Pakistan Economy - News & Updates - Archive

[Neo]

ISLAMABAD, Jun 17: A Norwegian company, NBT AS, will establish manufacturing facilities of Mega Watt Class wind turbines in Pakistan.

This was decided in a meeting held here on Saturday between managing director Karachi Shipyard, Vice Admiral Iftekhar Ahmed Rao and chairman NBT AS, Norway, Arne Myre.

The meeting was chaired by chairman Alternative Energy Development Board (AEDP), Air Marshal (retd) Shahid Hamid.

The firm reached an agreement with the Karachi Shipyard to manufacture wind turbines in Pakistan. The AEDP in pursuance of its mandate facilitated the agreement.

As per the agreement, the Norwegian firm would set up wind turbine manufacturing facility at Karachi Shipyard to manufacture wind turbines with a cumulative capacity of at least 1,000 MW within five years.

AEDB would also facilitate the Norwegian firm in setting up a number of wind power plants in Pakistan.

Speaking on the occasion, chairman AEDB Shahid Hamid stated that the agreement was a leap forward in achieving AEDB's goal of indigenous manufacturing of wind turbines.

He reiterated AEDB's commitment to promote alternative renewable energy in the country and ensured full support to all those interested in undertaking such nergy projects.

 

[Neo]

Sunday, June 18, 2006

ISLAMABAD: To sustain and improve growth in information technology (IT), the industry will need around 232,000 trained professionals by the end of financial year 2009-2010, making it possible for Pakistan to earn global IT revenues of $9 billion, predicts the Pakistan Software Export Board (PSEB).

The Board has based its assessment on the average growth rate of around 50 percent per annum (Export 60 percent and Domestic 33 percent) over the last couple of years, said a statement of the Board. The current demand for trained IT professionals is a little above 50,000. The industry needs to add around 180,000 more professionals within the next four years.

"The PSEB will work as a proactive match-maker between educational institutions and the IT industry and will help to provide practical work experience to graduates and students", Yousaf Hasan, PSEB MD, said while explaining the strategy of the Board to meet these targets.

Federal Minister of Information Technology Awais Ahmad Khan Leghari recently announced that the PSEB would launch two projects that would contribute to the government's objective of providing quality human resources to the industry.

These projects have been designed to help IT companies expand their operations by simultaneously employing more people and maintaining a reduced financial burden on the hiring companies. This will, in turn, help companies recruit more human resources.

The first phase of the PSEB's IT industry internship project started in 2002. Till date the PSEB has placed around 2,500 IT graduates throughout the industry for a three-month paid internship. Out of this number, 80 percent graduates secured jobs based on this experience. The project was well received in the IT industry and it urged the minister of information technology to initiate the second phase of the programme.

In the second phase of this project, the PSEB intends to develop talented human resources pool for the IT, IT-enabled services and computer graphics, animation and games development industry.

The PSEB aims to play a facilitating role by placing 10,000 students/fresh graduates from educational institutions within the local software industry.

The duration for the paid internship will be increased to six months. This initiative will result in restoring the industry's faith and confidence in the capabilities of homegrown talent.

 

[Neo]

Sunday, June 18, 2006

ISLAMABAD: Minister for Commerce Humayun Akhtar Khan on Saturday said the country’s exports in textile sector would surpass $10 billion mark and rice export to join $1 billion club in the current fiscal.

He told the National Assembly that export oriented policies have been adopted by the government and the exports for the current financial year are targeted at $17 billion. He recalled that six years back the country’s exports were hovering around $7 billion and achieving the $10 billion mark was a dream.

Referring to the “Super Basmati” claim of India, he said the investigations are being carried out and if proved correct Pakistan would take up the matter with the WTO under Dispute Settlement mechanism. “We will not wait for a minute to take up the matter with WTO if was proved correct,” he said. On trade deficit, he said there was nothing to worry about because the country’s foreign reserves are enough to meet with the situation. “We have such a strong economy that loan can be sought from any country of the world,” he said. On the situation of sugar, he said there is no shortage of the commodity nor such situation will be let to arise in future. He said government is making all out efforts to provide sugar at the fixed prices to the poor people through utility stores.

