Pakistan Economy - News & Updates - Archive

[Neo]

$40 billion investment in energy sector: AJK plans to meet power needs of Pakistan​

KARACHI (July 16 2008): Azad Jammu & Kashmir (AJK), which has invited $40 billion of foreign investment in hydel energy sector as a part of its energy and investment-focused strategy during FY2008-09, has a plan to provide electricity to the power-hungry Pakistan which is facing 4,000MW shortage.

"Pakistan has a shortage of 4,000MW while Azad Kashmir has the potential to generate 17,000MW of electricity, for which we have invited $40 billion foreign investment in the energy sector," Prime Minister of Azad Jammu & Kashmir (AJK) Sardar Attique Ahmed Khan told Business Recorder in an exclusive interview.

The AJK premier said his government had formulated a policy based on energy and investment for fiscal year 2008-09 under which no sales tax would be collected for 10 years on foreign investment in different energy sectors like hydel, solar, wind mill, bio diesel, fuel cell etc.

"We have the intention not only to provide electricity to Pakistan but also sell out the surplus to other regional countries like India," he added. The AJK Prime Minister said the investors would get the 10-years sales tax exemption even on the bio-products. The investment-based policy, he said, would also create employment opportunities in AJK, which would ultimately help the government alleviate the menace of poverty in the region.

He said some foreign investors were showing interest in response to his government's incentives in the energy sector. A Donors' Conference, to be held next month in AJK, would also focus on this matter, he added. On the political front, the premier said he was trying hard to convince Islamabad for associating a representative from AJK in the Sindh government as, he said, 2.1 million displaced Kashmiris must have a representation in the province.

To a query on the hurdles in the implementation of United Nations' 1948 resolution on Indian occupied Kashmir (IoK) the AJK premier said: "Right now the difficulty lies in the presence of mistrust, sense of victory and defeat and the money being spent by Pakistan and India over this dispute."

He said successive governments in Pakistan and India had persistently been striving to resolve the longstanding dispute which, he said, has become more "complex" with the passage of time. Khan said a non-serious attitude of New Delhi in terms of fulfilling its pledges was another major setback to the long-awaited peaceful resolution of IoK issue.

Referring to other national and international issues, like Freedom Movement in the SubContinent from 1857 to 1947, Good Friday Agreement of Northern Ireland etc, the AJK prime minister said the Kashmir issue would, however, take some time to be resolved.

Urging a negotiated settlement of the Kashmir issue, he said despite the existence of UN observers around 0.8 million Indian occupation forces were still busy in committing a state-sponsored terrorism against the innocent and unarmed people of IoK. Demanding a nuclear-free zone status for Kashmir, the AJK premier urged Islamabad and New Delhi not to use nuclear weapons in the region.

To a query he said his government had no controversy with the Muttahida Qaumi Movement (MQM) which, he said, was a national level party and "would behave responsibly in all situations". When asked about MQM's protest on his arrival in Pakistan, the AJK premier said the protest was held by a few youth, who would soon be disowned by the "mature" leadership of the Movement.

Attique Khan was optimistic about the present Pakistan People's Party-led government's policy towards IoK, saying that the leadership of the party would follow in the footsteps of its founding leader Zulfiqar Ali Bhutto who was a strong supporter of Kashmiris.

He, however, claimed: "Now the Kashmir issue does not need the governments but the governments need to address it and if they don't they will have to answer their people." Rejecting the impression that political parties in Kashmir were lacking a central leadership, Khan said the All Parties Hurriyat Conference (APHC) was their real representative body.

While developing national consensus on all issues was difficult in the wake of unabated human rights violations in IoK "all the parties are unanimous that India should get out", he added. To a query on political stability of the AJK government, the prime minister said he could not claim perfection but some political figures like Barrister Sultan Mehmood were creating problems.

"He has a short history of politics in which he went to various parties... he held meetings with Amin Fahim and Chaudhry Shujaat and now he is talking to Nawaz League," he said.

