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KARACHI (June 13 2006): Aero Asia International Airlines has been taken over by a multinational group that is based in England. An agreement to this effect was signed last week at the head office of Aero Asia International by Zahoor Ahmed, chairman of regal group and Yaqoob Tabani of Aero Asia.

The spokesman of the airlines, in a press release issued here on Monday said, Aero Asia International is expected to commence operation during the current week.
 
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KARACHI (June 12 2006): A group of four Malaysian companies have announced to invest US $500 million jointly in Information Technology, Alternate Energy and Environment sectors in Sindh.

The announcement was made by a delegation of the companies to Noman Saigal, Advisor to Sindh Chief Minister for IT, Environment and alternate Energy, during a presentation on their proposed projects at his office, an official handout said on Sunday.

The delegation consisted of Michael Choong, Director, IRIS Corporation, Steven Mok, CEO, MSC Power, Wan Haji Salamat, CEO, Puspakom, Iqbal Wahla and Umer Wahla. Director General, Sindh environmental Protection Agency, Iqbal Saeed, and other officers were also present.

The delegation had earlier made presentation on IT, environment and power sector projects to the Governor of Sindh.

The IT project includes Vehicle Registration and Driving License on Smart Cards to provide world standard chip-based biometric enabled security document as well as to make available many facilities and services to the public.
 
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Software exports jump 50 per cent

By Imran Ayub

KARACHI: The country’s software exports have for the first time crossed $70 million during 2005-06, registering a growth of 50 per cent as more and more western firms are turning towards Pakistan for IT-enabled services to cut costs and raise profits.

Officials and industry players believe the rising export figures indicate Pakistan is fast catching up with rapidly developing software industry and at such rate, the country’s global IT revenue may touch $9 billion by the end of 2009-10.

“The $72 million exports are those recorded by the State Bank,” said Yousaf Hasan, Managing Director Pakistan Software Export Board - a federal body set up to promote outsourcing and software exports. “If you count such numbers independently, which are not documented, these will be far ahead and may be more than double the exports registered every year.”

He said the latest data compiled by the State Bank of Pakistan suggested software exports and service outsourcing reached $72 million during 2005-06 and could hit $80 million or above by the close of fiscal year on June 30.

“It shows software export growth at 50 per cent,” said Hasan. “We managed to surpass growth rate of 2004-05 as in that year exports of software and IT-enabled services reached $48.5 million against $32.88 million during 2003-04.”

The IT industry has emerged as the fastest growing sector this fiscal, mainly supported by phenomenal rise in call centres’ operations during the last two years. More than 140 centres are currently operating mainly in Lahore, Karachi and Islamabad offering employment to around 5,000 people.

Defined as a unit, the call centres have adequate telecom facilities, trained manpower and access to database providing information to customers. The advancement in telecom technology has made it possible that the person handling a call could be anywhere provided that communication and interaction is properly handled.

Growth in business from western companies has inspired local investors to explore new opportunities. Though Pakistan remains far behind India, operators believe they are on the right path now.

“The good thing is that western companies are looking at Pakistan to outsource services,” said Jehan Ara, President Pakistan Software Houses Association. “It’s an important development as after 9/11 local companies faced a tough time in terms of winning business from these companies.”

She said the growth on one hand boosted exports while on the other proved a boon for local skilled workers and professionals, who once had no option but to fly abroad mainly to the United States and Canada to build careers.

“It also saved brain drain to some extent,” said Jehan Ara. “But the potential is much more than what we are getting. So it’s time to plan a comprehensive strategy, which involves operators, regulators and professionals.”

The authorities appeared aware of the approaching opportunities and claimed to spend Rs115.2 million during fiscal year 2004-05, for subsidising various activities of immediate relevance to the industry, like participation in international exhibitions and acquiring quality certifications.

The PSEB says it plans to continue projects it initiated during the last two years and plans more in the new fiscal for the growth of software exports and call centre operations. Industry players say jump in business has also triggered competition among local operators, who now plan more for better marketing and some have designed aggressive plans to win contracts from foreign firms. “Some of our members have set up front offices in the US and other countries to win deals,” said Farrukh Aslam, Coordinator Call Centers Association of Pakistan.
 
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LAHORE: Water and Power Development Authority (WAPDA) has signed a MoU with the Iranian power generation authority for the import of 100 MW of electricity from Iran to electrify Gawadar.

The agreement was reached on the special instructions of Prime Minister Shaukat Aziz to meet the emerging needs of Gawadar. Sources in WAPDA said the decision of importing electricity from Iran was taken under the ‘Energy Security Plan’ formulated in February 2005.

Besides this, the WAPDA was also preparing a feasibility report for importing electricity from Tajikistan. Sources in WAPDA revealed that the MoU was signed on May 25, 2006 in which both the sides agreed on power tariff. The price offered by the Iranian side was 6.9 US cents/unit whereas WAPDA offered 5.5 US cents/unit. After discussions, it was agreed by both parties that a reasonable tariff for electricity supply to Gwadar shall be 6.25 US cents/unit, sources disclosed.

Sources said the tariff will be applicable for the first year of the commercial operation date and both the sides further agreed to finance the cost of construction of the relevant transmission facilities including sub-stations within their respective jurisdiction. Anwar Khalid Member (Power) WAPDA and Majid Farmad, Manager for Generation Expansion Planning, Iran signed the MoU.

