Pakistan Economy - News & Updates - Archive

[Neo]

Uncertainty looms large over Pakistan: Moody’s​

KARACHI, Feb 25: Political uncertainties still abound and a wider process of reconciliation faces deep chasms, said Aninda Mitra, Moody’s vice- president and lead analyst, said in a statement on Monday.

The general elections being fair enough made them acceptable to all political parities and has given a hope that the political uncertainty would die with the birth of new democracy in Pakistan.

However, the delay in developing a consensus to resolve the pre-poll political issues like restoration of judiciary created doubts among investors and analysts about smooth functioning of democracy.

Pakistan has been facing tough time from the overseas analysts rating agencies quick to curtail the country’s rating.

Moody’s changed the outlook on Pakistan’s B1 sovereign bond ratings to negative in the immediate aftermath of the imposition of emergency rule in November.

The imposition of emergency proved harmful as the foreign investment started shrinking intensifying the negative impression about the country’s ability to perform smoothly.

“At that time, (when emergency imposed) we believed that the suspension of the rule of law had systemically heightened political uncertainty, making stable political outcomes unforeseeable,” said Mitra.

“Such high levels of political uncertainty and institutional opacity could affect confidence-sensitive investment flows and generally worsen macro-economic stability.”

In a recent report, the State Bank has warned that macro-economic imbalances were the threat for the stability of the economy and suggested the government for immediate corrective measures to improve the situation.

The immediate impact of fair elections was felt when the stock market reached a record high level and the rupee gained 2.4 per cent in just two days after the elections.

However, the uncertainty again tightened its hold over the market with the delay in consensus for the formation of a government in Islamabad as well as in the four provinces.

Mitra said concerns about deterioration in Pakistan’s credit fundamentals were further fueled by the shocks to economic activity, business sentiment, and reduction in foreign investment inflows that followed along with a sharp rise in inflation and widespread power cuts.The State Bank in its latest report expressed serious concern over rise in main inflation, especially food inflation but was more concerned that the non-food and non-energy inflation was on rise despite SBP’s tight grip over money flows to the market.

Moody’s analyst said that Pakistan’s recent elections may offer, but do not yet assure, an opportunity for a new coalition government to restore the rule of law, alleviate institutional rifts, and reduce regional, religious and ethnic tensions.

“The election brings with it the promise of real political improvements, especially if level of domestic violence is reduced and the government actions are afforded greater legitimacy and predictability,” said the analyst,

“This would likely improve economic activity, boost domestic business and investors’ sentiment, and restore foreign investors’ confidence and support a change in the ratings outlook to stable from negative.”

However, he said, until the two main opposition parties demonstrate an ability to restore political stability and forge an effective government, Moody’s will retain its negative outlook on Pakistan’s B1 ratings.

The Pakistan People’s Party and the Pakistan Muslim League (Nawaz) “have a history of animosity with ideological differences on several constitutional as well as socio-political issues,” said Mitra.

“The most serious credit challenge would probably arise from a synchronization of further political infighting, coupled with policy drift and worsening inflation and the fiscal fundamentals that could further worsen macro-economic as well as socio-political stability,” the analyst concludes.

Uncertainty looms large over Pakistan: Moody’s -DAWN - Business; February 26, 2008

 

[Neo]

Lucky Cement to offer $150m GDR this year​

KARACHI, Feb 25: Lucky Cement Company Limited intends to offer its stalled GDR worth $150 million during the current financial year, the company’s Finance Director Muhammad Abid Ganatra said on Monday.

The company also released its financial results for the half year ended on December 31, 2007, posting after-tax profit at Rs1,349 million, translating into earnings per share (eps) at Rs5.12. In the same time last year, the company had reported taxed profit at Rs792 million and eps at Rs3.01.

The aggregate sales were valued at Rs7,200 million for the period under review compared to Rs5,579 million in the corresponding previous half year, which was supported by exports that rose by 156.05 per cent to Rs3,614 million, from Rs1,404 million. Local sales were down to Rs3,587 million, from Rs4,175 million.

A statement issued by the company said: “Overall share of the company has been managed at 18.97 per cent out of total dispatches of the industry, whereas export share of the company was 38.84 per cent for the half year under review”. The company stated that during the half year, sales revenue had increased by 29.07 per cent mainly due to quantitative growth.

The company is focussing on exports where it said: “The new contract prices for loose cement export executed for calendar year 2008 are better than previous year contract prices, but its impact will start reflecting from third quarter”.

The company complained of lower local prices and the finance director stated that the cement industry “will have to pass on the increasing cost of production to the consumers by raising prices in the local market”. He explained that the cost of coal had risen phenomenally.

