Pakistan Economy - News & Updates - Archive

[Neo]

Automobile industry poised to play vital role in economic growth​

ISLAMABAD (August 25 2008): Automobile industry-one of the important sinews of the industrial sector is geared up to lend important contribution for country's economy making it further vibrant and buoyant.

Wide range of vehicles, indigenously manufactured by automobile industry to meet growing demand in this regard is reflective of growth and expansion of this sector at fast pace, sources at automobile sector observed.

Durability and reliability of the vehicles produced by the indigenous automobile companies will help woo the consumers besides saving huge chunk of foreign exchange spent on the imported cars, they added.

With dynamic economic strategy devised by the political dispensation, the automobile sector is bound to initiate important as well as giant leaps to inject its much-needed contribution to the country's economic growth, they opined.

The Toyota Motor Company- an important segment of automobile industry is well positioned to play its important role in the economic growth by generating more revenues to the national kitty.

Aman Mirza General Manager Toyota Islamabad Motors when contacted to comment on the policies of the present government towards automobile industry, he appreciated the investment friendly approach, which would help, improve the production capacity of the industry.

Aman Mirza claimed Toyota Corolla is the best seller in the South Asia and also on number one in Pakistan adding, it is available in nine different colours in the market and the new generation more luxurious in every aspect.

 

[Neo]

World Bank pledges $5.52 million for carbon finance project​

FAISALABAD (August 25 2008): The World Bank will provide $5.524 million (of which $2.869 million long-term debt) to proposed Carbon Finance project "Lahore Composting" (Saif Group, Pakistan, the sole owner of Lahore Compost Ltd-LCL) to avoid generation of methane emission from biodegradable wastes and improve cultivated land by using compost as a natural soil conditioner.

In an Integrated Safeguards Datasheet of Lahore Composting, Project Task Team Leader and World Bank expert Mihaly Kopanyi said that the Carbon Finance project will provide additional support for achieving the following objectives and benefits, namely to reduce carbon emission in a financially sustainable way, to promote and provide organic conditioner for agriculture; to increase recycling of valuable materials; to reduce health hazard by overall reduction of waste disposed off in landfills; and reduce the demand for landfill capacity.

This carbon finance project will purchase Emergency Recovery Plants (ERs) from the composting plant located in Mehmood Booti area of Lahore city. The program shall be financed by Lahore Compost Ltd through both equity and long-term owners-loan provided by the Saif Group, the sole owner of LCL. The operational cost will be covered and borrowing will be repaid through sales revenues and future carbon finance payments.

The plant managed by LCL has been operating on a pilot basis since March 31, 2006. The experience has been very positive so far and the quality of the compost is high. The LCL follows standard operation procedures for an aerobic windrow type technology; the plant is technically sustainable and in compliance with the Pakistan national environmental quality standards. The plant is currently operating with a 300 ton per day (TPD) capacity, but plans to expand to 1,000 TPD by 2009. All these expansions can materialise within the present premises of LCL.

Mihaly Kopanyi said that the expansion of the composting capacity will require both civil works and purchasing additional equipment. Both local and imported technology will be used for the composting plant. Specific equipment eg turner, screener, sorters have been and will be imported from a reputable producer of composting machinery.

Commenting over the "Key Safeguard Policy Issues and their Management", Mihaly Kopanyi said that the project does not envisage any large scale, significant or irreversible environmental impacts. The environmental and social impacts of the project are primarily positive, since composting will substantially reduce the waste dumped to the landfill, cut down the green house gas emissions to the atmosphere, provide jobs for both skilled and unskilled workers with a better work environment than a landfill; and does not require displacing people.

The LCL has undertaken an environmental and social impact assessment in harmony with the Pakistan Environmental Protection Act, 1997, and World Bank's Safeguard policies, he added

An Environmental management Plan (EMP) prepared under the project Environmental and Social Impact Assessment (ESIA) will be implemented during the project construction/expansion and operation phases to ensure that there are no adverse environmental impacts; rather potential environmental benefits are enhanced, he said. Mihaly Kopanyi also mentioned that the communities in the project area are likely to benefit from the project with potential skilled and unskilled jobs with a better work environment than a landfill and potential health and environmental benefits due to reduction in the amount of waste dumped in the existing unsanitary landfill. The project will also contribute towards reducing greenhouse gas emissions, thereby supporting and contributing to the global efforts towards minimising climate changes.