Sources said at present WAPDA was getting about 39 MW of electricity from Iran for different cities of Balochistan. Sources said the NESPAK was carrying out the feasibility report of importing 1000 MW from Tajikistan, but the situation in Afghanistan was the main hindrance in the project and that was why the government has directed the authority to accelerate its pace on importing electricity from Iran to meet the demand. Import of electricity from Iran would help provide electricity to remote areas and eliminate load shedding in Balochistan, Anwar Khalid, Member (Power) WAPDA said while talking with The News. He said presently the authority was purchasing electricity from Iran at the rate of 5 cent per unit.

Answering another question, the Member (Power) said the components of the tariff and the formulas for their indexation will be mutually agreed in the terms of electricity sale to Gawadar contract, which will be signed by the end of September 2006. He said the initial agreement was presented to the competent authorities of both the sides for final approval.

Giving technical details of the project, he said a total 170 kilometer transmission line will be constructed for the project. Iran will construct about 70 kilometer portion in Iranian territory while WAPDA will constructed the remaining 100 kilometer line in their jurisdiction.

Talking about the gap in demand and supply, he said the authority was utilizing its own hydropower and thermal power plants on priority. This has minimized purchase of electricity from the IPPs resulting in saving a good amount of money, he said.

The electricity demand was rising by over 12 per cent per annum as the number of consumers has increased due to rapid urbanization, extension of electricity grid supply to un-electrified areas and village electrification, Member (Power) said.

Presently the total installed electricity generation capacity in the country was 19,404 MW out of which 6,489 MW was hydel, 6,012 MW was IPPs, 6,441 MW was WAPDA’s own thermal power plants and 462 MW were Nuclear. The authority was working on different hydropower and other projects to enhance electricity generation capacity to meet with the rising demand, he concluded.
 
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ISLAMABAD: Pakistan has formally apprised the International Atomic Energy Agency and Nuclear Suppliers Group of its dialogue with China for the acquisition of a nuclear power plant.

“Pakistan has informed IAEA and the 44-member NSG of our intent to acquire a nuclear power plant of 600 megawatts which is commercially more viable than the two power plants of 300 MW,” an official source said yesterday.

He said the nuclear power plant would be set up in Karachi where the country’s first nuclear power plant, 138 MW Karachi Nuclear Power Plant (Kanupp) was established in 1972 with the Canadian assistance.

He said President General Pervez Musharraf, who yesterday left for China, will push forward the dialogue process with Beijing on nuclear energy cooperation.

Earlier, there were reports that Pakistan has sought two more nuclear power plants of 300 MW worth $1.2bn from China.

The official said Pakistan already has two such power plants and believed that the ever-growing energy needs could be met conveniently through a bigger power plant of 600 MW that generated more electricity in case of shut-downs as compared to smaller ones.

Pakistan is also deliberating upon the nuclear energy cooperation with the US but at the moment the Bush administration is reluctant to extend any such assistance to its close allied nation in the global war on terror.

“Nuclear energy cooperation talks are also on with the European Union but presently, it’s only China which has come up with a positive response to Pakistan’s request,” he said.
 
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Tuesday June 13, 2006

KARACHI : Karachi City Nazim Syed Mustafa Kamal has said after the completion of Pakistan's tallest building there would be 30,000 jobs available in 10,000 call centres.

He made this announcement in his address late on Saturday at the launching ceremony of the Karachi Electronics and Electrical Fair (KEEF) 2006. The fair is programmed from September 14 to 16 at the Karachi Expo Centre.


He said the tallest IT building would be completed in 12-14 months and it was totally a private investment project.


The Nazim said without public-private partnership no country could achieve its development goals. He praised the private sector's initiative towards the city's development process.


He maintained that a revolution always come from the private sector while the government's job was to provide facilities.


About KEEF 2006, he said the type of activities should continue because not only cities but also the country derives benefit from it.


Syed Mustafa Kamal said business environment was now friendlier then ever before. This was just the grassroots co-ordination between Pakistan's President and the common man towards the development process.


He said that there was no conflict between the Sindh government and the district government and consolidated efforts have brought about healthy business environment in Karachi.


He informed that due to normalcy returning to the city six months direct investment crossed Rs 55 billion.


The city Nazim said Pakistan's soft image came out from Karachi and growing business activities and foreigners confidence in the government sent a productive message to the international community. On the request of a leading businessman, Mian Pervez Akhter, the city Nazim announced a school for vocational training handing over on Monday.


He said should the school become a success then in all 18 towns these vocational schools would be opened.


In his speech senior Sindh minister, Syed Sardar Ahmed said the exhibition should be arranged in other cities of the province.


He said in the last few years Information Technology has revolutionised the country but the real benefit was not transferred to the country as India has done.


On the behalf of the Sindh government he said the provincial government was able to provide 12 to 15 vocational schools and it would be financed by the Sindh government. Dr Mirza Ikhtiar Baig, Honorary Consulate General Republic of Yemen, said the city has proven its worth in regard to international fairs.


He said electronics and electrical sector was getting growth and particularly in the manufacturing side. Now the growth in electronics and electrical manufacturing almost equals that of the automobile industry, he added.


