Pakistan Economy - News & Updates - Archive

[Neo]

‘Power crisis to last for another two years’ ​

Thursday, January 17, 2008

LAHORE: The power crisis in the country is expected to last for another two years and experts have advised the government to adopt immediate measure to cope with the situation in the best possible manner.

They pointed out that the national economy would not be able to withstand the type of blunders committed by the planners in electricity management this year. They said some of the mistakes or administrative errors committed during past six months should not be repeated in future.

They said the mega dams are pipe dreams of the present regime. They said government should look for alternate sources of generating electric power. The dams if ever built would be added bonus. They said the nation lost precious time in the bureaucratic struggle between the WAPDA and the Ministry of Water and Power. They said even most viable projects failed to take off due to this infighting.

They cited the example of Neelum-Jehlum Hydro electric project and Lakhra coal fired electric generation projects both of which were in cold storage but have been launched immediately after former Chairman WAPDA Tariq Hameed took over as Federal caretaker Minister for Water and power. They said authority to sanction new project, decide power purchase rate and tariff should be vested in one institution. Presently they said government of Pakistan through PPIB sanctions the thermal projects and decides the power purchase rate. The tariff is decided by the government that even over ride the decision of NEPRA the regulatory body in this regard. WAPDA they added has to buy and sell electrity at rates determined by the government whether they are commercially viable or not.

They said there would have been no load shedding this winter had WAPDA or whatever authority monitored the stocks of oil kept by the IPPs. As the managing Director PEPCO revealed that under agreement with the government of Pakistan it is mandatory for the IPPs to keep an oil stock of 21 days but none complied with this regulation. In ordinary circumstances this would have gone unnoticed but when the transport remained suspended for few days the folly of many IPPs was exposed.

They said WAPDA buys electricity from the IPPs under sovereign guarantee at a very high rate. They said WAPDA paid for electricity production in the past when it had surplus electricity. The IPPs they added are bound to provide the required power or pay heavy penalty. They said any lapse on mandatory regulations would have much serious impact on economy in future.

They said power conservation plan read by some WAPDA electrical engineers at a seminar revealed that if the entire households shift to energy savers from ordinary lights its would save 1200 MW of electricity.

This is a big saving. WAPDA is losing money on every unit it supplies to most of the domestic consumers. It requires one million dollar to install electricity generation capacity of one megawatt. Government has to provide WAPDA billions of rupee for generation of thermal electricity. The government could discourage conventional bulbs and tube lights by clamping higher duty. At the same time government could subsidize the energy saver bulbs. The authorities according to experts have not taken any concrete steps to promote use of energy saver bulbs.

The government had always taken half-hearted measures in imposing the shop timings. This is mandatory under the labor law. The employees working in the shops come in the morning and work till the closure of markets from 10 pm to midnight. This exploitation has to be stopped. After all markets close in developed economies by 5 to 6 pm and do more business. The business would be as usual but the employees would get the necessary relief. That this would save the government 600-MW electricity at peak consumption hours is an additional benefit.

The experts say that lavish air conditioning in government buildings should be curtailed forthwith. They said lightening at public and private buildings should also be reduced. In fact they added the government should impose additional tax on all lightings outside the buildings to discourage this practice. The experts point out that this measure along with reducing the steeet lights by half would save another 600 MW around the year at peak consumption hours.

‘Power crisis to last for another two years’

 

[Neo]

Bumper cane crop to yield 4m tons of white sugar​

KARACHI, Jan 16: The bumper sugarcane crop of around 60 million tons for on-going current season is likely to produce about four million tons of white refined sugar which will take the total stocks of the produce in the country to about five million tons.

Contrary to wheat and rice shortages resulting in soaring prices, sugar would be available in abundance because supply will be exceeding the demand which would stay below four million tons.

However, industry sources say this would create its own nature of problem as huge stocks would further depress already lower sugar prices in the domestic market which would result in huge financial losses to the second largest industrial sector of the country.

When the current crushing season began in November last, there were around one million tons of opening stocks of white refined sugar. Of these, about 650,000 tons were with the millers and around 350,000 tons with the state-owned Trading Corporation of Pakistan (TCP).

Consequently, the industry on the one hand is confronting high cost of production, and on the other, plummeting sugar prices owing to imbalance between demand and supply were causing a financial crisis.

The ill-planned import of sugar during 2005-06 when a huge quantity of 1.5 million tons was imported, followed by an additional import of around 0.6 million tons during 2006-07, damaged the local industry, a spokesman for the Pakistan Sugar Mills Association said.