So would the increasing trend of the industry to turn to foreign markets create shortage in the local markets? The company does not think so, pointing to surplus production. But ask builders and their associations and they would blurt out unsavoury words for cement industry and its ‘practices’.

Lucky Cement to offer $150m GDR this year -DAWN - Business; February 26, 2008

 

[solid snake]

Safe Behind Their Walls​

Security and luxury drive sales at an unlikely gated community in Pakistan.​

By Joe Cochrane | NEWSWEEK
Mar 3, 2008 Issue | Updated: 11:32 a.m. ET Feb 23, 2008

It's easy to forget about political assassinations, fears of loose nukes and the specter of Islamic militancy from a bench in Hill Park. Nestled in an idyllic neighborhood where children play in the streets and homeowners stroll to the local health club or mini-mart, the park and its manicured grass overlook a sliver of a vast gated residential development of the sort you might see in southern California. But the area, named Bahria Town, is located just outside Islamabad. At 45,000 square acres it is, according to splashy international ads, the largest private development in Asia, and despite Pakistan's well-publicized political and security problems, people are signing deals for six-figure houses, condos and apartments faster than they can be built. "These are changing times for Pakistan," says Salman Ahmed Khan, the development's director of marketing and operations, whose main job is to court prospective buyers away from Dubai and to Bahria Town. "Pakistanis are traveling, they're seeing nice things abroad and we want to provide that for them at home."

This unlikely playground for wealthy Muslims is the vision of Khan's boss and father-in-law, Malik Riaz Hussain, a 59-year-old billionaire Pakistani contractor. Set between the capital Islamabad and its sister city Rawalpindi, Bahria Town is the "masterpiece" of his 40-year career, a $6 billion project he has funded solo to avoid having to deal with outside investors. Its nine phases, too vast to fully appreciate without standing on one of the plateaus that overlook them, will one day mesh together into a planned residential city for 1 million people. The project broke ground in 1996, and already, many of the 50,000 luxury properties in the development are owned by wealthy Pakistan expatriates who swooped into Bahria Town after 9/11 to buy second homes amid fears they would be driven out of places like London, New York and Los Angeles. Equally important was the security and serenity that Bahria Town provides, which drew Pakistan expats and a smattering of wealthy Arab Muslims away from places like Dubai.

The complex offers amenities (24-hour armed security, schools, hospitals, a fire department, retail shopping, restaurants and entertainment centers) that go above and beyond those in many of the gated communities that have become so popular in countries from the United States to Brazil. Given the nation's security issues, it's especially easy to understand why the rich here want to cloister themselves. Rival Pakistani developers, including one owned by the military, have begun copying Hussain's vision, constructing their own gated communities in the suburbs of major Pakistani cities such as Karachi. Hussain himself is developing a second such site in Lahore, where former prime minister Nawaz Sharif already lives in a gated community called Model Town.

Hussain's original inspiration for the mega-community came from the pre-planned town of Reston, Virginia, just outside Washington, D.C. Materials and design inspiration have been imported from everywhere. In the center of roundabouts sit giant Spanish fountains costing $500,000 a pop; the main streets are lined with palm trees brought in from Thailand; grass for the local golf course comes from the U.S. state of Georgia; the education expert for the 1,100-acre university being built is from Seattle. "When I see America, when I see Britain, when I see Turkey, when I see Malaysia," Hussain says, "the only thing I think is, 'Why not Pakistan?' "

This is Hussain's key notion—that Bahria Town is a world away from Taliban and Qaeda militants, the assassination of Benazir Bhutto and weekly suicide bombings. "This is the real Pakistan," Hussain told NEWSWEEK.

But the real Pakistan also has violence. According to the South Asia Terrorism Portal, at least 1,523 civilians were killed in terror-related violence in 2007 and more than twice that number injured. An additional 441 Pakistanis were killed in sectarian violence last year. While most of the carnage occurred in the volatile North-West Frontier Province, where Islamic militancy is strong, there were also suicide bombings in Islamabad and Lahore that killed dozens of innocent bystanders. It's no wonder those who can afford it are drawn to places like Bahria Town, which has retired Army officers as security advisers and former foot soldiers on its police force. And independent power supply and private street cleaners also save residents from maddening daily electricity shortages in cities like Islamabad and garbage fouling the streets.

Hussain's focus and energy toward providing all this are limitless. He's up at his Islamabad residence by 6 most mornings, receiving project managers, local politicians and friends for breakfast before driving out to the project site in a heavily armed motorcade. He spouts off facts and figures about the development with encyclopedic knowledge, and says he frequently changes plans for the phases still being developed to make them better. He added an exact replica of Trafalgar Square at the Bahria Town development in the city of Lahore.

