Pakistan Economy - News & Updates - Archive

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Current account deficit within manageable limits: Ashfaque ​

ISLAMABAD (February 01 2008): Advisor and Special Secretary to the Ministry of Finance, Dr Ashfaque Hasan Khan, has said the current account deficit was well within manageable limits as despite unseen hits of billions of rupees to the economy inflows and outflows were not showing any huge difference.

Talking to Business Recorder, Dr Ashfaque Hasan Khan said the government's only worry was the rising oil prices in the world market and its impact on Pakistan's economy as it was adding to the budgetary pressure.

He said subsidy of billions of rupees every month on oil prices was forcing the government to review the budgetary projections for the current fiscal year. He said oil import bill was all time high of 6.5 billion dollars in the first half and at the current level it would cross 11 billion-dollar mark by June 30.

Dr Ashque Hasan Khan advocated immediate change in the policy of capping of the oil prices for minimising its pressure on the economy, and said the Ministry of Finance was strongly recommending at every forum to put an end to the exiting policy for passing on the actual prices to the consumers in different phases.

Dr Ashfaque Hasan Khan added that the government had different options to plug the current account deficit, including floating of a bond in the international market, but this option might be used at an appropriate time. However, he did not see the exiting conditions suitable for issuing any bond in global market.

He said Pakistan was issuing bonds in the international market every year since 2004, and it would like to use this option again once its economic team saw the global market ripe for such a move.

The advisor did not see any harm in borrowing from the State Bank of Pakistan for urgent government needs. He was of the view that the government was fully aware of the borrowing limit and its responsibilities under the Fiscal Responsibility Law.

Wheat import was another factor, which worried the advisor, who termed its import bill as another big blow to the economy that might cost the government 1.2 billion dollars.

The advisor was convinced that some elements created wheat crisis by hoarding stocks and the government measures were going to improve the situation drastically in next couple of weeks.

Business Recorder [Pakistan's First Financial Daily]

 

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Foreign reserves post $133.9 million decline ​

KARACHI (February 01 2008): The foreign liquid reserves of the country have declined by $133.9 million during the last week. Statistics of State Bank of Pakistan (SBP) show that total liquid foreign reserves held by the country stood at 15.0743 billion dollar on January 19, 2008 as compared to $15.2082 billion in the week ended on January 26, 2008.

Major decline has been witnessed in the reserves held by SBP, which show a decline of $150.3 million dollar to 12.8151 billion during the last week as compared to $12.9654 billion a week earlier. The reserves held by banks have been increased by $16.4 million to $2.2592 billion from $2.2428 billion.

Business Recorder [Pakistan's First Financial Daily]

 

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Pakistani entrepreneurs asked to explore untapped Russian market ​

LAHORE (February 01 2008): Russian Ambassador Sergey Preskov has said Pakistani entrepreneurs should explore untapped Russian market, having potential for genuine businessmen and Pakistani products.

He told Lahore Chamber of Commerce and Industry President Mohammad Ali Mian when they met on Thursday at the chamber where Senior Vice President Mian Muzaffar Ali and Vice President Shafqat Saeed Piracha also spoke.

Preskov said he had optimism that both Pakistani and Russian businessmen could enter into joint ventures to benefit each other in their respective businesses and could take to level of bilateral trade to new heights with a little.

He said his country had a lot to offer to the Pakistani business community by learning a lot from their Russian counterparts for the technological upgradation of their industrial units.

He said his country was rich in natural resources with business-friendly policies and it was time that potential Pakistani investors availed of the opportunity.

With particular reference to ongoing energy crisis, the ambassador said: "It is a basic issue for Pakistan and talks for construction of power plants are well on way and, hopefully, the things would take a very positive turn in the near future."

The ambassador and the chamber president also agreed to ink a memorandum of understanding (MoU) to establish a Pak-Russia Business Council and hold single-country exhibitions in each other's country.

Mian said Pakistanis thanked Russians for helping Pakistan establish a mega steel mill in Karachi. "Today, this steel mill is the biggest source of steel products, catering to the demand of the country and value addition for related products. But since then, no major initiative has been taken by Russia," he added.

