Pakistan Economy - News & Updates - Archive

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Generators’ import soars by 87pc By Aamir Shafaat Khan ​

Sunday, 22 Feb, 2009

KARACHI: Anticipating huge demand for generators in view of intense load-shedding in upcoming summer, dealers have expedited the imports to pile up stocks for the season.

The power generating gadgets have already become costlier by 10-30 per cent in view of appreciation of yen against the rupee coupled with rupee devaluation against the dollar in 2008.

Imports of power generators in July-Jan 2008-09 had swelled by 87 per cent to $992 million as compared to $531 million in the same period of last fiscal year.

In January 2009, imports stood at $138 million as compared to $122 million in Jan 2008. Imports in December 2008 were recorded at $130 million.

Already hit by load-shedding in the winter, many consumers fear more nerve- wrecking experience in upcoming scorching heat.

‘Not only the importers but the consumers are now certain that the load- shedding will be severe in summer as nothing serious has been done to control it,’ chairman Karachi Machinery Merchant Group (KMMG), Sikandar Shahzada said.

He said that the demand of generators had been thriving as the power cuts had been more acute in the last two to three years.

Prices of generators of US, Japan and Chinese origin have gone up by 25-30 per cent due to change in currency parities, making imports costlier. However, the price of Chinese generators had surged by 10 per cent. Mr Sikandar claimed that the prices of generators in these countries had not declined.

The buying season of generators gets underway usually from February and lasts till August. To meet the demand, importers place huge orders from October to January. It takes at least eight month for local delivery of Japanese generators, while imports from China and the US land in 20 days.

He said an anomaly at the Customs stage has been going on for the last two years under which petrol and gas generators are cleared at five per cent duty at the Lahore Dry Port but the same is cleared at 10 per cent at the Karachi Port. There is no change in the import duty of diesel generators at the two ports.

The import duty on diesel generators up to 60KV is 20 per cent, while on 100KV and above the duty is 15 per cent. There has been no sales tax on its imports for the last two years. The Punjab consumes more than 60 per cent of the total imports because of intense load-shedding in the last one and a half years.

Mr Sikandar pointed out that he had been discussing the anomaly issue with the Customs and other government officials, who assured to rectify the same but so far no practical step had been taken.

There is also a difference in generators’ prices available in Punjab as compared to Karachi due to five per cent difference in the import duty on two different ports, he added.

After substantial price cut in petrol, the sale of petrol generators has picked up slightly but 90 per cent of gas generators are sold in the markets.

Some people are now installing a local device made of Chinese parts at Rs35,000 for making the generator auto-start when power goes off and switch it off when power supply resumes.

He said the original gas generators of US and Japanese from five to 25KV are now available, which do not require a device for running into gas. For example a 25KV sound proof gas generator of Japan is priced at Rs900,000, while a 17KV American generator sells at Rs450,000. A 10KV US-made generator is available at Rs330,000, while a five KV ordinary Japanese generator is priced at Rs150,000.

There are two varieties available in Chinese types (branded and unbranded). For example, a branded 2KV generator is available at Rs18,000, while unbranded is priced at Rs12,000. An unbranded 5KV sells at Rs30,000 while branded one sells at Rs45,000. A Japanese 2KV generator is available at Rs52,000, while one of 5KV costs Rs120,000 and 10KV is selling at Rs250,000.

 

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China signed power generation accord with Pakistan ​

Sunday February 22, 2009

Pakistan and China on signed an agreement for cooperation in hydel power generation. Chairman Wapda Shakeel Durrani and President of China Three Gorges Project Corporation Li Yong`an signed the agreement which was also witnessed by President Asif Ali Zardari.
Under the agreement, China will provide technical assistance to Pakistan in the field of hydel power generation.

Earlier, the President had a meeting with Li Yong`an in which he expressed his desire for cooperation in the field of hydel power generation.

President Zardari said the basic purpose of his visit here is to study the Chinese model of power generation and development in agriculture sector.