Hussain is familiar with reinvention. Although born into a wealthy family, his father's contracting business collapsed, and he was forced at the age of 19 to start his career as a lowly clerk in Islamabad. He remembers vividly, three years later, having to sell some family silverware just to buy medicine for his sick 2-year-old daughter. "I've never forgotten being poor," Hussain says, pointing out that Bahria Town also includes thousands of low-cost prefabricated houses. Still, there's no missing the fact that Hussain's dream city is mainly for upper-class Pakistanis who "want the good things in life," says Khan, the marketing manager.

Hussain says Bhutto's death has only increased his motivation to push forward his groundbreaking development projects. He claims that Pakistan's instability has not affected sales at Bahria Town. Pakistani economists like Qaisar Bengali aren't so sure: "There are many housing schemes stuck in the middle because real-estate prices have dropped in the last year or so." Nonetheless, Hussain says he's optimistic about the future, especially given that last week's national elections were more peaceful and transparent than people had expected. A new civilian government will take charge in the coming weeks after more than eight years of military rule, which has stymied Pakistan's economy (it grew about 7 percent last year, trailing neighboring India by nearly two points). Corruption, kickbacks and red tape are rife.

Hussain himself maintains close ties to the military establishment; his early business success was due in large part to construction contracts with the Pakistan Navy. ("Bahria" is Urdu for "naval.")

But he and others hope the country is at a turning point—one that will fuel private projects like Bahria Town. Pakistan certainly has no shortage of natural resources or cheap labor; now that elections are settled, economists believe FDI will flow back into the country. Investors from the Middle East (including regional giant Damac, based in Dubai) have already been knocking on Hussain's door, looking to put money in joint ventures here. With the return of civilian government and the removal of the shackles of stringent, military-led development, Hussain is free to ponder his next megaproject: digging a traffic tunnel through the Margalla Hills on the northern outskirts of Islamabad, and putting up a new bedroom residential community in the valley on the other side. If he builds it, says the developer confidently, they will come.

© 2008 Newsweek, Inc.

Safe Behind Their Walls | Newsweek International Edition | Newsweek.com

 

[mujahideen]

Rupee down against Euro, British Pound

KARACHI: Rupee value witnessed a decrease against Euro and British Pound at the start of open market here on Tuesday. Dollar was sold in Ready and Telegraphic Transfer at Rs60.62 and Rs62.80; British Pound at Rs123.35; Euro Rs93.10, Japanese Yen Rs0.582; UAE Dirham Rs17.09 and; Saudi Riyal Rs16.77.
Courtesy Geo

 

[Neo]

KSE crosses 15,000-point mark on selective buying in blue chips ​

Zardari’s statement on building working relationship with Prsident Musharaff embolden foreign funds retail investors to extend positions

Wednesday, February 27, 2008

KARACHI: Eventually, the consolidating Karachi stock market moved beyond the 15,000 points psychological level successfully for the first time on Tuesday. The leading 100-Index has covered the distance from 14,000 points to 15,000 points milestone in a span of eight months.

KSE 100-share Index gained 109 points to conclude at 15,056 points while its junior partner the 30-Index surged 209 points to close at 18,623 points.

The fully utilised Continuous Funding System indicated active participation from local retail investors while rising Special Convertible Rupee Accounts meant for foreign portfolio investment showed increased accumulation by foreign funds. However, low trading volume and losers outnumbering the gainers point out that buying was selective and limited to fundamentally strong scrips.

“PPP Co-Chairman Asif Ali Zardari’s statement about building a working relationship with President Musharraf provided rationale to investors for building long positions amid placing market beyond 15,000 points landmark,” observed Ahsan Mehanti, CEO of Shahzad Chamdia.

“However, the turnover turned thin relatively with losers outnumbering the gainers on board with very small differences, which is not a good omen,” another analyst added. Ready market volume stood at 265.668 million shares, which is 7.5 million or approximately three per cent lower than 273.149 million shares changing hands a day earlier.

Out of total 368 active counters on board, 166 suffered losses, 158 registered gains, while 44 stocks closed unchanged. As a matter of record, 100-Index successfully breached through 14,000 points mark for the first time on July 05, 2007. Afterwards, index indulged into the consolidation phase with crossing this historical level so many times in reverse and forward gears. Finally, the benchmark surpassed 15,000 points milestone successfully for the first time today.

“Again, foreign portfolio investors are aggressively accumulating fundamentally strong scrips especially in banking and insurance sectors. It seems that they have full confidence in the making of next political government and its friendly relations with President Musharraf,” analysts added.

SCRA balances were continuously surging on every passing day since the elections and rose by another US$13 million or by 16.6 per cent on Monday, Feb 25 to US$90.6 million to date for this fiscal year from US$77.6 million on Feb 22.