He said both the countries needed to warm up their relations for mutual benefit of the people and to play an overwhelming role in international arena on a sustainable basis. He said the private sector could export various goods to Russia and, in return, Pakistan could supply all types of textile goods, leather and leather products, surgical goods, sports goods, agro-based products and food items, fresh fruits and vegetables, fish and fish preparations, carpets and rugs, pharmaceutical products etc.

He said Russia could also help in introducing Pakistani products in the areas of its influence. He said the profiles of Pakistani and Russian economies suggested brighter chances for joint ventures in food processing, oil, gas and mineral exploration, energy, engineering (heavy and light), transport equipment, automobiles, tractors, harvesters, machine tools, cement, fertilisers, industrial chemicals, plastic and rubber products and home appliances.

Mian said his chamber and the Russian Embassy would also start a language course at its premises to help Pakistani businessmen understand their Russian counterparts.

Business Recorder [Pakistan's First Financial Daily]

 

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Chichoki Mallian power project deal scrapped ​

ISLAMABAD (February 01 2008): The federal government has formally scrapped 450-500 MW thermal power project deal with Qatar Investment Authority (QIA), which was proposed to be set up in Chichoki Mallian (Sheikhupura), official sources told Business Recorder here on Thursday.

The Economic Coordination Committee of the Cabinet on October 31, 2007 had directed the ministry of water and power to issue a notice to the sponsors of the project, including Alstom-Marubini and QIA to give a deadline within a week as to when they intend to file an application before the National Electric Power Regulatory Authority for tariff fixation and also, by which date would they complete the project to avoid further delay.

The government issued several reminders to QIA to complete procedural formalities but they kept silent. "You have failed to come up with tariff petition by December 15, 2007 and now we cannot work with you," the sources quoted one of the concerned ministries as writing to the QIA top officials.

The sources said the QIA has also been conveyed the message that neither the Board of Investment nor the ministry of water and power or Private Power Infrastructure Board would be in a position to hear their viewpoint.

The ECC, in one of its recent meetings, had directed the ministry of water and power to complete public sector projects in time.

The project was being monitored strictly by Prime Minister House all the time when Shaukat Aziz was the chairman, Water and Power Development Authority but the present Water and Power Minister Tariq Hamid does not support the project.

The sources said initially the project was being handled by the Investment Division, which strived to save the deal, but later on it was transferred to the PPIB headed by Yusuf Memon.

They said the project cost, which the QIA has increased from $350 million to $525 million, is being considered as one of the major hurdles in smooth progress.

They said the justification given by QIA on cost overrun and changes in technical specifications were not acceptable to the concerned stakeholders (including Wapda), as the projected tariff would be too high.

Kenneth Shen, head of Strategic & Private Equity, QIA, also briefed a meeting a couple of months ago in the BoI indicating that strong world economic growth had given immense negotiating power to EPC, Alstom-Marubeni.

Though Marubeni was still interested in setting up the project, however, the revised cost was not acceptable to the government. A Marubeni delegation was also expected to meet the caretaker minister for water and power to seek his unconditional support.

The government, however, intends to award Chichoki Mallian project to M/s Dong Feng of China, which would set up 450 MW thermal power project at Nandipur (Gujranwala).

The contract's award to Dong Feng also created a controversy as one of the bidders ie Euro Dynamics International, a Lahore-based firm, has alleged that the second lowest bidder joint venture of Chinese company does not meet the qualification and requirements of a combined cycle plant.

The firm had also accused Wapda of hiding facts from the ECC on increase in price by the JV, besides violating Public Procurement Regulatory Authority's rules.

Business Recorder [Pakistan's First Financial Daily]

 

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Three projects of 600MW to come on stream in a year ​

ISLAMABAD (February 01 2008): Three power projects of 600 MW capacity, currently being processed by the Private Power Infrastructure Board, have been scheduled to start generation within a year to help minimise demand-supply gap, official sources told Business Recorder.

The PPIB is working on 58 multiple fuel (oil, coal, gas and hydel) projects having a cumulative capacity of 14,273 MW which are on different stages of completion and their expected commissioning is to start from 2008 and 2016, envisaging an investment of about $13 billion. These three include Attock Generation, Orient Power and Sheikhupura Atlas power projects.

