Pakistan Economy - News & Updates - Archive

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Coal-fired power plants ​

Upfront tariff decision on 11th

Thursday, January 10, 2008

KARACHI: A high-level government meeting on Friday will decide the tariff for coal-fired power plants as the country struggles to cope with a worsening energy crisis, The News has learnt.

The meeting to be attended by the chairmen of Water and Power Development Authority (WAPDA), Pakistan Electric Power Company (PEPCO), National Electric Power Regulatory Authority (NEPRA) and officials of the water and power ministry will be another attempt at solving the contentious issue of upfront tariff.

“Let’s hope something good is pulled out of this meeting,” said a source aware of the agenda of the meeting. “An upfront tariff of a little over 11 cents per kilowatt hour won’t be bad in present circumstances.”

But the NEPRA has already ruled out the possibility of fixing an upfront tariff for electricity produced from coal on the ground that there have been no feasibility studies available to ascertain that.

It continues to stick to the argument that the regulatory body has not received even a single substantial study that could pave the way for utilisation of the vast coal reserves in Sindh estimated at 175 billion tons.

But officials in the Sindh government point out that in 2003-04 a leading German energy firm RWE in its feasibility study found the relevant tariff between seven and 11 cents and also back in the 90s an American expert was commissioned by the government to conduct research.

The Sindh Coal Authority (SCA) has urged the federal government to fix an upfront tariff of at least eight cents per kwh for energy produced from coal-fired power plants. But that was before oil prices surged to $100 per barrel.

“Eleven cents is nothing, considering a saving of $700 million in terms of fuel substitution,” said a source involved with the proposed $2.2 billion coal-fired power plant of Hassan Associates. “It’s nothing, considering 14 cents given to oil-based power plants.”

An upfront tariff against a competitive bidding could help attract foreign investors, he said arguing unless better rate of return was offered there was no point in investing in Pakistani market.

“We have to give them some incentive, something concrete otherwise I don’t think anyone will find their investments feasible,” an official of the SCA seconded the reason, recalling that a Chinese company had backed off a billion-dollar project after failing to get a reasonable power tariff.

Shenhua Group Corporation of China (SGCC) was disallowed 5.7 cents per kwh when it was days away from starting work on the power plant that would have marked first-time usage of Thar coal reserves since they were discovered in 1992.

Coal-fired power plants

 

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US keen to develop industrial estates in FATA ​

Thursday, January 10, 2008

ISLAMABAD: The US Embassy’s Counsellor for Economic and Commercial Affairs, Amy E Holman has said that the USA would start working on infrastructure development in FATA which was one of the major bottlenecks in the establishment of industrial estates in the area.

Talking to Islamabad Chamber of Commerce and Industry (ICCI) President Ijaz Abbasi on Wednesday, she admitted that Pakistan possessed a great strategic importance in the region. She stressed that Washington was keen to enhance bilateral trade with Islamabad and added that through exploiting the strategic importance of Pakistan, the US could increase trade relations with the Central Asian states.

She also stressed the political stability in the country in order to gain economic stability. Holman mentioned that Pakistan was an important ally in war against terrorism. Answering a question about visa issuance, she said that visas would be granted to genuine businessmen after clearance from the State Department.

America funded $750 million for power development projects and was also working for data protection, she added. The commercial counsellors mentioned that the US was keen to export Pakistani cotton, special machinery, animal or vegetable fat, general machinery, fertilizer, transport equipment, organic chemicals and power generating machinery and equipment.

Earlier President ICCI Ijaz Abbasi emphasised the importance of economic relationship and pledged to work to expand bilateral trade and investment opportunities. He suggested starting the 10-year education programme for above 50 per cent population of Pakistan. He expressed his desire to facilitate the business community and urged to enhance the bilateral trade. Abbasi mentioned that major items of export to USA were textile yarn and fabrics, apparel and clothing accessories, leather and leather goods, surgical instruments and sports goods.

US keen to develop industrial estates in FATA

 

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CAA chalks out $3.5bn airport cities plan ​

Thursday, January 10, 2008

KARACHI: Director General of Civil Aviation Authority (CAA), Farooq Rahmatullah has revealed that the CAA is looking to invest $3.5 billion to construct ‘airport cities’ offering facilities like eateries, shopping centres, entertainment ventures, international hotels and business centres, apartments etc.