Li Yong`an said the corporation was ready to extend all possible assistance to Pakistan to overcome its energy challenges.

He also briefed President Zardari about the salient features of the dam which is the world`s largest having a capacity of 22500 megawatt.

Later, President Zardari visited to the site of the dam.

 

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PAKISTAN OFFERS DEDICATED ECONOMIC ZONE FOR MALAYSIANS​

On trade ties between the two countries, Tahir said Malaysian exports to Pakistan recorded US$1.7 billion last year compared to US$1.07 billion in 2007, registering a 59 percent increase.

Malaysian imports from Pakistan also rose by 27 percent to US$103.8 million last year from US84.4 million the previous year.

Tahir was confident that the Malaysian Pakistan Closer Economic Participation Agreement, which came into effect on Jan 1 last year, would immensely benefit trade between both countries.

Under the agreement, both countries will gradually reduce tariff on each others goods, making them competitive in the world market.

Last month, Pakistan announced customs duties reduction schedule for 5,912 Malaysian goods from now until 2014

 

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Govt likely to pocket Rs100bn from low crude prices ​

Tuesday, February 24, 2009

ISLAMABAD: The government is all set to break the record of last 60 years by earning substantial revenues of over Rs100 billion by not passing on full benefits of reduced prices of crude oil in the international market to domestic consumers, it is learnt.

The government is reluctant to cut prices because it wants to meet the fiscal deficit target of 4.2 per cent of gross domestic product (GDP), equivalent to Rs562 billion. In the remaining four months (March to June) of the current fiscal year, the government has no plan to pass on benefits of reduced prices in POL products to the consumers due to a substantial revenue shortfall being faced by the Federal Board of Revenue (FBR).

The Nawaz Sharif government in 1998-99 had collected Rs72 billion by not passing on low prices of crude oil in the international market to the local consumers when prices had tumbled to $10 to $15 per barrel.

“So far the government has earned Rs55 billion by pocketing around Rs15 billion per month,” a high-level official in the finance ministry said while talking to The News here on Monday. According to the official data obtained by The News, the monthly oil import bill stood at $1.319 billion in September 2008, which declined to $403.6 million in Dec 2008.

The government is saving around $900 million a month because of reduced POL prices in the international market. According to Adviser to the Prime Minister on Finance Shaukat Tarin there was a need to keep in focus the whole picture of economy as defence expenditures have gone up and FBR revenues have fallen.

Keeping in view the current inflationary rate, Shaukat Tarin said the annual tax collection was expected to be around Rs1,327 billion from the earlier target of Rs1,360 billion. “We are trying our best to evolve a consensus to further reduce the FBR’s tax collection target for the current fiscal year in our ongoing talks with the International Monetary Fund,” he concluded.

There is also a view among official circles that prices of gas should also be reviewed after one month or fortnightly basis. It seems that there will be no solace for the voiceless consumers because the government is finding it easy solution to continue with higher prices of POL products in order to bridge its fiscal deficit.

There is no possibility of reduction in prices of POL products for the domestic consumers in near future because Islamabad’s economic managers consider it easy as well as appropriate way for meeting the envisaged fiscal deficit target of 4.2 per cent of the GDP.

The FBR is facing revenue shortfall of Rs21 billion in Jan 2009. The FBR has collected Rs628 billion in the first seven months (July-Jan) period for the current fiscal year. If the annual tax target is fixed at Rs1,300 billion, the FBR will have to collect Rs672 billion in the remaining five months (Feb-June) of FY 2008-09. When FBR’s spokesman Mahmood Alam was asked about revenue collection trends, he said that in the past the FBR used to collect 45 per cent of the annual target in the first six months and the remaining 55 per cent was collected in the second half of the fiscal year.

 

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WAPDA plans to construct 32 dams ​

Tuesday, February 24, 2009

LAHORE: The Water and Power Development Authority (WAPDA) has planned to construct 32 small and medium dams in all four provinces of the country in addition to implementing mega projects in water and hydropower sectors.