The sources said that Letters of Interest (LoIs) have been issued to 35 projects with a cumulative capacity of 9,615 MW; Letters of Support (LoSs) issued to 14 projects totalling 2,590 MW, while implementation agreements (IAs) have been signed with 12 projects of 2,337 MW. These projects include 225 MW Orient Power, 225 MW Sapphire Power, 225 MW Saif Power, 165 MW Attock Gen, 202 MW Fauji Mari, 200 MW Nishat Chunian, 200 MW Nishat Power, 225 MW Atlas Power, 134 MW Star Power, 225 MW Halmore Power, 227 MW Engro Power and 84 MW New Bong Hydro Power Project. Moreover, IA of 179 Gulf power is ready for signing.

A number of companies have also concluded the Direct Implementation Agreements (DIAs) with their lenders, while eight IPPs of 1,667 MW capacities namely Orient Power Project, Sapphire Power Project, Fauji Mari Project, Attock Gen, Saif Power, Nishat Power Project, Nishat Chunian Power Project and Atlas Power Project have achieved financial closure.

Business Recorder [Pakistan's First Financial Daily]

 

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Cement exports hit record 618,000T in Jan ​

Saturday, February 02, 2008

KARACHI: Cement exports in January hit a record high of 618,000 tonnes breaking the previous record of 575,000 tonnes shipped out in August 2007 data available with the research department of a brokerage house revealed.

As per the data compiled by the JS Global research, January 2008 cement exports have increased by a massive 152 per cent on YoY basis and by 60 per cent when compared to December 2007. On the other hand, local dispatches stood at 1.6 million tonnes in January 2008 down by 13 per cent compared to January 2007.

“The cement exports could go up to one million tonnes per month if Karachi Port Trust (KPT) increases handling facilities at port,” said Galadari Cement CEO Badruddin Fakhri. “Cement exports can earn up to one billion dollars per annum if required infrastructure is available at KPT,” said Fakhri.

Port Qasim is fast developing cargo-handling facilities but KPT too needs speedy developments to facilitate cement exports, he said. Power shortage has been affecting cement production and this could be compensated by further increasing the cement exports. The shortage in local dispatches in the month of January 2008 in the country is due to political uncertainty, he said.

The decline in local cement sales during the period under review was due to the lack of transport available during the first 10 days of the month owing to the political turmoil post Benazir Bhutto’s assassination. Moreover, severe cold has considerably reduced working hours affecting local sales.

This decline in local sales was offset by the higher exports during the month resulting in total dispatches of 2.2 million tonnes in January 2008, an increase of 6 per cent YoY.

Nevertheless, both local and export sales grew by 13 per cent and 60 per cent respectively when compared to December 2007 as the number of working days during Dec 2007 were significantly low due to Eid-ul-Azha holidays and political tensions.

Cumulatively, cement sales during first 7 months (Jul-Jan) of FY08 depicted an increase of 21 per cent to stand at 16 million tonnes, owing to the expanding local demand and growing cement shortage in the region leading to higher exports. Export sales thus have shown a commendable increase of 148 per cent while local dispatches saw a rise of 6 per cent during the first 7 months of FY08.

In terms of company-wise break-up of JS universe companies, Pakistan Cement posted highest growth of 119 per cent as its sales stood at 1,373,000 tonnes in Jul-Jan 2008 versus 628,000 tonnes in the same period last year. The second highest growth of 73 per cent in dispatches was of Maple Leaf, followed by DG Khan and Lucky Cement, as they posted a growth of 62 per cent, and 28 per cent, respectively. In terms of quantity dispatched, however, Lucky remained the market leader with its highest dispatches of 3,134,000 tonnes.

However, DG Khan following its expansion at Chakwal also made healthy volumes at 2,242,000 tonnes sales in Jul-Jan FY08.

http://www.thenews.com.pk/arc_news.asp?id=3

 

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Rupee down to more than six-year low ​

Saturday, February 02, 2008

KARACHI: Rupee weakened to a more than six-year low against the dollar on Friday as importers bought the US currency to clear payments, dealers said.

The rupee closed at 62.64/69, its lowest level since October 2001. Dealers said rising import payments, especially for oil, and outflows from financial markets had boosted dollar demand.

