Pakistan Economy - News & Updates

[Neo]

Water and power sector: CDWP likely to approve 25 projects today ​

ISLAMABAD (July 17 2009): Central Development Working Party (CDWP) of the Planning Commission is expected to recommend/approve 25 projects worth Rs 940.5 billion in water and power sector in its special meeting today (Friday). The government has allocated Rs 17.96 billion for these projects in PSDP 2009-10 that would be cleared by CDWP. Deputy Chairman Planning Commission Sardar Asef Ahmad Ali will chair the meeting.

According to the agenda for the special meeting available with Business Recorder, CDWP will consider construction of Diamer-Bhasha Dam project worth Rs 850 billion with foreign exchange component of Rs 297.825 billion. The government has allocated Rs 15 billion for the project in PSDP 2009-10.

According to the agenda, CDWP will consider 7 projects worth Rs 38.630 billion in water and power sector for Balochistan, 5 projects worth Rs 24.09 billion for NWFP, 5 projects worth Rs 21.6 billion in Sindh and 7 projects worth 5.7 billion in Punjab province. The government has allocated Rs 860 million for Balochistan projects, Rs 900 million for NWFP projects, Rs 500 million for Sindh projects and Rs 500 million for Punjab projects.

Projects of Balochistan include: Winder Dam project (Lasbela) costing Rs 2.535 billion, Rs 177.286 million Hingol Dam Project, detailed engineering design and tender documents (PC-II) Lasbela, Hingol Dam Multipurpose Project (Lasbela) Rs 16.382 billion including Rs 81.960 million FEC, Naulong Dam Project-detailed engineering design and tender documents PC-II (Jhal Magsi) Rs 185.960 million, Naulong Dam Project (Jhal Magsi) Rs 14.726 billion including Rs 16.567 million FEC, Pelar Storage Dam, Awaran, Balochistan Rs 2.754 billion, and Garuk Storage Dam, Kharan Rs 1.868 billion.

The NWFP projects are: Rs 230.162 million Construction of Mardan Khel Dam, District Karak, Construction of Ghol Banda Dam, District Karak Rs 279.431 million, detailed design of Sheikh Haider Zam & Chaoudwan Zam Dam Project (PC-II) Rs 53.547 million, Bara Multipurpose Dam Project, Khyber Agency Rs 20.651 billion including Rs 269 million as FEC, and Daraban Zam Dam Project Rs 2.879 billion.

The projects of Sindh are: Construction of Darawat (Baran) Dam on Nai Baran near Thano Bulla Khan in Distt Thatta/Dadu Sindh worth Rs 3.656 billion, Consultancy Services for Survey Investigations Detailed Design, Tender Documents and PC-is of 7 Dams in Kohistan Region, Sindh (PC-II) Rs 140.317 million, Nai Gaj Dam Project, District Dadu Rs 17.807 billion including Rs 414.490 million as FEC, Khadeji Dam Project. However, the agenda did not contain the total cost of Khadeji Dam Project and Sita Dam Projects.

The projects of Punjab follow as; Construction of Papin Dam, Distt Rawalpindi costing Rs 1.167 billion, Construction of Jamalwal Dam (Chakwal) Rs 289.301 million, Construction of Lawa Dam (Chakwal) Rs 425.767 million, Construction of Mohra Shera Dam Project (Rawalpindi) Rs 556.331 million, Construction of Mujahid Dam, Rawalpindi Rs 529.566 million, Construction of Ghabir Dam Chakwal Rs 2.164 billion and Construction of Kot Fateh Khan Dam, Distt Attack Rs 599.703 million with Rs 22.060 million FEC.

 

[Hyde]

Construction of Japan Special Economic Zone to be started in September ​

MUHAMMAD ALI

KARACHI (July 17 2009): Japan would commence construction of the Japan Special Economic Zone (JSEZ), with an initial investment of $5 billion, in September. Talking to Business Recorder on Thursday, Zubair Motiwala, Advisor to CM on investment said that the government of Pakistan had offered some 1900 acres land for the purpose, in the vicinity of Port Qasim, 17km far from Pakistan Steel Mill.

He said that the meeting, in this regard, was held on late May at Tokyo, Japan. Moreover, he said that the government would grant 10 years tax holidays to attract Japanese investors to invest in the land of opportunity. He said that Japan would initially invest around $5billion for the next five years to develop the infrastructure of JSEZ and added that the first phase of the project would be completed within next two years.

He said that the government of Pakistan had assured support in the construction of JSEZ to Japanese entrepreneurs. Motiwala further said that the zone would provide One Window Operations (OWP) and all utilities, except electricity, which would be generated by JSEZ to meet its requirements, would be provided by the Sindh government.

He said that the zone would have its security arrangements, shopping areas, Japanese restaurants, recreation spots, parks, health and sports activities so as to have a self sufficient Japanese village. He said that several manufacturing units, including Suzuki, Sony, Yamaha and Marubeni, were interested in establishing their units in the JSEZ.