Talking to The News after after inaugurating the third Makro-Habib wholesale store at Shahra Faisal near Star Gate on Wednesday, he said that the CAA has arranged to facilitate proper infrastructure such as electricity, water, gas and roads and the air port city project has international planners working on it which is yet at its initial planning stage.

The DG further informed that such a city would be initially built in Karachi and then similar projects would be replicated around Lahore and Islamabad airports to commercialise the vast number of lands surrounding them.

Rahmatullah also revealed to The News that an airport express train is being planned for which would take passengers directly from the airport to the city and cantt stations with an approximate travelling time of 7 to 8 minutes.

He said that the feasibility report for both the projects are being worked upon and it would take about 15 years for the venture to materialize in any form. He added that the Makro stores being introduced in Pakistan are ideally in line with their strategies and therefore he offers them complete support.

Regarding the political situation he said that the country’s history is full of wars and martial laws but the country has continued to grow and therefore he is optimistic about the future as “whatever the circumstances are people strive to improve and achieve success.”

Meanwhile inaugurating the third Makro- Habib wholesale store near Star Gate Farooq Rahmatullah said that with the increased focus worldwide by civil aviation bodies on revenue generation, activities based on commercial operations and effective use of real estate within and around airports are in practice.

He said that the trends in CAA Pakistan are also shifting towards exploring this aspect of revenue generation and this is the first step towards achieving the milestone.

CAA chalks out $3.5bn airport cities plan

 

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Payment to OMCs: ECC approves govt’s guarantee to arrange Rs 20bn​

ISLAMABAD: Economic Coordination Committee (ECC) of the cabinet has approved the government of Pakistan guarantee for arranging Rs 20 billion from the local commercial banks to pay price differential claims to oil marketing companies (OMCs).

Official sources told Daily Times here Wednesday that the government had to owe Rs 41 billion to OMCs in term of differential claims to cap the oil prices due to rise in the prices in international markets.

Sources said that out of total amount of Rs 41 billion in terms of price differential claims the government has paid Rs 12 billion to Pakistan State Oil (PSO) and Rs 6 billion to Shell. Sources said that commercial banks would now arrange Rs 15 billion for PSO and Rs 5 billion for Shell on the guarantee of government approved in ECC meeting held on Tuesday.

The official said that government had anticipated Rs 25 billion subsidy in the beginning of the current financial year but it went up due to capping of the prices of petroleum products in the country despite hike in prices in intentional market and added that the amount of price differentia claims had reached to Rs 41 billion so far.

He said that for provision of relief to common men every month, the government is providing a subsidy of Rs14.5 billion out of which Rs13.5 billion per month on diesel prices which is 93 percent of the total subsidy. He said that the government is providing a subsidy of Rs18.5 per liter on Kerosene oil and Rs 17.20 per liter on diesel to cap the oil prices in the country.

Since January 16, 2007 to December 15, 2007, the prices of crude oil in the international market increased by 76.4 percent, diesel up by 68.1 percent and prices of Kerosene oil went up by 69.7 percent but the prices in the country remained frozen, the official added.

He said that the prices in international market since May 2004 until December 15, 2007 saw a rise as diesel 179 percent and the Kerosene oil went up by 175 percent. Contrary to the rise in prices in international market, he said that domestic prices of petrol went up only by 45 percent, diesel prices by 55 percent, and Kerosene oil prices were increased by 47 percent only. The last adjustment in oil prices was made in January 16, 2007, when the government reduced the prices of petrol by Rs 4 per liter and diesel by Rs 1 per liter.

Daily Times - Leading News Resource of Pakistan

 

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USA eager to enhance trade ties with Pakistan​

ISLAMABAD: The USA Embassy Counselor for Economic and Commercial Affairs, Amy E. Holman has said the USA is keen to enhance bilateral trade with Pakistan and provide funding for improvement of latter’s infrastructure.

Talking to the President of Islamabad Chamber of Commerce and Industry (ICCI) Ijaz Abbasi and SVP Munawar Iqbal here on Wednesday, she said Pakistan is progressive developing country and government’s policies for economic growth are appreciative.

“Pakistan has strategic importance and USA can increase trade relations with Central Asian Countries through it.” She mentioned that economic stability needs political stability.

Answering to question about visa issuance, she said visa would be granted to the genuine businessman after clearance of the state department, process is slow but the department can send trade delegations to the USA for the enhancement of mutual trade relations. She informed that the USA has funded $750 million for power development projects. They are also working for data protection and want to see the incensement in tax revenues.

