Pakistan Economy - News & Updates - Archive

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Khalifa Coastal Oil Refinery project: Parco likely to support resumption of work​

ISLAMABAD (March 07 2009): The board of directors of Pak Arab Refinery (Parco) is expected to support resumption of work on Khalifa Coastal Oil Refinery project with a capacity of refining 250,000 barrels oil per day (bpd). It is learnt here on Friday that Advisor to the Prime Minister on Petroleum and Natural Resources Dr Asim Hussain would be attending a meeting, scheduled to be held on March 17 in Abu Dhabi.

Sources revealed to Business Recorder that the management of UAE state-run International Petroleum Investment Company (IPIC) had suspended the work on the Khalifa Oil Refinery project after the controversy with the Pakistan government over the extension of Parco Managing Director Rasheed Jung.

They said the Pakistan government fulfilled the demand of the IPIC management by giving extension to Rasheed Jung for one year and the IPIC was now expected to resume work on KCR. The IPIC management had sought two-year extension of Rasheed Jung.

An accord on implementation of the Khalifa Coastal Refinery project was signed at the Prime Ministers House here on November 13, 2007. The UAE is also the partner in Parco oil refinery. The UAE has 30 percent equity in the Parco, located in Mehmood Kot area of Multan.

The Parco oil refinery is the countrys biggest project with a capacity of processing 100,000 barrels of oil a day. The total refining capacity in Pakistan is over 200,000 barrels per day and the Parco is the major contributor to the crude oil refining requirement.

The Petroleum Advisor visited the UAE on the issue of Khalifa Oil Refinery project in January and the IPIC management had agreed in principle to resume work on 5-6 billion-dollar Khalifa Oil Refinery project in Balochistan province. According to a tentative schedule, the board of directors of Parco will meet in IPIC office in Abu Dhabi on March 17 and will also consider the Khalifa Oil Refinery project.

The Petroleum Advisor was told during his visit that the issue of KCR would be discussed in the board of directors meeting. The Pakistan government is seeking assurance from the IPIC management in writing to resume work on Khalifa Refinery project, the sources said.

The IPIC, in its letter to the Petroleum Ministry written on December 15, 2008, said that global crisis had exposed the Parco to substantial liquidity problems and the company was facing financial difficulties even with routine matters such as opening of letters of credits (LCs).

The company was of the view that it was not the right time for the management to make changes in the Parco. The IPIC had supported Jung fully and termed his removal not acceptable to it. The IPIC had warned it would immediately cease its involvement in the Khalifa Coastal Refinery project if the Pakistan government did not give extension to Jung.

The IPIC believed that the Parco was in process of implementing the 132 million-dollar diesel hydrodesulfurisation project (DHDS) and 5-6 billion-dollar KCR that might be delayed with the removal of Jung. In return, the Petroleum Ministry had responded in a letter written on December 23, 2008, arguing that Jung was superannuated on February 15, 2006 and there was no recommendation from the board of directors for continuation of Jung as Managing Director beyond December 8, 2008.

The Petroleum Ministry had also offered to create a suitable position in the KCR for Jung if approved by the board of directors. But the IPIC insisted on giving extension to him in the Parco. After giving extension to Jung in Parco, the Petroleum Ministry is now hopeful that the IPIC would resume work on the KCR that was suspended due to issue of extension of the Parco Managing Director.

 

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New trade policy will be for 3 years: commerce secretary ​

Investment adviser says Afghan transit trade volume has doubled, affecting legal imports​

Sunday, March 08, 2009

KARACHI: Federal Commerce Secretary Salman Ghani has announced that the new trade policy will be for a period of at least three years and will also be consistent.

Speaking to businessmen at the Karachi Chamber of Commerce and Industry (KCCI) on Saturday, Ghani asked the businessmen to provide their suggestions to improve the trade policy.

He also requested for a comprehensive session with the KCCI to share productive inputs for preparing the trade policy. Ghani said the Trade Development Authority of Pakistan (TDAP) would look into matters of declining trade and take measures to remove constraints.

Businessmen Group Chairman Siraj Kassam Teli was of the view “at present the role of commercial counsellors in foreign countries is not very productive and they have to be appointed on merit with an ability to meet given targets to increase bilateral trade.”