When asked why infrastructure development in IoK was better than that of Azad Kashmir, the AJK PM claimed that road infrastructure in his state was even better than what it is in Pakistan. Citing the decades old Indian occupation as a major reason for underdevelopment in Kashmir, he said the October 8 earthquake had devastated 7,000 kilometres of roads in AJK.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Obama for tripling non-military aid to Pakistan​

WASHINGTON (July 16 2008): Democratic presidential candidate Barack Obama on Tuesday called for tripling non-military aid to Pakistan and said he would co-sponsor a bill to do so. He also called for changes to US policy toward Pakistan, saying that President George W. Bush had offered a "blank cheque" to President Pervez Musharraf in the form of US military aid.

Obama said a 'single-minded' focus on Iraq was distracting the United States from other threats and he renewed his vow to end the war. "This war diminishes our security, our standing in the world, our military, our economy, and the resources that we need to confront the challenges of the 21st century," Obama said in excerpts of a speech to be delivered later on Tuesday.

"By any measure, our single-minded and open-ended focus on Iraq is not a sound strategy for keeping America safe," he said. Obama, who has been accused by his Republican rival John McCain of shifting positions on Iraq, is seeking to lay out his views on the war ahead of a planned trip to Afghanistan and Iraq soon.

Dates of the trip have not been disclosed for security reasons. "This war distracts us from every threat that we face and so many opportunities we could seize," the speech excerpts said. "Instead of being distracted from the most pressing threats that we face, I want to overcome them."

The future of Iraq promises to be a central issue in the November election battle for the White House between McCain, an Arizona senator, and Obama, an Illinois senator. McCain criticised Obama for delivering a speech on Iraq before travelling there.

Obama's visit to Iraq, where he has only been once, in 2006, and Afghanistan follows repeated criticism from McCain that he should visit the area and talk to commanders. Obama has highlighted the resurgence of the Taliban in Afghanistan as a threat that has been harder for the United States to tackle because of the distraction of the Iraq war.

"I have argued for years that we lack the resources to finish the job because of our commitment to Iraq," Obama said in the speech. "As president, I will make the fight against al Qaeda and the Taliban the top priority that it should be," Obama said.

Business Recorder [Pakistan's First Financial Daily]

 

[Moin91]

First ship with 36,000T wheat arrives


Thursday, July 17, 2008
KARACHI: A vessel, MV Ocean Trader, carrying 36,000 metric tonnes of wheat imported from Ukraine berthed at Port Qasim on Wednesday afternoon.

A source in the Trading Corporation of Pakistan (TCP) said here that the ship will start unloading the wheat as soon as possible.

He said another ship, MV Al-Abam Belle, loaded with 36,000 metric tonnes of imported wheat will arrive at Port Qasim on Aug 4. The TCP had so far awarded contracts for the supply of 656,000 metric tonnes of wheat to eight firms under two tenders.

The latest contracts were awarded to six bidders for the supply of 516,000 metric tonnes of wheat at the rate of $409.88 per tonne on July 3 while the first contract was awarded to two firms for the supply of 140,000 MT of wheat at the rate of $399.45 per tonne on June 18 for July shipment.

The government has tasked the TCP to import 2.5 million tonnes of wheat to meet the shortage for the prime staple food. The TCP has invited bids from pre-qualified foreign suppliers for the purchase of 250,000 metric tonnes of wheat of latest crop from international sources. The tender will be opened on July 26 at the corporation’s principal office.

First ship with 36,000T wheat arrives

 

[Moin91]

SBP gets bids worth Rs52bn for T-bills

Thursday, July 17, 2008
By Shahzad Anwar

KARACHI: The State Bank of Pakistan (SBP) raised the cut-off yield on three months and one-year market treasury bills by 5 to 22.91 basis points in an auction on Wednesday.