Daily Times - Leading News Resource of Pakistan

 

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Steps to minimise loadshedding: gas supply to captive power plants to be reduced ​

ISLAMABAD (January 10 2008): The Power System Operation Committee (PSOC), constituted by the Ministry of Water and Power, has taken several measures to reduce load shedding, of which top on the list is curtailing of gas supply to captive power plants (CPPs) using RFO and diesel, official sources told Business Recorder here on Wednesday.

The committee comprises senior officials of the Ministry of Water and Power, Pepco, NTDC, SNGPL, SSGC, PSO and Indus River System Authority (Irsa). While reviewing power position, the committee was informed that in winter months (especially December-February) hydroelectric generation is based on Irsa water availability for Rabi.

Irsa's adjusted outflow from Tarbela was 2500 cusecs (average 560 MW) during second ten days' period of December 2007, which was expected to reduce to 6600 cusecs (average 154 MW) during second ten days' period of January 2008. The adjusted outflows would pick up again in February 2008.

The committee noted with concern that reduction in generation from Tarbela from its full capacity of 3748 MW to 154 in second ten days of January would not only aggravate the power supply gap but would also deprive the grid of much-needed support to maintain frequency and voltage essential for system stability. With reduced outflows, the generation from Ghazi Brotha with a capacity of 1450 MW would also cease.

PSOC Member from Irsa clarified that outflows were ascertained keeping in view the demand of the provinces, which in turn depended on canal withdrawal. Furthermore, the outflows this year had been affected by low level of water in reservoir which at 1400 feet was lower than 1500 feet last year.

The committee proposed that the option of increasing outflows at Tarbela in January through storage of water at Chashma barrage be considered for future use. The committee was informed that it would be on outage for inspection and maintenance in January and therefore the proposed option could not be implemented, sources said. They said that the committee also discussed provision of gas supply to thermal power stations.

The committee, after detailed discussion, directed Irsa to reschedule the outages of Chashma barrage for inspection and maintenance to allow increased water flows through Tarbela in January and give at least 48 hours' notice before any lower adjustments in outflows through Tarbela and Mangla to avoid any national grid collapse.

Sources said the committee also decided that as CPPs operate on dual fuel, they can meet their demand by using RFO and diesel. So, SNGPL should curtail 371 MMCFD gas to them and divert it for use in power plants. SNGPL should divert gas allocations of Techna IPP (40 MMCFD) and Chichoki Mallian (90 MMCFD) which are not currently utilised by Kapco and rental power plants.

SNGPL should supply 12 MMCFD gas to Guddu Thermal Power Station (GTPS) Faisalabad, if the same supply is not available during off peak hours. SSGC should spare 12 MMCFD gas and divert to SNGPL for supply to GTPS Faisalabad.

SSGC should reduce 10 MMCFD gas to JPCL and divert to Kotri to further reduce 10-20 MMCFD to JPCL without imposition of penalty on "supply or pay" conditions, and divert to SNGLP at Sawan for supply to Sawan along with additional 20-30 MMCFD for supply to Kapco by SNGPL of 50 MMCFD.

Business Recorder [Pakistan's First Financial Daily]

 

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Munda dam: Wapda consults stakeholders ​

ISLAMABAD (January 10 2008): The Water and Power Development Authority (Wapda) has taken up with other stakeholders the issue of prolonged delay in finalising the Munda dam action plan as simmering energy crisis in the country is heading from bad to worse.

"Wapda realised the prolonged delay in the project implementation when the people are suffering from long blackouts and the gap in power demand and supply is seen almost impossible to be bridged," sources told Business Recorder on Wednesday.

Sources said that Wapda had taken up the issue with Private Power and Infrastructure Board (PPIB) and the Planning and Development (P&D) division. The issue has been taken only after the country was hit by the worst ever electricity shortage.

Some independent experts are of the view that the policy-makers take action only after the people suffered crisis and according to them, the P&D, PPIB, water and power ministry should have taken quite in advance when there was a delay in the finalisation of detailed feasibility study and PC-I of the project and submit them to the P&D, the sources said.

To be built on the River Swat in NWFP at a cost of over Rs 71 billion, Munda dam is one of important schemes, and according to the government, it has to be completed by 2016 along with other four major dams. The dam would have storage of 0.67 MAF and generate 740 MW hydel electricity.

