Pakistan Economy - News & Updates - Archive

[Plasma]

Aedas regeneration for Karachi Port planned for Spring 2008

Thursday, 20 March 2008

Tenders for a landmark waterside development at Mai Kolachi adjacent to the Port of Karachi in Pakistan have been received and are currently being evaluated following the implementation of Aedas’ international competition-winning design for a mixed-use scheme.

Endorsed in 2007 by the Prime Minister of Pakistan, the development will command an iconic presence and provide an instantly recognisable beacon to Pakistan’s principal city of Karachi and the country’s largest sea port. The project is expected to commence on site in the second quarter of 2008.

The scheme which includes five high rise towers focuses around the centrepiece; an elegant 78-storey fully glazed tower The tower comprises 162,000 sq m of office space crowned with a 250-bed six-star luxury hotel with additional serviced apartments. The hotel bedrooms are cleverly arranged around an 85m-high atrium to maximise the magnificent views over the Arabian Sea.

Advanced digital modelling and sustainable design practices have responded to ecological challenges, drastically reducing the building’s carbon footprint and harnessing the potential of natural resources. The development is designed to set an exemplary precedent in Pakistan for environmentally responsible architecture and construction standards though the use of low energy design principles and techniques to maximise the use of passive environmental control.

Designed for the Karachi Port Trust, the development will help satisfy an international and domestic demand for institutionally acceptable ‘British Council for Offices (BCO)’ standard space. It will also help satisfy a significant shortage of luxury hotel accommodation and aspirational residential property in a city with a population of over 17 million. The development will be the catalyst that creates the heart of a new Central Business District and help realise Karachi’s optimum commercial and lifestyle potential.

Aedas has worked closely in partnership with the Karachi Port Trust, MM Pakistan and Mott MacDonald UK and Dubai.

Aedas regeneration for Karachi Port planned for Spring 2008

 

[Neo]

Naveed Qamar for urgent relief to agri, textile sectors ​

ISLAMABAD: Syed Naveed Qamar, MNA and a key figure of the expected new government has hinted urgent measures for encouragement of wheat growers, textile sector, POL consumers and exporters by providing incentives for them.

Syed Naveed Qamar, ex-Federal Minister for Privatization and MNA of Pakistan Peoples Party said this while talking to a group of reporters at a local hotel here on Thursday.

The caretaker government has twice revised POL price due to which the petrol price has increased to Rs 62.81 per liter, diesel per litre to Rs 38.96, kerosene oil to Rs 41.44 and HOBC per litre at Rs 74.77, which has not only affected the common men but hardly hit the industrials sector.

Naveed Qamar supported the increase in wheat procurement price and said, “we fairly need a higher procurement price for the current wheat crop to encourage the wheat growers, which would also help eliminate wheat smuggling from the country,” he added.

Economic Coordination Committee (ECC) of the Cabinet in the caretaker set up had increased the wheat procurement price from Rs 425 to Rs 510 per 40 kg. But, this price has not been instrumental in encouraging the wheat farmers to sell their produce to the government and they are selling their produce to the private sector on much higher price in Sindh. Ministry of Food and Agriculture and Livestock (MINFAL) is trying to convince the economic managers to again upward revision in the procurement price from Rs 510 to Rs 600 per 40 kg.

He was of the view that agriculture sector is of prime importance and subsidies should be allowed for development of this sector and for improvement of agriculture production, enabling it to meet not only national requirements but also for exports purposes.

Realizing the trade openness among the South Asia countries he said that Pakistan needed an open trade policy with India including other South Asian Association of Regional Countries (SAARC) member states under the South Asia Free Trade Area (SAFTA) agreement for the development and prosperity of the region.

India has already handed over to the government of Pakistan a list of over 400 items for inclusion in Importable items list maintained by Ministry of Commerce. India has also offered Pakistan to identify at least 20 items of its exports interests so that import of which is allowed duty free in Indian markets. These two issues are still pending and the new government is expected to take decision on it on priority basis.

“At present, we have bilateral trade with India over a billion dollar and it should be increased according to the existing potential, through openness in our trade policies,” he said adding that promotion of trade with other SAARC member states should be encouraged for mutual benefits.