It was the second consecutive auction when the central bank did not receive a single offer for six-month T-bills as primary dealers preferred to invest in short-term government security papers prior to announcement of a new monetary policy for the first six months of ongoing fiscal year.

The SBP received total bids worth Rs54.402 billion, of which Rs49.185 billion offers were for three-month T-bills and Rs5.216 billion for 12-month papers. The SBP had fixed a pre-auction target of Rs60 billion.

However, the central bank accepted almost all bids for three-month treasury bills with upward revision in cut-off yield to 11.7825 per cent per annum from 11.5534 per cent in last auction. For 12-month papers, the SBP accepted worth Rs3.429 billion of offers with a cut-off yield of 11.8392 per cent per annum against 11.7891 per cent in previous auction.

“Banks are giving priority to invest in one, two and three weeks apparently in a bid to engage minimum capital for shortest time on the anticipation that the SBP might raise its discount rate in coming monitory policy from 50 to 100 basis points,” a treasury head at a local bank said.

Moreover, due to low charm for banks in 6 and 12 month T-bills only corporate clients were active in the auction of one year T-bills.


SBP gets bids worth Rs52bn for T-bills

 

[Moin91]

EAC recommends adjustment in power tariff slabs

Thursday, July 17, 2008
By Aftab Maken

ISLAMABAD: The Economic Advisory Council (EAC) has proposed reorganisation of electricity tariff slabs by enhancing the ‘lifeline’ category from 50 to 100 units and adjusting the remaining slabs.

In budgetary recommendations, which the Federal government is implementing, the EAC proposed that the slab for lifeline users of 50 units, who are completely protected, should be enhanced to 100 units, while users of up to 300 units should be given an adequate subsidy.

For the last slab or users consuming more than 300 units, the EAC further suggests that they should be charged market rates or ‘overcharged’ for cross-subsidisation, reveals an EAC document available with The News.

The Ministry of Water & Power on March 1, 2008 notified an increase of 10 per cent in electricity tariff for domestic users and 6 per cent each for commercial and industrial consumers, whereas lifeline electric power consumers, using up to 50 units per month, would be exempted from the hike in power tariff.

Nine power distribution companies (DISCOs) in petitions before Nepra have requested to allow them an increase of Rs0.78 to Rs1.5 per unit and the process is under-evaluation with Nepra.

Confirming the EAC proposals, Secretary Water & Power, Ismail Qureshi told The News that the proposals after thorough examination would be forwarded to the cabinet for approval.

Increased POL prices have pushed the IPPs to manage the balance sheet difficultly, thus ultimately leading the IPPs to generate below the capacity and low investment in the sector.

The announcement for new electricity tariff is expected during the month of July while the government can also delay the announcement as increasing electricity tariff is ‘political one’.

The estimated impact for rationalising the electricity slabs would be Rs39 billion and it will lead to fiscal consolidation, as the country is facing looming fiscal and external deficits, said the document.

Beyond the short run measures, the EAC further proposed an increase in power generation through activation of under utilised capacity in GENCOs and IPPs, and also improve the efficiency in existing plants of WAPDA and KESC through initially private sector management and then privatisation.

Review and restructuring of KESC ownership and operations is also recommended and to give institutional support to fast track solar/wind energy for providing power to households.


EAC recommends adjustment in power tariff slabs

 

[Neo]

Overseas workers remit record $6.4bn ​

Thursday, July 17, 2008


KARACHI: Pakistan received highest-ever workers’ remittances amounting to over $6.451 billion in the recently concluded 2007-08 fiscal year. It surpassed the previous record of $5.49 billion received in the preceding fiscal year 2006-07.

In FY08 workers’ remittances showed an increase of 17.43 per cent, or $957.59 million, when compared with the FY07.

The amount of $6.45 billion includes $2.40 million received through encashment and profit earned on Foreign Exchange Bearer Certificates (FEBCs) and Foreign Currency Bearer Certificates (FCBCs).