The CFS financing touched ceiling at Rs54.63 million with enhanced rate of mark up at 11.28 per cent. It showed the improved confidence of retail investors in the local market, analyst added.

Under the lead of cement giants i.e. DG Khan Cement and Lucky Cement, majority of blue chips attracted fresh funds including FFBL, NBP, OGDC, Engro, POL, MCB, PSO and PTCL.

DGKC and LUCK depicted higher volumes despite DGKC’s less favourable results. Buying sentiments continued at the end of the trading day as accumulation continued across the board, S. Kashif Mustafa of ECL Research said.

The E&P sector remained the primary mover of the index with OMC following closely. Major actives of OGDC, POL and PPL remained in the limelight on the back of better results of POL and PPL and results of OGDC are expected to experience a growth of around 25 per cent.

Also, banks continue to expand as healthy earning results continue to pour in. Some accumulation was witnessed in the scrips of NBP and MCB while minor profit taking was witnessed in second and third tier scrips. The sector remains amongst the top picks as the sector is anticipated to perform well in the medium to long term perspective on the back of healthy fundamental growth in the sector with involvement of foreign stake holders, he added.

Accordingly, the overall market capitalisation rose by Rs35 billion to stand at Rs4.633 trillion. Highest volumes were witnessed in DG Khan Cement at 42.195 million closing at Rs112 with a gain of Rs3.50, followed by Lucky

Cement at 25.347 million closing at Rs131.45 with a gain of Rs3.70, Nishat Mills at 15.620 million closing at Rs114.95 with a gain of Rs5.45, Fauji Fertilizer Bin Qasim at 10.965 million closing at Rs43.75 with a gain of Rs1.35 and National Bank at 10.148 million closing at Rs268.90 with a gain of 90 paisa.

KSE crosses 15,000-point mark on selective buying in blue chips

 

[Neo]

Austerity measures may save Rs100bn ​

Wednesday, February 27, 2008

LAHORE: The experts have advised the new government to promote austerity as extravagant non-development expenditures during the past eight years have nullified the increase in tax revenues from Rs300 billion to Rs970 billion.

They point out that development expenditures in 1999-00 were Rs100 billion that increased to Rs375 billion this year (the development expenditures of Rs525 billion for the current fiscal year include Rs150 billion funding to be arranged by the private sector).

This means that out of over Rs670 billion increase in tax revenues, the government boosted development spending by Rs275 billion while non-development expenses rose by Rs400 billion. The development expenditure, which was financed through borrowing in 1999-00, is still being financed through the same method.

The experts say it will not be possible to reduce non-development expenditures by a big margin, but the government could still make a saving of Rs70 to Rs100 billion if it adopts prudent austerity measures. In this regard, they say, all non-essential expenditures should be put off.

Citing an example, some analysts point out that the Japanese prime minister’s official residence is an old three-storey house that has been denied major repair by Japanese parliament for the past few decades on the plea that the government lacks funds. Japan is the second largest economy of the world.

Besides this, only one or two Japanese prime ministers have chosen to stay in the official residence while others lived in their private residences and were not provided any amount for fixtures, furniture or renovation. However, in Pakistan all federal and provincial ministers enjoy even better perks.

They suggest the expenditures of both the presidency and prime minister would have to be cut back to half or to 1999 levels. The government would have to put a maximum ceiling on foreign travel of ministers and government officials and the practice of taking a planeload of people on a joy ride by the president or PM should be stopped.

The Japanese PM travels by a normal commercial flight when visiting a foreign country and his entourage is limited to three or four persons including some of his cabinet members. They say Pakistan needs to save every penny to spare funds for development and welfare of people. Citing a recent example of extravagance, they point out that the Pakistan Electric Power Company (PEPCO) recently issued advertisements worth Rs3 million inviting the 60 sugar mills of the country to sell their surplus power.

Though the PEPCO is facing acute power shortage and should explore every possible avenue from where it could get some electricity, no advertisement was needed to attract the sugar mills. Telephonic or personal contact would have been sufficient to arouse the interest of sugar mills. In fact, the mills are more interested in disposing of their surplus power as the tariff being offered is very attractive.

The Rs3 million wasted on advertisements might seem a small amount for the authorities but the PEPCO is a huge loss-making public sector company and needs to save every penny to reduce its losses.

The experts said the non-development expenses and lavish perks enjoyed by officials and ministers in the government should be stopped forthwith. There should be performance-based justification of all expenditures of the government.

The federal ministers have now made it a habit to be in their hometown at weekends at government expenses, which should be checked. The non-development budget should be frozen 20 per cent below the current level. They further suggest that austerity should be accompanied by good management practices that ensure prudent spending only.