In the absence of the project, Mihaly Kopanyi said the waste will be dumped in the unsanitary landfill site. The City District Government Lahore (CDGL) considered incineration as a potential alternative to the project but eventually rejected it due to its adverse environmental impacts and non-feasibility based on the characteristics of the solid waste.

Further, LCL has developed standard operating procedures based on the best available practices to ensure that there are no adverse environmental impacts; rather potential environmental benefits are enhanced, he added.

 

[Neo]

'Food productivity enhancement plan to be expanded in Punjab'​

SIALKOT (August 25 2008): Food security and productivity enhancement programme of small farmers has been expanded in 1012 villages at a cost of Rs 100 million in Punjab. Official sources told Business Recorder here Sunday that the programme would jointly be carried out by federal, provincial and district governments in Punjab.

In Sialkot district, the programme would be carried out in 72 villages and under the programme each village would be provided funds amounting to Rs 1.95 crore for the implementation of the programme while initial work on the project has been initiated in area.

The objectives of the project are to supplement the country's on-going efforts to increase food product through crop productivity to ensure food security and alleviate poverty in rural areas through improving income of small farmers and build a mechanism for sustaining productivity enhancement and food security programme. Under the programme special attention would be focused on increasing productivity for improving food security and meet rapidly growing food demands as well as to reduce seasonal and year-to-year variability in production on economically and environmentally sustainable basis.

The main crops like wheat, rice will be covered while small crops like pulses, oilseeds, maize and fodder are also included the project for providing assistance to the farmers, sources added.

The completion of this project would be supportive in bringing boom in per acre yield of crops and help reduce poverty scale in these districts of the country, sources added.

 

[Neo]

Govt to announce Rs1.5bn Ramazan Package ​

ECC may approve Rs24 billion subsidy under research & development support fund for textile industry​

Tuesday, August 26, 2008

ISLAMABAD: The government is to announce the Ramazan Package of Rs1.50 billion to ensure the provision of some kitchen items at subsidised rates in a bid to contain the traditional deadliest spate of inflation that always hits the poor masses in the holy month of Ramazan.

The Ramazan Package is to be unveiled by the government in the next meeting of Economic Coordination Committee (ECC) that would meet on August 26 with the Prime Minister in the chair.

The official said that if kept in view the inflation, the Rs1.50 billion relief package under which some kitchen items are to be provided at subsidized rates, would hardly make the difference. The relief package is a commendable effort at a time when the government is facing fiscal constraints.

The ECC meeting is also likely to approve Rs24 billion Research & Development (R&D) subsidy for the textile sector. The move to give Rs24 billion to textile people under the head of research and development support fund may face a lot of opposition from the other participants of the meeting.

The meeting may consider introduction of slabs for obtaining the R&D subsidy from the next fiscal 2008-09 under which the biggest exporters would get maximum benefits while the smaller exporters, who contributed major bulk in exports, were bound to face loss.

The existing subsidy rates stand at 3 per cent and 6 per cent. Now it has been proposed for introducing slabs for granting 3 per cent subsidy up to $25 million exports, 4.5 per cent subsidy for $25 to $50 million exports, 5 per cent subsidy up to $100 million exports and 8 per cent subsidy on exports over $100 million on the pretext that it would help mergers within the sector. “The subsidy for smaller exporters will be less if the ECC accords approval to this proposal,” said the sources.

The PPP government has not allocated any budgetary provision for textile sector’s R&D subsidy in the recently announced budget 2008-09 but now they are going to again subsidize the sector, which failed to perform well despite getting Rs32 billion subsidy in the last financial year.

“We provided Rs20 billion subsidy to the textile sector but it failed to reciprocate in the same manner. In dollar terms, the government provided around $300 million subsidy but the textile sector remained unable to fetch amount up to the level of $300 million in exports compared to the previous year,” said the sources. The ECC meeting is also to give approval for renegotiate the Rs6.9 billion loan, which PIA has obtained from local banks.

 

[Neo]

PSM to go for direct iron ore mining ​

Tuesday, August 26, 2008

ISLAMABAD: Pakistan Steel Mills (PSM) will go for direct mining of iron ore in different parts of the country to meet its demand, says a news statement issued by the Engineering Development Board (EDB) here on Monday.

Representatives of PSM briefed the committee on the exploration, mining, leasing and development for the preparation of National Steel Policy, formed by the EDB, which met here with Shakeel Ahmed, GM Mughal Steel in chair.

They briefed the committee regarding the steps taken by PSM for local iron ore in steel making. The committee felt the need to raise the level of coordination between various departments for solving the problems of miners, and examined various models existing in other countries of the world, especially India.