He urged to build up the vender industry in the country, because it was the backbone of business and did not manage not grow in the past. In his welcome address Karachi Electronics Dealers Association (KEDA) president, Abdul Waheed Memon said the leading manufacturers of the world and business community were at the ceremony with their latest designed products to be displayed at the show.


He said the opportunity would be equally beneficial for both the manufacturers and suppliers' representatives of the world and local businessmen and importers as well. He said KEEF 2006 would bring foreign investment and the business activities would get a momentum.


Microsoft Pakistan Corporate Manager, Jawwad-ur-Rehman appreciating the launching of KEEF 2006 and said this kind of events was very necessary.


He urged companies to come forward and provide opportunities to the youth of the city.


Shah Faisal Khan Afridi, CEO Haier Pakistan, Sarfrazuddin, Chairman Pakistan Electronics Manufacturer Association also spoke on the event. Vote of thanks presented by Syed Faisal Raza Abidi, General Secretary KEDA followed by KEEF 2006 monuments distribution ceremony.
 
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FAISALABAD (June 15 2006): The mining and quarrying sector grew by 9.6 percent in 2005-06 as against 3.8 percent growth last year. However, the sector contributed only 2.6 percent to the gross domestic product (GDP) in 2005-06, which is slightly lower than last year's 2.7 percent contribution.

According to an update report, the main contribution to the growth of mining and quarrying sector came from mining of aragonite marble, fire clay, limestone, coal and the extraction of natural gas, which grew by 70 percent, 24 percent, 7.7 percent, eight percent and 4.5 percent, respectively, in the first nine months of 2005-06.

As much of the country's mining reserves exist in remote areas, infrastructure improvements are necessary to attract higher investment in this sector.

Since 2000, the government has implemented a mining policy under which imports of machinery have been allowed free of tariffs and restrictions on repatriation of profits by foreign investors have been removed. These measures have been successful in attracting foreign investment in the mining and quarrying sector.

Pakistan has economically exploitable reserves of coal, rock salt, limestone and onyx marble, china clay, dolomite, fire clay, gypsum, silica sand and granite, as well as precious and semi-precious stones. Mineral deposits, which may have sizeable reserves, require greater exploration.

The reserves include gold, copper, tin, silver, antimony, the platinum group of elements, tungsten, lead, bauxite and fluorite.

Mining and quarrying represent an important activity in Pakistan's economy, contributing around 0.5 percent to the GDP since 1990.

Moreover, as mining has a high presence in the poor areas of Pakistan, employment and income generation in less developed areas would accompany the development of the industry.

Deposits are found mostly in NWFP and Balochistan. According to industry sources, there are around 1,600 processing units in the country with as many as 932 marble processing factories in NWFP alone. Most of the processing units in NWFP are micro units with 1-3 cutters with the bulk of processing for export taking place in Karachi.

Marble and granite is the sixth largest mineral extracted in Pakistan, others being coal, rock salt, limestone and china clay. According to the industry estimates, 1.37 million tonnes of marble and granite were produced while 97 percent of it was consumed locally.

Little efforts were made in the past to identify and estimate marble and granite reserves in the country. Some of the reserves of marble and granite were, however, calculated with the efforts made by development projects and concerned departments.

According to estimates, there are 160.2 million tonnes of marble reserves in the country, out of which 98 percent are in NWFP. Granite reserves, only at one place in Northern areas show a total of 414 million tonnes while other reserves of granite are spread all over NWFP, Balochistan and Sindh.

In 1999, granite accounted for 65,000 dollars in foreign exchange earnings, which was approximately 0.1 percent of international granite exports. The share reached a high of 0.3 percent in 1998 when Pakistan exports were 208,000 dollars, other than that exports were in the range of 61,000-87,000 dollars.

Pakistan is also a regular importer of granite and sandstone.

Pakistan's export price per tonne was in the range of 106-162 dollars per tonne, while import price reached a high of 493 dollars and a low of 80 dollars per tonne in the previous five years.

Marble exports can be distinguished in three categories, ie, raw marble, rough worked and finished marble. All of these have a comparable share in total exports in Pakistan, but finished marble has had the lion's share of about 50 percent throughout the previous six years.

All have experienced negative growth, but raw marble has increased its share in total marble exports from 19 percent to 24 percent in the previous six years. Pakistan only exports raw marble, and in 1999 it accounted for 5.1 million dollars in foreign exchange earnings, which was approximately 0.28 percent of international marble exports.

The share has increased from 0.17 percent (in 1995), while in value the exports have increased by 69 percent in previous five years. Pakistan raw marble export price per tonne was in the range of 234-338 dollars per tonne, while imports reached a high of 387 and a low of 28.67 dollars per tonne in the previous six years.

Pakistan also imported rough worked marble in previous six years. Some of the leading importers from Pakistan include the US, which imported 52 percent by value of Pakistan's marble in 1999, while Taiwan is another major importer sharing 15.12 percent of Pakistani exports of marble.

The quality of raw marble extracted from Pakistan is of the highest international standard with great potential to bring top end prices. However, only a small number of mines have enough capacity to produce significant orders for the international market.

Most mines are micro operations, where the extracted marble is used for producing tiles and handicrafts with a few slabs suitable for high value goods like larger furniture and decorative pieces.

On a per capita basis, Pakistani industry is larger than India's but the percent of extraction, level of productivity, technology and trade orientation are far behind.