He also drew attention of the federal commerce secretary to the Trade Organisation Ordinance and urged that the chambers and associations having genuine representatives in compliance with TOO 2007 should only be allowed registration.

Adviser to Sindh Chief Minister for Investment Mohammad Zubair Motiwala, in his speech, focused on promoting import-substitute industry and finding out whether investors were getting adequate returns from the trade and industry.

He highlighted the fact that the volume of Afghan Transit Trade had doubled, having a killing effect on legal imports and import-substitute industry. “The government must review it and put restrictions on items which are affecting legal Pakistani imports,” he said.

In order to revive the textile industry, he suggested zero-rated inputs for the textile and export-oriented industry. “Textile exports will only increase when cost of utilities and inputs is reduced and brought down to the level of competing countries,” he added.

KCCI Senior Vice President Mohammad Jawed Bilwani suggested that the government must suspend all provincial taxes and levies to give some relief to export-based industries, which would help them come out of the crisis and enhance exports. He said that the government must announce separate power and gas tariffs for textile and export-oriented industries and demanded duty-free import of accessories for textiles.

On Friday evening, Commerce Secretary Salman Ghani visited the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) to discuss the problems being faced by the business community.

FPCCI President Sultan Ahmed Chawla requested the Ministry of Commerce to set priorities in its policy in order to boost regional trade. “It is high time that Pakistan penetrates new markets with new products for successful economic and trade cooperation,” he suggested.

He said there was an urgent need for Pakistan to discuss and sign free trade agreements with regional countries and the Ministry of Commerce should play a pivotal role in that respect to achieve the targets.

“It is important that periodical evaluation is done to ascertain the problems and progress on trade and economic development and the Ministry of Commerce should take aggressive measures to help improve Pakistan’s image as a stable economy by working out a strategy to enhance exports and market it as an investment-friendly country,” he stressed.

Leading businessmen and industrialists from all over the country attended the meeting and apprised Ghani of problems they were facing in carrying on their business, with particular reference to trade and export of products to international markets.

Ghani assured them that “from now onwards the FPCCI will work as a partner of the commerce ministry and not as a client in order to generate a knowledge-based market with sophistication so that our volume of trade and exports can be improved and we achieve the required target.”

 

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Political instability may put economic targets in danger ​

Sunday, March 08, 2009

ISLAMABAD: Growing tension on the political horizon in the aftermath of disqualification of Sharif brothers and a sit-in call given by lawyers for reinstatement of deposed judges have put all envisaged macroeconomic targets agreed to the International Monetary Fund (IMF) in uncertainty.

The targets include GDP growth of 2.5 per cent, inflation at 20 per cent and tax collection at Rs1,300 billion. Official sources in the finance ministry are expressing fears that the economy, which is already struggling, will be put on the backburner by the government as it will focus on dealing with political matters and survival rather than working hard to revive the slowing economy. If heated political temperature continues to mount, it will disrupt economic activities, creating shortage of commodities and putting overall economic targets at stake.

“The political confrontation has created doubts about macroeconomic targets recently revised downward by the IMF and Pakistan in talks held in Dubai,” a high-level official who was also part of the Pak-IMF discussions told The News in an interview here on Saturday.

On the issue of any possibility to bring down the discount rates, the official said the State Bank of Pakistan (SBP) would unveil its monetary policy by next month in which the interest rates will be brought by 150 to 200 basis points keeping in view the decline in core inflation.

“It is worrisome for the economic managers that the core inflation is not coming down as rapidly as it should be and there is need to look at the figures of the Federal Bureau of Statistics (FBS) related to inflation,” he said. The last four months (March to June) are quite crucial for the country’s ailing economy in order to implement the IMF’s bail-out package of $7.6 billion under the Standby Arrangement (SBA) programme.

Pakistan and the IMF had revised downward the real GDP growth target to 2.5 per cent from earlier set target of 3.4 per cent for the current fiscal year. Although, the GDP growth target mainly relies upon the performance of agriculture sector but the political instability may plunge the economy into further stagnation in days to come. The load-shedding will also play its role as analysis shows the power disruption increased from July to Dec 2008 as compared to the same period of previous year 2007 despite the fact that the power usage did not increase in that period. “The mismanagement and inaction may result into slowing down the economic activities as the government is striving hard to settle down the circular debt related issue of power sector but some banks are showing reluctance to participate in the upcoming Term Finance Certificate (TFC),” said the official.