The monthly average remittances in the period from July 2007 to June 2008 recorded $537.60 million as compared to $457.80 million during the same period of the last fiscal year, registering an increase of 17.43 per cent.

The inflow of remittances in the July 2007 to June 2008 period from USA, Saudi Arabia, UAE, GCC countries (including Bahrain, Kuwait, Qatar and Oman), UK and EU countries amounted to $1,762.03 million, $1,251.32 million, $1,090.30 million, $983.39 million, $458.87 million and $176.64 million respectively, as compared to $1,459.64 million, $1,023.56 million, $866.49 million, $757.33 million, $430.04 million and $149 million, respectively in the July 2006 to June 2007 period. Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during FY08 amounted to $726.29 million as against $804.91 million in FY07.

During June 2008, Pakistani workers remitted an amount of $547.41 million, up $41.86 million or 8.28 per cent when compared with an amount of $505.55 million sent home in June 2007.

The inflow of remittances into Pakistan from most countries of the world increased last month as compared to June 2007. According to the break up, remittances from USA, Saudi Arabia, GCC countries (including Bahrain, Kuwait, Qatar and Oman), UAE, UK and EU countries amounted to $143.57 million, $123.67 million, $90.98 million, $88.29 million, $38.08 million and $13.98 million respectively, as compared to corresponding receipts from the respective countries during June 2007 i.e. $140.17 million, $96.47 million, $68.16 million, $95.39 million, $37.45 million and $12.47 million.

Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during June 2008 amounted to $48.80 million as compared to $55.33 million during June 2007.

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

 

[Neo]

Trade Policy 2008-09 : Govt may impose duties on luxuries, electronic goods​

ISLAMABAD: The government is likely to introduce higher duty regime in the new Trade Policy 2008-09 on import of luxury items including different electronic goods for the sole purpose to narrow the trade gap, officials in the Ministry of Commerce told Daily Times Wednesday.

In the last fiscal year 2007-08 the country spent $39.968 billion on imports of different items including oil and food items (30.87 percent increased over last year). However, the export of country stood at $19.223 billion (13.23 percent increase) resulting in to a trade deficit of $20.745 billion (52.95 percent increase over last year) by the end of last fiscal year 2007-08.

The Trade Policy for the current fiscal year 2008-09 would be announced on Friday with emphasis on discouraging imports and incentives for exports of traditional as well as non-traditional items to new markets. The Ministry of Commerce is likely to set an export target of $21.7 billion for the current fiscal year 2008-09 as compared to realized export figure of $19.222 billion in the last fiscal year 2007-08.

A proposal is under consideration to allow overseas Pakistanis to import up to 7-year old and used vehicles in Trade Policy 2008-09, under Transfer of Residence, Gift, and Personal Baggage Schemes.

Trade Policy is also likely to allow 25 percent export freight subsidy through land and sea routes for promotion of exports of cars and other vehicles manufactured in Pakistan.

The officials said it was impossible for the government to reduce spending on oil and food items imports as it leads to political disturbance in the country.

The officials were of the view that heavy duty on imports of electronics goods would save the government not more than $500 million while on other side smuggling of all such items would further get momentum.

The overall measures, the government would take place in the new Trade Policy would save the government about $2 billion, the official maintained. However, the rising tendency in oil prices at international market would further enhance the government spending for POL products imports and expecting that the overall import bill might further increased instead of declining in the fiscal year 2008-09.

This year the emphasis of the trade policy would be to cut the import volume by 50 percent so that macro-economic targets fixed for the current fiscal year 2008-09 are met. The new target of $21.7 billion is regarded over ambitious due to persistent energy crises including load shedding and gas shortages for the industrial sector across the country.

Sources said government would take several measures to reduce the import by 50 percent in the current fiscal year through trade policy measures that also include reduction of $1 billion in cotton imports.

And the policy would also carry measures for cotton export by additional $2 billion in the current fiscal year, sources added.