On textile sector, Naveed Qamar said that the country needed a balanced textile policy, which is capable of benefiting equally to the All Pakistan Textile Mills Association, exporters and cotton growers. Textile sector, which has already enjoyed Research and Development (R&D) support to the tune of Rs 30 billion for increase of textile exports during the last two fiscal years is still in search of more incentives to overcome their difficulties, he added.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

‘Uplift in gem, jewellery sector can push exports’​

LAHORE: Pakistan’s gems and jewellery sector has the potential for expansion and achieving export target if it is provided with the latest technology, training and supportive infrastructure.

These was stated by Vice President of Lahore Chamber of Commerce and Industry (LCCI) Shafqat Saeed Piracha while speaking at a seminar on gems and jewellery sector, organised by the LCCI Women Resource Center in collaboration with Gem and Jewellery Standing Committee.

Dr Mandip Sharma, President, Association of Women Entrepreneurs and Career Women, India and Chairperson LCCI Women Resource Center Shamim Akhtar also spoke on the occasion.

Piracha said that there is a need to create awareness among the stakeholders so they could be able to play their role for boosting economic activity in the country.

Pakistan has been gifted with abundant resources of several precious and semi-precious gemstones, at present mostly found in Northern Areas and NWFP, but with a huge potential in Balochistan, he said adding that most important of the currently found stones are emeralds of Mingora (Swat), pink and golden topaz of Katlang (Mardan) and aquamarine of Chitral and Neelam Valley.

Furthermore, he said, due to lack of realization of its importance as an industry, those who are engaged in the mining, cutting/polishing and trading of gemstones in Pakistan have not been able to exploit the full potential of this sector. Earlier, the Chairperson LCCI Women Resource Center Ms Shamim Akhtar gave a detailed briefing about the aims and objectives of the seminar.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

‘Pakistan, Korea should further deepen trade ties’​

ISLAMABAD: Pakistan and Korea are close friends and partners for the development of mutually beneficial relations and should further deepen trade and economic relations, Ambassador of the Republic of Korea, Un Shin, during his visit to Islamabad Chamber of Commerce & Industry (ICCI) said.

He said that Korea could join hands with Pakistan in telecom systems, laying of rail track network, power plants, ship breaking, and coal mining. The ambassador said that trade volume between the two countries was gradually increasing, which could be further promoted through exchange of business delegations.

He said Embassy of Korea would provide facilitation for participation of the ICCI delegation in the exhibitions arranged in Korea different sectors. He said a Korean cultural delegation would also visit Pakistan April this year.

Shin said Korea had expertise in telecommunication sector and could provide assistance to Pakistani companies in the technology transfer. He said Korea could join hands with Pakistan in telecom systems, laying of rail track network, power plants, ship braking, and coal mining and indicated that Korea was price wise is bit expensive due to its quality of services.

Muhamad Ijaz Abbasi, President of ICCI, said that Pakistan was passing through a transition phase of establishment of new parliament. He said that government had encouraged the foreign investment a great deal, and as a result lot of foreign investment came in Pakistan.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Pakistan's foreign exchange reserves dip by $297 million ​

KARACHI (March 21 2008): The foreign exchange reserves of the country declined by $297 million last week, mainly owing to rising oil import bill in the wake of soaring oil prices in the world market. According to State Bank of Pakistan (SBP), country's overall foreign exchange reserves declined from $14.142 billion to $13.844 billion during the week ended March 15, 2008.

The major fall was witnessed in the foreign reserves held by the SBP, declined by about $306 million to $11.723 billion, previously stood at $12.029 billion a week ago.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

High cost of air pollution ​

EDITORIAL (March 21 2008): The prevailing high level of air pollution in the country, particularly in its urban centres, is causing loss of as much as Rs 62 to 65 billion to the economy every year - or one percent of the GDP, with the overall environmental health hazards accounting for over 20 percent of the total burden of diseases in the country.

According to a study conducted by the Ministry of Environment, approximately 16.28 million people or 40 percent of the country's total urban population, is at risk of contracting pollution-related health complications such as cardiac, eye and ENT ailments, the annual cost of which has been worked out at Rs 25.7 billion. The figures show the steep cost the country has to pay for non-compliance with the environmental standards set by the World Health Organisation.

A recent World Bank study has calculated the loss caused by urban air pollution (UAP) to Pakistan's economy at $369 million, which the environmental experts believe, is the second most important contributory factor after municipal solid and liquid waste. The World Bank study has calculated that 60 percent of the 168,000 premature deaths caused annually in Pakistan are attributable to indoor pollution.