Austerity measures may save Rs100bn

 

[Neo]

Export of readymade garments up 7.2pc ​

Overall textile products’ export falls 3.44pc

Wednesday, February 27, 2008

ISLAMABAD: The export of readymade garments increased by 7.2 per cent during the first seven months of the current fiscal, according to figures released by the Federal Bureau of Statistics on Tuesday.

The export of readymade garments increased from $809 million from July-January 2006-07 to $864 million during the time under review. However, overall the export of textile products declined by 3.44 per cent during the first seven months of the current fiscal as against the export during the same period of the last financial year.

During July-January of the current financial year, total textile exports stood at $6.028bn against the export of $6.242bn in the same period of last financial year. The textile products which witnessed upward trend included, art, silk and synthetic textile, export of which grew by 25.19 per cent, madeup articles (excluding towels, bead-wear) export increase by 19.78 per cent while export of other textile items grew by 0.69 per cent.

According to the figures, export of raw cotton witnessed a decline of 12.79 per cent, cotton yarn 6.02 per cent, cotton cloth 8.26, cotton carded 23.20, yarn other than cotton yearn 19.89, knitwear 11.20 per cent, bed wear 6.21 per cent, towels 6.72 per cent, tents, canvas and tarpaulin 0.62 per cent.

Export of readymade garments up 7.2pc

 

[Neo]

US experts urge trade access, aid hike for Pakistan ​

Wednesday, February 27, 2008

WASHINGTON: Seeing Pakistan’s parliamentary poll as an historic step towards democratic progress, top South Asian experts have urged the United States to bolster economic aid as well as trade access for the country so that the Pakistani people may genuinely feel that America wants their long-term development.

“We should try to help Pakistan in its economic development, we should try to do things which masses see as genuine gestures which should be seen as trying to help their interest, which we believe, are also in our long-term interest,” said Eric Bjornlund, cofounder of Democracy International that observed last week’s polls in Pakistan.

Speaking on “The Pakistani Election: What Next” at a Washington think-tank, Bjornlund described the Feb 18 polls as representing a landmark stride in the country’s democratic process. He said: “There was general acceptance that the results reflected what people were trying to say” and added that it was a “remarkable” finding for Democracy International.

Robert M Hathaway, Director Asia Program at the Woodrow Wilson International Centre for Scholars, stressed that one of the best ways to send the message of enduring relationship with the Pakistani people is through materializing a robust assistance package for socio-economic development of the country. Such assistance, he said, may target building hospitals, healthcare delivery, schools, roads and projects that create livelihoods and jobs and touch lives of the people.

The Pakistani nation, he said, deserves democracy dividend as “the Pakistani people, for their own reasons and not because the US wanted it, carried out an exercise in political freedom, which has clearly exonerated all of us.

“They clearly demonstrated that they believe in political pluralism, and I think it is entirely appropriate for the US to say that after this demonstration that our two people share the values it is all the more reason to build our relationship through economic aid.”

Hathaway also favoured the idea of establishing reconstruction opportunity zones and said these should serve both the local populace and the American taxpayers. On boosting access for Pakistani products including textiles in the huge American market he said: “I think it is entirely appropriate for the United States to give Pakistanis greater access to the American market, it is difficult political issue, but clearly, and particularly after the election last week I think the US should revisit the entire issue as to what we can do to support Pakistani people. And one way to do that is to give them greater access to the market, including the textile market.”

Hassan Abbas, a research fellow at Harvard University, underlined the importance of political stability for sustained economic progress and said in view of challenges facing the country, PPP Co-chairman Asif Ali Zardari should be credited with reaching out to political forces across the spectrum. He stated the leaders of largest winning party plan to move forward with a comprehensive economic strategy.

Marvin Weinbaum, a scholar associated with the Middle East Institute, said the election was also about bread and butter issues and people want to see improvement in their lives. He emphasized that the Pakistani economic system must ensure that the people benefit from its success.

US experts urge trade access, aid hike for Pakistan

 

[Neo]

Pak-China Investment Co aims to expand business ​

Wednesday, February 27, 2008

ISLAMABAD: The Investment Division & Board of Investment (ID&BOI) in collaboration with the Ministry of Finance organised Pak-China investment forum on Tuesday aimed at providing an interactive platform to the newly launched Pak-China Investment Company Ltd (PCICL) so that it can devise its business plan and expand its clientele.

The meeting was presided over by Privatization & Investment Minister Shahzada Alam Manoo while ID & BOI Acting Secretary Major Iqbal Ahmad (R), Ministry of Finance Investment Advisor Dr Junaid Ahmad along with other BOI officials were also present.