The industry is poised to achieve record four million tons production during the on-going 2007-08 season which would be sufficient to meet the domestic consumption.

It is being anticipated that by the end of this season, the industry would be holding a huge inventory of around one million tons.

It is also being argued that since sugar demand is in-elastic in consumption and stretches over a period of one year, but its production takes place in about four months, piling up stocks at 17 per cent of production rollout per month, adding up to 68 per cent by the end of sugarcane crushing campaign.

As a result of this situation, the industry comes under severe financial constrain and bears significant debt-service.

The PSMA demanded that the government should come forward and rescue the industry by lifting surplus stocks which would also be in line with worldwide practice of creating strategic stocks of food items in the form of buffer stocks.

On the contrary, the industry has complained that the TCP is unloading sugar stocks which is also causing adverse impact on price structure, thereby depressing prices further.

The industry claims that the wholesale prices of sugar presently pitched at the lowest level of Rs22 per kg which include Rs3.15 of sales tax and Rs0.21 federal excise duty, thereby leaving a net revenue of Rs18.64 per kg as against verified cost of production at Rs25.84 per kg, excluding sales tax.

This incurs a loss of Rs7.20 per kg to the industry, they added.

There are strong indications that as the crushing season progresses and sugar stocks keep accumulating, prices would also keep coming under pressure. Therefore, it is being feared by the industry that it would further deepen their financial crisis. The PSMA spokesman also indicated that many mills have already exhausted finances and would shortly be confronting the situation of no funds to pay for sugarcane supplies, and they were bound to bring sugar industry to a grinding halt.

The PSMA (Sindh zone) drew the attention of the Sindh and the federal authorities about the alarming situation that has emerged and urged them for a positive intervention to avert the crisis taking an ugly turn.

It also warned that the sugar industry in Sindh cannot continue its on-going sugarcane crushing owing to fast deteriorating financial position.

Bumper cane crop to yield 4m tons of white sugar -DAWN - Business; January 17, 2008

 

[Neo]

Sugar Industry facing Rs42bn shortfall​

ISLAMABAD, Jan 16: The sugar industry has informed the government that it was facing a cash shortfall of Rs30-42 billion on account of sugarcane price and production cost that would lead to major defaults by the mills and crop losses to farmers.

Informed sources, however, told Dawn the caretaker minister for finance Dr Salman Shah was reluctant to offer any rescue package to the industry on the grounds that it would be politically too difficult for the government to defend dolling out subsidies to sugar industry that it accused last year of amassing ‘indecent profits’.

Informed sources said a secretary-level committee has been directed by the caretaker prime minister to look into the sugar crisis in detail and consider some of the proposals presented by the industry.

The committee is yet to hold a meeting, but the industry has recommended exemption of 15 per cent GST on sugar at least for the current year, coupled with the purchase of surplus commodity by the government at a fixed price rather than tenders that was sure to crash sugar prices.

The sugar mills have told the government the sugarcane prices of Rs65 and Rs67 per 40kg were fixed by the provincial governments on the assumption of mill-gate sale price of sugar at Rs29 per 50 kg of last year that has come down to Rs22-23 per kg matching a sugarcane price of Rs40-45 per 40kg.

They said with the present sugarcane prices, the sugar mills would be able to utilise about 50 million metric tons and able to generate Rs80 billion to pay the growers without adding any financial charges.

On the other hand, the return expected from the sales with the present price would be in deficit of about 30 per cent.

After including the general sales and special excise duty, the total manufacturing cost of 4.4 million tons of sugar would reach Rs121 billion while the companies would be able to generate a revenue of Rs91.58 billion on the sale price of Rs21 per kg ex-mill fixed by the government. This would leave a cash shortfall of about Rs30 billion and if shareholders minimum profit of 10 per cent is included, the net profit would surge to Rs42 billion.

In the meanwhile, the total sugar availability for the next year has been estimated at 5.36 million metric tons, including a carryover stock of about one million tons, as of October 2007. With a total consumption of 4.2 million metric tons per annum, the industry expects a surplus of about 1.16 million metric tons for the current year and add to the glut in the market.

To resolve this problem, the government has indicated to purchase about one million tons of sugar from the mills to reduce their cash problems. But the industry believes that international market was also experiencing surplus production that would create problems for the farmers during the current season.