Increase in trade with regional countries especially the neighbouring countries like India, Afghanistan, Iran and China would be the prime focus of the Trade Policy as this would help hike exports on competitive transportation charges. The major export item is textile, which is the 60 percent of total export and government would give special incentive for the textile sector in the shape of Research and Development (R&D) Support, which is proposed at Rs 30 billion for the current fiscal year 2008-09.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

S Korea to give $25 million soft loans for GEPCO​

ISLAMABAD: South Korea has pledged $25 million soft loan for the improvement of transmission and distribution system of Gujranwala Electric Power Company (GEPCO) and Pakistan and Korea are expected to sign an agreement within a week, sources in Water and Power Ministry told Daily Times Wednesday. Pakistan had placed a request of $1320.54 million soft loan from South Korea for extending network and sustaining financial losses of electric supply companies. Pakistan needs $2692.55 million to materialise different projects of power distribution companies. Sources said that Pakistan had placed a request before the Korean government for the project of GEPCO’s 6th secondary transmission and grids.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Pakistan’s apparels fetch lowest price​

ISLAMABAD, July 16: Pakistan’s textile and clothing sector export price has nosedived to the lowest level among the leading exporting countries preventing fresh investment in the sector necessary to improve competitiveness and productivity.

Sources told Dawn on Wednesday that the previous government’s policies of subsidising the export price of textile and clothing sector resulted not only in lowering of consumer price of the products but it also painted Pakistan as the cheap supplier to the world market.

“The import of textile machinery is on decline for the past few years. This shows that no body is re-investing in the sector,” an industry source said.

Analysts said that before promising any further subsidies package for the sector the government should carry out audit of the biggest recipients of the research and development (R&D) to identify the impact of the subsidy on growth in export and reinvestment.

Statistics showed that the government dolled out more than Rs43 billion subsidies under R&D during the past three years for increasing export of the sector.

They said that the re-finance scheme for export is another big subsidy, which is also one of the sources for fuelling inflation in the country. The long-term financing facility is also a subsidy available to the sector.

Having low unit price of textile and clothing resulted into lower profits, which actually blocked fresh investments in the new technology, the source said adding the low unit price also resulted into low return on equity, low capital formation, and ultimately low quality products.

An official report said Pakistan’s share of high value-added products (apparel) is lower than low value-added products (non-apparel) in the 27-member bloc of European Union and the United States. While Pakistan’s competitors like China, India, Bangladesh and Vietnam are exporting high-value added goods more than lower value-added goods.

In the USA, Pakistan is fetching lowest Sme (square meter) price of its cotton products ($0.91) as compared to India ($1.9), Bangladesh ($2) Vietnam ($3) and China ($1.5).

This showed that unit price of Pakistan ($0.9) is half of the world unit price ($1.8) in USA. The same trend has been witnessed in the EU market negating the textile tycoons’ claims of competition in international market.

This shows that the high price is not the problem of Pakistan textile sector but the problem is the low price.

Pakistan’s export of textiles and clothing (T&C) to the EU and the USA accounts for 68 per cent of its total T&C exports.

Statistics showed that Pakistan’s share in world export of T&C amounted to 3.1 per cent and 1.2 per cent, respectively, in 2004. The position is almost the same after the dismantling of the quota regime.

This showed that Pakistan’s share in global export of T&C is neither commensurate with Pakistan’s status of cotton producer nor reflects its potential despite the fact that Pakistan is the fourth largest produce of cotton.

Traditionally, Pakistan is the supplier of low quality and low value-added products as compared to its competitors, which was further aggravated by subsidising the export price during the past few years.

Pakistan’s apparels fetch lowest price -DAWN - Business; July 17, 2008

 

[Neo]

Record remittances received in fiscal year 2008​

KARACHI (July 17 2008): Pakistan received the highest-ever amount of over 6.451 billion dollar as workers' remittances in 2007-08 fiscal year (FY08). The workers remittances in FY 08 have also shown an increase of 17.43 percent or 957.59 million dollar, when compared with FY07. As 5.494 billion dollar received in the preceding 2006-07 fiscal year (FY07) on account of workers' remittances.