The attention of the government to settle the political issues will actually help the profiteers and hoarders to earn colossal profits and no one in the ranks of the government will spare time to take care of these matters in the wake of growing confrontation on political arena among major political parties.

The tax collection target of Rs1,300 billion for 2008-09 will also be in danger because if there will be stalled economic activities how the ambitious tax target will be achieved by the end of June 2009. The FBR has collected Rs706 billion in the first eight months (July-Feb) period of the current fiscal year and the board will have to collect Rs594 billion in the last four months from March to June for reaching its desired tax target of Rs1,300 billion agreed to the IMF. When major urban centers in Punjab will be closed down owing to protests and long march then the FBR’s tax collection efforts would be negatively impacted in days to come.

 

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Pakistan, Jordan to enter into FTA ​

Sunday, March 08, 2009

ISLAMABAD: Pakistan and Jordan have decided to ink free trade agreement (FTA) on goods in meetings held on March 4-5 in Jordan’s capital Amman, a senior official at the commerce ministry told The News.

“Jordan has a population of six million, with a whopping per capita income of $2,500.” Trade volume between the two countries stands at just $60 million. Pakistan imports from Jordan about 80 to 100 tariff lines whereas exports from Pakistan hover around 400 tariff lines. When asked as to why Pakistan is keen to enter into FTA with a country of 6 million people, the official said that Pakistan wants to capture the market of Iraq and some important Middle Eastern countries.

Mentioning the importance of FTA with Amman, the official said that Jordan has already entered into FTA with the US, EU and Singapore and is in talks for trade agreements with Canada and GCC (Gulf Cooperation Council).

Jordan is a country which depends on imported agricultural products as it has very little land to be used for agriculture. So Pakistan has the potential to export agriculture products to Jordan other than textile products.

To a question the official said Pakistan could import phosphate, potash and shale oil from Jordan. Basically Pakistan wants to establish the linkage with Middle East countries by inking FTA on goods with Jordan. Once this linkage gets established then Pakistani products can easily make inroads into markets of the Middle East countries. “This would substantially help in jacking up exports of Pakistan products in the markets of Middle East countries.”

To a question the official said that next meeting is to be held between Pakistan and Jordan in Islamabad after 3 to 4 months period.

In that particular meeting, the official said, both sides would exchange and discuss the wish list for tariff lines to be included for trade under bilateral trade deal.

Pakistan and Jordan are most likely to finalise the free trade agreement within this current year as both sides only need to hold two to three meeting to furnish the trade deal. “Jordan uses its Aqaba Port to import and export of goods.”

 

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Pakistan to approach Canada for BIT​

ISLAMABAD: Pakistan is expected to approach Canada for entering into Pak-Canada Bilateral Investment Treaty (BIT), official sources told daily Times on Saturday. It has been proposed to the government that the Board of Investment (BoI) may be asked to negotiate BIT with Canada as Pakistan and Canada are enjoying good trade relations and Canadian companies are keen to invest in Pakistan.

Canadian companies are keen to invest in mineral sector and a draft mineral agreement for exploration of copper and gold in Balochistan is yet to be finalised. Once this agreement is ready, the government would enter into partnership with the Canadian companies to start exploration in Balochistan. Official sources informed that Pakistan has imposed ban on imports of few Canadian products, which is the main irritant between the two countries in promotion of bilateral trade.

Red tape-ism at federal ministries’ level is the main reason behind this unjustified ban on Canadian products and lifting of such a ban can pave the way for increased bilateral trade as well as increased market access for Pakistan in Canadian markets. Pakistan has recently requested Canada for swift market access to its markets so that trade balance between two countries is made equitable.

 

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MoI positive for completion of Pak-US BIT draft in April​

ISLAMABAD: Ministry of Investment (MoI) is hopeful for the completion of mutually agreed final draft of Pak-US Bilateral Investment Treaty (BIT) by April this year, as bilateral consultations on unresolved issues have already started afresh.