The construction of the dam is also essential for controlling floods in the Peshawar valley. It is also stated that the construction of Munda dam could soften the NWFP anti-Kalabagh dam (KBD) stance and the latter could be constructed if the federal government makes strenuous efforts for developing national consensus.

The project could not be initiated due to negligence by the authorities concerned. Most of them make announcements about the development projects, but little is done when it comes to the implementation of such schemes, the sources said.

Some officials are of the view that Wapda and the water and power division did not come out of their paradox that the KBD construction should be the top priority. The Munda dam should be constructed only if NWFP is agreed on the construction of KBD.

The Munda dam on River Swat shall alleviate Nowshera flooding and back water of Kalabagh full reservoir only goes up to Akora Khattak. It also says that installation of 4,800 tube-wells in Sindh would address Sindh's apprehension that its lands would go out of production due to control over river because it would affect only 7,000 acres of mangrove forest.

Sources said that it was the responsibility of the PPIB to have issued the Letter of Interest (LoI) to an experienced firm. The PPIB, on the alleged instructions of the President Pervez Musharraf, issued the LOI to a newly formed unlisted US company. The LOI was aimed at upgrading the feasibility study for constructing the $1.2 billion Munda dam. The feasibility study was not completed in its time-frame of 18 months, the sources added.

Japanese consultants, who suggested about 10 cents per unit (Kwh) generation cost, originally conducted the feasibility study. But, the US company is of the view that many assumptions of that study were wrong and the tariff setting stage was far away.

The Munda dam would contribute to overall economic growth and generate Rs 361 million as 'water-user charge' annually for the NWFP government. The Munda dam, on completion, would help improve equity in water allocation, reduce flood risks in Nowshehra and irrigate 29,000 acres, besides benefiting 30,000 acres of already irrigated areas.

Business Recorder [Pakistan's First Financial Daily]

 

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Major crops could not progress well in fiscal year 2007 ​

ISLAMABAD (January 10 2008): Major crops could not progress well during 2006-07 as they grew by 1.1 percent slightly up from the last year's growth of 0.4 percent. Cotton production at 13 million bales in 2006-07 remained almost unchanged in comparison to 13.02 million bales in 2005-06.

Rice production at 5.4 million tonnes was marginally lower than 5.5 million tonnes produced in 2005-06, sources in the Ministry of Food, Agriculture and Livestock (Minfal) told Business Recorder here on Wednesday.

They said agriculture framework in Pakistan is supported to a great extent by the crop sector. In 2006-07, major crops accounts for 36.3 percent of the value-added in the overall agriculture sector.

They said minor crops account for 11.7 percent of the value addition in agriculture, livestock contributes 49.6 percent to agricultural value addition, which is more than the combined contribution of major and minor crops. The agriculture sector directly or indirectly constitutes 67 percent of country's total foreign exchange earnings.

Sources said the wheat production of 23.295 million tonnes during 2006-07 is highest ever in the country's history, registering an increase of 9.5 percent over 2005-06. The sugarcane production improved by 22.6 percent in 2005-06 to 54.7 million tonnes.

They said the government is trying its best to increase agricultural production by providing agricultural credit, support/intervention prices, encouraging use of the balanced fertiliser by granting subsidy on phosphatic and potashic fertilisers, irrigation water availability, adding favourable weather conditions also play a key role in increasing agriculture production.

Sources said within the crop sector, the import substitution and the crop diversification are two important development priorities of Minfal. Efforts are being made to maximise oilseed production, such as sunflower, canola, etc to substitute imports of edible oil to save foreign exchange, they added.

Like-wise under the crop diversification program, the government has planned to introduce higher value crops to diversify production and enhance net farm income, they maintained.

Business Recorder [Pakistan's First Financial Daily]

 

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Terrorism scare haunts oil exploration sector ​

ISLAMABAD (January 10 2008): As terrorism nightmare continues, Pakistan's oil and gas sector is in limbo as its exploration and production (E&P) companies are not finding professionals and hi-tech rigs and other services for carrying out activities to increase domestic share in production.

The government has been focusing on exploitation of carbon reserves for quick production of oil and gas to meet the growing energy demands, and its public and private sector companies are heavily depending on Chinese professionals and technology as they cost less, and Chinese, being hardworking, could go into hard and sometimes risky areas for exploration activities.