WAPDA Adviser on Diamer-Basha Dam project Dr Izhar-ul-Haq, in a briefing to a SAARC Energy Centre delegation at the WAPDA House, said the construction of eight small and medium dams, two in each province, would be undertaken in the first phase.

These included Hingol and Naulong dams in Balochistan, Nai Gaj and Khadeji dams in Sindh, Bara and Chudwan Zam dams in NWFP and Ghabir Dam and Dera Ghazi Khan hill ******** in Punjab. These dams had been planned to tap the local water and power resources, he added.

The WAPDA adviser told the delegation the Authority was constructing five hydropower projects under ‘Vision 2025’. Four of them with accumulative power generation capacity of 323 megawatts would come on line in 2010 and 2011, while the 969MW Neelum Jhelum Hydroelectric project would be completed in 2016, he added. Earlier, WAPDA member (finance) said WAPDA was fully focused on optimal utilisation of water and power resources for sustainable economic growth in the country.

SAARC Energy Centre programme’s leader on technology transfer Dr M Pervaiz said the centre was meant for fostering cooperation in the energy sector among SAARC members. He said Pakistan might have access to the Clean Development Mechanism (CDM) funds due to its hydropower potential.

 

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SAP APJ posts 23% software revenue growth​

KARACHI: SAP Asia Pacific Japan (APJ) posted 23 percent Software revenue growth, to €594 million. Software and related services grew at 24 percent for the year, to €1.192 billion. All revenue figures in this release are expressed in non-GAAP constant currency terms and all growth is measured against the previous comparable period. While SAP APJ experienced difficult market conditions in the fourth quarter, growing software and software related Services at 5 percent, total revenue for the full year grew at 20 percent, to €1.532 billion. “I am extremely proud of the way our team in SAP Pakistan handled market conditions we experienced during the last quarter of 2008,” said Sajjad Syed, Managing Director, SAP Pakistan.

 

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EDF massively misused ​

ISLAMABAD (February 24 2009): The Export Development Fund (EDF), established in 1991 to support export-oriented industries, has allegedly been massively abused, and distributed to some blue-eyed organisations and individuals under the head 'miscellaneous expenditures', sources told Business Recorder.

The Federal Cabinet, in its meeting on May 30, 1991, had decided that an 'Export Development surcharge (EDS), equivalent to 0.254 percent of the export value of exports will be levied with effect from July 1, 1991 and that the proceeds of the surcharge should be transferred by the government to EDF for distribution among the various export associations for export development. Commerce Minister Amin Fahim has acknowledged that some cases have been brought to his notice of misuse of EDF by successive governments.

"Some wrong things have happened with regard to utilisation of EDF, and we should learn lesson from the past," he said while talking to this newspaper on Monday. When his attention was drawn towards utilisation of exporters' money for medical treatment of one former president of the Federation of Pakistan Chamber of Commerce and Industry (FPCCI) in London, he said that he would investigate the matter.

The EDF Board has sanctioned Rs 11549.025 million so far, of which Rs 10367.161 million has been released, whereas Rs 1181.864 million is balance, one official in TDAP told this newspaper.

The government has forked out millions of dollars on (i) hiring of foreign law firm by All Pakistan Textile Manufacturers Association (Aptma) to defend imposition of safeguard duty measures by Turkey on import of cotton yarn, (ii) study for preparing a perspective plan for Pakistan's textile and clothing industry by Gherzi Textile Organisation, Switzerland, (iii) filing of a suit in the Indian court, (iv) benchmarking of various sectors of Pakistan textile and apparel industry, and (v) studies by Werner International, (USA), Some companies listed which received payment but there was no corresponding service rendered include Stanbrook &Hooper S.C, Brussels (Belgium), Sandler, Travis & Rosenberg, P.A., USA, Sidley Austin Brown & Wood LLP Brussels for Generalised System of Preference(GSP) and Thompson Cobb, Bazilio & Associates.