He said that only 22 Japanese companies were engaged in Pakistan, however, 1400 companies had invested in Malaysia. He said that Pakistan offered the best incentives for investment, including 100 percent equity, free flow of money with remittance of royalty and technical fee. He said that the Sindh government was also establishing a Foreign Facilitation Fund (FFF), with an initial amount of $30million, which would gradually be raised to $60 million, to pull out foreign investors from any financial crisis.

 

[white_pawn]

New trade policy on July 29 ​

ISLAMABD (July 19 2009): Commerce Minister Makhdoom Amin Fahim will unveil 2009-10 Trade policy on July 29 after the formal approval of the Federal Cabinet. "We are giving final touches to the trade policy, which will be placed before the Federal Cabinet on July 29," said one of the officials of the Commerce Ministry. A presentation would be given to Prime Minister Syed Yousuf Raza Gilani on July 24 instead of July 20 as was planned before, said the official.

"Most of the announcement of previous fiscal year could not materialise like in the past," said one of the officials of the Commerce Ministry on condition of anonymity. The sources said the Commerce Ministry would not recommend growth in exports more than 10 per cent during 2009-10 due to global economic slump, which meant the new target would not exceed 22 billion dollars.

Meanwhile, a spokesman of the Commerce Ministry said on Saturday that all visits of the Commerce Minister were directed to achieve better market access, besides image building of the country in the world community. Foreign visits were a requirement of some of the portfolios in the Cabinet and the Commerce Ministry was one of them, said the spokesman. The spokesperson further stated that draft of the trade policy had been cleared by the Commerce Minister after extensive deliberations with all the stakeholders and consultations with all concerned.

Business Recorder [Pakistan's First Financial Daily]

 

[white_pawn]

Exporters' overdue proceeds: EFS facility extended up to December 31 ​

RIZWAN BHATTI
KARACHI (July 19 2009): Granting another six months extension, the State Bank of Pakistan on Saturday allowed exporters, whose export proceeds are overdue, to avail financing facility under Export Finance Scheme (EFS). Earlier on March 3, 2009 one-time waiver for 90 days was allowed by SBP for the purpose of availing financing under EFS to all exporters whose export proceeds were overdue as on December 30, 2008, valid up to end of March, 2009 had been extended up to June 30, 2009.

However, the central bank on Saturday granted another six months extension for repatriation of overdue export proceeds and now exporters whose export proceeds are overdue will now be allowed to avail financing facility under EFS up to December 31, 2009. In this regard SME Finance Department of the central bank on Saturday issued SMEFD Circular Letter No 10 and instructed bank to facilitate the exporters with new waiver.

SBP said that new waiver has been granted on the representations made by various exporter associations and with current waiver overall exporters have to avail some nine months extension during the current year 2009. SBP has made it clear that another waiver will also be applicable in case of the exporters who have subsequently shipped additional consignments to the same importer or its associated company from whom export proceeds were overdue.

However, this relaxation will not be allowed where the payment in respect of shipments has been stuck up on account of discrepant documents, or failure of the exporter to ship the goods in accordance with the requirements of the importer, provided shipments so made and discrepant documents so sent have been accepted by the importer abroad.

It may be mentioned here that at present over 800 million dollars export proceeds are overdue for last few years. Meanwhile, Dr Ikhtiar Baig, Federal Advisor on Textiles assistance has appreciated SBP step and said that exporters were facing same difficulties due to the non-availability of export refinance under EFS. He said that due to global meltdown the exporters are facing repatriation of export proceeds, but we assured government and SBP it is only delay not a default.

Business Recorder [Pakistan's First Financial Daily]

 

[white_pawn]

CM says solar energy project to boost industrialisation ​

Saturday, 18 Jul, 2009 | 11:14 AM PST |

HYDERABAD: Efforts are under way to exploit solar energy, and also the Thar coal reserves, to overcome shortage of electricity.

The solar energy project, besides providing electricity, would boost industrialisation in the province, said Sindh Chief Minister Syed Qaim Ali Shah.

A meeting was held on Thursday night in this regard with the management of a company that showed interest in the solar power project, while the government was keen on establishing plants in each district with a capacity of 50 MW each, the chief minister said.

Thar coal reserves were being utilised with a view to ridding the country of loadshedding within the shortest possible time, he said.

He categorically stated that the government would not compromise on the rights of Sindh which was evident from the firm stand it took regarding the Kalabagh Dam, implementation of 1991 Water Accord, the NFC Award and ownership of Thar coal.

He wondered as to what kept the nationalists mum over the influx of outsiders during the reign of dictators.

The services PPP was providing would nullify the tactics of anti-democratic elements in misguiding and blackmailing people of Sindh, he said.

The PPP took reigns at a time when the world was passing through economic recession and even developed countries were laying off millions of people but the government not only sustained the pressure rather opened up employment opportunities for over one hundred thousand youth, said the chief minister.

