Pakistan Economy - News & Updates - Archive

[Neo]

Strategy evolved to set up SME industrial estates ​

SIALKOT (June 02 2008): Punjab government has evolved a strategy for the establishment of SME industrial estates in Punjab. Business Recorder learnt through reliable sources here Sunday that under the plan SME industrial estates would be set up in major industrial towns including Sialkot and work on the plan would be executed in near future.

The step was being taken to redress the problems being confronted by the SME sector that is the backbone of the national economy. All basic facilities would be ensured to the SMEs in these proposed SME estates sources added.

Special attention was also being accorded on the development of industrial sector on modern and scientific lines aimed at tracking it on modern production lines aimed at enhancing export volume and to bring industrial revolution through setting up large-scale industries including agro- industries in the Province.

Under the programme government has introduced certain schemes for the development of small and medium industry besides loan facilities was being extended to the small and medium businessmen enabling them to upgrade their industrial units and for setting up new industrial projects in the Punjab.

More than Rs one billion had been set aside to overcome the financial problems being faced by the businessmen engaged with small and medium industries as well as for removing the hitches which were hindering the process of setting up of new industrial projects.

Apart from this, government was also providing loan facilities for the advancement and expansion of agro-based industries and dairy development, engineering and information technology in the Punjab.

The prime aim of setting up of large-scale industries was to ensure strong industrial base and to keep the economic wheel into gear in the Punjab. The maximum establishment of industries will not only help in doubling the export volume but also create wide job opportunities for the jobless educated, skilled and unskilled labour sources added.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Raising rice nursery for better yield​

By Hafeez ur Rehman and Dr M. Farooq

RICE is an important cash crop grown with its coarse and fine cultivars in kharif. Although resources such as gravitational canal system for irrigation and environmental conditions etc., favour paddy production, the average per acre yields is 25 maunds per acre which is two to three times less than the yield in other rice producing countries. The reasons are poor practices adopted by farmers.

The rice crop is mostly transplanted by hand under puddle and non-puddle conditions. In some areas, resourceful farmers also practice dry and wet seeding, along with system of rice intensification (SRI) which is getting popular.

However, the best yield is achieved when the crop is sown at optimum time with management practices of weeds, diseases, and predators. Under such conditions, growth and yield depend upon the year-to-year seasonal patterns of solar radiation and temperature.

In the traditional system, it is very important to raise rice nursery and transplant it at an appropriate time to get optimum yield. It is recommended to raise rice nursery before May end as nursery seedlings raised before or after this period and then their early or late transplantation is prone to more bacterial blight and bakanea disease and increased attack by insect pests. Besids, high temperature at the stage of grain filling may produce empty spikelets. Because of the delay the kernel produced gets broken during threshing of harvested paddy. The delayed nursery transplanted seedlings produce low and weak tillering reducing final yield.

Nursery raising methods: The main reason for raising a nursery is to provide seedlings without weeds. Transplantation of healthy, vigorous nursery seedlings without insect pests gives better yield. Method for raising nursery depends on local cultural practices, soil type and water availability, however, each method is harvested with uniform yield provided the healthy seedlings are transplanted. Nursery in Punjab is cultivated by three methods wet, dry and recently developed method using primed seeds.

Wet method is practiced in clayey and clay loam soils where standing water conditions can be created. This method is popular in traditional areas of rice cultivation. In this method, the selected field is filled with water 25-30 days before sowing nursery. However, it is better to plow the field twice in dry or watery conditions to break the soil clods in order to create better puddle conditions. After watering, the field is plowed twice followed by planking. The same practice is repeated after 7-10 days and this whole operation is practiced depending on the water availability.

After planking, the field is left for the weeds to grow and destroyed. After seed bed preparation, the field is divided into two plots by making bunds in the mid field and then sub-water channels are prepared in each half and three ridges are made at perpendicular to each channel dividing it into eight sub-plots, it will facilitate seed broadcast, irrigation and drainage practices. Then sprouted seeds are broadcasted in these plots. This method seems to be difficult and costly but allows less weed growth and seedlings raised thus are healthy and vigorous and become ready for transplanting within 25-30 days.

For this nursery method, if farmers use their own seed stored at farm then it is better to use clean seed. Clean seed is placed between the water soaked layers of gunny bags for 24 hours under shade and also covered with gunny bags. To avoid damage by heat caused by suffocation, seed is turned with hands for proper aeration there times a day. After about 36-48 hours the sprouted seed is ready for sowing.

Then in puddle plots for nursery sowing, broadcast the 1 kg per marla sprouted seeds of coarse rice cultivars IR-6 and KSK-282 while for fine (Basmati) rice cultivars use 0.5 -0.75 kg seeds for raising nursery. At broadcast the water depth should be maintained at 1-1, 1/2 inch and don’t drain out water at that day. Next day, drain out the water in the evening and irrigate in the morning and continue this practice for one week in hot sunny days. Gradually, check water drainage and increase the water level not more than three inches with the increasing seedling age.

If nursery seedlings are week, apply ½ kg ammonium sulphate or urea ¼ kg per marla after 15-20 days of nursery sowing, if fertiliser applied to nursery is delayed death of seedling at the transplantation stage may take place. If more area is to be cultivated, it is better to use 30 days old seedlings to complete transplantation within a week.

The dry bed method is practiced in dry soil conditions and fields are prepared under dry conditions. Seeds beds of convenient dimensions are prepared by raising the soil to a height of about 5-10 cm. a thin layer of farmyard manure or half burnt paddy husk could be spread on the nursery bed mainly to facilitate uprooting. In this method, soaked seed are spread over the seedbed and then irrigated. Rab method is also practiced in some areas of Punjab.

Another improved method is by using primed seeds with CaCl2 and KCl salts solutions. It is being practiced by farmers in Sialkot and Faisalabad districts. Nursery seedlings raised thus are healthy, vigorous and ready for transplantation within 25-30 days. Such nursery transplanted seedlings result in better growth and yield better kernel quality at harvest and is also resistant to diseases. However, there is need of more research in this area and seeks extension services to transfer this technology to poor farmers.