Sources said that Commerce Ministry had also hired international consultants to prepare trade policies. However, like other studies, these were also gathering dust in a cupboard. Around Rs 50 million was released to Sialkot International Airport Limited (SIAL), out of sanctioned amount of Rs 180 million, for construction of cargo complex at Sialkot airport.

Sources said that Commerce Ministry also approved Rs 432.250 million for Trade Policy 2007-08 initiatives, out of which Rs 390 million has been released, whereas Rs 42.250 million is yet to be paid. According to sources, Commerce Ministry also released Rs 300 million to Civil Aviation Authority (CAA) as cost of land for Dazzle Park, Karachi.

Some other beneficiaries of this fund are: Textile Institute of Karachi, Pakistan Institute of Fashion and Design, Lahore, Karachi and Islamabad campuses, SMA, Rizvi Textile Institute, Karachi, Institute of Handloom/Home Textile Technologies, Fan Development Institute Gujrat, Cutlery Institute of Pakistan, Institute of Jewellery Development, Lahore (closed), Fashion Design Technology Centre for Women, Karachi (not established), Research and Training Centre for Weaving, Gujranwala (not established). The Ministry has released about Rs 30 million for these institutes.

Sources said that Commerce Ministry had also used this money on hiring services of some retired employees who had retired from their Ministry, besides bridge financing for consultants for restructuring of Trade Development Authority of Pakistan (TDAP).

They said that Finance Ministry was not providing EDS collected by the federal government to EDF. Only a portion of EDS was provided to EDF through annual budgetary grant.

In Trade Policy 2002-03, the Cabinet approved the proposal to amend the EDF Act, 1999 to make it mandatory for all EDS receipts to be automatically transferred to the EDF, but directed that the matter be finalised in consultation with the Auditor General and Finance Division.

Accordingly, the process was followed and the EDF Act, 1999 was amended by the Parliament through EDF (Amendment) Act, 2005, enabling transfer of whole EDS receipts collected in the preceding year to EDF in the following year.

However, the position has still not changed. The Finance Division has not provided the entire receipts of EDS collected in 2005-06, 2006-07 and 2007-08 in the following years 2006-07, 2007-08 and 2008-09 respectively even after amendment in the Act. Sources said that Commerce Ministry would take up this issue with Prime Minister Yousaf Raza Gilani during his visit to the Ministry on February 25.

 

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Neelum-Jhelum hydropower project: Pakistan may get $948 million loan ​

ISLAMABAD (February 24 2009): Pakistan may get a loan amounting to $948 million from China, Saudi Fund for Development and Islamic Development Bank (IDB) which would be adequate to meet 58 percent of the total cost of the 969MW Neelum-Jhelum Hydropower Project. Sources told Business Recorder that Pakistan would receive $448 million from China under Pak-China co-operation in hydel power generation agreement recently signed between the two countries during President Asif Ali Zardari visit.

The other two financiers IDB and Saudi Fund for Development have also committed $300 million and $200 million respectively. Pakistani and IDB officials are expected to hold meetings by end of Feb 2009 to finalise the modalities of the deal. The construction contract of the project has already been awarded to a Chinese company and the work is in progress.

The project cost is Rs 128.4 billion and Pakistan is seeking assistance from different countries to meet the cost of the project, sources added. Sources said the government has also requested Kuwait Fund for Development and Abu Dhabi Fund for Development to provide financing to carry out Neelum-Jhelum Project.

The government recently arranged the visit of representatives of these funds to visit the site of the project. The Water and Power Development Authority chairman also visited the site along with the delegation. The project is located in the vicinity of Muzaffarabad in Azad Jammu and Kashmir. It envisages the diversion of water of Neelum River through a tunnel into Jhelum River. The government had also imposed 10 paisa per unit surcharge during last year to be charged to electricity consumers to generate financing for the project. The project would be completed with Chinese assistance in eight years and officials described it as another symbol of Pak-China friendship.