Federal Minister for Investment Senator Waqar Ahmed Khan told Daily Times on Saturday that bilateral consultations at the level of United States Trade Representative (USTR) office and government of Pakistan have already started to settle the issues so that both sides could move fast for finalisation of this important agreement.

He said that the government of Pakistan has hired the services of a Swiss consultancy firm for analysing suitability of Pak-US BIT to reach at final decision on its signing. Similarly, top officials at Ministry of Law and Justice are also analysing the provisions of the proposed BIT agreement forwarded by the US authorities, he added.

Khan informed that issues pertaining to arbitration, transparency clause still require consultation and resolution. In this regard, Pakistan had sought final comments from the US so that things could be finalised by mutual consent. In a recent meeting with US Ambassador and US Commercial Attaché, the Ministry of Investment has also sought final opinion of US authorities in draft of the BIT.

Once the US reply, report of the Swiss consultancy firm and final view of the Ministry of Law and Justice is available with the Investment Division a detailed review would be initiated at highest level and final negotiations round would be held for completion of final draft acceptable to both countries. Incase final draft is ready by April 2009 then it would be placed before the federal cabinet for formal approval, said Khan.

An effort was made to conclude BIT with outgoing Bush administration before January 20, 2009 in the US but this effort could not yield desired results. Now Pakistan would negotiate and conclude BIT agreement with Barack Obama led US administration and a round of negotiation would be held between the two governments on appropriate time in near future, the minister said.

He dispelled the impression that signing of BIT with US would be harmful for the economy as well as for the country and said that few issues require final settlement and this agreement would be beneficial for Pakistan, he added.

The Pakistan People’s Party led coalition government has decided to obtain legal as well as expert opinion on the draft of the BIT, in this regard, draft has been handed over to the Ministry of Law and Justice and private legal consultants (Swiss consultancy firm) so that its clauses could be analysed keeping in view the international best practices, said the minister.

Pakistan is of the view that signatory countries to BIT do not use any political influence or any media campaign if any matter is referred for arbitration as well as transparency is upheld by both sides for mutual benefit, the minister explained.

Its worth to mention here that during the tenure of former President General (R) Pervez Musharraf, there were some apprehensions in the government ministries over the signing of BIT with the US. Due to which signing of this crucial agreement was cancelled during the visit of President Bush to Pakistan.

 

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Census of manufacturing industries 2005-06​

LSM’s contribution stands at Rs 844 billion​

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ISLAMABAD: The contribution of Large-Scale Manufacturing at basic prices stand at Rs 844 billion as compared with Rs 264 billion in 2000-01, figures from the Census of Large-Scale Manufacturing Industries (CMI) 2005-06 show.

The basic price is the amount receivable by the producer from the purchaser for a unit of a good or service produced as output minus any tax payable, and plus any subsidy receivable.

Census of manufacturing industries 2005-06 shows value of production at Rs 2929 billion depicting an increase of 165 percent over Rs 1104 billion in CMI 2000-01. LSM contribution to GDP also called as Gross Value Added (GVA) at producers’ prices has been estimated at Rs 912 billion as compared with the previous Census 2000-01 amount of Rs 280 billion. Capital stock or value of fixed assets amounted to Rs 1147 billion at the end of fiscal year 2005-06 as compared with Rs 428 billion at the end of fiscal year 2000-01.

The CMI is conducted after every five years using the frame of Provincial Labour Departments .It is conducted by Federal Bureau of Statistics (FBS) in collaboration with Provincial Directorates of Industries and Bureaus of Statistics (BoS) under the Industrial Statistics Act 1942. This enquiry has been conducted through mail questionnaires followed by field visits coordinated by provincial directorates of industries. Compilation of data for Punjab and Sindh has been carried out by their respective Provincial Bureaus of Statistics (BOS). Federal Bureau of Statistics played the role of planner and coordinator of different CMI activities including data processing and consolidation of this report.

CMI 2005-06 frame was enhanced using industrial directories provided by provincial directorates of industries as well as results of Economic Census 2001 conducted by FBS. The total number of industries surveyed in CMI 2005-06 was 13,146 establishments. Out of these 6417 establishments supplied requisite data (compared to 4528 units in CMI 2000-01). 2364 establishments were found closed and 3213 establishments gave no response.