While farmers practicing system of rice intensification should plant eight to 12 days old seedlings, so that root system may grow well and give 30 to 50 tillers and result in high yields. For nursery raising healthy seeds at the rate of two kg/ac should be used. The pre-sprouted seeds should be sown on raised nursery bed. A layer of FYM can also be applied and sprouted seeds are sparsely spread on it and then again covered with another layer of manure. Nursery is properly and carefully irrigated and after 10-12 days seedlings are uprooted and transported to the field carefully.

Seed Dressing: To control seed-born diseases such as bakanea and brown leaf spot an easy and economical way is treatment of seed with proper fungicide. Seed treatment method depends on nursery raising method. Two methods used for seed treatment i.e. slurry and wet/solution method. In case of slurry method, fungicide is applied two weeks before sowing nursery. While in case of wet method seed is dripped in water.

Nursery pest management: The nursery is also affected by different insects including stem borers, rice leaf folder and hispa, grasshopper and white backed plant hopper. Each insect attacks nursery at particular stage of it lifecycle to a threshold level. There is need of integrated approach to control these before their threshold level. Nursery raising using improved method is not a difficult task; however, it necessitates and depends on constant supervision.

Since transplanted rice requires high water input, labour and also more nutrient losses occurs under flooded conditions. Under the acute water shortage in the country due to increased urbanisation, competition from non-agricultural sources and even non-availability of farm labour at critical times, there is need to focus towards water saving technologies in rice like direct seeded rice, alternate wetting and drying (AWD), system of rice intensification and transplanted rice under aerobic soil conditions to get benefit the resource poor farmers.

There is need of collaborative research to undertake, disseminate these rice resource saving technologies to the farmers at their field, which are the ultimate users of any technology.

Raising rice nursery for better yield -DAWN - Business; June 02, 2008

 

[Neo]

'Government determined to develop business-friendly atmosphere' ​

LAHORE (June 02 2008): Punjab Food Minister Malik Nadeem Kamran has said that government is determined to develop and strengthen business-friendly atmosphere in the country and in this context a number of measures are being taken. He said that our predecessors especially in the economic field has discriminatory rewarded their corrupt nears and dears which weaken the economy of the country.

Present regime has adopted a number of revolutionary measures to augment the economic situation of the country, he added. He expressed these views during a meeting with a delegation of business community of Sahiwal at his residence.

Briefing the delegation, the Minister said that government is making all out efforts for strengthening industrial sector and for this purpose a Trade City is being set up at River Ravi. He disclosed that a project of a Mini Industrial Estate has been initiated where 70 thousand skilled workers will be employed. Mini Industrial Cities also being set up at district level, he added. The Minister said that government has also launched the project of setting up a business city and business centres for women to provide them equal opportunities of marketing their products.

Kamran said that provision of justice to the common man through good governance is the top priority of the government. Members of the delegation lauded the steps of the government to provide conducive atmosphere for the business activities and assured their wholehearted cooperation.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Updating the national aviation policy​

The forthcoming National Aviation Policy (NAP), awaiting cabinet approval, will open new doors to airlines operators besides promoting national tourism and aviation sectors.

Special tax exemptions/holidays and other attractions have been recommended by the Pakistan Civil Aviation Authority (CAA) in the policy for the entire aviation sector including hot balloon sports organisers. It is designed to attract not only new airlines but also open new markets.

The policy is aligned with national trade corridor encompassing the government’s vision to route international trade, tourism and passenger traffic through Pakistan. Special incentives to be given to domestic and international air careers and ground handlers. .

According to the draft policy, duly approved by the CAA board, the CAA has recommended that the current policy of zero per cent duties, surcharges and taxes on import of aircraft of all weight categories, engines and spares by Pakistani operators, the CAA and the maintenance companies, should be extended to accommodate manufacturers, equipment required for manufacturing and raw material imported for aircraft.

The same concession may be extended to the CAA and private operators for import of communication, navigation & surveillance (CNS), air traffic management (ATM) systems, life-saving equipment like ballistic recovery system (BRS), emergency medical kits, emergency locator transmitter (ELT), fire-fighting vehicles and equipment including training equipment like all types of simulators, technical publications/manuals imported by the CAA as well as operators and maintenance companies. The new policy maintains that tax holiday shall be granted to aircraft manufacturers, maintenance companies, flying training schools and ground training schools for 10 years.

The CAA has also recommended that the government should exempt all taxes and duties on air ticket for secondary destinations. The same privileges may be extended to operators of small aircraft and helicopters.

The new policy has also touched a very important aspect of market access. It says, restricted market access raises prices, creates monopoly and suppresses aviation growth. Liberal air services agreements remove limitations on airlines’ freedom to increase service, lower fares and promote economic growth. All international airports are to be developed as business and tourists hubs. Since Pakistan is strategically located on the international route, liberal arrangements with our bilateral partners, in addition to providing direct and convenient connections to the local traffic from these airports, will also facilitate to route the flow of international traffic from the East to Europe and North America through Pakistan.

To achieve the required results it was decided that Pakistan will liberalise bilateral arrangements on reciprocal basis with its bilateral partners to provide service from/to Karachi, Lahore and Islamabad (of course after completion of the new airport) to destinations in Western Europe, North America and Africa and to destinations towards the East. Furthermore, there would be no mandatory commercial agreements as part of bilateral agreements. However, airlines will be free to enter into such co-operative marketing arrangements as are mutually agreeable, which will be outside air services agreements.

For the last many months, the CAA concentrated on bringing changes in its cargo set up at each airport in general and top five airports (Karachi, Lahore, Islamabad, Faisalabad and Peshawar) in particular. Planes have been chalked out for cargo complexes/villages at major airports with all kinds of international standard facilities. Now special focus will be on cargo facilities in the new policy in which single-window clearing mechanism will be introduced which willl boost the cargo service at airports. Top clearing agents, including officials of Sialkot airport say that problems faced by clearing agents will be curtailed. An efficient transit, a single-window clearing mechanism comprising airlines, freight forwarders, customs house agents, customs, regulatory agencies and airline ground handling agents, insurance and banks facilities, etc willl be made available under one roof.