The amount of 6.451 billion dollar includes 2.40 million dollar received through encashment and profit earned on Foreign Exchange Bearer Certificates (FEBCs) and Foreign Currency Bearer Certificates (FCBCs). The monthly average remittances from July 2007 to June 2008 come to 537.60 million dollar as compared to 457.80 million dollar during the corresponding period of the last fiscal year, registering an increase of 17.43 percent.

The inflow of remittances in the July 2007 to June 2008 period from USA, Saudi Arabia, UAE, GCC countries (including Bahrain, Kuwait, Qatar and Oman), UK and EU countries amounted to 1,762.03 million dollar, 1,251.32 million dollar, 1,090.30 million dollar, 983.39 million dollar, 458.87 million dollar and 176.64 million dollar respectively, as compared to 1,459.64 million dollar, 1,023.56 million dollar, 866.49 million dollar, 757.33 million dollar, 430.04 million dollar and 149 million dollar, respectively in the July 2006 to June 2007 period.

Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during FY08 amounted to 726.29 million dollar as against 804.91 million in FY07, depicting a decline of 11 percent in FY08. During the last month (June 2008), Pakistani workers remitted an amount of 547.41 million dollar, up 41.86 million dollar or 8.28 percent when compared with an amount of 505.55 million dollar received in June 2007.

The inflow of remittances into Pakistan from most of the countries of the world increased last month as compared to June, 2007. According to the break up, remittances from USA, Saudi Arabia, GCC countries (including Bahrain, Kuwait, Qatar and Oman), UAE, UK and EU countries amounted to 143.57 million dollar, 123.67 million dollar, 90.98 million dollar, 88.29 million dollar, 38.08 million dollar and 13.98 million dollar respectively, as compared to corresponding receipts from these countries during June 2007 ie 140.17 million dollar, 96.47 million dollar, 68.16 million dollar, 95.39 million dollar, 37.45 million dollar and 12.47 million dollar. Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during June, 2008 amounted to 48.80 million dollar as compared to 55.33 million dollar during June, 2007.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

'No curbs on UK nationals to travel to Pakistan'​

KARACHI (July 17 2008): British Deputy High Commissioner Robert Gibson has informed the business community that Britain has neither issued a travel advice nor imposed any restrictions on the British nationals travelling to Pakistan. Speaking at a meeting of Korangi Association of Trade and Industry (Kati) on Wednesday, he said Britain has only cautioned its nationals to prepare travel plans carefully.

Praising Pakistan's economic policies, he said that Karachi is a vibrant city and Pakistan is a vibrant country for investment. He said that Pakistan is a country with challenges and has the resilience to convert these challenges into opportunities of development.

The Deputy High Commissioner said that Britain enjoys the best trade and economic relations with Pakistan. More than 100 British companies are working successfully in the country, he added. He said that Britain wants to further increase two-way trade and investment in Pakistan.

Robert Gibson noted that during 2006-07 British companies invested around 5 billion dollars in telecom, banking, power, education, etc, in Pakistan. Welcoming the guests, Kati Chairman Fazl-e-Jalil emphasised the need for making efforts to further increase two-way trades. He said that Pakistan is producing a number of agriculture commodities, which could be exported to UK.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Gwadar Port operations: PSAI interested in handling captive cargo​

KARACHI (July 17 2008): While Islamabad has attached a transshipment based geo-strategic significance to Gwadar Port its foreign operator, Port of Singapore Authority International (PSAI), seems more interested in handling the captive cargo than becoming a regional trade hub.

"Considering the geo-economic imperative of the regional changes, the Ports' Master Plan studies consider an alternate to the Persian Gulf Ports to capture the transit trade of the Central Asian Republics (CARs) as well as the transshipment trade of the region," says a three-year Performance and Activities Report 2004-07 issued by the ministry of ports and shipping during the rule of Pakistan Muslim League-Q.