Not only that many sugar mills could lead to closure due to liquidity problems, their inability to pay dues to the farmers would lead to discouragement to growers who would tend to avoid sowing sugarcane crop next year because of problems this year.

Sugar Industry facing Rs42bn shortfall -DAWN - Business; January 17, 2008

 

[Neo]

Economic targets may be lowered​

ISLAMABAD, Jan 16: A meeting held here on Wednesday for a ‘mid-term review’ of national economy discussed proposals to revise downward various economic targets set for the current financial year.

Sources told Dawn that the meeting held with President Pervez Musharraf in the chair was informed that it would be difficult to achieve 7.2 per cent GDP growth rate during 2007-08 due to a decline in revenues, exports and local and foreign investments. And the situation was compounded by the violence that followed the assassination of PPP chairperson Benazir Bhutto.

Analysts estimate that the violence caused Rs1 trillion losses in the industrial centres.

Caretaker Finance Minister Dr Salman Shah, State Bank Governor Dr Shamshad Akhtar and Federal Board of Revenue Chairman Abdullah Yousuf attended the meeting.

The sources said that the meeting was told that during the first six months (July-December) of the current financial year, economy suffered a great deal on account of increasing terrorist activities and law and order problems.

The FBR chairman briefed the meeting on revenue collection which had suffered heavily over the past two months.

The sources said the finance minister told the meeting that despite shocks and uncertainties the economy was still showing signs of resilience. However, he pleaded for increasing oil prices to avoid more economic problems.

He said it was becoming extremely difficult to continue offering a monthly subsidy of Rs14 billion.

Issues concerning low exports and high imports and wheat and flour crisis also came under discussion. The meeting was informed that the smuggling of flour to Afghanistan had been minimised with the help of Rangers and other law-enforcement agencies and wheat was being exported now only through government-to-government arrangements.

The president told the meeting that he was worried about the state of economy which had performed quite well during 2001-05, but started experiencing problems in 2006 and 2007.

He asked the economic team to make concentrated efforts during the remaining six months of 2007-08 for a broad recovery.

Economic targets may be lowered -DAWN - Top Stories; January 17, 2008

 

[Neo]

UK bank to invest $15mn in Pakistan​

ISLAMABAD: The UK-based Innovative Investment Bank would initially invest $15 million which would increase further substantially in future. Its main areas of services would be financial services, wholesale distribution, retail activities, management and development of commercial as well as residential property.

This was informed to caretaker Prime Minister Mohammedmian Soomro here on Wednesday in a meeting with Syed Mehboob Hussain, CEO of Innovative Investment Bank.

Soomro said that the banking industry, which has been transformed into a vibrant private sector enterprise as a result of the market based reforms, is playing an important role in the economic growth of the country.

Pakistan with its growing market, strong economy and emerging middle class offers opportunities for business and investment, he said adding that due to the government policies of deregulation, privatisation and liberalisation, foreign banks are investing in Pakistan. Continuity and consistency in policies, coupled with an investment-friendly and hassle-free environment has made Pakistan a destination of choice for foreign investors, the Prime Minister said.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Copper deposits estimated at 2bn tonnes: ACC Chief​

ISLAMABAD: Antofagasta Copper Company of Chile Marcelo Awad has informed the government that the Reko Diq Project in Chaghai district of Balohistan has two billion tonnes of copper deposits.

President of Antofagasta Copper Company (ACC) of Chile Marcelo Awad, who along with Chief Executive Officer of Tethyan Copper Company of Australia Hugh James called on the Federal Minister for Petroleum and Natural Resources Ahsanullah Khan here Wednesday and briefed him about the copper reserves. They exchanged views on investment potential in the mineral sector with the Federal Minister.

During the meeting, the President of Antofagasta Company briefed the Minister about the updated progress on Reko Diq Copper Project in Chaghai District of Balochistan Province being undertaken by the Antofagasta Joint Venture. Marcelo Awad informed the Minister that the Reko Diq Project involves multi-billion dollars investment and has two billion tonnes of copper deposits. He said that the company had so far invested $46 million on the development of the project and efforts were underway for the speedy commissioning of this mega copper project.

The Minister said that the government was keen to develop the mineral sector on modern lines and providing attractive package of incentives to the investors to boost mineral development activities in the country. He said the government was taking concrete steps to ensure availability of infrastructure pre-requisite for the successful mineral exploration.