He dispelled the impression that the sugar was being hoarded and said 325,000 tones monthly of the commodity were released by the sugar mills.

 

[Neo]

The China energy corridor raises eyebrows in Washington

By Kamal Siddiqi Editor Reporting

KARACHI: China and Pakistan are looking at the possibility of an energy corridor through Gwadar Port. Under this arrangement, China will source its energy needs from third countries which will be routed through the Gwadar Port overland to China. This idea is watched with suspicion in Washington.

Earlier, there was a talk of such a corridor that would take oil from Saudi Arabia to China through Pakistan. The proposal makes perfect economic sense. It brings China closer to the Middle East and its energy resources. It allows Pakistan the opportunity to earn money in transit fees. It also strengthens the relations of Pakistan and China even further.

However, Washington is being increasingly wary of Pakistan’s new energy politics. Despite repeated public disapproval from Washington, President Musharraf’s government has been proceeding with uncharacteristic speed on the Iran-Pakistan-India (IPI) gas pipeline project.

A lot of the paperwork has been done on this and even India has reluctantly come back into the talks after a period of dilly-dallying.

It is ironic, say many analysts, that India is currently more sensitive to US policies in the region as compared to Pakistan. In the words of one US senior diplomat in New Delhi, India is America’s “newest best friend.” Despite this, India also wants to be part of the action and has returned to the table for the IPI gas project. This is frustrating for the US government which wants to economically sanction Iran.

The dusty and sleepy town of Gwadar is gradually becoming the focal point of the high stake regional energy politics. For the US, the idea of a Chinese built harbour in Gwadar translates into Chinese presence in a sensitive part of the world. This is the shipping lane through which passes the bulk of the world oil tankers. It is strategic point where Washington is uneasy with the Chinese looking on.

The question for analysts is what does this mean for relations between Pakistan and the US. On the face of it, relations could not have been better.

However, cracks are emerging. The US has cut down on assistance to Pakistan. The Congress has started to show its concern on the human rights situation in the country.

There is also increasing impatience over the manner in which Pakistan is fighting militants in the tribal areas. Pressure is growing on General Musharraf to show results. In a no-win situation, the Pakistan government is now seeing the fallout of its actions in the tribal areas.

The growing influence of religious parties, of the Taliban variety, only puts into focus how hard it is becoming for Pakistan to win over support in the area. The religious elements are also becoming bolder in their attempts to take control and dictate administration. It seems that the writ is slipping from the hands of the government.

To add to Pakistan woes is the possibility of an armed confrontation between the US and Iran. If it does take place, Pakistan will be sucked into the sequence of events, no matter what. At the same time, it will affect the prospects of the IPI project, and this is something that cannot be viewed positively considering Pakistan’s growing gas needs.

On the energy front, the US continues to plug for the Turkmenistan gas project, an unattractive alternative to what Iran is offering. Pakistan has said that the US should compensate financially if it were to choose Turkmenistan over Iran. The US has showed no such willingness.

It is rare for Pakistan to put its own economic interests ahead of the priorities of the powers that be. The fact that Pakistan is gradually moving out of the US fold in terms of following energy deals with countries to which the US has reservations is interesting.

It may not be new for the US as allies have done this in the past, it seems like unchartered territory for Pakistan. The future promises to be eventful.

 

[Neo]

KARACHI: Ships might start calling at the Gwadar Port by the end of this year or early next year, Director General Gwadar Development Authority Ahmad Bux Lehri said here on Saturday.

Speaking at a seminar, organised by Jinnah City and Jang Cultural Wing, on “Gwadar: The Future of Pakistan”, he said the government was looking for an experienced port operator with links in the shipping world who could market the port well.