CMI report emphasises on scope, coverage, concepts and methods of this census and explains its variables. The report contains detailed census results for Pakistan, its four provinces and Federal Capital Territory of Islamabad on value of input and output, gross value added capital stock (fixed assets), employment and employment cost, etc. The results of CMI would be cornerstone for the forthcoming revision of Pakistan’s National Accounts.

 

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Foreign firm to invest $1bn in copper, gold mining in Balochistan​

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ISLAMABAD: The availability of proven 167 million tonnes copper ore reserve in Reko Dik Balochistan have attracted Tethayan Copper Company (TCC), which has decided to launch a mega project and invest over $1 billion by 2010, official sources in the Ministry of Petroleum and Natural Resources told Daily Times here on Saturday.

The mega project would produce 250,000 tonnes of copper annually, thus bringing Pakistan for the first time on the copper-producing map of the world.

The Australian company TCC finalised a feasibility study of the starter project aiming to produce 40,000 tonnes of pure copper with an investment of $200 million. As a result of extensive drilling in the area about 167 million tonnes copper ore reserves have been proved. Field studies to assess social and environmental impact of the project have also been completed. The sources further said that due to large size of the deposit M/s Antofagasta & Barrick Gold have taken over 100 percent Australian shares of the TCC. The new management has decided to launch a mega project with an investment of over $1 billion next year.

By commencement of the mining activities in the area, job opportunities were expected for about 1200 locals of Balochistan, which would help in removing deprivations of the province. Moreover commencement of the project would give impetus to foreign investment in mineral sector of Pakistan, the sources maintained.

As desired by M/s Antafagasta-Barrick Gold, Ministry of Petroleum and Natural Resources is working on the preparation of international mineral agreement to be signed between the company, government of Balochistan and the federal ministry. To solve the issues relating to the exploration/mining of Reko Dik copper-gold deposits on fast track, a high level steering committee has been constituted by the government of Pakistan having representation from all the stakeholders including the government of Balochistan.

Reko Diq is a giant copper and gold project in Chaghi, containing 12.3 million tonnes of copper and 20.9 million ounces of gold in inferred and indicated resources. The copper-gold deposits at Reko Diq were believed to be even bigger than Sarcheshmeh in Iran and Escondida in Chile. The Reko Diq copper deposits, which are in the neighborhood of Saindak copper project, are four times larger in copper ore tonnage than Saindak. The most credible international surveys suggest that Reko Diq was one of the biggest undeveloped copper projects in the world with over 11 billion pounds of copper and nine million ounces of gold.

The sources further said that potential of the country in this sector was widely recognised but the sector is not developed. The government made the development of the mining industry as ‘priority sector’ in various five years plans, but none of these efforts were materialised. Adequate institutional, human, research and development and other relevant infrastructure have been established for improvement of this sector but they remain under-utilised.

 

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Pakistan eyes $40bn aid from donors​

* Zardari to attend Friends of Pakistan meeting, donors’ conference in Tokyo
* Govt to seek help in security, infrastructure and energy​

ISLAMABAD: Pakistan will seek $40 billion in aid and investment and $6 billion in annual budgetary support over five years during a meeting of the Friends of Pakistan forum and a donors’ conference scheduled in Tokyo on April 17, sources told Daily Times on Saturday.

President Asif Ali Zardari will represent Pakistan during the meetings. Bilateral and multilateral donors will make pledges the same day.

The decision was made in a meeting at the President’s House on Saturday, officials privy to the meeting told Daily Times.

The government would focus on seeking help from bilateral donors in the security, institution building, social development, infrastructure development, governance and energy sectors, the officials said. It will also seek market access for Pakistani goods, oil supplies on deferred payment, barter trade, a trust fund for the development of FATA and debt swaps from western countries, they added.

The participants of the meeting at the President’s House discussed preparations for the events.

In a statement, Presidential spokesman Farhatullah Babar said that the 15-member Friends of Pakistan group was formed in September last year on the initiative of President Asif Zardari to garner international support for bolstering Pakistan’s security and economic situation.