The Minister said that annual production of 250,000 tonnes of copper from Reko Diq project would not only bring Pakistan on the world copper map but also help strengthen its economy.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

2,376 MW power from thermal plants by 2010​

* Sources say plan launched to decrease gap between demand and supply

ISLAMABAD: An additional 2,376 MW power will be generated with the start of 12 thermal power plants in the private sector by 2010.

According to official sources, major thermal power projects to be completed in two years include the 235 MW Muridke (Shapphire) power project, the 225 MW Orient Thermal power plant, the 225 MW Altas power plant and the 225 MW Halmore Power project Bhikki.

Similarly, 516 MW power will also be generated during two years with start of six hydel power plants in the pubic and private sector with the 130 MW Duber Khwar and 121 MW Allai Khwar projects.

Sources said the power sector had been facing an increasing gap between supply and demand over the past few years due to the increased electricity use in the country. They said several strategies had been made to reduce power supply deficit within two years, which will help save 750 MW from crisis management and 100 MW from load management by December 2008 and a total of 2,000 MW through crisis management by 2010.

Similarly, 1,750 MW will be saved by 2010 through short-term measures including 1,250 MW through supply side management, 300 MW through load management and 200 through energy conservation. Sources said the use of energy saver bulbs would help save 50 MW in the first phase while in the second phase, 200 MW power could be saved with the use of energy savers in the country.

They said by turning off extra lights and other electrical appliances, 50 MW power could be saved while around 150 MW electricity would be saved with the success of the automated meter reading project for domestic, industrial and commercial areas. They said the energy loss reduction plan would save 300 MW electricity through system reinforcement.

Sources said the Water and Power Ministry had constituted two committees on the directives of the energy task force to take short-term operational measures and medium to long-term development plans to redress the power crisis resulting from the demand and supply gap.

They said all concerned stakeholders including the Indus River System Authority (IRSA), oil and gas companies, the Pakistan Electric Power Company (PEPCO), the National Transmission and Dispatch Company (NTDC) and the Private Power and Infrastructure Board (PPIB) were members of the two committees to look into specific operational and planning issues.

They said a crisis management plan had been launched to manage the situation arising out of the supply gap with major components including prudent load management, energy conservation and demand reduction with no major impact on citizens’ convenience.

According to the sources, the power deficit would reduce and further improvements were likely regarding power generation in the shortest time in the country. They said the draft of long-term load forecast up to 2030 would be prepared by February 7 with the final load forecast being prepared by March 7 this year, adding that the load forecast and integrated power plan would be reviewed and updated on a year-by-year rolling basis.

Similarly, power distribution companies (Discos) would initiate a similar planning process to form the input for the integrated power planning of the country. app

Daily Times - Leading News Resource of Pakistan

 

[mujahideen]

I think Pakistan really needs to produce energy, by using all its resources. Pakistan is sitting on top of one of the biggest coal reserves in the world. But due to political problems these coal reserve cannot be used to produce energy. We only produce 6% of our energy from coal.

 

[Neo]

Atleast 2 more years and things will improve, see the report I posted earlier today.

Current crisis is a result of decennia of mismanagement and neglect, hope we'll stabalise political crisis and attract more FDI for the sector.

 

[mujahideen]

Atleast 2 more years and things will improve, see the report I posted earlier today.

Current crisis is a result of decennia of mismanagement and neglect, hope we'll stabalise political crisis and attract more FDI for the sector.

What you have said, I only hope these thing happen and happen soon. But the most important thing is that our politicians start thinking about the country and not about themselves.

 

[Neo]

Alarming increase in SPI-based inflation ​

ISLAMABAD (January 17 2008): The alarming surge of 14.54 percent in SPI-based inflation in the second week of January 2008 over the same period last year has soared to 18.63 percent, said Federal Bureau of Statistics (FBS) bulletin. The huge 1.28 percent SPI increase in a week might have been the reason for belated release of data, as it was not issued on due date ie January 10.

The data showed that combined SPI surged by 3.75 percent in last 13 days, as from 10.79 percent on December 27, it surged to 12.38 percent on January 3 and 14.54 percent on January 10.

Such an alarming increase in the SPI in a short span of time has robbed the people's purchasing power with the prices of core kitchen items going out of the reach as dearness for Rs 3,000 income group surged by 18.63 percent, followed by 18.26 percent for Rs 3,000 to Rs 5,000 income group and 16.45 percent between Rs 5,000 to Rs 12,000 income group. The inflation was 11.27 percent on January 10 even for over Rs 12,000 income group, giving an indication how dearness affected all the income groups.