Furthermore, infrastructure of a cargo village will include multi-modal transport, cargo terminals, cold storage centres, automatic storage and retrieval systems, mechanized transport cargo, dedicated express cargo terminals with airside and city side openings, computerization and automation. It was reiterated that Pakistan will continue to follow open skies policy for cargo operations based on 3rd, 4th & 5th freedom of traffic rights.

It was also decided that Karachi and Gwadar will be promoted as trans-shipment hubs where cargo villages will be established on the basis of public-private partnership to be linked with the national trade corridor (NTC).

Since Mr Farooq Rahmatullah took over as the DG, CAA, stress has been placed on promoting/attracting the private sector for the development and promotion of aviation activities. Studies were conducted and expert opinions were sought from leading private companies for the promotion of the aviation sector.

The CAA is following a restructuring programme which separates the regulatory, air traffic services and commercial functions to achieve the highest safety standards, to encourage the development of merchant airports, e.g., Sialkot International Airport and to efficiently absorb investment in the aviation sector. “The process is in advanced stages and after completion will make the CAA more efficient, responsive and, above all, capable of ensuring international standards of safety,” experts say.

The construction of new commercial airports as per the NAP will be permitted to meet the growth in air traffic. It was decided that the private sector will be given a free hand to construct and operate new/existing airports/airstrips/helipads/ heliports including cargo complexes on build-and-operate (BO), build-operate-and-transfer (BOT) or any other arrangement and to raise non- aeronautical revenues from these premises. Furthermore, it was also decided that privatisation of airports will be pursued to make them more efficient and productive.

The new policy provides fair and equal opportunities to public and private sector airports to market them within its framework and bilateral air services agreements. The private sector will be encouraged to develop additional revenue streams, i.e., passenger charges, cargo levies and commercial activities. However, the CAA will have the responsibility of economic oversight of all airports.

The writer is the Regional Legal Officer of the Civil Aviation Authority.

Updating the national aviation policy -DAWN - Business; June 02, 2008

 

[Neo]

16 power projects underway in Balochistan ​

QUETTA (June 02 2008): As many as 91 projects in water sector were being implemented while 16 electricity supply schemes were underway in various parts of Balochistan, official sources told APP here on Sunday.

These projects aimed at providing clean drinking water and electricity supply facilities to the people in the province, the sources said, adding that the government would construct 54 more small dams in different districts aimed at resolving water scarcity problems in the province.

They said: "The federal government will soon start work on electricity supply project for Dalbandin town of Chaghi district and its surrounding areas in collaboration with Saudi Arabia government. Saudi Arabia government will spend Rs320 million while the federal government will spend Rs500 million on the electricity supply project".

The completion of the project will not only revolutionise agriculture and mineral sectors, but also end unemployment in the district. Besides, it will also bring revolutionary social change in life-style of the people and improve their socio-economic standards in the areas, they said. The government is devising a comprehensive plan to provide electricity and construct more dams in all nook and corner of the province, the sources added.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

The option for solar power​

For Pakistan, 2008 will prove to be a long and hot summer. In April, some of the major cities were being put through six hours of load shedding every day. In May, power interruptions had increased to seven hours a day. Another hour may be added in June. Some relief may come in July as the reservoirs begin to be filled up by the monsoon rains but once the dry season arrives, the duration of load shedding will begin to increase again.

The government estimates the supply-demand gap at 4000 MW. This is not likely to be cut down since no new generation capacity is in the works for at least another one to two years. In the meantime, the price of oil continues to increase. New records are being set almost every day. This will increase the cost of generating electricity since a significant amount of power is generated by oil-fired stations. How to deal with this problem?

The question has some urgency as there are serious economic and social costs for letting the energy shortage go unaddressed. For some inexplicable reasons Pakistan never treated the energy sector as deserving of serious attention by the policymakers. The sector was an area of residual concern even when the country treated economic planning and strategising on economic issues as high priorities area for the policymakers. Power houses at Mangla and Tarbela were the byproducts of the Indus Water Treaty with India. The decision to invite the private sector to invest in energy generation was taken in the early 1990s when the country was faced with a growing supply-demand gap. In other words, the policymakers have turned to the sector of energy only when opportunities have arisen as a result of other developments or when there is a serious crisis. There is a crisis at this time. How will Islamabad react?

This may be a good time to develop a comprehensive approach towards the sector, factoring in policies aimed at affecting demand, supply and environmental concerns. In looking at supply, the country should seriously examine alternative sources for generating electricity than those that have been tried in the past. In this context is solar energy a serious option for Pakistan? Have the recent technological advances achieved by the industrial world made the sun a viable source of energy for a sun-drenched country such as Pakistan? If the technology that converts solar energy into electric power still more expensive than other sources of energy could subsidies be provided to attract private investment into this sector?

Some recent developments in converting solar power into electricity have begun to provide some answers to these questions. Surprisingly the answers come from the work being done in Germany. It is useful to look at the German experience to draw some lessons for Pakistan. Although Germany is wreathed in clouds and is therefore an unlikely candidate for becoming a pioneer in this field, it has become a leader because of the design of public policy to encourage the use of the sun as a source for generating electricity.

In 2007, Q-Cells, a German company surpassed Sharp, a Japanese company, to become the world’s largest manufacturer of photovoltaic solar cells. Thanks to the work done by Q-Cells, Germany has by far the largest market for photovoltaic systems which convert sunlight into electricity. It has about one-half of the world’s total installations. It is the third-largest producer of solar cells and modules, after China and Japan. Once the United States and Japan were the rising solar stars where the private sector was taking advantage of government subsidies. But these became less enticing as the government’s interest in developing the industry waned.

According to Mark Landler writing for The New York Times, “the debate over solar subsidies is a test of how an environmentally minded country can move from nurturing a promising alternative energy sector to creating a mass-market industry that can compete with conventional energy sources on its own footing. [But] it is a tricky transition, even with a sympathetic population.” Thanks to a policy that encouraged the development of solar energy, more than 40,000 people now work in the photovoltaic industry in Germany. Investors have come in from many countries including those from Canada, Norway and the United States. Many investors have come from the places that had developed the needed technology but where the governments were less supportive than the one in Germany.