“Demand for dollar is increasing due to oil and gas payments and also because of outflows from the stock market,” said a dealer at a brokerage house. Short-term money rates fell sharply on Friday amid increased cash inflows this week.

Overnight call rates ended at 0.75 per cent, down from Thursday’s close of 4 per cent. “Yesterday, there was an inflow of 67 billion rupees against an outflow of about 45 billion rupees, so there is still liquidity in the market,” said a brokerage dealer. Dealers said the State Bank of Pakistan may conduct a repo on Saturday to mop up liquidity in line with the tightening of the monetary policy for the six months to June 30. The State Bank on Thursday announced an increase in its discount rate to 10.5 per cent from 10.0 percent and the cash reserve requirement to 8.0 per cent from 7.0 per cent.

http://www.thenews.com.pk/arc_news.asp?id=3

 

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Web site for farmers ​

Saturday, February 02, 2008

LAHORE: The Punjab Irrigation and Development Authority (PIDA) is creating its website to facilitate farmer communities and provide fresh information about development activities in the irrigation system of the province.

Punjab Minister for Irrigation and Power Syed Dilawar Abbas, talking to a farmers’ delegation in his office, informed them that PIDA website would be completed in two months and for that purpose a contract had been awarded.

He said computer sets had been provided to 84 farmer organisations and a computer literacy programme had been started to train people. He said the farmer organisations would be able to share their experiences with each other and international donor agencies could also have up-to-date information about development activities in irrigation. Vigilance Irrigation & Power Director Brig (R) Ahmad Abbas said the firm designing the website would be responsible for its maintenance for four months after its launch.

http://www.thenews.com.pk/arc_news.asp?id=3

 

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Industry be preferred to households: experts ​

Saturday, February 02, 2008

LAHORE: Economic experts have stressed the government to take some politically tough decisions in the energy sector in an effort to sustain growth by giving preference to the industry over domestic and commercial consumers.

They argue that stoppage of energy supply to the industry would ultimately force them to close their businesses, leading to unemployment on a mass scale. As a result, majority of the domestic consumers would be left with no money even to feed themselves.

“It takes years to establish an industry but it goes into the red in few months if the enabling environment is denied to it,” an expert warned. The economists said recurring expenses of industries could not be met if they were forced to curtail normal production for which they had hired staff and arranged other facilities.

Once an industry went sick, they warned, its revival would be extremely difficult as liabilities started mounting with every passing day. They said only sustained industrial growth could generate resources for a long-term solution of the electricity and gas crisis.

The economists pointed out that the industry had not been fairly treated during the past decade. At the onset of the energy crisis some five years ago, the industries were encouraged to install big diesel-run power generators. However, when the cost of diesel went up, these generators became redundant. Then, they added, the industries arranged more expensive furnace oil-cum-gas run generators.

Natural gas was the most economical fuel for generating electricity as furnace oil prices tripled in the past two years due to increase in global crude oil rates. They said cutting gas supplies to industries meant producing energy at over Rs10 per unit.

The economists said it was a folly on the part of the government to expand the domestic base of natural gas supplies when it knew that there was shortage of the fuel for already existing consumers. Under that programme, Sui Northern Gas Pipelines Ltd provided 225,000 domestic and 400 CNG connections last year while the industry and power generating companies faced supply cut.

They said suspension of gas supply had double impact on electricity generation, first in the shape of higher fuel cost and second high maintenance cost if generators ran on furnace oil. They said furnace oil or diesel-run thermal generators were required to be stopped after a month or so for cleansing, otherwise their generating capacity would start declining.

That was the reason when last summer the private producers and Water and Power Development Authority produced much less thermal power than their capacity and shutdowns of thermal units were frequent for repair and maintenance.

They said commercial users like hotels and restaurants, particularly big hotels, should be asked to shift to liquefied petroleum gas instead of natural gas. It might add to the cooking cost, they said, but the impact as percentage of the total would be nominal. The energy thus saved should be provided to industries and power producers.

Similarly, the economists suggested there should be domestic gas loadshedding cyclically in different localities for four hours a day which would spare 8 to 10 per cent of gas for industries. They said closing CNG stations in periods of acute shortage would mean doubling the fuel cost of motorists.

