelling inflationary pressures. Core inflation will be to the order of 7.5 per cent against the target of 6.5 per cent. It will be impossible to meet the agricultural growth target of 4.8 per cent because of the poor performance of rice and cotton crops and fears of reduction in wheat output. Large-scale manufacturing has decelerated to 6.9 per cent, the lowest growth recorded since 2003. A mere 0.5 per cent expansion in textile exports against 2.5 per cent a year earlier represents a decline in international demand. Production of automobiles slowed down to five per cent from 11 per cent last year, signifying weakening consumer demand.

The housing sector has performed well, the report says. For how long though? The economy’s weaknesses are so overwhelming that one tends to overlook its few strong points. The report itself stresses the threat of “renewed macroeconomic complications, after five years of good performance, would be heightened if prompt actions are not taken to correct the recent drift in the fiscal indicators”. Given the government’s limited capacity and little room available to it to manoeuvre and fix the fiscal imbalances, we don’t yet know how painful the new period of economic downturn will prove. Nor do we know how long it might last. What we do know is that it is time to wake up and take stock of economic policies.

DAWN - Editorial; January 08, 2008

 

[Neo]

I too fear that Rupee will be devalued soon.

 

[Neo]

Activity shifts from manufacturing to trading ​

High rate of return major attraction

Tuesday, January 08, 2008

LAHORE: Trading activity won a definite edge over manufacturing in calendar year 2007, which was evident from the huge gap between Pakistan’s import of goods and services compared with its exports.

The resources have been transferred from manufacturing to trading mainly due to the government’s failure to properly tax the traders and keep a check on hoarding and black marketing. High rate of return on investment in trading compared with high cost and less return in manufacturing is slowly drifting the economy away from production to consumption and the year 2007 strengthened that trend.

Federal Board of Revenue Chairman Abdullah Yousuf has admitted on various occasions that the share of traders in Pakistan’s gross domestic product (GDP) is 16 per cent but their contribution to the tax revenue is only four per cent. Despite admitting the fact in early June 2007, the FBR has reduced the tax rate for traders by 100 per cent, giving a further incentive to the investors to go for trade.

Another fact that Abdullah Yousuf has failed to point out is that the traders control the entire non-documented sector of the economy. The World Bank, a decade ago, estimated that around 50 per cent of Pakistan’s economy was undocumented. The quantum of informal economy, if not increased, has also not declined in the last decade, which means the traders pay peanuts compared to the business they conduct in a year.

The most worrying thing which gained strength in the previous calendar year was the indulgence of large traders in hoarding of edible commodities. A few years ago, small village ‘artis’ or commodity traders in towns had been involved in hoarding of small stocks of commodities like wheat, rice or sugar. However, the trend has transformed into hoarding on a massive scale adding more commodities like potatoes, onions, pulses, etc to the list. The food inflation remained very high in 2007 due to that practice, which created artificial shortage of essential commodities.

The economic power of the hoarders could be judged from the fact that according to government figures 2.2 million tonnes of wheat was hoarded this year. Independent experts put the figure at a much higher level than government estimates. The cost of 2.2 million tonnes of wheat at government support price comes to over Rs24 billion. At current rate, the price of hoarded wheat jumps to Rs45 to Rs48 billion.

Trade and business are attracted by a huge domestic market of over 160 million people and they sell goods procured locally from both formal and informal sectors. They also import and sell foreign goods ranging from toys, processed food and cosmetics to heavy machines. In many cases, they resort to under-invoicing in the value of imported goods in a bid to evade import duty. They also misdeclare their imports either to pay less or avoid import tariff.

The traders also procure and sell smuggled goods. The goods brought into the country through the above methods can be found in most of the retail outlets of the country.

The imports, particularly made through smuggling, under-invoicing and misdeclaration, have hurt the local manufacturing sector. The local auto-parts’ manufacturers, garment manufacturers, artificial leather producers, toy-makers and many other industries have come under pressure or gone out of production due to this practice.

A few years ago, very few consumers had access to imported toilet soaps, toothpastes, shampoos, shoes and apparel as all these products were manufactured and consumed in the country. But now the share of local products is shrinking and imported varieties compete even with multinational brands in the domestic market both in terms of price and quality.