On the contrary, sources said, the management of Port of Singapore Authority International, the concessionaire operator of Gwadar Port, was following a plan mainly focused on handling the national cargo instead of transhipment business.

They said the inward approach surfaced when Khurram Abbas Country Manager of PSAI told participants of a seminar, held here under the auspices of Pakistan Institute of Maritime Affairs (PIMA) earlier this month, that the Authority would initially focus on national cargo in terms of handling.

Highlighting the salient features of a 30-year Master Plan for Gwadar Port, the PSAI chief had hinted that the Authority was in a competition with the two local ports in Karachi and would go for the transhipment side after undertaking development of the port, said the sources.

They said the PSAI had a commitment with Islamabad on prioritising regional trade at Gwadar Port and that was its (PSA's) international exposure in transhipment work due to which the government had selected it for port operations.

Sources claimed that because of this inward approach the PSAI was happy with the present government's decision to import new consignments of wheat through Gwadar Port. They said the PSAI chief was later badly taken on by other participants of the seminar who reminded the Authority of its past pledges to make the port a regional hub with an aim to capture transit trade of the Central Asian Republics (CARs) and other regional countries.

The speakers, mostly from the ports and shipping field, had strongly criticised the PSAI for not opting transhipment as a short-term possibility. They said some were of the view that the PSAI, in the near future, had no intention to attract transhipment business, which they said was considered to be hallmark of other Asian ports such as Dubai, Colombo, Sallalah, Singapore, and Hong Kong.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Oil output registers 4.6 percent increase​

KARACHI (July 17 2008): Pakistan's oil production has increased by 4.6 percent on year-on-year basis to 71,122bpd (barrels per day) in the first 11 months of the current fiscal year FY08 as compared to 67,967bpd in the same period a year back.

Gas production, on the other hand, increased by 2.9 percent on yearly basis to 4,045mmcfd (million cubic feet per day) in 11MFY08 as against 3,932mmcfd in the corresponding period last year, whereas LPG production fell by 0.8 percent to 1,529tpd (tons per day) in this period.

According to the latest monthly figures released by the PPIS, OGDC's production growth remained impressive as its oil output grew by 5.7 percent on yearly basis in 11MFY08. "The OGDC's production growth of oil and gas was mainly contributed by production increases in the fields of Bobi (100 percent stake), Chanda (72 percent), Dakhni (100 percent), Kunar (100 percent), Mela (56 percent), Adhi (50 percent) and Makori (28 percent). Apart from Adhi and Makori.

Gas production increase of 4.5 percent on yearly basis during 11MFY08 was mainly due to production hikes from the Qadirpur (75 percent stake) and Uch (100 percent) fields", Saad Arshad, an analyst at Invest Capital Securities said.

PPL's oil production growth of 47.8 percent on yearly basis in 11MFY08 was mainly on the back of production from Mela field (approximately 30 percent with PPL's stake of 26 percent). However, oil production from the Adhi (39 percent) and Makori (28 percent) fields also contributed to the rise.

Average gas production of the company remained stagnant at 1,007mmcfd during 11MFY08 which was mainly due to a steady decline in gas production from the company's major field in Sui. However, this decline was offset by an increase from the Adhi, Kandhkot, Qadirpur and Sawan fields. POL's oil and gas production fell by 12.3 percent and 2.7 percent on yearly basis, respectively during 11MFY08.

Oil production of the company was mainly affected by the fall in oil production from the Pindori field which averaged 2,240bpd in May-08. Apart from Balakassar and Khaur, all of POL's 9 operated fields suffered oil production falls with the largest 11MFY08 fall of 43 percent witnessed in Pindori. Average gas production of the company remained relatively stagnant at 46mmcfd during 11MFY08 as against 47mmcfd last year, down by 2.7 percent YoY.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

'Thar coal should not be given to federal government'​

HYDERABAD (July 17 2008): Members of the Sindh Democratic Forum (SDF) are upset that the federal government has issued a notification to set up the Thar Coal Authority, with the Sindh Chief Minister nominated as the leader. The SDF said that coal is a provincial subject on which the federal government has no jurisdiction, thus the action is unlawful and void.