All the heart of the debate in Germany is the Renewable Energy Sources Act which requires power companies to buy all the energy produced by alternative systems, not only solar but also wind and ocean waves at a fixed, above-market price for 20 years. This has proved to be powerful incentive for investors including those working with solar panels. The Act locked in the customer base for the electricity produced by alternative systems. They can earn reliable returns on their investment. The amount of electricity generated by these systems rose 60 per cent in 2007 compared with 2006. Most of the increase has come from wind systems, which now provide 6.4 per cent for the total electricity produced in Germany.

The share of solar energy is still very small – only 0.6 percent of the total. The small share of solar is understandable. The country gets only 1,528 hours of sunshine a year, less than a third of the total daylight hours. London has about the same exposure to the sun, but it has one third fewer sunshine hours than in the cities in Europe along the Mediterranean and one-half of the cities in western United States. Most cities in Pakistan receive between 2,200 and 2,500 hours of sun, 60 to 70 per cent more than that of Germany.

Germany is a good example of how public policy can overcome natural disadvantages. The Renewable Energy Sources Act has contributed to the country’s far lower dependence on hydrocarbons for generating electricity. In 2007, it derived 14.2 per cent of its electricity from renewable sources, ahead of the 12.5 percentage adopted by the European Union as a target.

The German Act, while mandating the utilities to buy the electricity generated by alternative systems, allows them to pass on the additional cost to the consumers. There is no limit on how much electricity can (or should) be purchased by the utilities from the alternative systems. This has caused utility bills to increase but for the time being by modest amounts for an average domestic consumer. The additional cost was only $1.70 a month in 2007. This will double by 2014. By that time the solar industry will scale up to $185 billion in terms of public support. This is about the same amount being provided to the superannuated coal industry.

The debate about the cost of solar and other renewable sources of energy has created pressures on the government to make the current law less generous. There are proposals to cut down the period over which subsidies would be provided, from the current 20 to 15 years. There is also as effort to sharply reduce the above-market price allowed to the producers. Fears that such proposals would be enacted into law, are forcing some Germany companies to move to other countries. Signet is building its next factory in Chennai, India; Q-Cells is building one in Malaysia.

What are the lessons for Pakistan in the German experience and the work being done in other industrial countries? One, Pakistan needs a structure of incentives to get power generated from such renewable sources as the sun. A purchase price guaranteed for a fairly long period that ensures good returns to the private sector would help. Two, this may be a good time to encourage the development of domestic industry that would produce the needed equipment for developing generating electricity from renewable sources. The technologies are still in their infancy and there is an opportunity for newcomers in the area to create niches for themselves. Some work is going to replace silicon in photovoltaic cells with plastics.

At this time, the efficiency of plastic photovoltaic cells is only five per cent while that of conventional silicon cells is 15 to 18 per cent. Even countries such as Pakistan could invest in the industries needed to develop alternative sources for generating electric power. Three, it may be an appropriate time to fix some targets for encouraging the use of renewable sources for generating power. The EU is working on a target of 12.5 per cent. In the United States, the two candidates for the Democratic ticket want renewable energy to generate 25 per cent of electricity by 2030.

This is the time for action by the government and it should look at all possible avenues for solving the current crisis.

The option for solar power -DAWN - Business; June 02, 2008

 

[Neo]

Pakistan IT sector on verge of taking off: Microsoft ​

ISLAMABAD (June 02 2008): The country is on the verge of taking off in the information technology (IT) field, following the telecom revolution, says Microsoft Pakistan Country Manager Kamal Ahmed. "I am very hopeful that the explosion in the IT sector will be just like the one we have seen in the country's telecom sector," he told a TV news channel.

He said that it had been observed in many countries that the telecom sector developed ahead of the IT sector. The telecom sector provides the bandwidth, which is the backbone for the IT sector to flourish, he added. He said that software, hardware and technologies are also getting cheaper day by day. So, people are buying more and more personal computers (PCs).

Citing another reason for the expected speedier IT growth, he said that today the businesses are competing against the global forces. To remain competitive, the country's businesses must adopt latest technologies, which provide quality controls and operational efficiencies, he said.

Kamal said he was hopeful that the new government would chalk out a sensible course for the growth of IT in Pakistan. He said that the government could increase its tax revenues and socio-economic growth by checking software piracy and promoting the sale of legal software.

He said that Microsoft is very much active in the corporate social responsibility area. The company has set up an 'IT academy' in cooperation with the 'Zindagi Trust'--an organisation being run by pop singer Shehzad Roy--where the undeserved school children are taught IT to enable them realise their full potential.

In his message to the youth, Kamal said, "Our young generation should make best use of the time it has at its disposal and study very hard." Secondly, they should never compromise on ethics, he said, and stressed: "Focus on becoming a better human being first and then a better professional."

Osman Maqbool, 'Small & Mid Market Solutions & Partners' Manager, Microsoft Pakistan, said, "Pakistan is one of the key emerging markets and offers a great potential." Over the last two years, he said, Microsoft has focused on developing its partners in Pakistan to serve its consumers and the businesses.

Microsoft has also focused quite extensively on utilisation of legal software and its benefits. "We have seen there is a great response against such awareness campaigns," he added.

Salma Nisar, Technical Account Manager, Microsoft Pakistan, highlighted the enterprise services and support offered by the global software leader. She spoke about how Microsoft Enterprise Services enables customers to realise the true value of their investment in Microsoft Platform through various infrastructure optimisation initiatives. Afzaal Mirza, Citizenship Lead, talked about the Microsoft Citizenship Initiative, which supports education, innovations, corporate social responsibility, Internet security and privacy, as well as community investment.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Timeframe suggested for resolving Kishan-Ganga issue​

LAHORE, June 1: Pakistan has formally proposed a timeframe of three months to resolve issues related to the Kishan-Ganga project, according to Indus Commissioner Syed Jammat Ali Shah.