Pakistan used to produce complete window and split air conditioners locally and the manufacturers imported only the compressor. Now manufacturing has been replaced by assembling as the body, grill and all other parts are imported and then assembled in the country.

In telecommunications, the growth in the sector has made mobile phone accessible for one third of the population. Pakistan now has more cellphones than those in Singapore, Hong Kong and Taiwan combined and is one of the fastest growing mobile phone markets in the world.

However, while the above tiny nations manufacture mobile phones, Pakistan is a net importer of cellphones worth over $1 billion.Though exporters complain that foreign buyers do not come to Pakistan due to security concerns, visits of foreign manufacturers and businessmen trying to market their products in the country have increased.

Similarly, exporters are denied visa more frequently by foreign embassies, but importers get recommendation letters from their foreign suppliers.

Activity shifts from manufacturing to trading

 

[Neo]

Stocks tumble as SBP report stokes fears for economy ​

Tuesday, January 08, 2008

KARACHI: The SBP quarterly report highlighting under performing economy invited fresh offloading from every quarter of investors at the Karachi bourse on Monday.

KSE 100-share Index shed 96.49 points and finished at 14,163.11 points in a range bound session. Its junior partner the 30-Index depicted a bigger loss of 185.73 points and concluded at 16,703.86 points.

“The reason behind witnessing bigger decline in 30-Index than the 100-Index is said to be the correction in heavy weightage banking stocks, which dominate the ruling in the 30-index owing to their bigger share as compare to other sectors,” a leading analyst said.

He added that all the blue chips settled in the negative column except the DG Khan Cement and 30-Index is composed primarily of the blue chips.

Negative signals from SBP report and power, gas and flour shortage depressed stakeholders, said analyst Hasnain Asghar Ali. Banks and energy stocks remained big losers contributing most minus points to the 100 Index. Besides, all the other sectors at KSE came under selling pressure and majority of stocks finished in negative column.

Following the aggressive recovery witnessed in the last two sessions of the last week, the 100-Index opened with extended gains and touched 14,280 points intra day high for a very brief period - adding another 20.40 points from the pre-opening level of 14,259.60.

The index went into the red region in the opening minute and stayed there till the end of session. The index dipped to 14,090.47 points intra-day low losing 189.53 points from the day peak level. Modest buying on the day lowest share price levels, however, invited an upward adjustment in the closing hour.

Analyst Ahsan Mehanti added that the SPB quarterly report on economic performance, highlighting investors concerns over inflation, deficits and export shortfall altogether convinced the jobbers to offload a part of their holdings in hand to remain on safer side.

Secondly, the concerns over media reports on direct intervention of US military inside Pakistan in the name of so called war on terror equally played the important role in depressing investment sentiments as the SBP report did, he further said.

Moreover, technical correction in the international oil prices, which currently stands near $97 per barrel after breaching through $100 mark last week also invited profit booking in the relevant scrips at the local bourse, he added.

Another analyst was of the view that the prevailing law and order situation amid political uncertainty were the root causes of the day declines. The State Bank of Pakistan has also highlighted the political instability as one of the major factor behind the depleting economy, he added.

Upcoming results (likely to stay inline with the market expectations) might inspire fresh buying while improved law and order situation can ensure smooth surge in the share prices, Ali added.

The overall turnover in the ready market declined to 245.216 million shares from 288.081 million shares on previous Friday. The turnover in the future market also declined to 35.365 million shares against 54.198 million shares of previous sessions. Market capitalisation fell by Rs28 billion to sands at Rs4.324 trillion.

The minus signs dominated the board with 235 decliners 107 advancers and 32 scrips that closed unchanged.

Highest volumes were witnessed in TRG Pakistan at 21.987 million closing at Rs13.85 with a loss of 60 paisa, followed by NIB Bank at 21.733 million closing at Rs23.15 with a gain of Rs1.10, Bosicor Pakistan at 19.535 million closing at Rs21 with a gain of 40 paisa, Arif Habib Securities at 13.683 million closing at Rs170.55 with a loss of Rs1.80 and DG Khan Cement at 11.358 million closing at Rs94.45 with a gain of 45 paisa.

Stocks tumble as SBP report stokes fears for economy

 

[Neo]

Airblue growth beats PIA on domestic routes ​

KARACHI: The number of domestic passengers who preferred travelling in private airline Airblue has grown whereas the national flag carrier Pakistan International Airlines (PIA) is losing its popularity, data compiled by the Civil Aviation Authority (CAA) revealed.