There is no sign the prices would come down in days ahead, experts say, owing to political turmoil, energy crisis, law and order situation, and upcoming general elections, all the indicators would add to the inflation.

The SPI bulletin, based on data collected for about 53 items from 17 centers, said that prices of 25 commodities increased while only five showed moderate decline and 23 remained unchanged, yet higher over the last year.

The prices of tomatoes surged by 18.79 percent during the week under review, per kg tomatoes increased to Rs 31.26 from Rs 26.40 last week. The official figures can be disputed, but showed that per kg wheat flour price has gone up to Rs 22.01 from Rs 20.44 during last week, firewood 40-kg Rs 227.62 from Rs 218.33, vegetable ghee (loose) per kg to Rs 107.53 from Rs 103.22, mustard oil 122.91 from Rs 118.54, red chillies, LPG, tea, gur, kerosene, bananas, gram pulse (washed), beef, mutton and so many other items prices have increased during the week.

The life of salaried and downtrodden classes has been miserable as 15 percent increase in their salaries has already been offset by similar increase previously. There has hardly been any increase in the income of poor, while volatile surge in prices brings every day new challenge for them.

The combined SPI has been recorded 171.06 percent on January 10 from 168.89 percent on January 3, showing substantial increase of 1.28 percent during the week under review. Sources said the officials of the FBS gave caretaker Prime Minister Muhammedmian Soomro a detailed briefing on the prices, but any measures as a result of that meeting are yet to be seen.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Local firm to set up 48 megawatts power plant in Karachi ​

ISLAMABAD (January 17 2008): A Karachi-based firm will establish a 48-MW rental-based barge mounted power plant in Karachi. Informed sources quoting official documents confirmed to Business Recorder that Karachi Electric Supply Corporation, now a private entity, had declined to purchase power to be generated by the firm for certain reasons.

The sources said when the firm approached a caretaker minister at Lahore on November 26, 2007, they were assured that if KESC was not willing to purchase power, National Power and Dispatch Company (NTDC) of Wapda would procure power and sell it to KESC on an agreed tariff.

To accommodate this firm, the sources said that gas allocated to two of the Independent Power Producers to be established in Karachi has been shut off for setting it aside for the new project.

The plan is very much in progress and the concerned ministry is extending all possible help towards the execution of the project. "We are thankful to you for informing us that it has been decided to accept 48-MW barge mounted power plant and to make the corresponding gas allocation," said, the firm in a letter to the minister on November 27, 2007.

According to the letter, the owners of the barge are making necessary arrangements for relocating it for which the shipping company requires details of the disembarkation port in Pakistan.

The barge mounted gas turbine generator station consists of one 48-MW (ISO) Siemens-Westinghouse W 251B11 distillate or gas fuelled turbines deriving 11.5 kV, 50 Hz brush air cooled alternators with switchgear, parallel systems and all auxiliaries, mounted on a common barge. The barge is fitted with 11/132 kV step-up transformers, which could be changed if any alternative grid voltage is required.

The foreign associates of the company, Messrs. Blue Crest Capital Management, one of the largest hedge funds in Europe had to met the minister in December but it was not confirmed if they had called on him to say 'thank you'.

The firm, in its letter further said that it was doing everything possible to cut the commissioning time after the signing of the contract on the lines as per the understanding reached between NTDC and Alstom Power Rental. In 2008, Karachi's minimum electricity demand is expected to hover around 2,640 MW against KESC supply of around 1,810 MW.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Advanced CAD/CAM centre set up in Peshawar ​

LAHORE (January 16 2008): Training in designing and manufacturing products is now available to the people of Peshawar, as an advanced computer-aided design/computer-aided manufacturing (CAD/CAM) centre equipped with latest computers and software has been set up in this city.

This brings the total of such facilities set up by Technology Upgradation and Skill Development Company (Tusdec) in the country to five. According to Tusdec spokesman here on Tuesday, the company has already set up National Institute of Design and Analysis (Nida) in Lahore and Advanced CAD/CAM Centres in Karachi, Quetta and Sialkot.

Nida Lahore is playing its role as the hub for these centres. The newly established Peshawar centre will offer courses in Engineering Design, Electrical and Electronics, Civil/Architecture, Mechanical Drafting and Interior/Furniture design as just some of the planned courses. The centre is aimed at producing innovative designers instead of only software operators.