Indus Commissioners of India and Pakistan held an eight-hour meeting of the Permanent Indus Commission on Sunday to address Pakistan’s objections to the project. The meeting was inconclusive as both sides maintained their stated positions. The Indian side, however, promised to respond to the timeframe proposal on Monday.

Mr Shah said both sides were trying to solve problems at the commissioners’ level so that other provisions of conflict resolution could be avoided. Both sides have shown a remarkable cooperative spirit but it was a matter of rights and cannot be allowed to linger on for an unreasonable period of time.

Pakistan had raised six objections to the revised design of the dam. Of these, four — free board of the dam, quantum of storage, silt outlet and diversion of water — came under discussion on Sunday. Both sides could not resolve the four out of the six questions as the Indian side maintained its previous position. Both sides were exchanging data and trying to remove confusion.

Pakistan understands that it was a time consuming exercise but they can be resolved within a timeframe. Pakistan was pressing for a deadline because such talks could not go on forever, he said.

Pakistan side had first raised objections to the project in 2004 and the Indian side revised the design of the dam in a bid to remove the objections. The Pakistani side, however, raised fresh objections to the revised design, which came under discussion on Sunday.

The problem between the two countries arose when India decided to build a dam on the Kishan Ganga River that originates in occupied Kashmir. The proposed site for dam is near Kanzalwan – a town from where the river enters Azad Kashmir.

The Indian plans include storing water and then tunnelling it to the Wuller lake, where it is constructing a 800MW power house.

Pakistan maintains that India, under the treaty, can store water but it cannot divert it to any other side because the Indus Basin Water Treaty charges it with releasing as much water downstream as it stores.

Thus, any diversion would violate the provisions of the treaty. It would also badly affect hydro power development plans (especially the Neelum-Jehlum hydro-power project) and agriculture in Azad Kashmir.

The Indian side is of the view that Pakistan is not developing its hydel resources anyway and should not get so serious about its objections.

In addition to raising treaty issues, Pakistan also objected to the design of the dam and asked India to address its concerns before proceeding further.

Timeframe suggested for resolving Kishan-Ganga issue -DAWN - Top Stories; June 02, 2008

 

[ejaz007]

SME bankprivatisation attracts 19 EoIs
Staff Report

ISLAMABAD: The Privatisation Commission (PC) has received an overwhelming response in the shape of 19 Expressions of Interest (EoIs) from reputed Pakistani and International parties who have expressed their interest in entering the process towards acquiring 93.88 percent strategic shareholding in SME Bank Limited along with transfer of management control. The last date for receiving EoIs was May 31, 2008.

BMA Capital Management is the Financial Advisor for the transaction.

SME Bank’s privatisation represents an attractive investment opportunity for investors interested in entering into the commercial banking market of Pakistan. SME Bank has an unrestricted commercial banking license covering banking activities in Pakistan.

SME Bank is a public limited company, which was incorporated in Pakistan on October 30, 2001. At present, SME Bank has employee strength of approximately 630 permanent and contractual individuals and is operating through a diverse network of 27 branches, which include 13 active commercial branches. According to JCR-VIS Credit Rating, SME Bank was rated BBB for long-term and A-2 for short-term credits. SME Bank also holds a 73 percent share in SME Leasing Limited, listed on the Lahore Stock Exchange which was incorporated as a wholly owned subsidiary of SME Bank.

The potential buyer will have to retain the name ‘SME Bank Ltd’ for one-year post privatization and the charter of Bank is to be maintained for three years post privatisation. GOP will keep the right to appoint at least one director on the board of directors of SME Bank post privatisation.

The parties which have submitted their EOIs include: Pak Kuwait Investment Company, Orascom Telecom Holding SAE, Citigroup Venture Capital International Investment G.P, Commercial Bank of Kuwait, Global Investment House K.S.C, Gulf Cap FZC, KASB Bank Limited, Kohinoor Textile Mills and Mechantbridge Holdings S.A. Luxembourg, Al Nakeel Investment LLC on behalf of Emirates Investment Group, Hashwani Hotels Limited, Pakistan Services Limited, and The International Investor, Kuwait, Security Investment Bank Limited, Pak Libya Holding Company, Pak Brunei Investment Company, Associated Group, Pak Steel, Invest Bank, Oracap Holdings, Noor Financials and IGI Investment Bank.

Daily Times - Leading News Resource of Pakistan

 

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Italy to support Pakistan for accessto EU markets: prime minister

ISLAMABAD: Pakistan has asked Italy to support Pakistan in European Union (EU) for improved market access for Pakistani products in EU countries as well as its bilateral trade with Italy. The Prime Minister, Syed Yousuf Raza Gilani talking to a Italian delegation Monday has said Pakistan and Italy enjoy close friendly relations covering diplomatic, political, economic, security and agriculture sectors. The Italian team headed by Giuseppe Vegas, Minister of State for Economic and Finance met PM. Ambassador of Italy to Pakistan was also present. Gilani said Pakistan accords priority to its close relationship with Italy and is keen to further expand these relations in other sectors as well. He said his government was focusing on improving the agriculture sector to overcome the food shortage and also seeks Italian cooperation to develop a mechanized agriculture in the country. In order to enhance people to people contact between the two countries, the PM called upon the need for exchange of visits of parliamentary delegations besides further strengthening the cooperation on the cultural side and to preserve heritage of old cities. He said Pakistan was facing energy shortage and desired Italy to invest more in the power sector to supplement government efforts to overcome the shortage.

Daily Times - Leading News Resource of Pakistan

 

[ejaz007]

314 small dams development plan approved
FIDA HUSSAIN

ISLAMABAD (June 03 2008): The National Economic Council, which met here on Monday, approved the national programme of small dams, under which the government will construct 314 dams across the country. Total cost of the programme has been estimated at Rs 54 billion.

The PSDP allocation for next fiscal is Rs 10 billion. These dams will be constructed over a period of 4 years. According to the document of NEC, 23 small dams will be constructed in NWFP, 43 in Punjab, 23 in Sindh, 215 in Balochistan and 10 in Federal Area. The hydro potential will also be harnessed.