According to another study, the suspended particulate matter (SPM) in major cities of Pakistan is six times higher than the normal standard set by WHO. The failure of successive governments in incorporating these factors in economic policies has contributed significantly to the loss of GDP. Experts believe that air quality can be improved by integrating a number of technical and management options and by providing financial incentives, aside from regular monitoring, evaluation and remedial measures.

Overall reduction in the particulate contaminated air and inefficiency in fuel consumption will result in the saving of 19.8 million dollars per annum to vehicle owners due to better fuel consumption, and will result in annual reduction in emission of CO2, lead and hydrocarbons. Better transport planning and traffic management can significantly contribute towards controlling air pollution in the country.

Rapid growth of transport sector, with increased number of vehicles plying on the roads, the use of low quality fuel and the presence of industries in municipal limits are some of the major causes that have contributed to the rapid deterioration of air quality in urban centres of the country. Air pollution in major urban centres, including Karachi, Lahore, Islamabad/Rawalpindi, Peshawar and Quetta is rapidly increasing largely because of growing vehicular traffic. The levels of air pollution in Karachi and Lahore, for instance, are estimated to be 20 times higher than the standard set by WHO.

A study conducted by SUPARCO in 2003-04 had found an extremely high concentration of pollutants in most cities of the country. The Economic Survey for 2005-2006 had noted that suspended particulate matter was the most serious air quality issue in the country, and that a major source of these emissions was motor exhaust. Yet no credible measures were mounted to counter this grave health hazard.

Almost 400-fold increase in the number of vehicles in the country, ie from 0.8 million 20 years ago to over 4 million in 2006, was a major contributory factor in the steep rise in the level of air pollution. This was compounded by unchecked sale of low quality fuel. Above all, the oil refineries' resistance to the government's request for switchover from low quality diesel to better quality Euro-II, has been a major factor in rapid degradation of urban air quality.

The cost in terms lost man-hours has been very high indeed. For instance, a UN study has found that extremely fine carbon particles emitted through motor exhaust can penetrate the deeper recesses of human lungs, causing serious respiratory diseases. Other major fuel sector pollutants vitiating urban environment in Pakistan include carbon monoxide, sulphur dioxide, nitrogen dioxide and lead, with the last mentioned being extremely harmful for young and growing children, because it can cause irreversible mental retardation. (Incidentally, the amount of lead annually released through vehicular emissions into the air in Pakistan is said to be 520 metric tonnes!)

Health services and infrastructure in Pakistan, meanwhile, are among the poorest in the region, with only one doctor for every 1,310 patients, one dentist for every 25,297 citizens and one nurse for every 4,636 patients (2006 figures). Pakistan's infant mortality rate, according to the UNDP World Development Report for 2006 was 74 per 1,000 live births.

These statistics assume ominous dimensions when viewed against the backdrop of lack of standards for quality of ambient air and water in Pakistan, while very little work has been done to develop an integrated air quality management system (AQMS). With limited budgetary allocations made to address the environmental degradation, there is an urgent need for the government to set clear priorities in how it can improve air and water supply quality.

The problem can be addressed to a large extent by making annual tree plantation campaigns more credible, and by launching more clean water supply schemes. The annual loss of Rs 62-65 billion to the economy can be curtailed by spending only a fraction of this amount on preventive measures.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

FBR investigates fall in profits of revenue generating sectors ​

Faces difficult task of collecting Rs1 trillion revenues​

Sunday, March 23, 2008

ISLAMABAD: Investigations are under way to ascertain reasons for a steep decline in profits of major corporate sectors such as banking, oil and gas as well as telecommunication, which has made it too difficult for the Federal Board of Revenue to even cross the ‘psychological barrier’ of Rs1 trillion in the current fiscal year.

In another move, tax authorities have selected certain renowned entities of the corporate sector for conducting a detailed audit in order to detect tax evasion of billions of rupees, The News has learnt.

The FBR has started selecting renowned entities of the corporate sector for conducting a detailed and full-fledged audit and the exercise in some of the cases is under way for detecting alleged tax evasion, a high-level official in the FBR confirmed while talking to The News here on Saturday.

Some other cases have been selected and a detailed audit will be initiated very soon, added the official. “Yes, we are conducting audit of the corporate sector under a pilot project of the National Audit Plan,” Member Audit FBR said when asked in that regard on Saturday.