The representatives of Funds were informed that Pakistan was currently facing power shortfall and the Neelum Jhelum Project would help meet the shortfall. The Pakistani authorities said that a power project would greatly help the government to meet its energy requirements, badly needed for economic development of the country.

The construction of Neelum-Jhelum Project would enable Pakistan to get water usage rights and any further delay in construction of the said project would allow India to use water for power generation under the Indus Water Treaty brokered between the two countries by the World Bank.

 

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Second $750 million tranche: Pakistan and IMF officials to meet in Dubai ​

KARACHI (February 24 2009): The country's top financial officials will shortly meet International Monetary Fund (IMF) officials in Dubai as time for handing over of second $750 million tranche of the Fund's standby loan for Islamabad is fast approaching. According to sources, Pakistan's officials would also discuss the country's economic targets set for the next six months, besides the handing over of the loan in March.

They said tat State Bank of Pakistan (SBP) Governor Saleem Raza went to Dubai on Monday to meet the IMF officials, while Advisor to Prime Minister on Finance Shaukat Tarin would leave on Tuesday. Several SBP and Finance Ministry officials are already there. Tarin, according to sources, is confident that Pakistan would get the second tranche without any difficulty.

"The country's overall economic situation is improving and Pakistan would get some 750 million dollars next month on account of second tranche of IMF standby loan", Tarin told Business Recorder.

He said that that economic indicators are reflecting that Pakistan is now almost out of crisis situation. "I am confident that Pakistan will get the second tranche on time and after the improvement in the economic indicators like current account deficit at present there is no more hurdle in the second instalment," he added. He said that he would negotiate with IMF officials along with other Pakistani officials for the next six months' targets.

About budgetary borrowing he said that Pakistan would achieve the IMF target of Rs 258 billion borrowing for the current year. However, sometimes it might go up due to some liquidity shortage, he added. Sources said that the SBP and ministry of finance officials have been in touch with IMF officials for last one week and they have briefed them about the performance of Pakistan's economy.

 

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Prospects of greater market access discussed: EU team meets Sahibzada Malik ​

ISLAMABAD (February 24 2009): A five-member European Union's South Asia delegation headed by Robert Evans held a luncheon meeting with the Minister of State for Foreign Affairs, Sahibzada Malik Amad Khan in the foreign office here on Monday. According to foreign office press release the EU delegation is on its visit to Pakistan from February 22-25.

Evans, who earlier visited Pakistan in February 2008, conveyed to the Minister of State the EU's satisfaction on progress Pakistan has achieved in strengthening democratic institutions. During the meeting, both sides discussed bilateral issues including greater market access for Pakistan, forthcoming Joint Commission and Ministerial Troika meetings in March, and the first Pakistan-EU summit meeting by mid 2009.

They also discussed regional and international issues including Pakistan-India relations in the aftermath of Mumbai attacks, situation in Afghanistan and counter-terrorism. Earlier in the morning, the delegation called on Acting Speaker National Assembly and Chief Election Commissioner. The delegation will also call on the Prime Minister and hold meetings with the Minister for Information and Broadcasting, Interior Advisor, Chief Minister, Punjab and Speaker Punjab Assembly.-PR

 

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'Russian and Central Asian markets explored for Pakistani exports' ​

KARACHI (February 24 2009): Trade Development Authority of Pakistan (TDAP) has explored new Russian and Central Asian markets recently to export products. A 12-member Russian delegation is visiting Pakistan to discuss trade with the local traders and industrialists on February 25, said Chief Executive TDAP Syed Mohibullah Shah at a press conference held at the authority's main office the other day.

He was of the considered view that the Russian and the Central Asian markets have great potential for Pakistani products, which have not so far been exploited properly. Pakistan could only export 100 million dollars products to Russia in the past. Shah said that there are products like textile and clothing, fruits and vegetable, surgical instruments, footwear, meat and poultry, cutlery etc, which could be exported to Russia with their large demand there.