According to provisional aviation statistics for the year 2006-07, Airblue carried 1.4 million passengers in 2006-07, up around 7.7 per cent from previous year’s 1.3 million it carried between different cities of Pakistan. The PIA, faced with accumulated losses of more than Rs35 billion, lost domestic market share by 5.7 per cent as it carried five million passengers compared to 5.3 million during the period under review. “Airblue has capitalised on Aero Asia clientele,” said an industry official. “The market lost by Aero Asia in the last couple of years has been taken over by Airblue.”

After more than a decade of successful operations, Aero Asia was barred from flying by the Civil Aviation Authority (CAA) in May last year owing to safety concerns. Aero Asia carried more than one million passengers in fiscal 2004-05 but the number shrank to 756,308 in the following year and dropped to 278,900 in 2006-07. In contrast, Airblue, which started with only 22,320 passengers in 2003-04, carried 1.4 million passengers in the last fiscal year.

“Besides, PIA has suffered from a very bad punctuality record in the last couple of years,” continued the official who requested not to be named. “This irregularity and financial woes of PIA have also worked to the advantage of Airblue.” The private carrier has also emerged as a leader in introducing innovation in the aviation industry of the country. It brought the self check-in facility at its Karachi’s hub of Jinnah International Airport whereby passengers with baggage obtain a boarding card through the touch screen menu without needing to report to the counter.

The concept of booking-first-to-get-the-lowest-fare has also contributed to advance of Airblue in gaining the market share. PIA is now following the suit and has adopted the same strategy. Airblue with its six A320 and A321 aircraft was also able to ride the tide of rising fuel cost, which bankrupted many airlines across the world.

Shahid Khaqan Abbasi, the Chief Executive Officer and the brain behind the success of the private airline is confident that future fuel-related price shocks would be sustained. “We are in a phase of growth,” he told The News. “With aggressive revenue management and increasing the number of passengers we will make through this period.” However, he hinted that few cost elements would be passed on in fares and others would be absorbed through operation of the aircraft on profitable routes.

Around 305,370 passengers travelled by Shaheen Air International (SAI) in 2006-07 as compared to 55,670 in the previous year. On the international front, PIA carried 3.59 million passengers in 2006-07, Airblue 237,170 and SAI 198,067. Except for the flag carrier, the two domestic airlines have registered growth in previous year.

Airblue growth beats PIA on domestic routes

 

[Neo]

Cellular operators invested over $2bn in 2007 ​

Tuesday, January 08, 2008

ISLAMABAD: Mobile cellular operators have made investment worth over $2 billion in 2007, realising huge market potentials in the country, an official of the Pakistan Telecommunication Authority (PTA) said on Monday.

“An exceptionally good response from the market and an ever increasing potential has kept foreign investors still eying for opportunities to invest in Pakistan,” he said.He said China Mobile the largest mobile operator in Asia has entered the mobile market by investing almost 704 million dollars and has bought Paktel Limited.

The official said China Mobile’s takeover of Paktel is a promising move that is believed to bring life back to the company.Similarly, he said, Singtel which had been trying to enter the telecom sector has finally gotten successful by buying 30 per cent shares of Warid Telecom and has invested almost 758 million dollars.

Local operators have also been able to access funds from international capital markets and Mobilink has been fairly successful too in this regard, when the company completed 250 million bond offerings in late 2006.

Other cellular companies have also invested heavily in the right areas and narrowing the gap with market leaders, he said. Telecom companies have invested over 8 billion dollars during the last four years particularly the mobile sector whose investment share accounts for 73 per cent.

It is expected that the trend of investments may continue in the next five years because large potential markets still exist in Pakistan and all operators intend to grab their share. The telecom sector has emerged as the largest recipient of Foreign Direct Investment (FDI) during the last few years. Liberalisation and competition in the sector has compelled many companies to expand their infrastructure across the country.

Cellular operators invested over $2bn in 2007

 

[Neo]

Businessmen resist early closing of markets, shopping centres ​

Tuesday, January 08, 2008

ISLAMABAD: The Islamabad Chamber of Commerce and Industry (ICCI) and the traders’ community of the capital city on Monday requested the authorities not to force traders to close their shops in Islamabad between 6:00pm to 8:30pm.