The countries and international bodies included in the group are Australia, Canada, China, France, Germany, Italy, Japan, Saudi Arabia, Turkey, the UAE, the UK, the US, the European Union, the EC and the United Nations.

A number of other countries including Sweden, Norway, Spain and the Netherlands are also likely to join the initiative in the near future, Babar said.

Two meetings of the group have thus far been held, one in New York on September 26, 2008 and the other in the UAE on November 17, 2008.

The April meeting will be crucial as a clear affirmation of support of world powers to stand by Pakistan is considered invaluable for the country’s long-term security, stability and economic development. The donors’ conference on the same day in Tokyo will be attended by representatives of the World Bank and the Asian Development Bank among other bodies to address issues relating to Pakistan’s immediate financial problems.

 

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KESC adds 50MW to city’s grid​

KARACHI: The Karachi Electric Supply Company (KESC) has started commercial operations of a 50MW new rental power project for the city.

The project, which was completed in less than six months, provides additional capacity to Karachi’s grid and aims to give relief to consumers by minimising the power shortfall in the city.

The power generation project was completed in two phases in which rental power plants of 25MW each were installed at two strategic sites of the city. The first plant was installed at the Haroonabad site and the second was installed at the West Wharf Industrial area.

KESC CEO Naveed Ismail stated that the hallmark of the utility’s management is to execute tasks with excellent project management, using its own skills and those of the global partners.

“The supply gap in the city’s electricity needs tactical solution, alongside long-term capital investment. Our team has worked with great skill to complete this project and we must commend them in doing this for Karachi’s benefit,” Ismail said.

 

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Khalifa Coastal Oil Refinery project: Parco likely to support resumption of work​

ISLAMABAD (March 07 2009): The board of directors of Pak Arab Refinery (Parco) is expected to support resumption of work on Khalifa Coastal Oil Refinery project with a capacity of refining 250,000 barrels oil per day (bpd). It is learnt here on Friday that Advisor to the Prime Minister on Petroleum and Natural Resources Dr Asim Hussain would be attending a meeting, scheduled to be held on March 17 in Abu Dhabi.

Sources revealed to Business Recorder that the management of UAE state-run International Petroleum Investment Company (IPIC) had suspended the work on the Khalifa Oil Refinery project after the controversy with the Pakistan government over the extension of Parco Managing Director Rasheed Jung.

They said the Pakistan government fulfilled the demand of the IPIC management by giving extension to Rasheed Jung for one year and the IPIC was now expected to resume work on KCR. The IPIC management had sought two-year extension of Rasheed Jung.

An accord on implementation of the Khalifa Coastal Refinery project was signed at the Prime Ministers House here on November 13, 2007. The UAE is also the partner in Parco oil refinery. The UAE has 30 percent equity in the Parco, located in Mehmood Kot area of Multan.

The Parco oil refinery is the countrys biggest project with a capacity of processing 100,000 barrels of oil a day. The total refining capacity in Pakistan is over 200,000 barrels per day and the Parco is the major contributor to the crude oil refining requirement.

The Petroleum Advisor visited the UAE on the issue of Khalifa Oil Refinery project in January and the IPIC management had agreed in principle to resume work on 5-6 billion-dollar Khalifa Oil Refinery project in Balochistan province. According to a tentative schedule, the board of directors of Parco will meet in IPIC office in Abu Dhabi on March 17 and will also consider the Khalifa Oil Refinery project.

The Petroleum Advisor was told during his visit that the issue of KCR would be discussed in the board of directors meeting. The Pakistan government is seeking assurance from the IPIC management in writing to resume work on Khalifa Refinery project, the sources said.

The IPIC, in its letter to the Petroleum Ministry written on December 15, 2008, said that global crisis had exposed the Parco to substantial liquidity problems and the company was facing financial difficulties even with routine matters such as opening of letters of credits (LCs).

The company was of the view that it was not the right time for the management to make changes in the Parco. The IPIC had supported Jung fully and termed his removal not acceptable to it. The IPIC had warned it would immediately cease its involvement in the Khalifa Coastal Refinery project if the Pakistan government did not give extension to Jung.