The sources said all this is being done to bridge the existing revenue gap in order to move towards the desired tax target of Rs1,025 billion. The real objective is to cross psychological barrier of Rs1 trillion mark in the current fiscal, the official further said.

FBR has collected revenue of Rs584 billion in first eight months (July-Feb) period of fiscal year 2007-08 with Rs215.642 in shape of Direct Taxes and Rs368.724 billion as Indirect Taxes.

“We have already lost Rs35 billion revenue and the dream of crossing psychological barrier of Rs1 trillion seems un-achievable,” another high-level official in the FBR said.

The official claimed that the Board was inching towards bridging the gap of Rs35 billion but it would be too difficult to achieve the desired tax collection figure of Rs1,025 billion by June 30, 2008.

“We are discussing Rs990 billion revenue target internally,” said the official and added that the Board was investigating to ascertain the reasons for massive decline in profits shown by the corporate sector in the current fiscal year.

The corporate giants such as banking, oil and gas and telecom sectors, the official said, massively under reported their profits on one side and claimed huge refunds amounting to Rs8.5 billion on the other, resulting into huge revenue shortfall in the current fiscal year.

The banking, oil and gas and telecommunication are perceived huge profit making sectors by billion of rupees in last few years but now they were showing sharp decline in their profits from the current fiscal year.

Chairman FBR Abdullah Yousaf during the last Board in Council meeting directed the authorities concerned to investigate massive decline in profits of banking, oil and gas and telecom sector which subsequently resulted into less revenue payments, the official further said.

There is need to conduct study to know about chances of miscalculations in estimation of their expected returns by the corporate sectors where they showed decline in their profits. The banking sector claimed refunds of Rs4.5 billion, oil and gas Rs2.5 billion and telecom sector Rs1.5 billion till December 2007.

On oil and gas sector tax collection, the official said that the domestic sales tax collection was Rs24.6 billion in first eight months (July-Feb) period of the current fiscal against Rs18.2 billion in the same period of the previous fiscal, showing a growth by 35 per cent.

The tax collection in shape of excise duty on oil and gas stood at Rs1.7 billion in first months of the current fiscal against Rs2.7 billion in the same period of the previous fiscal. On imports, tax collection on oil and gas sector was Rs11.1 billion in first eight months of the current fiscal against Rs8.9 billion in the same period of the previous financial year.

The FBR faced a revenue loss of Rs3.5 billion owing to zero-rated crude oil decision taken by the tax authorities on November 30, 2007 on the basis of no tax paid with no refunds.

The FBR has paid Rs45 billion in shape of refunds in first eight months of the current fiscal compared to Rs58.697 billion in the same period of the previous financial year, showing that the tax authorities paid Rs13 billion less refunds in the current fiscal year.

Answering a query regarding increase in tax collection owing to recent surge in POL prices, the official said they will generate additional Rs2 to 3 billion in the remaining four months (March-June) period of the current fiscal year.

FBR investigates fall in profits of revenue generating sectors

 

[Neo]

Czech businessmen keen to invest in power ​

Sunday, March 23, 2008

LAHORE: The Czech Republic has huge business opportunities for potential Pakistani businessmen in sectors like power, textile, pharmaceutical, leather and construction and Czech businessmen are ready to initiate joint ventures with their Pakistani counterparts for mutual benefit.

Board of Investment Acting Secretary Major (R) Iqbal Ahmad stated this while talking to Lahore Chamber of Commerce and Industry Vice President Shafqat Saeed Piracha at the LCCI on Saturday.

The BoI acting secretary, who had recently returned from a four-day visit to the Czech Republic, said Czech businessmen were very serious in doing business in Pakistan, particularly in the power sector.

He informed the LCCI vice president that the Board of Investment had constituted a Czech-specific task force to prepare a set of recommendations for maximum participation of the private sector.

The existing volume of trade between Pakistan and the Czech Republic needed special attention and frequent exchange of delegations, he said, adding lack of information was coming in the way of bilateral trade and the chambers of commerce of both countries should play their role in that regard.

He said the economic growth achieved by Pakistan in recent years had impressed the manufacturers and investors in the Czech Republic and “they are now considering Pakistan as the best place for investment.” He said there was a need to work together in order to identify possible fields of cooperation and to provide proper information for business communities of both sides.