The ICCI President Ijaz Abbasi, in a meeting with the trader associations’ representatives, said that Islamabad was the city of government servants who always visit markets in the evening for shopping and implementing the closure plan would be ‘unjust’. “The government should not insist closing of shops between 6:00pm to 8:30pm. However, the traders should install energy savers in their business centres to avoid energy wastage.” He added that before taking any decision, the authorities should take the stakeholders into confidence.

About closing of steel mills, Abbasi said that these should not be completely closed but should be notified to stop operation in the peak hours so as to avoid halt in manufacturing and increase in unemployment. In steel mills, on average there are 400 employees and keeping these mills closed would cause more unemployment and ultimately would deteriorate law and order situation, he said.

Furthermore the supply of gas to industry is either under load-shedding coupled with increase in gas tariff by 5 to 10 per cent and or low pressure further the gas supply to textile spinning mills in some areas has also been disconnected. Abbasi said that progress of trade and industry depends on constant supply of electricity; adding, load-shedding is causing loss of billions of rupees to trade and industry.

“The business activities in the whole country have been affected owing to frequent power breakdowns resulting in exhausted work force, damage of machinery, and loss of precious working hours.” He regretted that export orders are being delayed and production capacity was being negatively affected. He added that no doubt, matter of electricity load-shedding is being faced by all segments of the economy of the country; however, the time span of the load-shedding in various electricity distribution companies was discriminatory. It varies not only within the various electricity distribution companies but also varies from location to location as the priorities are being given to posh urban areas of the cities. The continued and unannounced breakdown of electricity harms the public appliances and affects the businessmen, traders and industries badly. Frequent power failures and fluctuating voltage has paralysed the industrial and commercial activities, which lowered the production and increased the cost of business. President ICCI stressed that under such circumstances, the government has to take up a comprehensive package of generating electricity on top priority basis. Construction of big dams like Kalabagh Dam, putting gas turbines, developing solar and wind energy were very essential steps to be taken soon, he stressed.

Businessmen resist early closing of markets, shopping centres

 

[Neo]

Estimates of water shortage revised​

ISLAMABAD, Jan 7: The water shortage for Rabi crops has surged to 28 per cent — from the original 22 per cent — owing to continuous releases for power generation on the government’s directive despite provincial protests that their crop output may be negatively affected.

Indus River System Authority (Irsa) Chairman Bashir Ahmed Dahar told reporters after a meeting of the advisory committee on Monday that overall shortage for the current Rabi season had increased to 28 per cent and Irsa would continue to release 18,000 cusecs of water to overcome the current “national energy crisis” probably until January 26.

He confirmed that provincial water requirements for irrigation and drinking stood at 10,000 cusec and an additional 8,000 cusec per day was being released for power generation. He also conceded that provincial objections to the releases were there but “we received directives to cooperate and give additional water quantities for power generation”.

As a result of these additional releases, the power companies were able to produce about 1200MW of electricity every day, reducing the electricity shortage by similar quantity. He said the provinces had demanded to discontinue additional water releases.

He said these measures were earlier worked out first at the ministry of water and power and then were approved at a meeting presided over by the caretaker prime minister. He said that Irsa had been assured that water releases would be reduced whenever the Wapda-Pepco authorities succeed in improving oil and gas shortage.

He agreed that enhanced water releases for power generation had been going on since December 25 – much before the issue was brought before the advisory committee for approval. He said the wheat crop normally required watering for four times and this year this may be reduced to three times. The requirement of fourth watering would be overcome through rationing and better management.

He said storage in Tarbela dam currently stood at 0.88 MAF compared with 2.45 MAF at the same time last year but hoped the situation will improve by current rain pattern that was much delayed than usual circumstances. He said total inflows in Tarbela dam currently stood at 17,000 cusec and 10,000 cusec was being released against a downstream provincial requirement of 3,000 cusec. In contrast, inflows in Mangla were 5500 cusec but about 8000 cusec was being released, which was depleting the storage level.

Estimates of water shortage revised -DAWN - Top Stories; January 08, 2008

 

[Neo]

Wheat sowing 8% less than target ​

* Only 7.874 million hectares have been used for wheat sowing this year against the target of 8.578 million hectares

By Ijaz Kakakhel

ISLAMABAD: Government is about 8 percent behind the wheat sowing targets set for the year 2007-08 and not a single province has been able to meet the annual targets.