All sectors affected by these measures would naturally protest but the government would have to take the steps in order to ensure the industries kept running. Control over consumption should continue even if the supplies increased, they said.

The conservation of electricity was also of vital importance till new capacities were created, they said adding traders should be forced to close shops by 7pm and all air-conditioners in government offices be removed. The state itself should lead in this conservation drive.

Government offices, they pointed out, still ran electric heaters in winter and air-conditioners in summer, which was not the case a decade ago. However, the efficiency of bureaucracy has not increased due to these facilities.

http://www.thenews.com.pk/arc_news.asp?id=3

 

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CSF to present second report on Pakistan ​

Saturday, February 02, 2008

ISLAMABAD: The Competitiveness Support Fund (CSF) is all set to start working on the second Competitiveness Report for Pakistan.

The CSF, a joint initiative of the United States Agency for International Development (USAID) and Ministry of Finance, Government of Pakistan, as partner institution of the World Economic Forum (WEF) in Pakistan is working closely with the Global Competitiveness Network of the WEF on this report. The Competitiveness Report 2008 will track Pakistan’s performance, spotlighting the areas of progress and areas of further focus.

In addition to explaining the results of the Global Competitiveness Report 2007-2008 of the World Economic Forum and benchmarking Pakistan’s progress against its peers, the report will evaluate Pakistan’s progress in raising its competitiveness in 2008-09. Each of the areas of recommendation will be assessed based on tangible, measurable results. This will be completed both at the national as well as regional level.

The current report will spotlight a thematic area that may require focused attention from Pakistan’s economic leadership. Pakistan is ranked 92 among 131 countries on the global competitiveness rankings. The CSF will start its interaction with the stakeholders in the first week of February 2008, including all relevant ministries, leading public and private sector institutions, business council and trade bodies along with academia and the media.

The CSF will identify the areas to improve Pakistan’s competitiveness through a consultative initiative with key stakeholders. The report is an important policy tool for government’s economic growth agenda and for private sector investment in Pakistan. The report will also include the action plan and timetable to improve key industries that will boost economic growth.

This year, the competitiveness report will assess the global competitiveness index of Pakistan’s economy on the following pillars ie 1) institutions, 2) infrastructure, 3) macroeconomic stability, 4) health and primary education, 5) higher education and training, 6) goods market efficiency, 7) labour market efficiency, 8) financial market sophistication, 9) technological readiness, 10) market size, 11) business sophistication and 12) innovation.

Pakistan’s first competitiveness report was launched by former prime minister Shaukat Aziz in March last year. The CSF report for 2007 stated that Pakistan improved its competitiveness position in the rankings of the World Economic Forum. The Competitiveness Report 2008 will take an in-depth look at Pakistan’s ranking on the Global Competitiveness Report (GCR) of the World Economic Forum (WEF). The report will provide a snapshot of the strengths and weaknesses of Pakistan’s economy, key positive and negative trends in the economy, regional development in each of the four provinces along with economic potential in the FATA and FANA region.

This year, the Competitiveness Support Fund (CSF) will include a chapter on gender in Pakistan’s Competitiveness Report 2008, which will identify gender gaps affecting competitiveness in Pakistan, especially the areas identified by the WEF in its Global Gender Gap Report 2007. The report will also provide a framework for capturing the magnitude of gender-based disparities. It will also explain for the policy-makers and business leaders in seeking solutions for talent shortages and how to bridge gender gaps and leverage the talents of both women and men.

http://www.thenews.com.pk/arc_news.asp?id=3

 

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Monetary policy hits industrial growth: FPCCI ​

Saturday, February 02, 2008

KARACHI: Federation of Pakistan Chambers of Commerce and Industry President Tanvir Ahmed Sheikh has expressed concern over the monetary policy statement released on Thursday by the State Bank, saying it is a major cause of slow growth in the industrial sector and widening of economic inequalities.

He said the benefits of higher GDP growth rate, building of foreign exchange reserves, accelerated stock market index and record growth of foreign investment had not trickled down to improve the living standards of common man. Simultaneous improvement in macroeconomic indicators and accelerated inflation and poverty had indicated the obstacle in transformation mechanism, he said.