“The government does not want to hand over the port operations in a hurry, it is looking for an appropriate party,” he said. “If we offer the port operations to a new player and it fails to market and run the port efficiently, then our all efforts would go down the drain.”

He said it was wrong to say that inauguration of the Gwadar Port was delayed many times, adding that the government had never fixed any date for its inauguration.

Lehri urged the investors buying lands in Gwadar to get the property transferred in their name and report the actual price to the respective department in order to keep their investment safe. He said a strategy had been formulated for the disputed lands in the city.

He informed the audience about the works going on for linking Gwadar with the rest of the country and foreign countries including roads network as well as railway line. He spoke at length about the development activities in Gwadar and said the private sector was very liberally engaged in this process.

He said the investors coming to Gwadar from the rest of the country should prefer locals for jobs as it would improve their living conditions. Besides, “if you hire people of other areas for jobs, they would take month-long leaves to see their families, which would affect your business,” he added. Balochistan Minister for GDA Sher Jan Baloch said the Chinese government had agreed with Gen Pervez Musharraf that Gwadar Port would be deepened further. He said Mirani Dam would be completed and inaugurated by September this year.

He said currently two desalination plants - one for Gwadar Industrial Zone and the other for Sanghar Housing Scheme - were being established in Gwadar while two more have been approved.

“Private sector is handling all these projects and we are now giving NOCs for housing schemes only to those parties, who can set up their own desalination plant.”

He said the Gwadar Port should have been developed decades ago as it always had the potential to become the backbone of the country’s economy.

Chairman Gwadar Investors Forum Sarmad Jan said the policies with regard to sale/purchase and transfer of lands should be formulated on long-term basis because rapid changes shake the confidence of investors.

He said the government should ensure security of investment and appoint well-qualified officers in the government departments in order to attract more cash towards the city.

“Around 90 per cent of the remittances coming from the US may come to Gwadar, if government’s policies ensure the security of investment,” he said.

Nazim Turbat Abdur Rauf Rind also spoke on the occasion.

 

[Neo]

KARACHI: The National Institute of Oceanography (NIO) will shortly start detailed mapping of offshore hydrocarbon reserves through a geological survey of 990-km coastal belt of Pakistan.

Initially, the research facility plans to take seismic record of offshore sedimentary basins laying 200 metres below sea level, Director General NIO Dr M M Rabbani informed The News on Saturday.

“I am confident Pakistan’s offshore region contains massive oil and gas reserves,” he said, supporting his claim in historical backdrop of sedimentary formations.

He believes that continues discharge of sedimentary deposits into Indus Basin over millions of years has preserved enough living organism to provide substantial quantity of crude oil.

Moreover, Rabbani has another reason to support his optimism. “Rate of decay of microscopic organism is relatively higher in Indus (basin),” he said, emphasising that low oxygen levels in coastal water has played a major role in this regard.

The survey of 260-km Indus basin along Sindh province and 730-km Makran basin of Balochistan will be completed in 2-5 years. Offshore oil and gas exploration has not met success but the government is actively pursuing local and foreign companies to make a breakthrough.

Pakistan’s Exclusive Economic Zone - its share of sea water - spreads over 240,000 sq km or up to 200 nautical miles from seashore.

With the recently published economic survey underlining the need for diversifying energy sources, the NIO has identified twenty-two creeks along the coastal belt with a potential to produce 900 megawatts of electricity from tidal wave energy.

Tidal waves in these creeks can produce from one kilovolt to 467kvs of energy if a single-rotor turbine is used, Rabbani informed, explaining that production increases with increase in number of rotors.

The head of research facility admits that this project is relatively expensive but dwarfs the fact citing skyrocketing petroleum prices.

 

[Neo]

KARACHI (June 19 2006): The supply of oil and gas in the country increased by 4 percent in ten months of the current fiscal year, as per latest data released by Pakistan Petroleum Information Service (PPIS).