Two provinces, Punjab and NWFP have even failed to touch the last year’s crop and are behind one and five percent respectively, officials in the ministry of food, agriculture and livestock told Daily Times here on Monday.

The MINFAL had set wheat sowing targets for the year 2007-08 at 8.578 million hectares while least year it was 7.89 million hectares, showing a 8.72 percent increase in the sowing areas of wheat. The sowing in Punjab was completed over an area of 6.203 million hectares while the target was 6.433 million hectares for the current year till December 22, 2007. The government was 4 percent behind in achieving the wheat sowing targets for the current year and achieved so for 96 percent targets.

The Sindh province was behind four percent of its wheat sowing target of 982,000 hectares and up to January 2, 2008 it covered an area of 934,000 hectares. Last year Sindh had covered 885,000 hectares. Target for NWFP was set as 754,000 hectares and out of it 495,000 hector covered till December 1, 2007. The NWFP was 34 percent behind its current year wheat-sowing target. But in the NWFP the wheat-sowing period usually delayed due to its weather conditions, the officials maintained.

The target for Sindh was 409,000 hectares and till December 3 2007, 242,000 hectares covered the wheat sowing target. Balochistan was 41 percent behind its wheat-sowing target. Last year the covered area for wheat sowing was 240,000 hectares.

The government has fixed the total target for wheat sowing areas as 8.578 million hectares for current year 2007-08 for achieving 24 million tonnes. But so for the government is behind 8 percent of its current year target and covered 7.874 million hectares, the officials added.

On contact the official spokesperson of MINFAL Qadir Bukhash Baloch told Daily Times that in Punjab and Sindh the wheat sowing period was continue till January 10. “There are enough time for achieving the targets in both the provinces while in the NWFP the sowing period always delays,” he maintained. He was confident that the wheat-sowing target would be achieved.

About current spell of rain, he claimed that this was considered as gift of God as it was essential for rain-fed areas. The government achieved 2 million tonnes wheat from rain-fed areas and expressed the hope that it would be achieved easily if rains occur in future.

He said the set targets of wheat was for Punjab 18.5 million tonnes, Sindh 3.2 million tonnes, NWFP 1.5 million tonnes and Balochistan 0.8 million tonnes in the current year.

About other Rabi crops, he expressed the hope that all crops would be increased due to current spell of rains.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

8 projects of 1,667 MW achieve financial closure​

ISLAMABAD: Eight power projects with a cumulative capacity of 1,667 MW have so far achieved financial closure, which is would be commissioned by the year 2010.

According to official sources, these projects have achieved financial closure under the 2002 Power Policy. They said out of these projects two new power projects have achieved financial closures by Mansha Group, namely Nishat Power Project and Nishat Chunian Power Project, of 200 MW capacity each. Earlier, the company signed Implementation Agreements and Power Purchase Agreements of both these projects in last quarter of 2007. The projects are being set up at District Kasur near Lahore.

The sponsors of Nishat Power Project are Nishat Mills Limited, and those of Nishat Chunian Power Project are Nishat Chunian Limited, both owned by Mian Mohammad Mansha. The lenders of both projects are the consortium of commercial banks including Habib Bank Limited (HBL), Allied Bank Limited (ABL), United Bank Limited (UBL), Standard Chartered Bank (Pakistan) Limited (SCB) and Faysal Bank Limited (FBL) being Financial Advisors and Lead Arrangers. The estimated cost of both the projects are $204 million each and are targeted to be commissioned by June 2009 and December 2010, respectively.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Most of textile exports miss targets in July-November 2007-08​

* Share of textile products in total export proceeds also fell to 61 percent, which normally stays around 65 percent

KARACHI: Export of most of textile products missed the targets in the first five months of current fiscal year by significant margins, speaking about the gravity of the prevailing crisis in this vital sector of the country.

Also, the share of textile products in the total export proceeds fell to 61 percent during the said period, which normally stays around 65 percent, according to official statistics.

Among all the exportable categories, the worrisome factor was the failure of value-added textile sector to achieve the set target in July-November 2007-08, which makes a bigger part in the foreign exchange earnings.