About the Central Asian markets, he said that particularly Tajikistan, Kyrgyzstan and Kazakhstan are lucrative venues for their contiguity with Pakistan, which reduces transportation passage and time as compared to their import of such items from Turkey, Ukraine and other Eastern European states.

He said that a "Trade Caravan" will be leaving in summer 2009 for these states through Sust border located at Pakistan-China border making passage via Chinese province Xinjiang. The caravan will display a wide range of local products.

Shah said that Pakistan has comparative advantages in these markets as compared to the other competitors besides a competitive edge in products' range, which could easily flood these markets. The global economic recession has least hit the Russia and the Central Asian countries, he believed, saying that the demand for Pakistani products is still at large. TDAP will also establish its office in Gilgit. CE TDAP further said that PIA flights will also be started for major Central Asian countries.

 

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'Only knowledge-based economies will have a place in global market' ​

LAHORE (February 23 2009): The Vice President Saarc Chamber of Commerce and Industry Iftikhar Ali Malik has urged the students to concentrate on their studies as the 21st century is of knowledge based products and only knowledge based economies would have a place in the global market.

Malik was speaking at Annual Day function of Customs Public School here. He said youngsters are our future and valuable asset, they must work with determination, courage and consistency and this would make them leaders of tomorrow. "All professions are respectable; select agriculture, trade, industry or any service; do not opt only for government service" he added.

He said to create awareness among the young students, school management should arrange visits to animal farms, fish farms, orchards, fruit processing plants, industrial units instead of emphasising on excursion only.

He told the students that all the national heroes were young like them. But all of them had a goal in their mind. They just focused their attention towards the achievement of their goal. He advised the students to set a goal of life in their mind and then make small plans to achieve that goal. Concentrate on education to be creative. Manual work has lost its charm. Knowledge based products will dominate 21st century.

He said the students should work hard to get education, training, and develop expertise and skill. Future is for the fittest, get inspiration from your leaders, teachers and elders. Be healthy in physique and morality - these both are the ladders of future prosperity. Try to make name in spirits, games, like our renowned players, he added.-PR

 

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About 104,630 tons of chillis produced in 2008-09 ​

ISLAMABAD (February 23 2009): About 104.63 thousand tons of green chillis were produced during the year 2008-09 to fulfil the domestic consumption. An official of the Ministry of Food, Agriculture and livestock told APP here on Sunday that chillis were cultivated over 48.81 thousand hectares land during current financial year.

He said that 56.30 thousand hectares land was set as target to produce 104.50 thousand tons chillis during 2008-09. The area under chillis' production was decreased as compared to the area under green chillis production during the same period last year, he added.

He said that despite the decrease in total area under production, the crop output was increased. The official said that Sindh was the largest chili producing province where 38.10 thousand hectares land was put utilised for the purpose, saying that 88.51 thousand tons of crop was achieved, he added. He further said in Punjab about 5.61 thousand hectares land was set to cultivate green chillis while, 8.92 million tons of crop output was obtained during 2008-09.

In Balochistan and NWFP provinces green chillis were grown over 4.5, 0.60, thousand hectares land while 6.50 and 0.70 thousand tons chilli was produced respectively, he added. During the year average 2143 .62 kg per hectare green chillis was produced, he added.

 

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Sino-Pak cooperation: four MoUs signed on agriculture ​

WUHAN (February 22 2009): Pakistan and China on Saturday inked four memorandums of Understandings (MoUs) for co-operation between the agriculture sectors of the two countries. President Asif Ali Zardari and Governor of Hubei Lihong Zhong witnessed the signing. The MoU between the government of Sindh and Hubei Seed Group aims at joint development of rice hybrid seed and its commercial production in Pakistan.