He added little trickledown effect was observed during the “macroeconomic growth regime” and said the tight monetary policy was one of the major hurdles in the way of transferring the benefits of economic growth to the lower segment of society by enhancing employment-generating activities through promotion of industrial investment.

Sheikh said negative growth in banks’ financing for the private sector was observed during the last six months, indicating a serious decline in investment activities, while financing of working capital had shown no significant improvement.

Total credit supply to the private sector fell by Rs14 billion during the first five months of the current fiscal year. He continued that all those indicators had shown recession in the industrial sector and the situation might lead to greater unemployment in near future and the monetary policy must address these economic issues.

Sheikh pointed out that the Export Finance Scheme (EFS) had been playing a major role in growth of exports, adding the scheme provided an incentive to exporters when exports were not possible because of competition in the international market where Pakistani products had been facing an uneven playing field, anti-dumping duties and high cost of production.

However, he added, after the announcement of part-I of the current monetary policy in July 2007, export loans under the EFS had depicted substantial net retirement. “Now, present changes in the EFS will create further problems for the export-oriented industry,” he voiced concern.

The FPCCI chief expressed concern over further tightening of the monetary policy by making a 50-basis-point increase in the discount rate and one per cent increase in the reserve ratio. He warned that this policy measure would hamper the ability of the banking sector to lend and would ultimately adversely affect the industry.

http://www.thenews.com.pk/arc_news.asp?id=3

 

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Oil & Gas Exploration: Licence granted to NHEPL and KEC in Sindh​

ISLAMABAD: The government on Friday granted petroleum exploration licence to the joint venture of New Horizon Exploration and Production Limited (NHEPL) (60 percent Operator) and Kuwait Energy Company (KEC) (40 percent) over Block No 2468-9 (Jherruck) covering an area of 733.79 square kilometers.

The block lies in Hyderabad and Thatta districts of Sindh, falling in Zone-Ill.

The venture intends to make an investment of $95 million in the aforesaid block to carry out geological and geophysical studies, acquisition of 150 square kilometers of 3D seismic data or 350 line kms 2D seismic data and drilling of two exploratory wells during phase-I of the initial period of three years.

The KEC is a rapidly growing exploration and production company that is active in Egypt, Oman, Yemen, Indonesia, Syria and Russia. KEC is the largest non-government exploration and production company in Kuwait The licence and the Petroleum Concession Agreement were signed by Secretary Petroleum and Natural Resources, Farrukh Qayyum, on behalf of the President of Pakistan, Director General Petroleum Concessions, Chairman and CEO of NHEPL Syed Wamiq Bokhari and CEO of KEC Mrs Sarah H. M. Akbar.

Federal Minister for Petroleum and Natural Resources, Ahsan Ullah Khan graced the occasion along with other senior officials of the Ministry including Additional Secretary, Shaukat Hayat Durrani. app

Daily Times - Leading News Resource of Pakistan

 

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Competitiveness report to assess Pak economy​

ISLAMABAD: Second State of Pakistan’s Competitiveness Report 2008 would provide a snapshot of the strengths and weaknesses along with key positive and negative trends in the economy, regional development in each of the four provinces along with economic potential in the Federally Administered Tribal Area (FATA) and FANA region.

The Competitiveness Support Fund (CSF), a joint initiative of the United States Agency for International Development (USAID) and Ministry of Finance, Government of Pakistan, is starting its work on the second State of Pakistan’s Competitiveness Report for 2008. CSF, as the partner institution of the World Economic Forum (WEF) in Pakistan is working closely with the Global Competitiveness Network of the WEF on this report.

The State of Pakistan’s Competitiveness Report 2008 will track Pakistan’s performance, spotlighting the areas of progress and areas of further focus. In addition to explaining the results of the Global Competitiveness Report of 2007-2008 of the World Economic Forum and benchmarking Pakistan’s progress against its peers, the report will evaluate the country’s progress in raising its competitiveness in 2008-09. Each of the areas of recommendation will be assessed based on tangible, measurable results. This will be completed both at the national as well as regional level. The 2008 Report will spotlight a thematic area that may require focused attention from Pakistan’s economic leadership. Pakistan is ranked 92 among the 131 countries on the global competitiveness rankings. CSF will start its interaction with the stakeholders in the first week of February 2008, including all relevant ministries, leading public and private sector institutions, business councils and trade bodies along with academia and the media.