The meeting suggested that iron ore and coal deposits be mined for the production of steel by the private sector. Development of mechanised mining of raw materials used in steel making was also discussed.

It also firmed up its recommendations regarding the acquisition of technology for the beneficiation of low grade iron ores and coal. Strategy to open up investment opportunities in infrastructure development like rail roads, ports, etc, was also finalised.

Special and simplified procedures for leasing for steel manufacturers/concerned raw material producers were also recommended along with capacity building measures. Development of mechanism for enhancing the role of the geological survey of Pakistan, to conduct feasibility studies, was also on the agenda.

 

[Neo]

Foreign investors keen to set up Islamic banks ​

Tuesday, August 26, 2008

LAHORE: Provincial Minister for Finance, Planning and Development, Tanvir Ashraf Kaira, on Monday, said that foreign investors of the Middle East, Far East and UK have shown keen interest in establishing Islamic finance banks in Pakistan.

Presently, the total assets of Islamic banks are worth Rs135 billion and there are 170 branches of six licensed full fledged Islamic banks, he said, adding that more than 13 commercial banks are working in Islamic banking.

He expressed these views while addressing the inaugural session of the 2nd International Conference and Exhibition on Islamic Banking and Finance at Aiwan-e-Iqbal Lahore here. “Islamic banking and finance is a system based on strong economic, financial and social considerations, envisaging equitable distribution of rewards and risks among the stakeholders and it is the need of the hour to promote Islamic banking and financing in the country.”

 

[Neo]

Privatisation plan for ’08-09 to be okayed today​

* Privatisation status of ‘big ticket items’ such as PSO, PPL, OGDCL, NITL to be announced n GDR launch will also be finalised​

ISLAMABAD: The Privatisation Commission Board is scheduled to meet today (Tuesday) to approve the PPP-led government’s aggressive privatisation programme for the current fiscal year 2008-09, a senior official at the Privatisation Commission told Daily Times on Monday.

Federal Minister for Finance, Revenue, Privatisation and Investment Syed Naveed Qamar would chair the meeting. The significance of the meeting is that the government would announce privatisation status of important public sector enterprises (big-ticket items) such as the Pakistan State Oil (PSO), Pakistan Petroleum Limited (PPL), Oil and Gas Development Company Limited (OGDCL), and the National Investment Trust Limited (NITL).

The enterprises that offer more attractive investment opportunity would be higher on the priority list for privatisation.

The status of the launch of Global Depository Receipt (GDR) under which shares of important public sector enterprises that would be offered for sale at international stock markets would also be finalised. Some Rs 52 billion privatisation proceeds are in the pipeline and inclusion of more important public sector entities in the privatisation schedule for the current fiscal year would help generate additional financial resources.

Privatisation programme for September and October: The Privatisation Commission has already decided to complete the privatisation of SME Bank, Hazara Phosphate Fertilizers Limited, National Power Construction Company and Heavy Electrical Complex by September 2008 and completion of all necessary arrangements for Global Depository Receipts (GDR) of Kot Addu Power Company for its listing in October 2008. The government has already directed the concerned officials to expedite the privatisation process for the sale of 26 Pakistan Tourism Development Corporation’s motels and restaurants, which have received enthusiastic response from the reputed investors in the related field.

According to the official sources the as an option privatisation ‘big ticket items’ like the PSO, PPL, OGDCL, power generation and distribution companies and NITL would be considered in the Privatisation Commission Board meeting. Qadirpur gas field’s privatisation is also on the card that would help generate much needed foreign exchange of $3.5 billion for the government which is facing foreign exchange crunch due to host of reasons. At present, some 57 public sector enterprises and corporations are included in the tentative list for privatisation. However, their final status would be determined in the meeting. According to the sector-wise break-up, the following are their names:

Banking, finance and insurance sectors: The NITL, First Women Bank, United Bank Limited, Habib Bank Limited, National Bank of Pakistan, National Insurance Corporation, Pakistan Insurance Corporation, State Life Insurance Corporation.

Oil, gas and energy sector: The OGDCL, Pak Arab Refinery Limited, Pakistan Petroleum Limited, Pakistan State Oil Company Limited, Sui Northern Gas Pipe Lines, Sui Southern Gas Pipe Lines, Peshawar Electric Supply Company, Faisalabad Electric Supply Company and Jamshoro Power Company Limited.

Fertilizer sector: The National Fertilizers Corporation, Hazara Phosphate and Fertilizers Limited.