The domestic oil and gas production depicted an increase of 4 percent to 681,000 boepd (thousand barrels of oil equivalent per day) compared to Jul-Apr FY05 production of 655,000 boepd.

Rise in gas production was the main reason behind this growth as oil production during this period suffered a nominal decline. This was because the energy mix is largely skewed towards gas.

According to a report of JS Capital Markets Ltd, domestic gas production in Jul-Apr period increased by 4.6 percent, to 3.8 bcfpd (billion cubic feet per day) versus 3.7 bcfpd produced during similar period of last year.

The increase in gas production mainly derived from optimum production from existing fields.

On the other hand, indigenous oil production remained flat, showing a marginal decline of 1.3 percent to 65.5,000 bpd as against 66.4,000 bpd previously.

Combined oil and gas production of the E&P giant, OGDCL, remained flat at 165,000 boepd in Jul-Apr FY06, compared to 163,000 boepd recorded in similar period of last year. Oil production of the company stood at 38,300 bpd in this period--an increase of 2 percent from previous level of 37,500 bpd. Gas production during this period stood at 951 mmcfd versus 941 mmcfd previously.

Based on this, OGDCL market share in domestic oil and gas production came to 58 percent and 25 percent respectively. Recently, OGDCL through notice to KSE communicated that initial testing at Chanda-2, a development well, showed an additional production capacity of 1,564 bpd of oil and 2 mmcfd of gas.

The additional production from Chnda-2 is expected to start soon. OGDCL holds 72 percent stake in Chanda concession.

Currently, Chanda field is producing 2,500 bpd oil and 7.3 mmcfd gas.

Once again double-digit increase in POL's oil and gas production was observed with combined oil and gas production depicting an increase of 49 percent from 11,900 boepd to 17,700 boepd in Jul-Apr FY06. Oil production surged by 32 percent to 7,154 bpd compared to 5,410 bpd corresponding 10 months of last year. Gas production during the period increased to 47 mmcfd from 29 mmcfd thereby showing a growth of 62 percent. Increase in oil and gas production was due to increased production from Pindori, Pariwali and start of production from Tal Block.

PPL combined oil and gas production during Jul-Apr FY06 saw an increase of 6.5 percent to 175,000 boped from 164,000 boepd previously. Gas, being the mainstay for PPL, witnessed 6.4 percent increase with production recorded at 1,010 mmcfd as against 949 mmcfd during the same period of last year.

This mainly resulted from start of production from Manzalai-Tal and optimum production from other fields.

Oil production showed a growth of 11 percent to 1,823 bpd in Jul-Apr FY06 compared to 1,645 bpd previously.

 

[Neo]

ISLAMABAD (June 19 2006): Prime Minister Shaukat Aziz on Sunday said the multifaceted relationship between Pakistan and China reached a new heights as a result of President Musharraf's visit to China and the two countries have agreed to expand bilateral ties as well as regional co-operation in a broad spectrum of areas, including defence, security, energy, transportation, education culture, trade and economy.

Addressing the PML parliamentary party meeting at the Prime Minister house, he said the concept of building trade, transport and energy corridors between Pakistan, China and the Central Asian States presented by President Pervez Musharraf in his talks with the Chinese President as well as in his meetings on the sidelines of Shanghai Cooperation Organisation was greatly appreciated by them and the Chinese leadership agreed to further work on the implementation of these proposals.

The Prime Minister said the President during his visit to China and Almaty successfully presented Pakistan's position as a country strategically located at the confluence of three vital regions of the world - South Asia, Central Asia and West Asia. It provides the shortest access to sea for all landlocked countries of Central Asia as well as western China.

To facilitate this access Pakistan is building a deep sea port at Gwadar on the Persian Gulf and constructing rail and road links to connect the region, he said.

Pakistan in this way is fast emerging as the junction for multiple corridors of co-operation between the three regions involving energy, trade and transportation.