The programme will help in storing water and contribute to power generation. The NEC identified the areas which needed government attention in the Annual Development Plan 2008-09. These are Thar coalfield, Gwadar port, Keti Bundar, mechanised farming, water conservation, etc.

THAR COAL FIELD: Thar coalfield is one of the biggest coalfields of the world, having 175 billion tons (95 percent) of 185 billion tons of total coal resources of Pakistan. In spite of the huge coal reserves, presently coal constitutes only 7.0 percent of primary energy supplies and less than 1 percent share in power generation. As against this, the world coal average share is 26 percent (Primary Energy) and 40 percent (Power Generation). Further, the coal share in the electricity generation of the countries are: China (79 percent), India (68 percent), USA (51 percent), and Germany (51 percent).

The coal exploitation had totally been ignored in the past, and no serious efforts had been made for the development of coal, especially mechanised coal mining techniques for large scale coal mining. Now the efforts are being made to develop the Thar coalfield on fast track basis and the work to formulate National Coal Policy is underway which is expected to be completed by end-2008.

The Thar Coal Infrastructure Development Project has already been completed with a financial package of Rs 1.57 billion, having Federal Government financing to Rs 1.10 billion. Six blocks have been appraised in detail, of which four by Geological Survey of Pakistan (GSP), at estimated cost of Rs 337.893 million, and two by Government of Sindh. The Government of Sindh has awarded five blocks to private sector to generate initially 2500 MW.

Feasibility Study on Gasification on Thar Coal to ascertain techno-economic viability of Thar Coal for gasification is being undertaken at an estimated cost of Rs 104.01 million. The present government is now setting up an integrated Thar Coal Development Board, to be headed by Sindh Chief Minister, and including Federal representatives. An institutional roundtable on Thar coal is planned to be held in Washington in July 2008, to be followed by road shows before mining and power generation contracts are awarded through public bidding.

PLACEMENT BUREAU: The Prime Minister announced establishment of Employment Commission and National Employment Scheme. The objective of the Employment Commission is to provide employment to one person from each poor family of 50 percent of the districts of the country. The work on launching various employment schemes is under process. For effective implementation of the Prime Minister's announcement, Placement Bureaus are being established throughout the country. Placement Bureau will also identify the poor and deserving families and will provide jobs for sustainable livelihood.

'Adara Hunarmand Pakistan' is being revamped and assigned new role to match the supply with demand in the labour market and for effective implementation of Employment Schemes. For this purpose, an allocation of Rs 2.0 billion will be provided for Vocational Training and Skill Development in PSDP 2008-09.

DEVELOPMENT OF GWADAR PORT: Phase-II of the project will be implemented on BOO (Build Own and Operate) or BOT (Built Own and Transfer) basis. Phase-II envisages construction of 10 more berths eastward of 4,200 m long coast in phases under private sector as and when the utilisation on the existing berths under Phase-I reaches maximisation (ie 70 percent).

The port will be provided with road and rail link with the national network. Port of Singapore Authority International (PSAI) has been assigned the job of port development under Phase-II in the Concession Agreement for 40 years. Salient features of Concession Agreement are as follow:

RAIL LINK: Alignment of railway track including location of railway station has been finalised and process of land acquisition was underway.

JOINT DEFENCE COMPLEX: Award for acquisition of 9,278 acres land over and above CAA land for Joint Defence Complex has been announced and 80 percent payment has been made. Within 3 weeks, total land area, free of any encumbrance, will be handed over to Ministry of Defence.

Oil City, being an industrial hub including chemicals/petrochemicals industries and petroleum refineries for storage of oil, was needed at Gwadar to meet the future requirements. The proposed hub would act as more like an industrial park and different Ministries/Line Agencies would be involved. GDA has prepared a PC-1 for approval of CDWP/Ecnec.

FREE TRADE ZONE (FTZ): A free zone will be developed at Gwadar. Cost of land for the FTZ at Dhore Ghatti was proposed by the Ports and Shipping amounting to Rs 6.67 billion, which is too high. Efforts to re-locate FTZ at a place where land is available at comparatively cheaper rates, in the north east of Koh-e-Mehdi with sea access close to proposed container terminals area. An allocation of Rs 5 billion for FTZ has been made in the next PSDP 2008-09.

HIGHWAY CONNECTIVITY: Pakistan's road sector accounts for 91 percent of passenger traffic and 95 percent of freight traffic. Total length of roads in Pakistan is about 260,000 km with 63 percent paved road network. The roads in Pakistan are broadly classified into five main categories: National Highways, Motorways, Strategic Routes, District and Urban Roads.

MASS TRANSIT SYSTEMS IN KARACHI AND LAHORE: In Karachi, six mass transit corridors have been identified. Corridor-I of these (Merewether Tower to Sohrab Goth 17.5 km) is the priority corridor. An allocation of Rs 10.0 million has been earmarked in the Federal PSDP 2008-09 for the project for carrying out the feasibility study in the first phase.

In Lahore, First Priority line (measuring 27.5 kilometres - 17 km elevated and 10.5 km underground) of the Lahore Rapid Mass Transit System (LRMTS) from Hamza Town and terminating at Shahdra is being constructed with the Asian Development Bank's financing. For the next phase, an allocation of Rs 10.0 million has been earmarked in the Federal PSDP 2008-09 for carrying out the feasibility study.

DEVELOPMENT OF KETI BUNDER: Pakistan's two major ports - Karachi, with an annual handling capacity of 16.1 million tonnes, and Port Qasim, with a capacity of 6.2 million tons are 45 km (28 miles) apart and rely on dredged channels that limit the size of vessels that can use them.

The present government has planned to build a deep-water port at Keti Bunder to meet its own growing needs and eventually serve landlocked Afghanistan and Central Asia. The need has been felt for a third port to meet the challenge of Pakistan's external sea borne trade especially with Japan, Europe, the Middle East and the United States, which has increased significantly in recent years. As a start-up, an allocation of Rs 10.0 million has been earmarked in the Federal PSD 2008-09 to carry out feasibility study for the port.