Despite reserves of high quality marble, over 90 percent of all Pakistan's marble is sold in the domestic market or in Afghanistan compared with India, which exports more than half of production. While growth of production has been high at over 20 percent per annum over the past decade, and exports have quadrupled between 1997 and 2004, in recent years, the construction needs in Afghanistan has led to a doubling of production over the past two years.

Even so, Pakistan marble exports account for only about 0.5 percent of global trade at around 20 million dollars.

Moreover, marble producers sell in predominantly low value-added segments of the market with marble chips and powder dominating sales to Bangladesh, raw or roughly cut marble sale to markets in Italy, Taiwan and increasingly to china.

Yet the bulk of exports are in the form of raw blocks of unprocessed stone. Though the Afghanistan construction boom is temporarily sustaining a production boom in Pakistan, sustained global competitiveness in processed marble products will depend on increased outward orientation or higher value added products, based on the use of rapidly advancing technologies throughout the industry.
 
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KARACHI (June 15 2006): The growth of large-scale manufacturing (LSM) sector, which accounted for 70 percent of total manufacturing output and 52 percent of total output of industrial sector in FY05 and was responsible for 27 percent of the contribution of commodity producing sectors to overall real GDP in that year, decelerated to about 9 percent in first 9 months of FY06 (July-March).

This compared with the overall annual growth rate of 15.6 percent achieved by the LSM sector in FY05. This transpired from the data released by the State Bank of Pakistan on June 14 covering about 75 percent of manufacturing activity of the sector.

At this stage, it appeared well nigh impossible for the overall LSM sector to have grown by another six/seven percent in the span of the remaining three months to catch up to the annual growth rate of last year. [The LSM posted a growth of just 9 percent during the current year, against the target of 13 percent, and last year's growth of 15.4 percent.]

Among the two heavyweights accounting for over 50 percent of the manufacturing activity covered, 'textile' (weight 24.492) scored a growth rate of only 3.98 percent during July-March period while 'food, beverages and tobacco' (weight 14.352) achieved a growth rate of 6.95 percent during the same period. Within 'textile', the largest growth rates of 11.16 percent and 0.07 percent were scored by 'cotton yarn' and 'cotton cloth', respectively accounting for nearly 84 percent of overall textile manufacturing activity.

Data on 'cotton ginned', representing about 14 percent of the activity in the sub-sector, showed a decline in production of about 11 percent, being a reflection of lower cotton output during FY06.

According to statistics finalised in the National Accounts Committee meeting on May 24, cotton production declined by 12.95 percent to 6.336 million tons against previous year's production of 7.279 million tons as the area under cultivation declined by 3 percent to 3,096,000 hectares against 3,192,600 hectares of past year.

The largest scorers within 'food, beverages and tobacco' were 'cooking oil' (17.60 percent), 'vegetable ghee' (13.16 percent) and 'cigarettes' (4.74 percent) together accounting for nearly 64 percent of production activity in the sub-sector. Output of another heavyweight (viz sugar), which accounted for nearly one-third of total manufacturing activity of this sub-sector, went down by 2.4 percent during the year up to end March 2006, being again a reflection of lower sugarcane output. Sugarcane production was reported to have declined by 6.2 percent to 44.312 million tons, against 47.244 million tons produced last year with area under cultivation posting a decline of by 6.1 percent to 907,000 hectares during the year against 966,300 hectares cultivated during FY05.

Other significant growth rates were achieved by 'pharmaceuticals' (14.17 percent with output of injections increasing by 30 percent), 'tyres and tubes' (12.20 percent), 'paper and board' (11.85 percent), 'electronics' (11.78 percent with 'air conditioners', 'TV sets' and 'refrigerators' posting growths of 19.63 percent, 12.25 percent and 11.27 percent respectively), 'leather products' (10.84 percent), 'chemicals' (9.89 percent with soda ash and caustic soda growing by 6.68 percent and 5.85 percent respectively), 'fertilisers' (9.78 percent), and 'non-metallic minerals' (9.49 percent). These manufacturing sub-sectors together accounted for some 31 percent of the covered LSM sector.

'Automobiles'--a sub-sector enjoying a weight of 3.995 within a total of 100--posted an increase of about 28 percent in output while two other sectors enjoying rather insignificant weights, namely, 'wood products' and 'engineering items' grew by hefty 47 percent and 40 percent respectively. Together, the two were responsible for less than even 0.5 percent of the total LSM activity. These hefty growth rates, indeed, cannot contribute much to the overall growth rate of the LSM sector.

Sub-sector 'metal industries', enjoying a weight of 3.504, was the biggest failure during FY06 so far recording a decline in output of 0.75 percent with production of pig iron, coke, billets, HR/coils and plates and CR coils etc posting major declines.

Within other sectors, a major decline was also reported in the case of 'buses' whose output within 'automobiles' declined by about 62 percent.
 
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LAHORE (June 15 2006): Punjab Finance Minister Hasnain Bahadur Dareshak on Wednesday unveiled in the Provincial Assembly Rs 274 billion tax-free provincial budget for 2006-07, showing revenue surplus of Rs 82 billion. The budget, which is 22.13 percent more than the current year''s budgetary estimates, carries an allocation of Rs 100 billion for development expenditure in the province.

Dareshak is the first Punjab finance minister in the history to present budget four times in a row. Late Makhdoom Altaf was the other finance minister who presented four budgets in the assembly in the past.