Talking about budget 2006-07, the Prime Minister said the development and welfare-oriented budget presented by the government is a manifestation of its commitment to improve the quality and standard of the life of people while maintaining the momentum of growth and the government will ensure its effective implementation.

The Prime Minister said it is heartening to note that the budget 2006-07 has been received well by all segments of the society and added the constructive and positive debate generated in the parliament both by the treasury and opposition benches is a sign of the political maturity in the country.

The Prime Minister said this year's PSDP allocation of Rs 435 billion is 35 percent higher than the last year's budgetary allocation which will open new avenues of development and prosperity in the country.

A sizeable amount of Rs 109 billion allocated for subsidies and relief will ease problems faced by less privileged sections of the society by bringing down prices of essential commodities, the Prime Minister observed.

He said the government will evolve a proper mechanism to keep a close check on price increase and profiteering and the provinces will play an important role in this effort.

The Prime Minister said the record high allocation for the development projects and a substantial amount for subsidies has been made possible due to the additional fiscal space created during the last four years as a result of the wide-ranging structural reforms, macroeconomic stability and consistency and continuity in policies.

The magnitude of the growth achieved during the last four years in a row has positioned Pakistan among the fastest growing economies of Asia, the Prime Minister added.

"The government is perusing an agenda of development with dignity and quality and we are trying to move the country toward more self reliance and more equitable distribution of resources," the Prime Minister said.

He said the country has moved out of a low investment, low growth syndrome that had marred its economic performance and aggravated the incidence of poverty during 1990s. Inflation is softening; there is stability in the exchange rate and sharp reduction in public and external debt burden.

The Prime Minister asked parliamentarians to play their due role in ensuring timely implementation of budget proposals by co-ordinating with all relevant departments.

The Prime Minister announced setting up of a judicial commission to probe the death of journalist Hayatullah Khan. He said Rs500,000 will be paid to the family of the journalist and the government will bear all expenditure on the education of his children. He said NWFP governor has also ordered inquiry into the death of Hayatullah Khan.

Addressing the meeting PML president Chaudhry Shujaat Hussain talked about the reorganisation of PML and party elections. He said PML believes in strengthening democratic traditions and the party elections are being held under that spirit.

He said the process of elections will be completed in August this year.

The parliamentary party unanimously congratulated the President on his successful visit to China and Almaty.

They said the record high amount allocated for the development projects will lead to employment generation, better facilities of health and education, better infrastructure, clean drinking water and provision of electricity to more villages.

It will contribute to government's efforts to ensure that benefits of growth trickle down to the grassroots level.

 

[Owais]

Duty-free tractor import scheme heads for logical end



ISLAMABAD (June 19 2006): The duty-free tractor import scheme announced in budget 2005-06 is heading towards its logical end as two of the companies, who were granted 2,500 tractors quota each, have approached the government for refund of their bank guarantees.

The Industries and Production Ministry had allowed three parties - the Dewan Automotive Engineering Limited, the Universal Tractors Pakistan (Pvt) Limited, and the Agro Tractors Limited - to import 7,500 tractors, out of total of 10,000 tractors under the approved scheme against million of rupees as revolving bank guarantee.

However, a two-member bench of Sindh High Court (SHC) comprising Justice Muhammad Mujibullah Siddiqui and Justice Syed Zawar Hussain Jafari quashed the scheme on two constitutional petitions filed by the Shahzad Riaz Trade Links and the Fecto Belarus Tractors Limited.

The affected parties filed appeals in Supreme Court of Pakistan against the decision of the Sindh High Court, which is being heard by the apex court.

Meanwhile, the federal government announced another duty-free tractor scheme in the federal budget on June 5, providing a level playing field to all the parties who are interested in import.

Keeping in view the changing scenario, two companies - the Universal Tractors Pakistan Limited and the Dewan Automotive Engineering Limited - have approached the federal government for refund of their bank guarantees.

However, the federal government is of the view that bank guarantees would not be refunded to the parties till the final decision of the Supreme Court.