Daily Times - Leading News Resource of Pakistan

 

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‘Thermal power deals to raise production cost’​

ISLAMABAD, Feb 1: The government has been warned that the country’s power generation capacity that is heavily tilting towards expensive thermal generation compared with hydel resources.

The Planning Commission and the National Electric Power Regulatory Authority (Nepra) have told the president and the prime minister that the public concern about shortages would soon turn into a question of unbearable increase in cost of production and affordability, sources told Dawn.

The sources said the ratio of hydroelectric power generation capacity would decline to less than 20 per cent by 2010 from the current 28 per cent because of an increasing number of contracts being signed for thermal power generation.

They said the government had been advised to be careful in increasing generation capacity through the short-term solution of thermal power generation at exorbitant tariffs and strive for maintaining a ratio of 70:30 between thermal and hydel power generation.

While the generation in winter would remain more or less at the current level in the next few years, the power supply from thermal plants will increase substantially as new projects come on line by 2010.

Hydel power generation during the current winter fluctuates in 1,500-2,000MW against total supplies of 11,000-12,000MW, mostly coming from high-cost oil-based thermal projects. Fuel cost accounts for more than two-third of thermal tariff that keeps rising with international prices and currently averages beyond 10 cents (Rs7) per unit. The aggregate hydel power tariff from Tarbela, Mangla and Ghazi Barotha comes to less than 30 paisa per unit.

The president and the prime minister were shocked to know that hydel power generation had dropped to 13 per cent in recent days against its capacity of about 28 per cent because of lower availability of water, the sources said.

While the Wapda Vision 2025 and energy security plan 2030 envisaged improving hydel generation to 35 per cent and the power policies announced by the government called for a bar on thermal projects, most of the agreements signed for power production over the past five years were in the thermal sector, they were told.

The sources said Nepra had declined to approve wind power tariff of more than 10.5 cents it had offered to six power producers with a total capacity of about 300MW. It informed the government that wind-based power tariff in India was 7-8 cents per unit.

None of the wind power producers had been able to achieve financial close as required under the law although they had been given upfront tariffs early last year, the sources said.

Nepra informed the government that the sponsors of the projects had not been able to lock in their contracts with manufacturers by making down payment and said the cost of their non-professional attitude should not be passed on to the consumers.

The president and the prime minister were also convinced after several presentations by Nepra and the Planning Commission that coal-based power projects at Thar could not be offered a rate of 7.8 cents per unit and it should be adopted as reference tariff for international bidding to produce 20,000MW by 2019.

‘Thermal power deals to raise production cost’ -DAWN - Business; February 02, 2008

 

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Pakistan assumes chairmanship of G-77​

ISLAMABAD, Feb 1: Pakistan has assumed the chairmanship of the Group of 77 and China, Vienna Chapter for 2008, with Ambassador Shahbaz accepting the instrument of office from Sudan in Vienna, Foreign Office said here on Friday.

This is the fourth time since the inception of the Vienna Chapter that Pakistan has assumed its chair.

Pakistan assumed the chair at a ceremony attended by over 30 member states of the Group based in Vienna.

The ambassadors and representatives paid rich tributes to the active contribution of Pakistan in its activities and expressed confidence in its ability to lead the Group during current year, the Foreign Office said.

The Vienna Chapter provides support services for the preparation of meetings for the Vienna-based UN organisations such as Unido, the International Atomic Energy Agency, the United Nations Office at Vienna and the Preparatory Commission for the Comprehensive Nuclear-Test-Ban Treaty Organisation.

The office serves as an institutional memory of the G-77 and China to members of the Group.

OUTGOING SAARC SG: Saarc Secretary General Chankyab Dorji, who is paying his farewell visit to Pakistan, called on caretaker Foreign Minister Inamul Haque and Foreign Secretary Riaz Mohammad Khan separately in the Foreign Office on Friday.

Mr Haque stated that Saarc must establish itself as a credible regional organisation and evolve concrete and result-oriented programmes to reflect the aspirations of the people of the region.

Pakistan assumes chairmanship of G-77 -DAWN - Business; February 02, 2008