HOUSING FOR ALL: Currently, around 300,000 housing units are being constructed against an annual demand of 650,000 units, with the backlog of 6.5 million houses continuing to increase. A much larger shelter construction is envisaged to start reducing the backlog both financially and environmentally. The public sector will assume the role of a facilitator for implementing of housing programmes rather than being the developer.

'Land Banks' will be established, whereby federal and provincial state lands would be transferred to the proposed banks. The availability of the land in the land banks would be increased by purchasing cheap lands in small and medium towns, and in the proposed development corridor with determined growth potentials.

The housing schemes will initially be started in big cities; Islamabad, Karachi, Lahore, Quetta and Peshawar. Government of Pakistan has earmarked Rs 10 billion as revolving fund in the plan out of which Rs 2 billion have been allocated for current year's expenditure.

EXPANSION AND UPGRADATION OF BHUs: Presently there are over 5000 Basic Health Units (BHUs) all over the country but they are not functioning properly. In order to provide better healthcare, particularly maternal and child health facilities, all the basic health units will be upgraded with backup support of supply of equipment, medicines, training of doctors and other health personnel and better pay and package. Rs 500 million has been allocated to the programme in the next financial year.

MECHANIZED FARMING: It is possible to conserve resources and increase farm productivity by mechanising various farm operations. Proper placement of fertiliser through fertiliser band placement drill can save fertiliser and will result in high crop output. In view of recent hike in phosphatic fertiliser prices, an attempt to increase fertiliser use efficiency is the need of the hour. Although tractors are being extensively used in farming,, use of deep tillage implements is limited. With laser land leveller it is possible to save nearly 25 percent water. For effective weed control, it is essential to use appropriate sprayers.

To encourage the use of fertiliser band placement drills, laser land levellers, rotavators, ridgers, weedicide sprayers and wheat straw choppers, it is proposed to launch a 5-year project, costing Rs 2.0 billion, whereby subsidy will be given to farmers/village organisations to enable them to purchase and use the machinery which will conserve resources and increase productivity.

LIVESTOCK SECTOR PROJECTS: WHITE REVOLUTION: Livestock sub-sector accounts for about 50 percent of agriculture sector GDP and is the main tool for alleviation of poverty in the rural areas. Over the last decade, livestock number has increased by nearly 30 percent. However, the milk and meat productivity remains low. This is primarily due to low quality of the animal breed, inadequate health cover and nutritional deficiencies. To overcome these deficiencies, several projects, at a cost of Rs 5.8 billion with the 2008-9 allocation of Rs 1.6 billion, have been initiated.

WATER CONSERVATION: Due to increase in cropped area over time, Pakistan is experiencing irrigation water scarcity. The government has launched a number of initiatives to conserve water and to increase its use efficiency.

EXPORT PROCESSING ZONE (EPZ) BALOCHISTAN: The Government of Pakistan has planned to set up Export Processing Zone (EPZ) in Balochistan. An allocation of Rs 5.0 billion has been made in the PSDP 2008-09. The aim of this project would be to exploit the export potential of the country using the strategic location of Balochistan, especially the Gwadar port. It will help in poverty alleviation by providing employment opportunities to the people of Balochistan.

The proposed EPZ will provide fully developed facilities of the international standard such as roads, water, sewerage, telephone and effluent treatment plant etc as per Standard Incentives Act of EZP. The electricity needs of the EZP would be met on sustainable lines by setting up power plants. Common Facility Centre (CFC) and training centres would also be established in the EPZ to cater for the human resource development and training needs of industries.

Tax incentives on the lines of Jabel Ali EPZ, Abu Dhabi and Shenzen EPZ China would be provided to attract foreign investors. The Gwadar port may provide the required port facilities. One-window facility will be provided to assist and facilitate the prospective investors.

PAPERLESS GOVERNANCE: 'Paperless Governance' lies on the highest priority agenda of the Government to provide relief to common man. To provide quick and efficient service delivery to the citizens and provide them the much-desired relief, automation of Ministries and Government Departments is a prerequisite. The project will not only enhance efficiency, transparency but will also improve accountability.

PUBLIC-PRIVATE PARTNERSHIP: Pakistan has great potential for developing infrastructure projects on public-private partnership basis. Pakistan's public sector investment in infrastructure has declined as percentage of GDP over the years, resulting in huge backlog in the provision of infrastructure. Currently, the public sector can only accommodate about half of the annual infrastructure requirements of $3.5 - 4.0 billion per year. The gap can only be offset by involving private sector in infrastructure development.

ESTABLISHMENT OF COOL CHAIN SYSTEM: Within Pakistan's agriculture, horticulture occupies a significant position owing to high value cash crops, source of subsistence living, enormous scope for value addition, good source of foreign exchange earning etc. However, fresh horticulture products are perishable and thus warrant adequate care during post-harvest handling for efficient distribution.

Therefore, a good supply chain management system has to be in place for domestic and export marketing, which is a weak area in Pakistan. As a result, produce losses are colossal, ranging from 20 percent to 40 percent, and even more. Losses in financial terms run into billions of rupees. Above all, the sustenance of exports is dependent on efficient supply chain.

It is proposed to launch a 'Cool Chain System' project, costing Rs 7.6 billion, with 2008-09 allocation of Rs 93 million. The activities to be undertaken include: pack houses, cold storages, reefer yards and testing labs. The project shall be implemented under public-private partnership with arrangement by Pakistan Horticulture Development and Export Board (PHDEB) under the guidance of Ministry of Commerce and Minfal.

Business Recorder [Pakistan's First Financial Daily]

 

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Black money: amnesty scheme likely in budget
RECORDER REPORT

ISLAMABAD (June 03 2008): The proposed amnesty scheme to be announced in budget (2008-2009) may legalise black economy on payment of 2.5-3 percent of the value of un-declared assets. Sources told Business Recorder on Monday that the proposed amnesty scheme would make it mandatory for the new taxpayers to file income tax returns for at least five years.

This might be done to ensure that a person should not escape on whitening of un-declared assets. A specific period would be announced for all such persons availing amnesty scheme to regularly file returns. The filing of returns might be compulsory irrespective the taxpayer is earning or not. The scheme would be offered to be new taxpayers to legalise their all kinds of assets including property, cash etc on payment of the said amount.