The court observed that it was not known as to how the import in CKD was included in the facility and no decision of the ECC has been produced before the court to show that the facility was also meant for the CKD.

The court had also struck down the exemption notification issued by the CBR to the extent of import in CKD condition being beyond the purview of the ECC decision, while the exemption to import by the approved parties in CBU condition would remain intact, but fresh notification should be issued after the new allocations.

"The existing notifications are not to be acted upon," the court said.

At the conclusion of arguments, Mehmood. A. Shaikh, the counsel for the Agro Tractors Limited, contended that his client had already imported 156 tractors, which are not in CBU condition, and his client had to bear heavy demurrages, praying that the party should be allowed to get the tractors released on zero tariff.

The court observed: "We are not inclined to allow this relief because we have held that the exemption granted by the CBR to import in CKD condition is beyond the purview of the ECC decision, and we have struck down the exemption notification to that extent. The party should get released imported tractors on payment of normal duties and taxes."

The sources said the companies were worried since the government had opened import of tractors for all the aspirants, why they should stuck their amount on the name of bank guarantees.

But, local tractor manufacturers were exerting pressure on the government for reversal of duty-free tractor import scheme, however, any decision in this regard would take a long time, the sources added.

 

[Owais]

Finance ministry identifies five areas to focus on



ISLAMABAD (June 19 2006): The Finance Ministry has identified five major challenges to be focused during 2006-07, which include increase in tax-to-GDP ratio, improvement in provincial receipts, review of subsidies, strict monitoring of public sector expenditure, completion of privatisation transactions, and GDRs.

The summary of Finance Ministry on federal budget 2006-07, a copy of which was made available to Business Recorder, suggests that one of the major failures of the government was 'slow improvement' in tax-to-GDP ratio at the federal and provincial levels.

While CBR's performance over the current year has been sterling, the primary challenge would continue to be a paradigm shift in the tax-GDP ratios which were, as stated, among the lowest in developing countries, the Ministry said.

It also observed that fiscal space for the kind of development agenda that the country needed could only be created by a significant and equitable increase in tax receipts to ensure the sustainability of the expenditures that were required for the future and to remain within the limits of the debt limitation and fiscal responsibility.

Regarding provincial taxation, the ministry said that for several years provinces' own receipts had stagnated at 0.9 percent of the GDP. It asked the provinces to make vigorous efforts to improve their revenue-GDP ratio. Despite this, large amounts were being transferred to the provinces from budget 2006-07.

"This will enable the federal government to focus and fund the critical national infrastructure including the mega dams," the ministry added.

The Finance Ministry is of the view that subsidy would continue to be carefully targeted and reviewed on need basis.

A case in point was the power and gas tariff, where industrial and commercial sectors cross-subsidise domestic consumers.

The ministry was also of the view that effectiveness of public sector expenditure would need to be monitored carefully to ensure that the government gets value for its monies.

"PSDP will need to be subject to a more vigorous result-based measurement, rather than being based largely on financial inputs and utilisation," the ministry said.

According to the summary, the ministry was disturbed for not meeting the deadlines of privatisation transactions, directing the Privatisation Commission (PC) to must ensure that the transactions planned for the next financial year, including GDRs, are completed well in time.

 

[Owais]

Using wrong NTNs: CBR to issue 'correction notices' to 6000 importers



ISLAMABAD (June 19 2006): The Central Board of Revenue (CBR) has decided to issue correction notices to 6,000 importers, who have submitted wrong National Tax Numbers (NTNs) for clearance of consignments at ports.

Sources told Business Recorder on Sunday that over 6,000 importers had submitted NTNs, which did not match the NTN database maintained by the Board.

The Board is going to write letters to these importers, who are using wrong NTNs for the clearance of consignments under 'One Customs' project.

Sources said that the importers/exporters should verify the NTN from the CBR website for smooth clearance of consignments under one tax number declared with the sales tax as well as customs department. The taxpayers should update their business record declared with the tax departments.