The joint breeding programme between the government of Sindh and Hubei Seed Group will be through germplasm technology transfer to achieve maximum productivity of hybrid rice. Another MoU between Pakistan Agriculture and Research Council and Hubei Research Group focuses on establishment of joint breeding in Pakistan.

According to the MoU, the two sides will work for development and transfer of germplasm technology and oilseeds to Pakistan, which will yield high production. Under the MoU, Pakistan's scientists will also be trained in breeding agronomy and oilseed production. Another MoU was inked for expansion of co-operation through exchange of high profile visits and promotional events to enhance mutual understanding and friendly relations between Sindh and Hubei province.

The fourth MoU was inked between National Dredging Company (NDC) for establishment of dredging works at Karachi Port, Port Qasim and Gwadar Port, canals, rivers, barrages in Pakistan.

China Harbour Engineering will help National Dredging Corporation of Pakistan in getting support and necessary assistance of the government of China for its dredging work. The agreements were signed by Sindh Chief Minister Qaim Ali Shah, Parc Chairman Dr Zafar Altaf and Hubei Seed Group Chairman Guobao Yuan. Meanwhile, President Asif Ali Zardari also visited China's largest optical fibre company, Fibrehome, and lauded its role in the development of China.

On his arrival, company General Manager Li Gaung Chaung received President Zardari, and briefed him about the company's various departments and production units. He said that the company produced electronic devices, transmission systems and various other equipment, which were exported world-wide. The President was taken around various units and departments of Fibrehome, and evinced keen interest in the equipment that it produces. He said like other sectors of industry, the company was playing a very positive role towards Chinese economy and development.

 

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Accord with China over hydel power co-operation ​

EDITORIAL (February 24 2009): President Asif Zardari attended the signing ceremony between China and Pakistan in Yichang for co-operation in the field of hydel power generation. The signatories were the Wapda Chairman and the President of China's Three Gorges Project Corporation. Pakistan can draw a number of good lessons from the history of water and power management in China.

Three Gorges was originally envisaged by Sun Yat-sen in 1919. In 1932 Chiang Kai Shek began preliminary work on it. Mao Zedong also supported the project but the Gezhouba dam was begun first and the economic problems of China at the time militated against further work on the construction of the Three Gorges Dam. In the 1980s, plans for its construction were revived, and, in 1992 the National Peoples Congress approved the project.

The Three Gorges is the largest hydel dam in the world. In China, construction delays were attributed to its high cost and the inability of the Chinese government to fund the dam from its own resources.

Eventually the dam's costs were met through: Three Gorges Dam Construction Fund, profits from the Gezhouba Dam, policy loans from the China Development Bank, loans from domestic and foreign commercial banks, corporate bonds, and revenue from Three Gorges Dam before and after it becomes fully operational, with additional charges for electricity contributing to the Three Gorges Construction Fund.

Pakistan, at present, is suffering from a severe economic crisis which forced the economic managers to negotiate the 7.6 billion dollar stand-by arrangement with the International Monetary Fund. Even during times when Pakistan was not on an IMF programme the cost of any dam was considered so high as to be simply not doable without support from the international lending agencies.

These agencies have to meet their own safeguard criteria and it is doubtful if these safeguards in terms of environment and displaced persons would be met in the case of mega dams. Incidentally there was intense international criticism of the Three Gorges dam. Thus in this context support from China would be critical not only to start construction of dams but also to complete them.

Be that as it may the heavy load-shedding schedule imposed by Wapda for the past ten months or so in its efforts to manage demand to bring it at par with supply has left the people of all provinces acutely aware of the need to increase supply. It is unfortunate and patently evident that Pakistan no longer has the luxury of time before it decides what to construct where.

The World Bank brokered Indus Water Treaty with India has been used by New Delhi to its advantage and it is expected to continue with its policy to complete construction of dams that would negatively impact on water flows to Pakistan, the lower riparian. The federal government must bridge the trust gap between provinces on the construction of dams - irrespective of their size and depth - without any further loss of time.