The Pak-China friendship bond has been working as a catalyst to inspire and encourage Chinese engineers and other professionals to work with Pakistani manpower and help exploit untapped oil and gas reserves.

There are strong feelings between the Chinese and Pakistanis that both are natural allies and friends of each other and they should work in a big way for making Pakistan's economy strong and help it progress and prosper.

This relationship has worked for years not only in oil and gas sector but also in many other fields. Chinese presence in Pakistan is considered as a symbol of success and Pak-China cooperation. Islamabad is really proud of Chinese cooperation and it has the reasons since Beijing is putting in the best efforts to help Pakistan grow and come up to the challenges upfront.

However, some unseen forces moved against Pakistan. They hatched deadly conspiracy against Islamabad by putting into action a plan to target Chinese engineers in Pakistan. The sole purpose of targeting and killing innocent Chinese engineers on Pakistan's soil was to give a strong message to the Chinese that they should either leave the country, or face tragic death.

Pakistan's enemies succeeded in their plan as many Chinese engineers were killed in different parts of Pakistan in 2006 and 2007. These targeted killings left no other option for the Chinese but to flee from Pakistan. The Chinese government, which would have never thought of such obnoxious developments, issued new guidelines to its companies to ask them to stay away from Pakistan. And, it happened, in fact.

Now, not a single Chinese company is permitted to sign any contract for oil and gas or any other sector. This is a painful development for Pakistan. Its several sectors are suffering due to unceremonious exit of Chinese from Pakistan. But the oil and gas sector is one which is suffering the most.

This situation has left both the public and private sector E&P companies in complete bewilderment. They are now left without professionals and technology and in an environment where no one likes to visit Pakistan. Irrespective of public and private sector oil and gas companies, Chief Executive Officers (CEOs) of public and private sectors E&P companies are running from one country to another to hire professionals and bring technology for exploration work at fields, but with no positive result.

The worsening law and order situation is haunting them around the globe. One can not have second argument that the work in oil and gas sector would remain shut as long as law and order situation is bad. Only drastic improvement in law and order can convince the foreign investors and services companies, in particular the Chinese firms, that they can operate in Pakistan without any fear and risk to their staff and machinery.

The insurance premium for Pakistan has gone very high due to worsening law and order situation and high risk. This situation is even disturbing for those E&P companies which have signed ambitious exploration programmes with the government. It is unlikely that in the given situation when no one is ready to come to Pakistan for seismic survey and exploration work they can meet the drilling targets of honour work programmes.

The multinational and domestic E&P companies have very good opinion about the Ministry of Petroleum and other government departments for exploration work. They are of the view that the government has been doing its level best to provide conducive atmosphere for operating successfully in exploration and production work in Pakistan.

The Ministry of Petroleum, which is fully cognisant of the situation on the ground, should take a lenient view of the E&P companies' work programmes and facilitate them to manage bringing of oil and gas sector professionals and technology as early as possible to make sure that exploration work does not suffer for an indefinite period.

The government also has to come up with a comprehensive plan of action to overcome growing power shortage in the country which is threatening to destroy all good work it has done over the years that resulted in the most admirable growth rate.

Business Recorder [Pakistan's First Financial Daily]

 

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MINFAL told to procure 7m tonnes wheat at Rs600 per 40kg ​

Friday, January 11, 2008

ISLAMABAD: The provincial food secretaries on Thursday clearly told MINFAL to procure seven million tonnes of wheat during next harvest at not lower than Rs600 per 40 kg.

The Economic Coordination Committee (ECC) of the cabinet while deferring wheat support price for the coming crop has asked MINFAL to procure seven million tonnes of wheat at market price.

In a meeting at MINFAL for devising a wheat procurement policy for next crop, all the four provincial food secretaries said that the commodity price presently is hovering around Rs800 to Rs900 per 40 kg and it would be difficult for the procurement agencies to purchase the grain much below the market price, a source privy to the meeting told The News on Thursday.

It would be an uphill task for the procuring agencies to purchase the wheat from the growers at a rate much below the market rate and in the presence of flourmills as third buying party, the procurement targets for the food departments would not be easy, one of the participants of the meeting quoted a provincial food secretary.

Regarding the procurement for the next crop, the same official said that the State Bank of Pakistan (SBP) will provide cash margin only to the flourmills rather to the wheat traders or middlemen, but this time it would be at the rate 80:20 rather than 90:10.