The SDF members regretted that officials of the Federal Ministry of Water and Power and WAPDA tried to control the resources of the province. They added that they were motivated to do so by "greed and narrow self interest". They added that Sindh has been especially been victimised by these groups.

The SDF said that this ministry in 1997 scuttled a 4 billion dollar investment plan by Hong Kong based investor Gordon Wu. The investor planned to develop Thar Coal to produce 5000MW of electricity by the year 2000. They added that had this action not been taken by the Sharif government, Pakistan would not face load shedding today and would not have an oil import bill of US $9 billion.

They added that the first Benazir government needlessly gave away the Super Highway, which they saw as Sindh Government property, to the National Highway Authority. The members added that the Toll from the Super Highway was being used by the NHA to pay for the loss making Lahore Islamabad motorway. The forum felt that another PPP Government was making a similar mistake now. The Coal of Sindh, be it Thar, Dadu, Thatta or Badin is a tremendous wealth of the Sindhi people, the SDF said and under no circumstances should it be handed over to the federal government, as they claimed the Ministry of Water and Power and WAPDA are enemies of Sindh.

The SDF suggested that the Sindh Coal Authority be expanded to become the Sindh Coal and Energy Authority, tasked with exploit the coal resources of Sindh and generating electricity.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

An empty promise?​

EDITORIAL (July 16 2008): The government seems to have leapt without thinking in promising earlier this year that it would deliver another 2200 MW electricity to the national transmission system by April 2009. According to a BR report, based on documentary evidence, the Private Power Infrastructure Board (PPIB) itself reckons that "the target of 2200 MW programme runs the risk of delay."

The programme's component thermal power projects are behind schedule. For example, the Orient Power Company Limited (OPCL) was to commission 150 MW simple cycle phase of a project in the current month, but there is no indication of that happening anytime soon. The concerned parties have not even fulfilled all the signing formalities. Aside from the management issues, also hindering progress is the non-availability of gas for these projects. In fact, gas shortages are a major problem.

The SNGPL was supposed to supply 38 mmcfd for the OPCL project, but failed to do so. It told the PPIB that it could accede to its demand only by diverting gas from an existing power plant such as Kapco, which it rightly explained, would not result in any "capacity addition."

The matter now rests with the petroleum ministry, which has been requested to arrange the requisite gas supply from PPIB's special quota. So far things are at a standstill. It is plain from the preceding details that the government had announced its plan to enhance power production without ensuring proper project support.

Apparently, impelled by the growing crisis it felt it had to do something and generate a certain amount of electricity from wherever possible, including 615 MW from thermal power projects. Hence it made the announcement without undertaking a proper feasibility exercise, as is plain from the record and the consequent delays. The same is also obvious from the water and power minister's seeming indifference when he admitted at a recent cabinet meeting that he was unaware of new deals concerning the setting up of rental power plants.

It is sad that this should be going on at a time power shortages are casting a dark shadow on the economy, which is already experiencing a slowdown on account of a poor law and order situation, political uncertainty and the resultant low investor interest. Surging energy prices together with power shortages are further aggravating things. Textile mills, the mainstay of our industrial and export sectors, are badly hit. So are a number of small and medium enterprises.

The export-oriented industries are finding it increasingly difficult to meet deadlines, and to remain competitive in foreign markets. Many face cancellation of orders because of having failed to fulfil their obligations in a timely manner. The situation being what it is, the government must grapple with the power crisis on a war footing, and do whatever it takes to generate more electricity to give a boost to economic activity.

Business Recorder [Pakistan's First Financial Daily]