The finance minister said that the share of federal divisible pool taxes constituted 66 percent of total revenues. Straight transfers, subventions, grants contribute 13 percent, while province''s own sources revenues form 21 percent of total revenues.

He said that Revenue Expenditure remains at Rs 191 billion in the proposed budget estimates. Major allocations in current expenditure in the proposed budget are: Local Government Rs 87.3 billion; Police Rs 20.3 billion; General Administration Rs 13.8 billion; Education Rs 13.7 billion; Interest Rs 11.9 billion; Pensions Rs 11.00 billion; Irrigation Rs 6.1 billion; Health Rs 6.00 billion; Public Health Rs 5.5 billion; Agriculture Rs 2.5 billion; and Industries Rs 2.00 billion.

Dilating on Rs 100 billion development expenditure to be undertaken in the coming fiscal year, Dareshak said that Rs 12 billion, showing an increase of Rs 2 billion from the current budget, had been earmarked for Local Government development projects in the coming fiscal year. He said that Rs 65 billion of expenditure in year 2006-07 would occur on Core Provincial Development Programme.

Highlighting the Annual Development Programme (ADP) in different sectors in the proposed budget, he said that Rs 12.48 billion had been allocated for education. He said that 200 schools'' upgradation; training of 121,857 teachers and managers; establishment of 3,251 libraries and 70 colleges would take place under this programme.

Boosting of provincial government unparalleled efforts in Special Education, he said that Rs 600 million would be pooled there out of Education portfolio development fund. Similarly, under education development head Rs 300 million would be spent on literacy promotion and Rs 5.00 billion on Education Sector Reforms.

In health sector development Dareshak told the House that Rs 4.30 billion were earmarked for Health Sector Reforms (HRS). In development of emergency services for other cities in the proposed budget 2006-07, an amount of Rs 900 million had been kept under health sector development, he added.

About development efforts in 2006-07 on Annual Development Programme, he said that Rs1.80 billion was meant for Local Government & Rural Development; Rs 5.2 billion (Water Supply Sanitation); Roads (Rs 14.00 billion); Special Infrastructure (Rs 23 billion); Irrigation (Rs8.50 billion); Agriculture (Rs 1.10 billion); Livestock (Rs 600 million); Industries, TEVTA, Mines & Minerals (Rs 1.05 billion); Access to Justice (Rs 600 million); Public Buildings (Rs 3.20 billion).

Earlier, opposition legislators on a point of order criticised the government for hurting the sanctity of budget by passing on information to the press. The journalists of press gallery, agitating against a government department action against ''On-Line'', a leading news agency, boycotted the assembly session. They later, on the assurance of Provincial Law Minister Muhammad Basharat for holding a judicial inquiry of the incident, came back. The session, that commenced at 11:20 am, was chaired by Afzal Sahi.
 
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LAHORE (June 15 2006): Punjab government's Rs 100 billion annual development programme (ADP) of 2006-07, which is 58.7-percent higher as compared to the last year's figure of Rs 63 billion, will mainly focus on social sectors - education, health, water supply & sanitation, besides services and urban sectors.

Out of Rs 100 billion ADP outlay, Rs 28,493.150 million will be spent on social sectors, Rs 25,700 million on infrastructure development, Rs 3,375 million on production sectors, Rs 1,360 million on services sector and Rs 4,255 million on miscellaneous sectors, including special infrastructure progarmme and district and TMA programme etc.

This year's ADP has been designed under the Medium Term Development Framework (MTDF) 2006-09. The development programme 2006-07 not only includes projected estimates for 2007-08, but also includes the summary and main components of the development schemes as well as major outcomes and targets.

The gross size of the development programme of Rs 100 billion includes provincial development progamme of Rs 65 billion, special infrastructure programme of Rs 23 billion and districts/TMAs programme of Rs 12 billion. According to the budget document, when compared with last years' development outlay, it is 59 percent higher. The core provincial progamme is 23 percent higher as against last year's size of Rs 53 billion.

The salient features of the progamme are as maximum funding of ongoing projects, full funding for projects to be completed ie, 70 percent ongoing and 30 percent new. Moreover, 60 percent of 2,430 schemes are to be completed and full funding for foreign aided and mega projects as per requirement. The progamme will also focus on rural areas (70 percent), infrastructural investments (35 percent) and allocation to pro-poor sectors (82 percent). Allocation per scheme will be Rs 27 billion.

As per sectoral analysis of the ADP, Education sector will get Rs 12,480 million, which constitutes 19.20 percent of the development programme 2006-07, which is 35 percent higher than the last year's allocation. It has, however, been envisaged that by the year 2008-09, the allocation for the education sector will be enhanced to 24 percent of the total development outlay in that year.

According to the budget document, in order to attain millennium development goals (MDGs), the following objectives will be achieved: 100 percent participation rate at primary level by 2015 and participation enhancement at the elementary and secondary levels; provision of quality education at all levels, promotion of science and computer education at the secondary and tertiary levels; and reduction in gender and regional disparity in access to education. In addition, Rs 600 million and Rs 275 million have been allocated for special education and literacy.

HEALTH: As compared to Rs 3,300 million of the last year's figure, Rs 4,300 million budget is allocated for health sector, which is 30.3 percent higher.