About the procurement price, sources said that the provincial food department would be independent to determine the wheat price at the time of procurement and inter-provincial wheat movement would not be banned.

About the seven million tones procurement of wheat, they said that Punjab would procure 3.5 to 4 million tones, Passco 2 million tones, Sindh one million tones and rest of 0.5 million tones by Balochistan and NWFP through their private sector.

The meeting was chaired by Additional Secretary MINFAL, Shahid Hussain Raja and it was attended by the representative of SBP, Passco and Planning Commission and provincial food secretaries.

MINFAL told to procure 7m tonnes wheat at Rs600 per 40kg

 

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‘Pakistan a flourishing market for call centre industry’ ​

Friday, January 11, 2008

KARACHI: Abdullah Butt is the president of Association of Call Centres & Operators (ACCO) Pakistan, which is the only body that is aggressively promoting Pakistan’s call centre opportunities on international and domestic fronts.

In an interview to The News, Butt said that ACCO as a forum was working very closely with Hong Kong, India, the UK and the Philippines call centre associations, and added that ACCO was proud to be part of the International Contact Centre Consortium, USA. It is represented in the US, the UK, India, Bangladesh and South Africa, which elaborated the scope of ACCO. This trade body is working with the Pakistan Software Export Board and IT ministry hands in hands to seek opportunities from international business providers for Pakistani call centres.

Butt also heads AsOnTV.com, Pakistan’s leading tele-shopping network, with its offices in India, the UAE, China, the UK and the US. During the interview, Butt discussed the issues and concerns of the call centres and Business Process Outsource (BPO) in Pakistan and disclosed that for the first time results of elections 2008 could be heard on telephone and also via SMS. The call would be charged at Rs14 per minute and SMS at Rs5.

“Another achievement to our credit is that we have come up with a call centre working 24/7 to help pensioners and register their complaints. This project is sponsored by the EOBI and all expenses are borne by it.”

He also noted that among major issues in Pakistan, one was that of marketing as local businessmen were not able to properly market yet. “India has been in this business for a number of years and they are very good in marketing. They have marketed themselves very well in everything which they offer and have been able to earn more than US$18 billion every year through these services.”

He observed that despite support from the government, incentives and even provision of funding to set up this business, investors were still reluctant to invest in the business. “Call centre and BPO business is very much there in India, Pakistan, China and the Philippines. But in India this industry is very well established but cost has increased and Pakistan is now an alternative to the west for call centres.”

Butt said that Pakistan has all the tools required to catch up with the $50 billion industry with 30 per cent per annum growth rate linked with $700 billion e-commerce trade worldwide. “That is the theme, we want to catch on. India has emerged as a major location for IT-enabled services such as call centres, customer support centres. Research suggests that such exports could exceed to $15 billion annually before the end of the decade,” Butt said and noted that lower input costs, reasonably good infrastructure, a trained English-speaking workforce and a favourable time zone differential vis-‡-vis the US has spurred the growth of the call centre industry in India. “The government of India has already levied an income tax of 36.2 per cent on all call centres owned by foreign companies, while the Indian companies are enjoying a tax-holiday till 2016.” He said that there was a proposal under-consideration in New Delhi to tax activities conducted over international private leased connections (IPLC) that carry India’s voice and data traffic.

Butt also cited the latest Gartner report which pointed out that India will loose 45 per cent of its share in call centre market due to shortage of manpower and lack of infrastructure. “Pakistan offers a competitive and alternative market as the country possesses workforce with good accent, fair comprehension skills and low cost talent pool.” He sighted this as an advantageous and suitable situation for Pakistan to grab the opportunity.

“But in Pakistan, the cost of utility is so high. The more you use the more you pay. The process of import is very cumbersome and expensive. Moreover, the visa constraints on international employees and investors also hinder the business.” He also pointed out some other loopholes in the sector and said that there was lack of mass knowledge about the industry and no support or encouragement from Pakistani missions abroad and non-cooperative behaviour from overseas Pakistani business houses towards call centre/BPO industry in Pakistan. He also highlighted that there was no facilitation from banks on financing the call centres.

“It is important to make financial institutes to understand the concept of call centres. Hiring the services of trained call centre experts Pakistanis/foreign nationals, by the public sector for the industry mass media awareness of the career path in call centre industry is very important in order to boost the industry.”