Speaking on the occasion, the LCCI vice president said the current level of trade between Pakistan and the Czech Republic needed more concrete steps on both sides, foremost among them was exchange of information. In order to bridge the information gap, he said, it was necessary that the chambers of commerce of both countries were involved and delegations organised on reciprocal basis, besides arranging single country exhibitions.

Currently, the two countries are in the process of signing a Bilateral Investment Treaty (BIT) and an agreement for avoidance of double taxation.

Czech businessmen keen to invest in power

 

[Neo]

NetSol inks agreement for computer-based training in Pakistan ​

Sunday, March 23, 2008

LAHORE: NetSol Technologies Ltd has signed an agreement for Computer Based Training (CBT) with a public sector organisation in Pakistan.

This contract is in continuation of earlier contracts signed by NetSol Technologies with other public sector organisations in the recent past.

The Computer-based Training or Electronic Learning (eLearning) is commonly associated with the field of advanced learning technology (ALT), and deals with associated methodologies in learning using network and/or multimedia technologies.

Under the newly-signed agreement, NetSol Technologies Ltd will develop a computer-based 3D animation of instruments used by concerned public sector organisations for training of its employees.

In the current information age, learning has converted into eLearning, as conventional classroom teaching provides little or no interactivity with the subject matter. It is being replaced now by CBT all around the world.

Chairman and CEO NetSol Salim Ghauri said NetSol is in the process of developing its expertise in CBT and signing of the present agreement proves it has already started gaining customers’ confidence for such projects.

NetSol inks agreement for computer-based training in Pakistan

 

[Neo]

5,000MW hydel power identified in Azad Kashmir ​

Sunday, March 23, 2008

ISLAMABAD: AJK Prime Minister Sardar Attique Ahmed Khan has said there has an identified huge potential of 5,000MW hydel power generation in Azad Kashmir, adding that the area has been enriched with the natural resources, imperative for development and making the area self-reliant. He said this while addressing at the 2nd session of the World Water Day seminar here the other day. Besides others ex-foreign Secretary Dr Tanvir Ahmed and Brig (Retd) Ashfaque Ahmed also spoke at the seminar.

The AJK premier said: “The water resources are being reassessed by every nation within their boundaries, the purpose is triple to sustain irrigation; to make available safe drinking water, and to produce electricity. The societies that did not have the wealth of running waters are bound to face three catastrophes: starvation, industrial paralysis and social unrest.”

He said the scenario needs the core attention of the planners to pay the proper heed to this important segment necessary for eneregy requirements and economic prosparity of the area. He was of the view that the Azad Kashmir is enriched with the vast natural wealth, glaciers, rivers, streams, springs and scores of perennial channels to the volumes of almost mini-rivers.

5,000MW hydel power identified in Azad Kashmir

 

[Neo]

Oil import surges to new heights​

* Soaring international oil prices push up both crude, manufactured petroleum products import phenomenally​

KARACHI: Country’s oil import bill peaked to record $6.338 billion level during the first eight months (July-February) of the current fiscal year, depicting 33.68 percent growth over $4.741 billion in the same period of last year.

Figures released by Federal Bureau of Statistics on Saturday showed that an increase of 43.55 percent was recorded in the import bill of manufactured petroleum products to $3.416 billion during the period under review against $2.379 billion during the same period of last year.

Crude petroleum oil import soared to $2.922 billion during July-February period of the current fiscal year, up by 23.74 percent against $2.361 billion during the same period of last year.

In month of February of this fiscal year, oil imports grew phenomenally by 154.27 percent to $1.344 billion compared to $528.876 million in the same month of last year on the back of huge growth, over 80 percent, in import of manufactured petroleum products and over 218 percent increase in crude oil import.

Analysts attribute this high growth to skyrocketing prices of petroleum products in international market, saying that the increasing trend in high import bill will continue in the coming months because of high prices of oil in global market.

Although, international oil prices slid below the $100 dollar mark in the last few days, however, the impact of highest ever oil price of $111 dollar per barrel during the initial days of March would be seen when the figures of oil import will be available, analysts believed.

Last year, oil import bill had crossed $7 billion and this year the finance ministry estimates that it will hit $11 billion by the end of June 2008, however analysts predict that it would be even touching $15 billion mark if any sharp fall was not seen in international oil prices in near future.

Machinery is the second largest component in the import bill after petroleum as its import stood at $4.459 billion in July-February this fiscal year, up by over four percent from $4.272 billion last year.