The prominent participants of the meeting were Chen Jianbo, CEO PCICL, Iqbal Ashraf, Managing Director PCICL, representatives of Plum Qingqi Motors Ltd, China Building Material Industrial Corp (CBMC), Harbin Power Engineering Company, CMPak Ltd and various other Chinese companies operating in the country.

Manoo said “China and Pakistan are strategic partners and have been cooperating in a number of large projects in the energy sector, mining, electronic and telecommunications and infrastructure projects including upgradation of the Pakistan Railways.”

The minister was of the view that the establishment of Pak-China Investment Company is another important milestone in economic relations as the company shall play its role in unleashing the potential of Pakistan.

PCICL CEO and PCICL MD deliberated about the background of their company and the objectives were highlighted. Ashraf said Pak-China Investment Company is established not only to promote economic cooperation between the corporate sectors of both the countries but they also intend to redefine the role of Development Finance Institutions (DFIs) in underdeveloped countries.

The participants of the meeting were informed that PCICL is part of the five year economic development cooperation with China and will help various sectors of Pakistan to seek Chinese investments and it has paid up the largest capital of $200 million.

PCICL would perform investment banking business on commercial basis to carry out activities in the financial, infrastructure, services, mining, industrial manufacturing and non-manufacturing sectors of the country.

Pak-China Investment Co aims to expand business

 

[Neo]

Sindh govt asks firms to start drilling coal​

KARACHI: The Sindh government will ask foreign and domestic coal-based power generating companies to start its drilling and exploration works in their respective allotted areas, official sources told the Daily Times.

Sources in the Sindh Mines and Mineral Department said the notification orders would be sent very soon to all those companies that have signed Memorandum of Understanding (MoU) with Sindh Coal Authority and Sindh Mines and Mineral Department, and have not started any exploration or drilling so far. Out of seven companies only two have started drilling work in their respective areas.

China National Machinery Import and Export Corporation (CMC) has conducted its operations at Sonda-Jherruk, Thatta and proposed 10 cents per unit to generate electricity whereas Oracle Coal Field has commenced drilling, for 150 MW, the first borehole of a seven hole programme on Block VI of the Thar Coalfield.

Besides, AES Oasis Limited has signed MoU for establishment of 1,000 MW coal fired power plant at Thar. Ukrinterenergo of Ukraine has also inked MoU for Coal Washing Plant of 1.0 million tonnes coal annually. Dadabhoy signed for establishment of 200 MW coal fired power plant at Sonda-Jherruck in district Thatta.

Soneri Energy (Pvt) Limited is in process of assessment of the Coal Bed Methane, coal and physically associated substances and coal by-products. MoU signed by Associated Group for 500 MW Thar Block-IV. Al-Abbas Group has also inked MoU with Sindh Government.

The Shenhua Group of China has signed an MOU with the Sindh Government to carry out detailed geological and hydro geological investigation to study the feasibility of setting up 1,000 MW coal-fired mine-mouth power plant based on Thar coal. The group, however, left the country after the disagreements with concern ministries but it is reported that ministry is trying to call back this group.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Export target may be missed: APTMA ​

LAHORE: Owing to the prevailing economic policies of the government, all economic targets including the export target may be missed, said chairman All Pakistan Textile Mills Association (APTMA) here on Tuesday.

He said excessive interest rates, which are incompatible with the prevailing international rates and the grave energy crisis in the country have started causing de-industrialisation in the country in general and Punjab in particular.

APTMA, Punjab chairman said the textile industry of Pakistan imported machinery worth $928 million in the year 2004-05, which led to a 19.9 percent growth in manufacturing sectors in that year, the subsequent policies of the government have led to reduction in import of textile machinery to about $350 million in 2007-08.

Resultantly the growth rate of manufacturing sector has come down drastically so much so that the latest figures of manufacturing sector growth for the month of November 2007 have been announced at 4.74 percent (5 month average 6.9 percent against annual target of 10.5 percent).

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Early completion of Doha Round to benefit Pakistan​

ISLAMABAD, Feb 26: The country’s export will suffer in case the Doha Round negotiations are not concluded this year, observes Pakistan Permanent Representative and Ambassador to WTO Dr Manzoor Ahmad.

He said if the round was not finished this year it might be extended for another two to three years and Pakistan would be end-loser as its products were facing high tariffs in rich countries particularly in the US and EU markets.

The envoy told a select gathering of civil society and journalists here on Tuesday that the seventh ministerial conference of 151 member states of the World Trade Organisation was expected to be convened between March 20 and April 15 to bridge the gap on some thorny issues.

This conference will serve as key barometer to gauge the progress of negotiations on the early conclusion of Doha Development agenda.

“The general impression in Geneva is to conclude the round in the current year which would give boost to Pakistan’s export,” Dr Manzoor added.