Butt was optimistic regarding the future of call centres and observed that there was so much business available for Pakistan internationally, that even if 100 call centres each of 100 seats were working in Pakistan, still there would be more business coming in. “We will have to adopt the right practices, right procedures and provide right incentives for the development of this industry,” he underlined the points which he suggested as guideline for the business.

‘Pakistan a flourishing market for call centre industry’

 

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CDWP takes up 40 projects of Rs 118 billion on January 12 ​

ISLAMABAD (January 11 2008): The Central Development Working Party (CDWP), which will meet on Saturday, will take up 40 development projects worth over Rs 118 billion in economic and social sectors. The CDWP will meet on January 12 as its meeting which was earlier scheduled on January 5 was postponed due to political turmoil as a result of assassination of former premier Benazir Bhutto, sources told Business Recorder on Thursday.

To be presided over by Planning Commission Deputy Chairman Dr Akram Sheikh, the meeting will consider six development projects costing around Rs 59 billion in physical planning and housing, three schemes of Rs 26 billion in energy sector, three projects of Rs 10.67 billion in transport and communications, three schemes with a cost of Rs 6.675 billion in water resources, two projects of Rs 2.8 billion in industries and commerce, and 10 projects of Rs 9 billion in higher education.

The CDWP will also take up one project costing Rs 1.2 billion in health, two schemes of Rs 0.153 billion in governance, five schemes of Rs 0.55 billion in manpower, and some other small schemes being sponsored by other ministries.

Sources said that in energy sector the water and power division sought an allocation of Rs 26 billion for three projects. The projects include power transmission enhancement project worth Rs 25.039 billion, National Power Plan of Rs 0.5 billion and feasibility study for evacuation of power from hydropower project River Indus and its tributaries in Northern Areas costing Rs 0.28 billion.

In physical planning and housing, the agenda of the meeting include the water channel to take water from Tarbela to the cities of Islamabad and Rawalpindi costing over Rs 37 billion. The interior ministry is the sponsoring agency of the development scheme, they added.

Sources said the Erra's project of New Balakot City worth Rs 12 billion will also be taken up by the CDWP. The Planning Commission has already cleared the project in an earlier meeting of the CDWP. The Punjab government development project of construction of south-west waste water treatment plant, Lahore, will also come up for the CDWP consideration. The project will cost Rs 9.35 billion.

In water resources, the Punjab government's Barani integrated water resources sector project worth Rs 6.3 billion is also on the agenda of the meeting. The Asian Development Bank (ADB) will provide a financial assistance of Rs 4.5 billion for the project, they added. In governance, the CDWP will take up the NWFP government project aimed at strengthening the financial accountability of provincial Public Accounts Committee (PAC) and the PAC cell in the provincial assembly.

Besides this, the narcotics control division scheme of Khyber Agency area development project of Rs 0.9 billion is also on the agenda of January 12 meeting. The Pakistan Atomic Energy Commission (PAEC) has sought Rs 0.14 billion for the establishment of center for earthquake studies.

Business Recorder [Pakistan's First Financial Daily]

 

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Soomro for advance plan to procure, store new wheat crop ​

KARACHI (January 11 2008): Prime Minister Mohammedmian Soomro on Thursday called upon the federal and provincial governments for joint advance planning for procurement and storage of wheat of new crop. Chairing a high-level meeting at the Governor's House, he said that farmers should use better technology and inputs to have better yield so as to meet wheat requirements domestically.

Among others, Sindh Governor Dr Ishratul Ibad Khan and Chief Minister Abdul Qadir Halepota attended the meeting. The Prime Minister asked the provincial governments to ensure grinding of wheat and distribution of atta through close monitoring and under the supervision of their respective food departments.

The provincial food departments, he directed, should check the declared stocks of licence holders and any undeclared stocks should be confiscated.

On the occasion, Federal Food Minister Prince Essa Jan informed the meeting that some 32,000 tonnes of wheat is beeing released by Minfal daily. He said the food ministry is importing 1.5 million tonnes of wheat which has started arriving and its entire import will be completed by mid-February.

The Prime Minister was informed that people have started buying atta more than their requirement which is affecting both its availability and prices. The Sind food secretary informed that in Sindh, availability of wheat and atta was not a grave problem as was the high prices and, therefore, there was great rush of people at utility stores because of price difference.