The major objectives envisaged in the health care delivery programmes include measurable impact on MDGs through investment in the health delivery services with significant reduction in incidence of diseases, implementation of a standardised service delivery package in the devolved set-up; better health management system, a well thought-out strategy to be implemented for patient care, reduction in poverty as well as social protection for vulnerable population groups, greater focus on preventive health care, particularly in the rural areas, improved primary, secondary and tertiary health care through effective and quality referral system and optimal utilisation of facilities; enhanced capacity for planning, costing and budgeting and making community participation meaningful and to give public private partnership a purposeful dimension.

In the ADP for water supply and sanitation, an amount of Rs 5,200 million has been provided as against Rs 4,500 million showing an increase of 15.6 percent, which would mainly focus on provision of water supply and sanitation coverage.

LOCAL GOVERNMENTS: In the ADP, 2006-07 Rs 1,800 million have been earmarked for local governments and rural development, which is 50 percent higher as compared to last year's figure of Rs 1,200 million. The major objectives include improving quality of life in 425 low-income areas of 21 towns in 6 districts of southern Punjab by providing drinking water, water treatment plants and construction/rehabilitation of slaughterhouses etc.

Moreover, it aims at training of elected councillors on holding their offices to acquaint them with official business and other allied skills; to accommodate and facilitate women councillors and local government functionaries, a separate block is gong to be set up in the existing local government academy at Lalamusa. Besides, it aims at providing basic infrastructure and deficient facilities in the selected villages to upgrade them to the level of model villages.

In line with the government policy, the development of the road infrastructure is being given due importance in the mid term budgetary framework i.e. 2006-07 and 2008-09. The revised allocation during 2005-06 was around Rs 13,500 million. In order to maintain the present tempo of infrastructure development the proposed allocation to the road sector in MTDC is Rs 14,000 million for 2006-07; Rs 16500 million for 2007-08 and Rs 18,000 for 2008-09.

AGRICULTURE SECTOR: An amount of Rs 1,100 million has been set aside for the agriculture which is 18.9 percent higher against the last year's budget of Rs 925 million. The focus will be on enhancing crop productivity through use of improved agronomical practices and high yielding and hybrid varieties besides strengthening agriculture research and extension services to adequately respond to the challenges and opportunities offered by WTO regime.

Moreover, the government has allocated Rs 1,050 million for promotion of industries, TEVTA and Mines & Minerals in the province and this amount is 38.2 percent higher as compared to the last year's figure of Rs 760 million. Similarly, forestry, wildlife and fisheries will get Rs 575 million, food Rs 50 million, livestock development Rs 600 million, information technology Rs 800 million, services Rs 500 million, labour, human resource development Rs 60 million, environment Rs 550 million, information, culture and youth affairs Rs 210 million, religious affairs and auqaf Rs 50 million, access to justice Rs 600 million, regional planning Rs 2,200 million, social welfare Rs 330 million, tourism Rs 90 million, emergency services Rs 900 million and sports Rs 400 million.
 
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LAHORE (June 15 2006): The Punjab government has enhanced the budgetary allocations for education and health sectors by 35.7 percent and 30.3 percent to Rs 12,480 million and Rs 4,300 million, respectively for the year 2006-07, as compared to Rs 9,200 and Rs 3,300 million allocated in 2005-06.

The allocation for education constitutes 19.20-percent of the Annual Development Programme (ADP) 2006-07. According to ADP, school education budget increased by 65.3 percent to Rs 3,305 million as compared to Rs 2,000 million of year 2005-06 while Rs 2,900 million have been allocated for higher education against Rs 1200 million of 2005-06 thus denoting an increase of 141.7 percent.

Similarly, allocations for special education and sports have been increased to Rs 275 million and Rs 400 million, respectively, as compared to Rs 200 million and Rs 300 million in 2005-06. The government also enhanced literacy budget from Rs 200 million to Rs 275 million.

However, allocation for Education Sector Reform Programme remained unchanged at Rs 5000 million. The enhancement in allocation is aimed at achieving the objectives of Millennium Development Goals (MDGs), which include 100 percent participation rate at primary level by 2015 and participation enhancement at the elementary and secondary level, to provide quality education at all levels, promotion of science and computer education at the secondary and tertiary levels and reduction in gender and regional disparity in access to education.

The salient features of strategic intervention to achieve the goals include:- training of 121,857 teachers and managers, establishment of 3251 libraries, provision of edible oil to the tune of 3.077 metric tons, setting up of 386 IT labs, and 100 public college education besides establishment and up-gradation of 70 colleges during the year 2006-07.

HEALTH SECTOR: The health sector budget has been increased by over 30 percent to Rs 4300 million to achieve major objectives envisaged in the Health Care Delivery Programme. This includes measurable impact on MDGs through improvement in the health delivery services with significant reduction in incidence of diseases, implementation of a standardised service delivery package in the devolved set up, better health management system, a well thought-out strategy to be implemented for patient care, reduction in poverty as well as social protection for vulnerable population groups, greater focus on preventive health care particularly in the rural areas, improved primary secondary and tertiary health care through effective quality referral system and optimal utilisation of facilities, enhanced capacity for planning, improved capacity for data analysis research as well as evidence and outcome based planning, and to make community participation meaningful and to give public private partnership a purposeful dimension. Out of Rs 4300 million, Rs 860 million have been allocated for preventive healthcare, which is 20-percent of the total health budget. The allocation also includes an amount of Rs 2100 million for Chief Minister's Health Sector Reform Programme (HSRP) while Rs 1082 million have been made available for tertiary care hospitals. The government has also allocated Rs 215 million for the medical education, and Rs 43 million for research and development.