During the exercise, the Board pinpointed only those 6,000 importers who are operating under wrong identification numbers, sources added.

The blocking and de-blocking of the consignments would be reviewed keeping in view the availability of correct particulars with the customs and sales tax departments.

After receiving the letter, the importers have to rectify the error in NTN or his consignment could be blocked at the port.

In case the NTN of the importer/exporter is incorrect at the CBR website, the concerned person could approach the nearest NTN center for correcting the same.

The clearance of consignments would be stopped under 'One Customs' in cases where data of a particular importer/exporter does not match with the database of customs as well as sales tax. In this regard, the NTN enforcement has been done at the ports.

The persons submitting defective data would not be able to carry out transaction unless or until authentic information is submitted to the department.

When asked whether it would be a 'notice' served on the importer, sources said that it would not be a notice, but a letter for the purposes of guidance.

 

[Kaiser]

Motorola to provide wireless network for Pakistan


Chicago-based telecommunications company Motorola has announced that it will provide wireless network managed services to Wateen Telecom-Pakistan, which is part of the Abu Dhabi Group's Warid Telecom International led by Sheikh Nahayan Mabarak Al Nahayan.
The $75 million deal will see Motorola design and implement a MOTOwi4 broadband voice and data network in Pakistan, which under the managed services contract will also require the US company to take responsibility for the operations and maintenance of the network.
The agreement is thought to be the world's largest nationwide commercial WIMAX 802.16e contract and will allow Wateen Telecom-Pakistan to offer corporate hosted VoIP, virtual private networks (VPNs) and residential internet access and voice services across Pakistan. 'This managed services agreement with Motorola will enable the combined team to realize Wateen's vision of 'Broadband Pakistan' quickly and efficiently,' said Sheikh Nahayan.

 

[Kaiser]

Pakistan Expects $3.5 Billion in ***

Pakistan is expecting US$3.5 billion in direct foreign investment (***) by the end of fiscal year 2006-07. The financial year in Pakistan ends on June 30.

Pakistani Prime Minister Shaukat Aziz claimed that wide-ranging structural reforms have transformed Pakistan into one of the ideal locations for foreign investment in the region.

Pakistan has been trying to introduce wide-ranging structural reforms over the last seven years coupled with macroeconomic stability and a rapid, strong and sustained economic recovery.

Talking to Gregory Hinckley, the president of Mentor Graphics, who called on the prime minister's official residence Saturday evening, Aziz said that Pakistan is investing in human resource development to prepare a massive pool of human capital in various disciplines of science and technology to build a knowledge-based economy in the country. Mentor Graphics is a U.S.-based multinational working in the area of electronic design automation (EDA).

"We are following the policy of deregulating in all public sectors, which has resulted in an inflow of substantial investment," Aziz said.

"We have a world-class infrastructure, cheap labor, highly qualified professionals, a level playing field provided to investors and simplification of procedures by the government, which has attracted substantial investments in the telecom sector," he added.

Pakistan is improving the communication system and building redundancy by providing a number of alternate international linkages for Internet traffic, Aziz told Hinckley. It will set up software technology parks at Islamabad, Lahore and Karachi to facilitate the software companies.

Hinckley presented a check for $50,000 to the prime minister to benefit victims of October's earthquake.

Mentor Graphics provides software tools for design, simulation and testing of large-scale integrated circuits. The company contributes to development by using local manpower. It has employed over 100 Pakistanis, a significant number of them high-end design engineers.

Hinckley appreciated the quality of the infrastructure- and investment-friendly policies of Pakistan. He said Pakistan is rich in human capital and that the talented professionals working in his company had impressed him.

But the level of lawlessness is not satisfactory in Pakistan. Travel advisories are routine. And Pakistan is facing an insurgency-like situation in Baluchistan and Waziristan.