CAD/CAM technology, developed in the United States in 1950s, has been instrumental in the promotion of digital manufacturing in developed as well as developing countries. The major dividends of this technology are improved product quality and cost-effectiveness.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Remittances rise 19pc to $3.066bn ​

Friday, January 18, 2008

KARCHI: The remittances sent home by overseas Pakistanis continued to show a rising trend as an amount of $3,066.33 million was received in the first half (July-December 2007) of the current fiscal year 2007-08, showing an increase of $498.31 million or 19.40 percent over the same period of the last fiscal year.

The amount of $3,066.33 million includes $1.12 million received through encashment and profit earned on Foreign Exchange Bearer Certificates (FEBCs) and Foreign Currency Bearer Certificates (FCBCs).

The monthly average remittances for the period July-December, 2007 comes out to $511.06 million as compared to $428.00 million during the same corresponding period of the last fiscal year, registering an increase of 19.40 percent.

The inflow of remittances in the July-December, 2007 period from USA, Saudi Arabia, UAE, GCC countries (including Bahrain, Kuwait, Qatar and Oman), UK and EU countries amounted to $874.21 million, $563.06 million, $500.33 million, $457.21 million, $227.23 million and $88.99 million, respectively as compared to $659.27 million, $483.32 million, $397.03 million, $358.58 million, $218.67 million and $74.89 million, respectively in the July-December, 2006 period. Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during the first half of the current fiscal year 2007-08 amounted to $354.18 million as against $374.92 million in the same period last year.

SBP said that during the last month (December 2007), Pakistani workers remitted an amount of $479.26 million, up $4.05 million or 0.85% when compared with an amount of $475.21 million sent home in December 2006.

The inflow of remittances into Pakistan from most of the countries of the world increased last month as compared to December 2006. According to the break up, remittances from USA, Saudi Arabia, UAE, GCC countries (including Bahrain, Kuwait, Qatar and Oman), UK and EU countries amounted to $140.45 million, $81.25 million, $77.33 million, $77.21 million, $29.82 million and $12.90 million, respectively as compared to the corresponding receipts from the respective countries during December 2006, i.e. $125.81 million, $84.33 million, $78.91 million, $67.11 million, $38.57 million and $12.32 million. Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during December 2007 amounted to $60.15 million as compared to $67.99 million during December 2006.

Remittances rise 19pc to $3.066bn

 

[Neo]

Phase II of enhancing power transmission system on cards ​

Friday, January 18, 2008

ISLAMABAD: The government has planned to embark upon the massive work on phase II of power transmission system with the estimated cost of Rs25.04 billion in a bid to strengthen transmission system to meet increasing requirements of power demand growth across the country.

According to a senior official in Ministry of Water and Power, the main objective of the project is enhancement in the power transmission system by extension, argumentation and expansion of existing 500 kv and 220 kv transmission system of national Transmission Dispatch Company (NTDC).

“It will also help improve the system security, stability, loss reduction and reliability.” The project is proposed to be funded from Asian Development Bank loan (80%) of the project cost and NTDC’s own resources (20%).

Under the phase -II, as many as10 projects relating to transmission lines would be completed. The government of Pakistan, the official said, had requested Asian Development Bank for providing assistance for the preparation of a project to enhance overall power transmission system.

In response, ADB made a program to extend the loan under a phased scheme called Multi-trance Financing Facility (MFF) to meet all the requirement of NTDC for financing of the project under short, medium and long tem plans.

Under its first tranche, PC-1 for NTDC Power Transmission Enhancement Project $260 million has been approved by Executive Committee of National Economic Council (Ecnec).

Now for the second phase, the official disclosed, M/c BPI of UK have selected 10 sub projects identified by NTDC for ADB for financing. The same consultants for ADB under project Preparatory Technical Assistance (PPTA) loan have carried out project preparatory feasibility work.

In the recent years, as economic activity picked up in Pakistan, there was a quantum jump in the power demand as a result of which NTDC system has been subjected to stress and congestion at various strategic locations.

As a result, the system was stretched beyond capacity and this caused overloading, which resulted in outages. He said that this has necessitated the extension, upgrading and argumentation of existing grid stations and installation of new substations and transmission system.

In addition, overloaded system is one of the major causes of high transmission losses besides, colossal loss to the economy due to load shedding. He said, a number of transmission lines and grid stations are overloaded up to their capacity causing breakdowns besides increasing losses. In addition a number of 500 KV and 220 KV transmission lines are also under different stages of implementation.

Phase II of enhancing power transmission system on cards