The HSRP was launched with a comprehensive set of interventions to overcome the inadequacies in primary and secondary health care services, widespread prevalence of communicable diseases, urban-rural imbalances, professional and managerial deficiencies in District Health System, basic nutrition gaps in target population, deficient health education system, addiction and mental health as well as unregulated private sector.

It may be mentioned that HRSP is one of the major components of the Medium Term Development Framework 2006-09 (MTDF) for health sector with different strategies for identification of various policies, projects and programmes.
 
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ISLAMABAD (June 14 2006): The Oil and Gas Development Company Limited (OGDCL) has hit three major discoveries--Chanda-2, Kunar and Maila-1 in NWFP, Sindh and Punjab, respectively. Source said that Chanda-2 has been drilled to 4990 metres in Kingriali formation in district Kohat of NWFP and the company is actively drilling at three more formations-Datta, Lumshiwal and Lockhart--in the same area.

On the basis of log data, the company's drilling experts have termed the initial reports from these formations as very encouraging. They are pretty confident that the drilling of these formations will add substantially to oil and gas production from Chanda field in near future.

Chanda field is a joint venture of OGDCL, Government Holdings of Private Limited (GHPL) and Zavor Petroleum with 72 percent, 12.5 percent and 10.5 percent shares respectively. Its first deep discovery- Chanda-1- has already been declared as a big discovery and as on June 13, it was producing 2570 barrel oil and 5 mmcfd gas per day.

The OGDCL report submitted to Director General of Petroleum Concessions of the Ministry of Petroleum on June 9, indicated that testing at Chanda-2 proved as a great discovery, having initial production of 1560 barrel of oil and 2 mmcfd gas at half inch choke. The report said its production would double once its testing reaches the required level at one-inch choke.

The report said: "OGDCL has discovered oil and gas in its development well Chanda No 2. The discovery has been made from a new formation. The surface co-ordinates of the well are 33-13-55.316 (latitude) and 71 -30-98 (Longitude). The location of Chanda Well No 02 was delineated in Chanda D & P Licence area, drilled and tested by OGDCL in-house expertise."

It added that potential of Datta sandstone would be tested shortly and it was expected to add to hydrocarbon potential. Kunar field is another productive area in Sindh where joint venture led by OGDCL hit another discovery. It has also been reported to DGPC.

Kunar's testing report indicated that its one zone Kunar-1 was tested that proved production of 470 barrel oil per day and 24 mmcfd gas. Its two zones were under drilling. Kunar-1's report was submitted to the ministry on May 20 last.

Sources said Maila-1 has also been an encouraging discovery having substantial quantity of gas and oil but OGDCL is yet to submit its test report to DGPC.

An official said Maila-1 is at the final testing stage and, keeping in view its encouraging initial test reports, the Ministry is expecting highly promising results from Maila-1. OGDCL, PPL and GHPL are in the joint venture partner for Maila field.
 
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ISLAMABAD (June 14 2006): The SHV Energy, a Dutch company will invest Rs 400 million to increase its Liquefied Petroleum Gas (LPG) storage capacity to 1,450 tonnes to bridge the demand-supply gap.

In a meeting with State Minister for Petroleum and Natural Resources, Mir Muhammad Naseer Mengal here on Tuesday, Company Chief Executive, Patrick J Gregory said that the company is planning to further invest Rs 400 million in LPG activities, which would improve its supply.

After this investment, its storage capacity would be increased from 200 tonnes to 1,450 tonnes at Port Qasim, which would definitely meet the demand, Gregory informed.

The SHV is the largest LPG marketing company world-wide with operation in 26 countries. It launched its operations in Pakistan in 1998 and was now the largest LPG marketing company with a market share of 20 percent.

Welcoming the Dutch company's investment plan, the Minister of State said that the government would facilitate and co-operate with them in this regard.

The government had deregulated the petroleum sector with a view to bring healthy competition in an investor-friendly atmosphere. He hoped that SHV would continue to avail the investment opportunities in the LPG sector for the mutual advantage.

Additional Secretary, Shaukat Hayat Durrani and SHV General Manager Corporate Affairs Parvez Akhtar were also present during the meeting.
 
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KARACHI (updated on: June 15, 2006, 21:55 PST): A record Rs 171.224 billion Sindh Budget for 2006-2007 with no new tax levied was presented in Sindh Assembly by Senior Minister Syed Sardar Ahmed here on Thursday.

The budget incorporates a record development outlay of Rs 50 billion which includes Provincial ADP of Rs 24 billion and District ADP of Rs 8 billion.

Other components of the development outlay are FPA Rs 5.3 billion, Federally Assisted Projects Rs 10.5 billion, DERA Rs 250 million and SDSSP Rs 1.95 billion.

The General Revenue Receipts including the Federal Transfers and Provincial Receipts are estimated at Rs 147.613 billion as against the overall Revised Receipts of Rs 126.962 billion.