He said the provincial government had several meetings with the Flour Mills Association which agreed to supply atta at ex-mill rate at Rs 17 per kg within 24 hours and will be available in the market within 24 hours at Rs 17.50 per kg.

On the occasion, the Federal Government Commission on damages headed by Captain Usman Ali Essani, briefed the Prime Minister about the assessment work of damages caused after December 27 Rawalpindi tragedy. The Prime Minister said it is a big job to assess the damages throughout the country and expressed the confidence that the Commission will take it as a mission and complete it within the stipulated one-month time.

He asked the Commission that it can co-opt any officer for help in the assessment of damages. He directed that the process of assessment of damages be made transparent and simple for the people to understand while cases of claims of poor people be given priority.

He issued directive for immediate disbursement of Rs 0.3 million to heirs of each deceased of the violence and Rs 50,000 to the injured throughout the country. Commission Chairman Essani informed the Prime Minister that he had held a number of meetings with the provincial government, administration, and local government elected representatives in Karachi and facts and figures provided by various departments are now being scrutinized.

He said that a pro forma has to be filled and signed by claimants and accordingly damages will be assessed so as to eliminate possibilities of false claims and to verify the stipulated quantity of danages. He said the pro forma has been printed and sent to the provinces.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Unabated borrowing from SBP: excessive liquidity stoking inflation ​

KARACHI (January 11 2008): Fifty-eight percent of the Federal budget deficit is being financed by the State Bank of Pakistan through money printing with the stock of paper with the Central bank rising to an all time high of Rs 650 billion.

There has been a sharp rise in expenditure under 'economic affairs' reflecting the impact of large subsidies extended to diesel, DAP (fertiliser) and wheat imports by the government: The government borrows from the State Bank of Pakistan in between fortnightly auctions.

For this purpose, MRTBs are created for replenishment of treasury bills (MTBs) sold to scheduled banks. Government borrowing from the banking system for budgetary needs has already crossed Rs 220 billion mainly on account of Rs 340 billion spent as current expenditure. Besides, the oil bill of interest payment on domestic debt have doubled to reach Rs 98.5 billion, quashing the favourable impact of a decline in growth of interest payments on foreign debt.

The 100.7 percent increase in servicing of domestic debt reflects both an increase in the absolute value of the debt stock, and rising interest rates, as well as the impact of large one-off bullet maturities (principal and interest) of long term bonds (Defence Saving Certificates) issued in the aftermath of nuclear test in the late 1990s. Further, after registering a decline of 18.5 percent in the first quarter of FY07, defence expenditure has surged by 20.3 percent in the corresponding period of the current fiscal year. This perhaps reflects engagements of the armed forces in tribal areas and the Swat Valley to maintain law and order.

Finally, there has been a sharp rise in expenditure under "economic affairs" reflecting the impact of large subsidies extended by the government for diesel, DAP (fertiliser) and wheat imports.

The domestic borrowing has doubled despite 14.4 percent higher tax collection and 51.5 percent increase in non-tax receipts as well as higher inflows under National Saving Schemes and significantly more issuance of long terms paper (PIBs) by the government.

The inflationary impact from money creation, ie, borrowing from the Central bank and the possibility of 15 to 20 percent increase in domestic petroleum prices after the elections and prior to induction of new government, the end June CPI inflation would be close to 8.5 percent - considerably higher than even SBP forecast of 7.5 percent, say knowledgeable economists.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Export refinance: banks provided Rs 138.45 billion up to December 15 ​

KARACHI (January 11 2008): The export refinance facilities, extended by the commercial banks to the exporters at 7.5 percent, reached Rs 138.45 billion up to December 15, 2007 as against Rs 126.85 billion extended during the corresponding period of the last fiscal year, showing a growth of 9.15 percent.

The modification made in the system of grant of refinance to banks under the Export Finance Scheme has resulted in enhancement of availability of working capital facilities to the exporters, especially exporters of value-added textile sector, at lowest rate of 7.5 percent interest per annum.

State Bank of Pakistan on Thursday said that reports regarding the reduction in the availability of working capital facilities to the exporters were incorrect, baseless and misleading. In the last monitory policy, the SBP has decided to exit from the export refinance and some 30 percent of overall outstanding were diverted to the banks in the July, 2007.

Business Recorder [Pakistan's First Financial Daily]