This growth in the import bill of machinery was on the back of almost 35 percent growth in the import of power generation machinery, 10.20 percent growth in electrical machinery & apparatus, a marginal growth of just one percent in telecom import and over four percent growth in other machinery.

On the other hand import of office machinery, textile machinery, construction & mining machinery declined during the period under review.

The import bill of agriculture and other chemicals was up 31.37 percent to $3.650 billion in July-February of current fiscal compared to $2.779 billion in the corresponding period of last year. In this group, over 150 percent growth was seen in fertilizers, almost ten percent in plastic material and over 30 percent in medical products.

The import of food items surged to $2.509 billion in the first eight months of current fiscal year as against $1.924 billion during the same period of last year, showing a growth of over 30 percent. This growth was mainly due to import of wheat and soyabean oil.

The import bill of transport was down by around seven percent to $1.470 billion during the said period from $1.579 billion in the same period of previous year.

The total import bill reached $24.140 billion during the first eight months of current financial year, reflecting a growth of almost 22 percent to $19.796 billion in the corresponding period of last year.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Private sector power plants to produce expensive electricity​

ISLAMABAD: The country will have most expensive electric power when the new independent power plants set up by the private sector would come into operation within two years, sources in Water and Power Ministry told Daily Times on Saturday.

Previous government had agreed and finalised agreements with new Independent Power Producers (IPPs) on much higher tariff for thermal power generation. Sources said that government has made agreement with IPPs to produce 12,000MW thermal power on high tariff of 12 cents/Kwh to 14 Cents Kwh.

These agreements were finalised realising the fact that during the last five year not a single unit has been added in the national system as against the 8 to 10 percent annual growth in the power demand.

In the first phase, 15 IPP plants would be set up to generate 2,868MW power by 2009-10. The government has granted the 12 cents/Kwh to 14 cents/ Kwh to these IPPs. This tariff has been determined based on Rs 25,500 per tonne furnace oil price and if the price of furnace oil shoots up, the tariff would automatically go up putting additional burden on the consumers, they added.

They said that if the next government depends on the thermal power generation to meet the power needs, the electricity will be available on much higher rates to the consumers.

They also said that the higher rates would also cause increase of many fold in the cost of production especially for the export-oriented industries like textile and other processing industries, making them uncompetitive in the world markets. In this way, the masses would be facing higher rates of products also in the country too. The exporters who are already facing a tough competition from other countries like India, China and Bangladesh would be facing a new challenge. Sources stressed the need that the country should have to rely on coal and hydel based power generation option.

Sources said that these tariffs for future IPPs are determined based on the price of Rs 25,500 per tonne furnace oil and the price of furnace oil already stands at Rs 36,000 per tonne at present. They said that if the prices of furnace oil during the operation period of future IPPs shoots up to over Rs 25,500 per metric tonne then the tariff of future IPPs would go up to over 16 to 17 cents/Kwh that would hurt the the electricity consumers badyl.

They said that Water and Power Development Authority (WAPDA) was receiving electricity at the rate of Rs 4.46 per unit from HUBCO that will increase to 16 to 17 cents/Kwh. They said that the rates of future IPPs would be higher than 17 cents/Kwh if the furnace oil prices go up.

They said that government would have to shift its policy from IPPs thermal power generation to hydel and coal based power generation to provide cheaper electricity to the consumers. Government needs building small as well as big dams and develop coal reserves in Thar for generation power to meet the power requirement in the coming years, They added.

They regretted that IPPs were granted higher rates of tariff and a certain lobby is creating difficulty for announcing upfront tariff for coal based power plants. Private sector has demanded the government to fix 10.5 cents/kwh tariff for the coal based power plants but the decision has not been made in spite the country is facing worst power shortage crisis.

The row between Sindh government and National Electric Power Regulatory Authority (Nepra) has not been resolved so far in this regard as NEPRA wants to announce 7.65 cents indicative upfront tariff for coal-based power plants whereas Sindh Coal Authority has demanded to fix 9.5 cents upfront indicative tariff for the electricity generated through coal power plants in Thar.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Replacement of outdated mining system to save foreign exchange ​

KARACHI: Pakistan can save millions of dollars on import of coal if outdated system of mining is abolished as during mining process, around 50 percent product goes waste, said an official of Sindh Coal Authority (SCA) here on Saturday.

Thar coalmines would take another five to six years to give production subject to the speedy work and development of infrastructure on modern mining system, said SCA official, Abbas Ali Shah, talking to Daily Times.