 

[Kaiser]

Daimler-Chrysler to invest $5.8bn


By Sher Baz Khan

ISLAMABAD, June 15: Daimler-Chrysler and Coastal Group has decided to invest $5.85 billion in Pakistan by starting production of Mercedes-Benz trucks, both commercial and military, buses and Mercedes cars of various types to create a vendor industry.

The group would set up their plant on 1,200 acres of land near Shaikhupura provided by the government. The investment would create 5,000 jobs directly and indirectly, said Umar Ahmed Ghumman, minister of state for Privatisation and Investment and chairman Board of Investment (BoI) at a news conference at the Parliament House here on Thursday.

Coastal Group would make all the financial investment in the project, while Daimler-Chrysler would provide technology transfer.

It is to mention here that on May 7, 1998 two of the world's leading car manufactures, the German Daimler-Benz AG and the USA-based Chrysler Corporation, announced the largest industrial merger in history. The new company, called Daimler-Chrysler, became the world's fifth largest car maker with combined revenues of around $130 billion, a combined operating profit of around $7 billion, and a combined workforce of more than 420,000 employees.

The minister said the group would export products to neighbouring countries as well as to the Gulf region, which would earn billions of dollars in foreign exchange for Pakistan. A training institute conforming to the international standards would also be established in Pakistan to update the technical knowledge in the country.

An industrial estate for vendor industry would also be set up to locally produce spare parts as per European standards for local and export purposes, Mr Ghumman said.

Black cabs: Responding to a question about the reported violation of rules in import of black cabs from the United Kingdom, Mr Ghumman said: "We are importing duty-free 300 black cabs for testing purposes. The government had to give this facility in order to invite $1 billion investment from Prime Transport Limited to assemble, manufacture and operate London taxis in Pakistan under joint venture partnership with LTI of UK and ST Electronics of Singapore."

The minister said 150 of the black cabs would be tested in Karachi, 100 in Lahore and 50 in Islamabad so that to keep in mind the local conditions while manufacturing the cabs locally. He said no rules of the Public Procurement Regulatory Authority (PPRA) had been violated as the matter did not involve any investment by the government and the investment did not create any scam.

"I have no personal connection with the person who has invested the money. He is a Pakistani and his name is Dawood Khan. He belongs to Karachi. He wanted to introduce a secure and safe taxi system in Pakistan after a 15-year-old girl from his family was raped and killed by a taxi driver," he said.

The minister said no one was ready to provide such an investment for the purpose-built black cabs, but still, “we invited the tenders through various newspapers to ensure transparency," he added.

The minister said that as per the agreement, the London taxis would charge Rs11 per km which was reasonable. To a question, he said the manufacturing plant of black cabs was being set up in Gharo, near Karachi on 300 acres. The plant had to be shifted to Pakistan because the manufacturing of a single black cab required 43,000 sterling pounds in the UK compared to the 22,000 sterling pounds in Pakistan.

He said the government wanted to change the culture of taxis in Pakistan by revolutionising, introducing and implementing the most economical, dependable, comfortable and safe satellite-controlled taxi service in the country.



http://dawn.com/2006/06/16/ebr2.htm

 

[Kaiser]

DAIMLER-CHRYSLER TO INVEST IN PAKISTAN

Friday June 16, 2006, 7:16 pm


KARACHI, June 16 Asia Pulse - Daimler-Chrysler and Coastal Group of UAE has decided to invest US$5.85 billion in Pakistan by starting production of Mercedes-Benz trucks, both commercial and military, buses and Mercedes cars of various types to create a vendor industry.

The group will set up their plant on 1,200 acres of land near Shaikhupura provided by the government. The investment would create 5,000 jobs directly and indirectly, said Umar Ahmed Ghumman, minister of state for Privatisation and Investment and chairman Board of Investment (BoI) at a news conference at the Parliament House here on Thursday.

Coastal Group would make all the financial investment in the project, while Daimler-Chrysler would provide technology transfer.