Details show that readymade garments export stood at $568 million against the target of $587 million during the July-November of current fiscal, knitwear export at $882 million against target of $940 million, bedwear at $786 million against target of $857 million.

Also, export of cotton yarn stood at $579 million against $595 million target, cotton fabrics at $758 million against $880 million target.

While few export items in the textile group met the target, however these have very nominal share in the overall export of this category.

Textile exports remained flat during the period under review as it stood at $4.487 billion against $4.510 billion the same period of last year, showing a negligible growth of 0.51 percent.

Textile exporters, commenting on the export performance of textile feared further deceleration in it because of intense competition as well as rising cost of production of these products, especially the recent hike in gas prices to hit blow to already depressed export.

Also, the chaos and violence after the assassination of Pakistan Peoples Party (PPP) Chairperson Benazir Bhutto last month would have very adverse implications for the future export growth of the textile products.

“Already huge number of export orders could not be materialized due to collapse of law and order and disruption of communication network across the country following the death of Ms. Bhutto, which would be bringing down the export of textile products by a big margin,” representatives of textile association felt.

They said that now the export orders are being diverted to other countries because of fragile law and order situation and instability in the country, which is keeping the foreign buyers at distance to visit the country and make future business deals.

Drawing a bleak picture for the sector in the coming days, exporters are fearful of post-election scenario as in view of growing tension between the political parties, the situation did not appear to be calming, which would be a bad omen for the export sector particularly textiles. It is worth mentioning that textile sector enjoyed Rs 30 billion as cash subsidy as well as others concessions on bank loan rates and export finance for the last two and half years, however all this could not help to revive its export.

State Bank of Pakistan (SBP) has also cautioned in its quarterly report released on Saturday about further deceleration in textile export growth in the short terms. Keeping in view the large share of textile exports in total exports, this might translate into the deceleration of overall export growth as well, it stated.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

ECC to review power supply for industrial sector​

* ECC likely to approve much-awaited IPI project worth $7.2bn

ISLAMABAD: Economic Coordination Committee (ECC) of the Cabinet is expected to approve measures, leading to improved supply of power and water to the industrial sectors and wheat flour to the general public, official sources told Daily Times on Monday.

ECC would meet with the Caretaker Prime Minister, Muhammadmian Soomro in the chair and would review the overall economic situation in the country.

The official said that the widening gap between power generation and power demand has compelled the authorities to announce closure of some of the important industrial sectors for power management purposes.

Economic Indicators would also be reviewed with special focus on imports and exports and tax collection during the first half of the current fiscal year 2007-08. Tax and export authorities are facing difficult satiation and are examining to put additional effort to meet their annual targets. ECC would be informed about the measures being taken to meet the annual targets.

Power and water being essential input for almost all the industries would be ensured so that export targets of the country would be met.

The coal being most neglected sector would be utilised for power generation purposes. In this regard, the ECC is likely to approve indicative upfront tariff initiative for encouraging investment in coal-fired power plants in the country.

The government has decided to introduce the “indicative upfront tariff” for electricity generated through coal-fired power plants that would be based on feasibility studies presented by companies, the official said.

National Electric Power Regulatory Authority (NEPRA) has proposed the indicative upfront tariff of electricity generated through coal-fired power plants and the other stakeholders have agreed in this regard.

According to sources, all stakeholders who attended the high level meeting last week agreed on the proposal of fixing upfront tariff for electricity generated through coal-fired power plants. Now the water and power ministry has decided to get approval of summary from the ECC of the Cabinet.

Sources also said that the indicative upfront tariff would be made after keeping in view of the feasibility studies presented by different companies that would be interested to work in generating electricity through coal fired power plants. Sources said that government would also ensure that the tariff should not exceed the tariff in oil sector that is 12 cents at present.

ECC is also expected to approve much-awaited Gas Sales Purchase Agreement (GSPA) of $7.2 billion Iran-Pakistan-India (IPI) gas pipeline project. The Steering Committee on IPI gas pipeline project that met on Tuesday in petroleum ministry has already approved the finalized draft of GSPA on IPI for formal approval in ECC meeting.

ECC would also review the prices of essential items in the open market and at the utility stores, availability and stock position of the essential commodities and their expected demand in the months to come.

Daily Times - Leading News Resource of Pakistan