World coal consumption likely to increase around 6.3 percent in 2008 due to growing demand by China and India, he said adding that the coal use rose 23 million tonne to 391 million tonne in Asia. Shah said Lakhra mines were providing around 2.5 million tonne of coal, which was meeting about 45 percent domestic needs.

The cement and other industrial sectors import around 3.5 million tonne of coal from South Africa, Indonesia and Australia. He said a large quantity of coal is used in brick kilns while some 10 percent of the production is used domestically.

As the coal use will remain on the higher side this year, it was expected that the price of the commodity would further grow to touch $125 per tonne from $60 per tonne.

He said the world use of coal in power generation has been 32 percent to 60 percent in different countries while in Pakistan it is used only in the cement sector.

The resource base of Balochistan’s coal stands at 125 million tonnes compared to 185 billion tones of the country. The coal field of Chamalong–Bahlol which is recently being opened for exploration and mining through an agreement signed between Marri and Luni tribes with the joint efforts of federal and Baluchistan governments is considered to be the biggest coal field of Asia. Proper and detailed exploration, which is in progress, would prove that the actual coal reserves in Balochistan are much more than 125 million tonne.

Federal government has proposed to set up coal based power generation plants at Keti Bandar near Karachi due to easy access to water. Official said that Sindh province is going to have a third port at Keti Bandar after Karachi Port and Port Qasim as the government has approved PC-1 for setting up that port. Ministry of Ports and Shipping has prepared a master plan and sought views from different ministries regarding the activities on the port. Sindh has the biggest reserves of clay, granite and coal and the Keti Bandar Port would help setting up plants for granite and coal. This would not only help utilise the clay, coal and granite but cause trade activities on the port.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

WTO members identify barriers in trade with Pakistan​

ISLAMABAD: During Pakistan Trade Policy Review at World Trade Organisation (WTO), many WTO members expressed their observations on Pakistan’s trade and economic policies and suggested ways for improvement.

United States identified book piracy, weak trademark enforcement, lack of protection for proprietary pharmaceutical and agricultural chemical test data and pharmaceutical patents, as serious barriers to bilateral trade and investment.

According to the details released by Geneva-based Pakistan’s WTO Mission, the US representative appreciated the challenging times faced by Pakistan during its political transition. The United States also encouraged Pakistan to submit its 2005 new and full subsidies notification to the WTO for review. It believed trade liberalisation had slowed and the privatisation agenda stalled. Increased government involvement in the economy had burdened the federal budget and created considerable market inefficiencies, it observed. Production and export support had risen, as had monopolistic activities of state-run companies.

Pakistan’s economic fundamentals had improved; persistent structural weaknesses had raised the costs of doing business with Pakistan, thereby impeding productivity and competitiveness. Reducing political uncertainty and continuing trade liberalisation and other productivity-boosting structural reforms to promote economic diversification and sustained growth could best address it. The representative of the European Communities referred to Pakistan’s trade ties with the EC, which remained its first trading partner. The EC appreciated Pakistan’s steps to significantly reduce peak ad valorem tariff rates but they remained on a number of items, including motor vehicles. While the Capital Value Tax on motor vehicle imports had been withdrawn in June 2007, additional restrictions applied to commercial imports of used vehicles. The EC encouraged Pakistan to re-consider its motor vehicle import policy.

The representative of China said the China-Pakistan free trade agreement, which had entered into force in July 2007, would help deepen and broaden their economic relationship. Negotiations on trade in services commenced in April 2007 and were expected to conclude before long.

Although Pakistan has not formally recoginsed Israel, the representative of Israel during trade policy review expressed concerns with several of Pakistan’s policy instruments. In particular, Pakistan did not accord MFN treatment to Israel, banning all imports. Israeli FDI was also prohibited. It sought explanations from the Pakistan delegation on how these measures conformed to WTO requirements on non- discrimination. The representative of India noted areas of concern such as Pakistan’s low level of tax collection, narrow basket of exports, low agricultural productivity, and regional imbalances. Bilateral trade remained relatively small. A major constraint was Pakistan’s continued denial of MFN status to India, with Indian exports restricted to a positive list of 1,802 products. India believed Pakistan’s restrictive trade regime with India sharply reduced the mutual benefits from bilateral trade and prevented the complementarities of the two economies from being realised. It urged Pakistan to reconsider its trade policy regime with India to conform to the GATT, and hoped that implementation of the South Asian Free Trade Agreement from January 2006 would improve the situation.