Engineering sector: The State Engineering Corporation and its units, National Construction Limited, Pakistan Machine Toll Factory, Pakistan Steel Mills Corporation & its units, Pakistan Steel Fabricating Company Limited.

Mineral and Natural Resources: Pakistan Mineral Development Corporation and Lakhra Coal Mines.

Ghee Units: Ghee Corporation of Pakistan, Morafco Industries (machinery as is where is basis).

Automobiles sector: The Pakistan Automobiles Corporation, Republic Motors Limited (assets), and the Sindh Engineering Limited.

Infrastructure sector: The Civil Aviation Authority, Port Qasim Authority, Karachi Port Trust, and the National Highway Authority.

Transport sector: The Pakistan International Airlines Corporation, Pakistan National Shipping Corporation, Pakistan Railways and its allied facilities, factories, workshops etc.

Tourism sector: The Pakistan Tourism Development Corporation, Services International Hotel Lahore, and PTDC Motels and Restaurants.

Other sectors: The other public sector enterprises to be privatised include the Printing Corporation of Pakistan, Tomato Paste Plant, Corporation and Others (status to be determined), State Cement Corporation of Pakistan, Sate Petroleum Refining and Petrochemicals Corporation, Pakistan Industries Development Corporation, Utility Store Corporation and its stores, Trading Corporation of Pakistan, Cotton Export Corporation of Pakistan, Rice Export Corporation of Pakistan, Export Processing Zone Authority, Pakistan Industrial and Technical Training Centre, Convention Centre, Islamabad and Pakistan Engineering Company.

 

[Neo]

Oil and gas discovery in Tando Allahyar ​

KARACHI (August 26 2008): The Oil and Gas Development Company Limited (OGDCL) has announced an oil and gas discovery in Kunnar South-1 (Zone-2), in Tando Allah Yar block in Sindh. According to a notice at KSE, OGDCL owns 95 percent production stake in this block, the other 5 percent is owned by GHPL. According to initial tests, oil and gas flow from the well stood at 250 barrels per day of condensate and 14.7mmcfd of gas.

"The discovery would have an annualised earnings impact of Rs 0.16 per share on OGDCL's bottom line", Umer Ayaz, an analyst at JS Global Capital said. Production from the well is expected in the next 8 to 9 months.

 

[Neo]

'Policy statement on economy soon' ​

ISLAMABAD (August 26 2008): Leader of the House in Senate Raza Rabbani has said that finance minister would shortly give a policy statement on economy in the house. Rabbani was responding to a point raised by Senator Waseem Sajjad. The PML (Q) Senator expressed concern over depreciation of rupee against the dollar.

Waseem Sajjad said that the government had failed to give its economic policy statement, which, according to him is must to steer the country out of the economic crisis. He asked the government to ensure political and economic stability, holding back the capital flight in order to put the country in a right direction on economic front. He said that today the Bangladesh and Indian are stronger against the US dollar.

 

[Neo]

Over $350 million export consignments not dispatched yet ​

KARACHI (August 26 2008): The continued strike of goods transporters has badly affected the import and export activities, resulting in suspension of around $350 million export consignments during last seven days, exporters said on Monday. They said that for last seven days not a single export consignment has reached Karachi and Bin Qasim ports following transporters refusal to provide logistics.

"We are unable to dispatch the ready export consignments to ports presently lying in factories for their destinations due to the continued strike," exporters added. They said that transporters have parked over 10,000 trucks, container carriers and other vehicles outside ports and nearby areas. They are reportedly threatening private transporters of the factory owners.

At present exporters and industrialists are compelled to stop their export operation completely and have parked private vehicles in the industries and wait till the strike ends, they added. "It has been estimated that during the last seven days over $350 million export shipments could not reach ports due to the continued strike," said Zubair Motiwala, former president, Karachi Chamber of Commerce and Industry.

He said the country dispatches some $52 million export consignments every day. Karachi Port Trust and Port Qasim are the two major ports for exports, which have not received a single export cargo since last Tuesday. Textile exports have badly been affected by the goods transporters' strike, as over $200 million of consignments are laying in the factories waiting for transportation, he added.

"The goods transporters' strike has not only brought exports from Karachi to a standstill, but also caused suspension to exports from upcountry," Motiwala said. He said that this is more interesting that transporters of goods association on July 14 announced a raise in freights as result of rise in the diesel and spare parts prices which the industrialists are paying them. In case of further delay, buyers will demand shipments via airplane, which is nine times higher than the cost through vessels, he said.