According to the break-up the Divisible Pool Tax Transfers are estimated at Rs 63.468 billion; Federal grant-in-aid being given as per new Order 2006 is estimated at Rs 5.83 billion, Straight Transfers Rs 37.90 billion, District Support Grant Rs 18.606 billion, Province's Own Receipts Rs 22.808 billion.

The General Revenue Expenditure for 2006-2007 is estimated at Rs 139.224 billion against revised estimates of Rs 126.184 billion for 2005-2006 - showing an increase of 10.3 percent over the revised estimates.

The Current Capital Receipts are estimated at Rs 9.248 billion and the Capital Expenditure is expected to be Rs 11.727 billion with a deficit of Rs 2.47 billion.

For 2006-07, combined share of Local Government is estimated at Rs 56.754 billion as against revised estimates of Rs 52.833 billion for 2005-2006 with an increase of Rs 7.4 percent.

The Rs 50 billion development outlay is 19 percent higher than the current year.

Delivering the budget speech, Senior Minister Sardar Ahmed said the ADP for next financial year has been planned at Rs 32 billion which includes Rs 8 billion for district governments and Rs 24 billion as Provincial component.

He said the ADP 2006-07 registers an increase of 33 percent over the year 2005-06.

Sardar said the Provincial component of ADP will be entirely funded by the Provincial Government whereas the district governments will fund their component from the "Single Line Transfers" which will be administered from July 2006 onwards based on the PFC Award.

He said in terms of priority, the Government has assigned Rs 20.83 billion allocations to following sectors:

Special Packages Rs 5.5 billion (KR Rs 2 bln, HS Rs 1.5 bln, Rural Package Rs 2 bln)

Communication Rs 4.5 billion

Water and Power Rs 1.5 billion

Education Rs 1.5 billion

Agr and Livestock Rs 1.36 billion

PP&H Rs 1.29 billion

Mines and Minerals Rs 1.1 billion

MPAs Program Rs 1.08 billion

Health Rs 850 million

Industries Rs 600 million
 
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ISLAMABAD (updated on: June 15, 2006, 18:24 PST): Pakistan and United States on Thursday inked an agreement to provide US $200 million in direct U.S budget support for Pakistan's federal Public Sector Development Programme (PSDP), 2006-2007.

The bilateral agreement was signed by Minister of State for Economic Affairs Hina Rabbani Khar and Secretary for Economic Affairs Division Khalid Saeed, and U.S. Ambassador to Pakistan Ryan C.Crocker, U.S Agency for International Development (USAID) Director Jonathan Addleton.

The agreement is the second tranche of the five annual $200 million instalments, of U.S economic assistance to support Pakistan in health, education and sanitation.

The $200 million is part of the 3 billion U.S. dollars pledge for assistance to Pakistan made by President Bush to President Musharraf at Camp David in 2003.

Minister Hina Rabbani Khar in her brief comments said the two countries were bound in long-standing relations and there was a sense of renewed co-operation in all areas.

She appreciated the US assistance to support Pakistan's initiatives in health, education and sanitation through the budgetary assistance and said these will help government's strategic goals in poverty reduction.

She said the US assistance needed to be emulated by other donors to help the country improve its social sectors. She said despite the challenges, the country has managed to achieve macro- economic stability.

The budget 2006-07, she said clearly indicated that Pakistan was spending more on development and there was a need for more spending to improve the effectiveness and quality of the programmes that were being undertaken.

The US ambassador Ryan C Crocker said the US assistance represented the "depth and strength" of relations between the two countries and reflected support to the government.

He said the US 200 million dollar assistance was part of the US 3 billion package for Pakistan and his government was meeting its commitments for the second consecutive year.

He said the government was engaged with the US Congress on funding for the next year. He said the US government was "totally committed to providing full assistance it pledged to Pakistan." He said his government provided the funds for last year and will do it in the years to come.

Crocker hoped the funding will help Pakistan in social sectors and bring about a meaningful change in health, education and clean drinking water.

He said the USAID through its development assistance was also targeting the earthquake reconstruction. He said additional agreements providing $40 million for earthquake reconstruction and another $147 million in project support will be provided within the next several months, bringing total USAID assistance this year to Pakistan to $403 million.

Ambassador Crocker said the funds will assist the Government of Pakistan to sustain the strong economic growth of the past several years.

The agreement provides almost twelve billion rupees in direct budget support to government's Public Sector Development Program (PSDP), 2006-2007 and will be used to fund health, education, and water and sanitation programs in the federal government's budget.

Under the funding, two-thirds of it will go for the federal PSDP basic education budget; over half of PSDP's health budget; and 38% of the Water and Sanitation budget.

The fund for education will lead to building of schools, providing scholarships and training teachers. Health programmes are aimed at fighting communicable disease, train and equip midwives, and improve child health. Clean water assistance will benefit people throughout Pakistan.

Apart from the budget support assistance, USAID is providing project assistance to Pakistan in education, health, economic growth, democracy and governance, and earthquake reconstruction.

The support includes $1.5 billion in economic assistance and $ 1.5 billion in military assistance. The United States has also pledged to provide over $510 million in earthquake relief and reconstruction assistance.

Ambassador Crocker said the assistance to Pakistan was aimed supporting peace and stability in South Asia over the long term.

He said continued economic growth and stability in Pakistan was also creating conditions for continued joint success in the fight against terrorism.
 
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