The representative of Japan cited Pakistan’s many challenges included under-invoicing by importers, which unduly lowered import prices and needed remedying to induce more joint-ventures, and a number of excise tax concessions favouring local content that seemed unjustified under WTO SCM Agreement.

The representative of Singapore said while Pakistan had liberalised, there was scope for improvement in tariffs, services, investment, and the use of anti-dumping measures. The representative of Thailand said Pakistan’s tax refund and rebate procedures for exporters could also be simplified.

The representative of Turkey identified remaining problems to be addressed included the considerable gap between the bound and applied rates, which reduced predictability, some domestic taxes that discriminated against imports, imposition of regulatory duties in addition to tariffs, the complex tax system, and the strong state involvement in trade. Turkey encouraged Pakistan to further reform these areas so as to improve the transparency and predictability of its trade regime.

The representative of Norway said that in order to positive FDI trend to continue it was imperative that domestic political risk and uncertainty be managed. The representative of Australia welcomed indications that it would continue to open services to international competition and that new market access would be reflected in its revised Doha Round offer.

The representative of the Republic of Korea identified that the use of discretionary reference prices had sometimes resulted in friction with importers and delayed clearance. Korea sought an elaboration from the Pakistani delegation on any plans to address this issue and to enhance the transparency of customs procedures.

The representative of Hong Kong and China looked forward to further improvements in Pakistan’s import tariff regime under the current market access negotiations. The representative of Canada urged Pakistan to reduce the complexity of its overall tariff structure, in particular reducing the 15 percent specific tariff rates and generally simplifying the 14 percent ad valorem rates. Regulatory duties on certain imports had recently become less transparent.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Cellphone imports dip 21pc in Feb​

KARACHI, March 22: There has been a slowdown in import of mobile phones and a leading importer has attributed the decline to reasons like rising food inflation, increase in snatching incidents, higher sale of used phones and over 80 per cent import of low-cost cellular instruments.

According to figures of Federal Bureau of Statistics (FBS), mobile phone imports plunged by 21 per cent to $66 million in Feb 2008 as compared to $84 million last year. Imports in January stood at $76 million.

Total imports in July-Jan ‘08 fell by 10 per cent to $507 million from $565 million in the same period last year.

Director and chief operating officer United Mobile Azad Lalani told Dawn that an estimated one million cellphones were sold per month ahead of assassination of Benazir Bhutto. Now the sale ranges between 800,000-900,000 sets.

He said that after sharp rise in food prices and rising cost of living people now think twice before purchasing a mobile.

Around 80-85 per cent of the cellphone sale comprises of low cost instruments ranging between Rs2,000 to Rs3,000 and its buyers are mainly from the rural and semi-urban areas. Even the share of low cost phones in total imports also hovers between 80-85 per cent, he said.

Besides, the average sale price of cell phones has also dropped from $45 to $35 in world markets while $35 phone instrument is now priced at $31.

Lalani said that the habit of changing cellphones by many users has also declined in the last few months. Besides, many people have postponed purchasing costly cellphones after worst looting incidents triggered by the murder of PPP leader Benazir Bhutto on December 27.

The entry of Chinese low-cost phones (imitation of branded phones) and the availability of used phone in the markets have also hurt the sale of new phones, he added.

Director public relations Mobilink Omar Manzur said that the mobile phone penetration in urban areas has crossed over 90 per cent and now most of the demand for new connections is coming from the rural areas.

There might be decline in overall growth this year as compared to 2007 but the overall users in the country has been increasing. He added that many new cellphones, when sold, usually find their way into the rural areas.

According to figures compiled by Pakistan Telecommunication Authority (PTA), the cellular phone density has been increasing. In Feb 2008, it stood at 50.76 per cent as compared to 48.96 per cent in January and 48.61 per cent in December 2007.

Out of the total 160 million population the total cellphone users in the country stands at 80.3 million till February. Of these Mobilink has 31.3 million subscribers followed by Ufone 16.84 million, Telenor 16.1 million, Warid 13.6 million, Paktel 2.1 million and Instaphone 320,238.

Till January, 2008 there were 78.838 million cellphone subscribers while their number was 76.88 million till December 2007.

Cellphone imports dip 21pc in Feb -DAWN - Business; March 23, 2008