The FBR has examined the tax model of Egypt, where an amnesty scheme was to legalise assets on payment of 2.5 or 3 percent. The scheme would help in documentation of the economy and attracting maximum investment. The amnesty scheme is also a part of government strategy to broaden the tax-base and bring maximum number of persons into the tax net.

Business Recorder [Pakistan's First Financial Daily]

 

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'OGDC partnering with BP on offshore project'

ISLAMABAD (June 03 2008): The Oil and Gas Development Company (OGDC) is Pakistan's leading exploration and production (E&P) company. It prides itself on a competent and dedicated workforce engaged in providing energy security to Pakistan.

In an exclusive interview with Business Recorder's Islamabad Resident Editor Anjum Ibrahim and Senior Economic Reporter Arif Rana, OGDC Chairman and Chief Executive Officer, Arshad Nasar, emphasises the critical role played by the OGDC in Pakistan's development and asserted that OGDC is the only organisation in Pakistan that can be transformed into a multinational entity.

THE FOLLOWING ARE EXCERPTS FROM THE INTERVIEW:

BR: To what extent has OGDC been successful in achieving its drilling targets?

Arshad Nasar: OGDC's target two years ago was 15 wells per annum. Last year the target was revised upward to 41 plus 9 - the latter 9 being exclusively in Balochistan and therefore requiring security clearance. This clearance is still pending, but it is expected that work will commence soon.

BR: What is OGDC's success ratio in relation to drilled wells?

Arshad Nasar: The International success ratio is 1:8 to 10 wells while in Pakistan we are the leaders, our success ratio is very high, less than three wells.

BR: Is there any possibility of OGDC entering into the world exploration market?

Arshad Nasar: OGDC is the only entity in Pakistan that has the ability to become a multinational. However its overriding objective is to bring additional oil and gas resources to assist Pakistan meet its requirements. OGDC is currently involved in bidding for contracts outside the country and talks are under way with a number of possible joint ventures in this regard including Yemen, Egypt, Turkey, China and Libya.

BR: What is OGDC's global depository receipt (GDR) performance on the London Stock Exchange?

Arshad Nasar: OGDC made a presentation to international investors prior to listing on the London Stock Exchange. The presentation was very successful and generated $813 million. This reflects international investor confidence in OGDC. In contrast, response to the Indian CNGC was poor.

BR: Is the cost of drilling on the rise?

Arshad Nasar: Yes and naturally so. With the cost of oil rising, more and more countries are engaging themselves in drilling activities. This has implied a rise in the cost of drilling worldwide.

BR: Will OGDC support the government for another GDR?

Arshad Nasar: It is the government's prerogative to decide that. At present there is no such plan.

BR: Is OGDC planning to go for an offshore project in the near future?

Arshad Nasar: OGDC is partnering with British Petroleum on an offshore project in Pakistan's territorial waters. A survey and other technical work are in progress.

BR: Is petroleum policy 2008 facilitating upstream industry for exploration and production activities?

Arshad Nasar: The new petroleum policy is instrumental in bringing more investment in Pakistan for exploration and production activities. It provides a level playing field to all stakeholders for a win-win situation.

Business Recorder [Pakistan's First Financial Daily]

 

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Budget deficit at 5pc in first 9 months ​

Tuesday, June 03, 2008

KARACHI: Pakistan’s budget deficit for the first nine months of the 2007/08 fiscal year was 5 per cent of gross domestic product (GDP), according to official data.

That compared with a budget deficit of 3.1 per cent in the year ago (July-March) period, according to data posted on the Finance Ministry’s Web site. Total expenditure was 1,468.7 billion rupees while total revenue was 974.2 billion rupees.

However, the trend in the deficit improved in the third quarter (January-March), falling to 1.4 per cent from 2 per cent in September-December quarter and 1.6 per cent in the July to September quarter.

One analyst partly put the third quarter improvement down to an increase in inflows from the United States to reimburse the Pakistan military for counter-terrorism expenditure.

“Compared with the previous two quarters, receipts from budgetary support and logistical support from the United States has improved the fiscal deficit number for the third quarter,” said Asif Qureshi, head of research at Invisor Securities Ltd.

“There has also been cuts on the expenditure side.” The government initially set a full-year budget deficit target of 4 per cent of GDP, however the central bank issued a report at the weekend saying the full-year deficit would be between 6.5 and 7 per cent.

Budget deficit at 5pc in first 9 months

 

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Cable TV sector employing 30,000 people: report​

KARACHI: The cable television sector alone is employing some 30,000 people in the country, reveals the Information & Computer Technology (ICT) Report.

The report is conducted by statistics division of the government of Pakistan.

According to the report Pakistan Television (PTV) is employing 6,000, Radio Pakistan has the manpower of 3,000 whereas fast expanding private electronic media has provided 16,000 jobs. The private radio stations/companies have generated 1,000 jobs whereas satellite TV generated direct employment for 4,000 people.

The report also pointed out huge increase in the advertising revenue of national television networks, which jumped to Rs 25 billion by the end of last financial year from Rs 12 billion in the financial year 2003-04. “These earnings reflect upward trend while boosting the country’s economy”, it adds.

In the national electronic media domain, the cable television remained the fastest growing field with the number of subscribers across Pakistan has increased sharply from 1.50 million in 2004-05 to 3.27 million by the end of last fiscal year.

Punjab leads with 1.27 million subscribers followed by Sindh 1.01 million, NWFP 0.50 million and Balochistan 0.04 million. Islamabad has six times more TV subscribers at 0.22 million as compared to Balochistan.

Province of Punjab also tops in number of cable TV licensees with 353 network operators followed by Sinhd 313, Balochistan 70, NWFP 52 whereas the number for Islamabad is 118. Quoting Gallop Media Report, it put the homes having TV sets at 12,280,000.

ICT report, pointing out slightest increase in the radio sets possession in households, mentioned that Pakistan’s radio penetration is slightly higher than India and Bangladesh.

Daily Times - Leading News Resource of Pakistan