The strike also brought the cement exports to a halt. Industry sources said that Pakistan is exporting some $20 million of cement every week but could not be made since the strike began. "Despite, cement exporters' own transports, the goods transporters have stopped them from travelling to ports,' they added. At present, one ship - 'C Princes' is berthed at Karachi port, waiting for cement loading. While two others are waiting for cement loading in the open sea, they added.

 

[General Fujita]

Information Technology must for Pakistan's progress

Wednesday, 27 August 2008 00:00 Pakistan Daily

'Present era requires expertise in the field of Information Technology (IT),' The Acting Governor of Sindh, Nisar Ahmed Khuhro said this in the inauguration of the AR Saleh Mohammad Computer Learning Centre. The Centre at the AR Saleh Mohammad Government Model Primary/Secondary School in Lyari has been established by a social welfare project of the Kalia Group called Ko-Ordination Group (KRG).

Khuhro pointed out that late Benazir Bhutto had always stressed on the acquisition of computer education. Further, he said that Benazir dreamt Pakistan a developed country with educated people. The Acting Governor promised that her mission would be pursued and achieved.

He was optimistic that the county will make a rapid headway during the era of the government of Pakistan People's Party (PPP). Khuhro also emphasised the need of IT for the progress of the country so that it could ensure a respectable place in the world. He appreciated the Kalia Group for establishing the Computer Learning Centre.

 

[General Fujita]

TeleCard embarks on aggressive plan to rollout Wimax service in Pakistan

Wednesday, 27 August 2008 00:00 Pakistan Daily

Pursuant to a decision of the TeleCard Board to actively participate in the fast growing Wireless Broadband market, the company is pleased to announce that it has chosen Augere as the principal contractor to rapidly design and build the network such as to position a great offering/value proposition for the growing and very quality sensitive internet user community in the country.

The equipment deployment for the initial phase has already commenced and the company expects the offering of Wimax service to be commercially ready by end of the year.

 

[General Fujita]

Pakistan Telecommunication Authority to start automated blocking of illegal IPs

Wednesday, 27 August 2008 00:00 Pakistan Daily
Pakistan Telecommunication Authority (PTA) has decided to start automated blocking of Internet Protocol Addresses (IPs) involved in illegal termination of international traffic, in a bid to check grey traffic flowing into the country.

The facility would be operational within next few days, said PTA Chairman Dr Muhammad Yaseen in a meeting with CEOs of major Internet Service Providers (ISPs) of the country. He asked all ISPs to declare their IP addresses alongwith the antecedents of their customers so that illegal telecom traffic could be monitored. It was emphasized that operators should oversee their customers to make sure they were not involved in grey traffic termination. He also sought cooperation of operators against menace of grey telephony.

 

[General Fujita]

Telenor plans to expand network in Pakistan

Tuesday, 26 August 2008 00:00 Pakistan Daily

Telenor has planned to expand itself only in the field of Telecommunication with special focus of Northern Areas, NWFP and FATA as the things will be little smooth there.

Peter Dindial, Chief Technical Officer told exclusively to The Post after the launching ceremony of Telenor Pakistan Ambassadors. Adding more he was of the view that Telenor Pakistan is committed foe its business expansion as there is a huge opportunity of broadband expansion.


Dindial said although business circumstances here were not much satisfactory, still Telenor believed on its improvement as there was huge cellular market of 160 million Pakistanis here. When pointed about the introduction of Wateen Telecommunication's expected media line-ups, he said that Telenor will only expand itself in the field of Telecommunications but still we have choice of IP TV and broadband TV as well.

 

[General Fujita]

Barclays Bank UK to operate with 10 branches in Pakistan

Tuesday, 26 August 2008 00:00 Pakistan Daily

Barclays Bank PLC, a major financial services provider would start its operation in Pakistan with branches in Karachi, Lahore and Islamabad by the end of 2008

Barclays Pakistan aims at operating 10 branches along with 10 sales centres across the country with more aggressive expansion plans for 2009.

This was revealed in a press conference Monday here in Islamabad. Speaking on the occasion Ahmed Khizer Khan Chief Exective, GRCB emerging markets said the decision to establish Barclays in Pakistan was based on a long-term view of the country and the faith in the progressive economy of Pakistan.

He said Barclays had launched a range of consumers commercial and treasury products, these introductory products include current and saving accounts trade financing personal loans, mortgage, debit and ATM cards, covering the basic financial needs of consumers, while other products are including car financing, credit cards (VISA) small and medium enterprise financing, business financing, investment accounts and internet banking will be introduced in the coming months.