Answering a question, he said that after a statement from the French president recently the negotiations process in the areas of agriculture got slow down. However, he said, senior-level meeting would be started from the next week for seeking convergence in various areas.

Responding to queries of the civil society, the envoy advised for quality research and feedback on the issues of Pakistan’s interest. “We will welcome comments from civil society, which talks about national interests,” he said.

Dr Manzoor said Pakistan was looking for greater market access of textile and clothing sector under the current round of negotiations on industrial goods. He said the text on industrial goods also proposed immediate relief in duty for Pakistan and Sri Lanka on export of textile and clothing products in the rich countries market.

Asked as Pakistan had no domestic policy for industrialisation of non-textile products, he replied that currently the textile was the only potential sector for export for which the mission was seeking greater market access.

Answering another query he said that Pakistan could never be able to export auto parts or cars until there was a mark reduction in tariff protection to the local automobile industry.

Elaborating the recent development in the areas of agriculture, Dr Manzoor said the current round on agriculture would have no impact on farm producers. He said the farm producers would have a sufficient time for protection in case of early conclusion of the round.

He said the agriculture products were highly protected as the average bound tariff on agriculture products was 101 per cent. The duty cuts would be applied on these products, which according to him would give a marked protection to local producers.

Asked what would be an ideal position for Pakistan to get maximum market access, he said that gains were calculated in terms of the whole package at the conclusion of the round.

He said that unlike G-33, Pakistan was demanding lesser number of special products, which would also open South-South trade.

Early completion of Doha Round to benefit Pakistan -DAWN - Business; February 27, 2008

 

[Neo]

Qatar Group annuls $225 million cement plant project ​

KARACHI (February 27 2008): Qatar Group of Company has annulled $225 million project for setting up cement plant near Dhabeji, due to delay in legal documentation process by the department concerned, it has been reliably learnt.

A highly-placed official in the Planning and Development Department on condition of anonymity told Business Recorder on Tuesday the company was reluctant to invest huge amount in the project, due to delaying tactics, which were on since the company signed the Memorandum of Understanding with the department concerned last year.

Due to sluggish processing, the QGC fears huge losses in the project, hence unwilling to invest, the official said. "It would have been a fat chance! Investing $225 million after thoroughly analysing the working environment of the department concerned," the official quoted the QGC representative as saying.

The official said that two meetings had earlier taken place in the office of the Additional Chief Secretary and the General Administration Department to finalise the deal, which were attended by the secretaries of the Law Department, the Mines and Mineral Development Department and the Land Utilisation Department.

Subsequently, the government decided to provide 400 acres land for the project, which would also earn Rs 100 million revenue for provincial exchequer besides bringing in an investment of about a quarter billion dollars, he added.

"The company was waiting for go-ahead signal by departments concerned for some 10 months but the legal documents have not yet been approved by them, which was essential for commencing the project," he observed. He said the government has spent millions of rupees on PC-1 of the project, which have gone down the drain after annulment of the deal.

Business Recorder [Pakistan's First Financial Daily]

 

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Gas load-shedding and yarn shortage: $1 billion textile garments export orders at stake ​

KARACHI (February 27 2008): Around one billion dollars of textile garments export orders are at stake due to suspension of fabric processing at dyeing mills in the wake of gas load-shedding and shortage of yarn in the local market, exporters-cum-manufacturers said on Tuesday.

The yarn crisis is looming large to hit the textile garment exports severely in the coming days, they expressed apprehensions, saying that the commodity prices are constantly surging and its volume is decreasing. There is also gas shortage bringing the manufacturing process almost to a suspension, they said.

They apprised that Yarn-10 number about four months ago was available at Rs 460 per 10 pounds, which has now surged to 560 per 10 pounds. Such a sharp rise in raw material price is alarming for the country's shrinking textile garment exports, they added.

"We may not be able to export the already booked consignments of around one billion dollars on time for increasing costs overburdened by the gas disruption, skyrocketing yarn prices and its unavailability," said former chairman of Pakistan readymade garment exporters and manufacturers association (Prgmea), Ijaz Khokhar.

He criticised the yarn exporters for creating artificial shortage of the commodity to multiply their profits at the expense of national exchequer. He said that the dyeing mills are charging 20 percent more since the gas shortage has hit them.

Trade Development Authority of Pakistan (TDAP) has failed to resolve the issues hitting the country's overall exports, Khokhar said alleging the concerned ministry is incapable of running the authority in line with the world market demands.

Expressing apprehensions, he said that the country's image is also at sake and is being tarnished in the world markets due to the TDAP's inaptitude. "Frequent cancellation of exports orders for gas, electricity shortage, deteriorating law and order situation, political turmoil and now soaring yarn prices have dented the country's image abroad," he maintained.