The IPIC believed that the Parco was in process of implementing the 132 million-dollar diesel hydrodesulfurisation project (DHDS) and 5-6 billion-dollar KCR that might be delayed with the removal of Jung. In return, the Petroleum Ministry had responded in a letter written on December 23, 2008, arguing that Jung was superannuated on February 15, 2006 and there was no recommendation from the board of directors for continuation of Jung as Managing Director beyond December 8, 2008.

The Petroleum Ministry had also offered to create a suitable position in the KCR for Jung if approved by the board of directors. But the IPIC insisted on giving extension to him in the Parco. After giving extension to Jung in Parco, the Petroleum Ministry is now hopeful that the IPIC would resume work on the KCR that was suspended due to issue of extension of the Parco Managing Director.

 

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Zardari for spending huge amount on uplift of Fata ​

ISLAMABAD (March 08 2009): President Asif Ali Zardari on Saturday stressed on the parliamentarians from Federally Administrative Tribal Areas (FATA) to spend huge amount on development to bring it at par with other parts of the country. He was talking to a delegation from Fata, comprising of ministers, senators and MNAs at Aiwan-e-Sadr.

He recalled that the government has already announced to double the funds for development programme for FATA from Rs 8 billion to Rs 16 billion during the next two years to bring the tribal areas at par with the other parts of the country. The President also discussed the current political situation of the country with the delegation and sought support of the parliamentarians from Fata to resolve the crisis through reconciliation.

According to sources, Fata parliamentarians expressed dissatisfaction over the role and attitude of governor NWFP Owais Ahmed Ghani and demanded his replacement. Zardari said that there was no other option but to impose governors rule in Punjab after the Supreme Courts verdict against the Sharif brothers. He said that governments first priority was to establish peace in the country, particularly in the troubled tribal areas.

The sources said that the President, however, hoped that the current political crisis would come to an end due to reconciliation efforts. The issue of electing new chairman and deputy chairman of Senate also came under discussion during the meeting. The sources said that the parliamentary leader of Fata MNA, Muneer Khan Orakzai assured complete support on behalf of the elected representatives to the PPP led government on all issues.

It is also learnt that some of the delegation members demanded of the President early lifting of the governors rule in Punjab, observing that the move, on one hand created political turmoil in the country and on the other, it diverted the attention of the government from the restive tribal areas. Some public representatives also sought a similar deal with the tribes in Fata in line with the one struck in Swat by the NWFP government.

According to the statement of Presidency, the President said that the government is endeavouring to bring the tribal areas at par with the other regions, and believed that development in Fata should be in line with the wishes of the tribal people.

The president emphasised that the present efforts of the government are aimed at bringing back stability, peace and tranquillity that was the characteristics of this area. We believe that development and creation of job opportunities for locals of this area would help achieve the desired objectives.

It may be recalled that President Asif Ali Zardari has already announced a huge compensation package of Rs 280 million for those killed and wounded in the tribal areas due to militants attacks, besides increase in the development outlay of FATA by Rs 3 billion taking it to Rs 11 billion. The delegation members thanked the President for his support and his keen interest in the development of this region. The delegation included among others, Federal minister for Environment, Hamid Ullah Jan Afridi and minister of State for KANA Abdul Raziq.

 

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50 megawatts rental power project: KESC starts commercial operations ​

KARACHI (March 08 2009): Karachi Electric Supply Company (KESC) has started commercial operations of 50MW rental power project for Karachi. The project was completed in less than six months after its announcement in September 2008, and provides additional capacity to Karachis grid, aimed at providing relief to the consumers by minimising power shortfall in the city.

According to a press release issued by KESC on Saturday the project, which marks the fastest ever addition of capacity to Karachis power grid, was completed in two phases of 25 MW each. Installations have been made at two strategic sites of the city, with the current addition having been made in the West Wharf industrial area, while the initial 25 MW has been added at Haroonabad site.-PR

 

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Textile City in doldrums? ​

EDITORIAL (March 08 2009): Addressing a news conference in Karachi on Wednesday, the CEO of the Pakistan Textile City (PTC), Zaheer Hussain, said the progress of the project has stalled due to shortage of funds and frequent changes in board members. PTC was launched nearly two years ago as a public-private venture with the objective of establishing a WTO and ISO compliant textile-processing zone over 1,250 acres of land in Port Qasims industrial area.

Another 500 acres of land is also being acquired near Gulshan-e-Hadeed for a workers colony. So far around Rs 1.4 billion have been spent on the acquisition and development of land and approval of the master plan. Also, contracts for development work, including hiring of technical advisor for 250MW power plant and setting up of a combined effluent treatment plant, have either been completed or are at an advanced stage of progress.

But further progress has been halted because the required funds are not forthcoming from the shareholders. The federal government, a major shareholder with up to 45.45 percent share, so far has contributed nothing except for two guarantees of Rs 250 million, each. The National Bank of Pakistan gave Rs 50 million and the Sindh government, holding 9.09 percent equity, has contributed a total of Rs 100 million. The estimated total cost of the project is around Rs 14-15 billion.

At the current rate of progress the cost is going to increase manifold by the time the project is completed. Then there is the problem of some people wanting to be part of the project simply to buy and sell land to make money rather than to set up textile units. It is pertinent to recall here that last August the Sindh government had taken a serious notice of speculators acquiring plots in various industrial zones in the province.

It had announced several measures to ensure that all those who apply for such plots would actually install industrial units on the land allotted to them. The same issue seems to be afflicting PTC as well, which is apparent from the project CEOs comments that diverse interests retard the pace of development and that some board members are keen to keep the cost of land low, while others want to cut expenditure by compromising on quality. In any case, with this kind of attitude, PTC cannot be expected to become a textile zone boasting world-class infrastructure facilities.

It is plain that as a major shareholder the federal government needs to act urgently to ensure that the project moves forward. To make that happen it must do two things. One, of course, would be for it to fulfil its part of the financial obligations. And the other would be to ensure that the PTCs board members are genuine stakeholders. Those who run its affairs or apply for industrial plots must furnish affidavits to the effect that they would set up textile units on these plots, and in the case of failure accept allotment cancellation.

 

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Cotton target missed by three million bales​

KARACHI (March 09 2009): The country missed the 14.1 million bales cotton production target for 2008-09 by some 3 million bales due to various factors, including decline in the cultivated area, use of pirated Bt cotton seed, and mealy bug attack on standing crop, sources in agricultural sector told Business Recorder on Sunday.

They said that at present almost all fields of cotton have been cleared in Sindh and Punjab and only very few of areas have some cotton crop standing, from where about 0.1 to 0.2 million cotton bales are expected during this month.

The process of cotton arrivals in the ginneries has become slow and during last 15 days of February arrivals of cotton was less than 0.1 million bales--88,178 bales. The Pakistan Cotton Ginners Association (PCGA) would release its final report of phutti arrivals in the first week of April. It issued its last report on March 4, which showed that up to March 1, 2009 some 11.2 million bales had arrived in the ginneries.

Following PCGA report, traders believe that the country has missed its both original and revised cotton production targets by a huge margin. As per PCGA statistics, cotton production stood at 11,221,104 bales at the end of February 2009, while more 0.1-02 million bales are expected during this month to make total cotton production to about 11.4 million bales, sources said.

During the current season, some 0.29 million bales have been exported and 9.57 million bales sold to textile millers till February 28, while the unsold stock stands at 1.1 million bales including (11,53,279 pressed bales and 30,291 bales in shape of phutti), said PCGA report. Ginning factories of Punjab produced total 8,237,814 million bales, 2,983,290 million bales in Sindh, it added.

"The country has missed its actual and revised cotton production targets due to 7 percent decline in cotton cultivation area," said Dr Badar Ebad Siddique, a former vice president of Pakistan Central Cotton Committee (PCCC).

He said that due to attractive price of rice and sugarcane, the farmers in Sindh and Punjab switched over to other crops. However, he said that Sindh had achieved its cotton production target of 3 million bales.

"We were already expecting losses and target missing due to the sowing of cultivated Bt cotton," Ghulam Rabbani said. He said that uncertified seeds, low quality medicines and delayed availability of Dai Ammonia Phosphate (DAP) were some other reasons of missing the target of cotton production.

Bt cotton seed and crop medicines, which are available in the domestic markets, are not as per standard and some of them are expired, he added. Government should be ensured fertiliser availability on time and quality seeds and medicine to achieve next year cotton target, he added.