Foreign buyers are now reluctant to place orders with Pakistani manufacturers for persistent delays in shipment, he said. However, Ijaz termed the postponement of Expo-Pakistan fair till October this as a sensible move by the authority.

Urging upon the elected government, he said that it should focus on development of trade and business in the country unlike the previous government and launch policies in this regard. He added that government should not depend on foreign financial assistance but make the local products more competitive to compete in the world markets.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Energy deficit will rise to 53 million TOE in 2015 ​

KARACHI (February 26 2008): Pakistan energy deficit will increase to 53 million TOE (tons oil equivalent) in 2015 and 136 million TOE in 2025, against a projected total energy requirements of 114 million TOE and 211 million TOE for the year 2015 and 2025 respectively.

This was stated by Abbas Bilgrami, Managing Director of Progas Pakistan Limited, while talking to a group of journalists during their visit of the Progas Terminal here on Monday. Abbas Bilgrami said that Pakistan's current energy requirements are around 60.4 million TOE against an indigenous supply of 41 million TOE.

He said that since oil and gas will continue to form the bulk of the energy mix, large imports will be needed to bridge the supply and demand gap. He said that Progas Pakistan Limited's import terminal has the necessary infrastructure and large capacity to supply the country's growing needs for future import of fuel oil, LPG, CNG and LNG. It is poised to be the regional bulk breaking centre for distributing hydrocarbons into the Indian Ocean Rim countries.

Progas Pakistan Limited has successfully completed its first year of full operations of the Progas Bin Qasim LPG Terminal. The terminal has operated under world class Health, Safety and Environmental standards. The terminal is an infrastructure of national importance, which has added significantly to Pakistan's energy security. "Progas is committed to developing this terminal into Pakistan's Energy Hub", he added.

He said that the Progas Terminal is a common user facility, which is available to all importers and marketing companies on a hospitality basis. The rates of this service are competitive and with the capacity that this facility has it obviates the need for further investment in LPG storage and import infrastructure for the next decade.

He pointed out that Progas is Pakistan's first company to have developed a fully dedicated multi-user LPG Import Terminal at Port Qasim, Karachi. Its dedicated jetty can currently undertake ships up to 15,000 DWT but designed to be able to handle VLGC with minor modifications. The terminal has a current capacity to handle upto 2 million MT of LPG imports annually. Total LPG imports in 2006-7 have grown to the highest ever in Pakistan's history of over 65,000 MT. The company imported over 30,000 MT of LPG during 2007, making it the single largest LPG importer in the country.

These figures are 80 percent higher than the previous year. The company imported about 15,000 MT of LPG in 2006. Through the importation of this extra LPG the country has been able to meet part of the large existing latent demand for this vital commodity thereby providing greater pricing stability until the current caretaker government's decision to cap local producer prices.

The LPG market growth has been increasing at an average rate of 19 percent annually. The LPG consumption during 2006-7 in Pakistan was more than 628,000 MT the highest it's been ever.

Progas Pakistan Limited imported another shipment of 2,500 Metric Tons of LPG on Sunday February 24, 2008. According to the Hydrocarbon Development Institute of Pakistan (HDIP) Pakistan Energy Yearbook-2007, the Annual Compounded Growth Rate (ACGR) for imported LPG has grown at 48.8 percent between 1999 - 2006.

This demand for imported LPG is expected to remain high for the foreseeable future, with increasing gas shortages, power outages coupled with the expected removal of the cap on the prices of other liquid hydrocarbons. LPG will act as the bridge fuel for those industries and consumers who will be unable to get sufficient quantities of Natural Gas or other liquid hydrocarbons.

Progas Pakistan Limited is a joint venture of KUB Malaysia Berhad, KGL Petroleum Kuwait, Progas Energy Limited and the National Logistics Corporation. Progas's infrastructure also includes Pakistan's largest LPG storage facility with a capacity to store 6,750 MT of LPG or approximately 250,000 Mt per annum of throughput. Apart from this facility there is a state of the art LPG bottling plant with a capacity to fill 5,000 MT of LPG per shift per month. Progas' management believes that imports will contribute a significant part of the energy balance in the coming years.

In addition, Progas Pakistan Limited also has regional distribution centres with bottling and storage facilities at Haripur near Islamabad, Rajpura near Lahore with a total capacity to handle 300 MT of LPG and Mobile storage base consisting of LPG carriers and ISO Containers with a capacity to move around 1000 Metric Tons. "Progas is ready to work with all stakeholders in the industry to better serve the Pakistani consumer and the nation", Abbas Bilgrami said. Muhammad Akhtar, General Manager Finance & Admin gave a detailed presentation on existing supply, demand and other issues of LPG Sector in the country.

Business Recorder [Pakistan's First Financial Daily]