He assured of restoring the jobs of those retrenched from the national institutions.

Presently, some 41,000 youths were being provided training along with stipend in different trades and professions and on completion would be absorbed, he said adding that another 70,000 would benefit this year under the Benazir Bhutto Youth Development Programme.

Reflecting on budgetary allocations, the Chief Minister said that Rs55 billion had been earmarked for development works and Rs2.5 billion for the prevention and treatment of hepatitis.

He said that 100 per cent increase were effectuated for education sector wherein incentive money for girl students raised to Rs2,400 per annum from Rs1,000, and in Thar to Rs3,400.

Plans to provide milk and biscuits to school children were under way for keeping them healthy, he said.
The government was paying thrice the salary amount to doctors performing welfare services in the desert and backward areas, he added.

The Sindh Chief Minister was speaking as the chief guest at the 16th Death Anniversary of Shaheed Dr Mohammad Ismail Odhejo organised by Shaheed Dr Mohammad Ismail Odhejo Memorial Committee in collaboration with the PPP District Badin, in Matli on Friday.

He lauded the services of Dr Mohammad Ismail Odhejo and said that he was a talented member of his cabinet, sympathetic to the poor and a true PPP worker.

The CM announced a development package for Matli. Earlier, he visited the grave of Dr Mohammad Ismail Odhejo and offered Fateha.

The Sindh Home Minister Dr Zulfiqar Mirza, Sindh Minister for Local Government Agha Siraj Durrani, MNA Mahesh Malani, District President PPP Badin Dr Sikandar Mandro, Ex-District Nazim Badin Kamal Khan Chang and Saleem Odhejo, son of Dr Mohammad Ismail Odhejo eulogized the services of Dr Mohammad Ismail Odhejo.

DAWN.COM | Provinces | CM says solar energy project to boost industrialisation

 

[white_pawn]

Activity at Karachi and Qasim ports​

RECORDER REPORT
KARACHI (July 19 2009): The Karachi Port handled 134,338 tonnes of cargo including 100,222 tonnes import and 34,116 tonnes export cargo including 1,586 empty and loaded containers during last 24 hours ending at 0700 hours on Saturday. The cargo comprised of 63,314 tonnes dry cargo including 46,742 tonnes general cargo; 9,200 tonnes coal; 7,132 tonnes cement and 71,024 tonnes oil/liquid cargo.

Four ships namely Flag Investors, Champion Trader, Arnis and Hyundai Baron sailed out to sea during the report period. Six vessels viz Caribbean Carrier, Quetta, Arnis, TS Dubai, Queen Arrow II and Ninos are currently at the berths. Three ships namely Addarraq, Queen Arrow II and Quetta expected to sail on Saturday, while two vessels viz TS Dubai and Thuringia Express are expected to sail on Sunday.

Five vessels viz Bow Spring, Al-Ihssa, YM Asia, Hanjin Ningbo and Mazin Arab due to arrive on Saturday, while eleven ships namely Al-Marwah, Royal Peridot, Gulf Tiger, Dorian, Thomas Mann, Silver Craft, World Trader 1, Thor Wind, SD Nova, Guan He Kou and Yuan Cheng are due to arrive on Sunday.


PORT QASIM
A total cargo volume of 60,095 tonnes comprising 45,394 tonnes import and 15,511 tonnes export inclusive of containerised cargo carried in 2,124 containers (TEUs) was handled during last 24 hours on Saturday. The cargo comprised of 29,766 tonnes furnace oil; 973 tonnes sugar; 1,847 tonnes cement and 28,419 tonnes containerised cargo.

Oil tanker MT Iron Monger-5 sailed out to sea on Saturday morning while container ship namely Maersk Novazzano is expected to sail on the same day. A total of four vessels viz Indradi, Al-Ihsaa, Al-Salam-II and Nova Noor carrying chemicals, containers, diesel oil and cement are currently at the outer anchorage.

Six ships namely CV Maersk Novazzano, CV MSC Magali, MV Rimar, MV Andinet, MT Pearl-K and MT Iron Monger-5 are currently occupying berths to load/offload containers, cement, sugar and furnace oil respectively during last 24 hours. Two ships namely MT Al-Salam-II and MT Indradi carrying diesel oil and chemicals are expected to take berths at Fotco Oil Terminal and Engro Terminal respectively on Saturday.

Two vessels viz MT Oriental Oki and MT SC Haikoo with chemicals and palm oil due to arrive on Saturday, while five ships namely MT Sea Sky, MV Cemtex Orient, MV Terrisha, CV CMA CGM Quatz and CV Maersk Missouri are due to arrive on Sunday.

Business Recorder [Pakistan's First Financial Daily]

---------- Post added at 05:43 PM ---------- Previous post was at 05:42 PM ----------

Work on Northern Bypass to start soon: minister ​

PESHAWAR (July 19 2009): Federal Minister for Communication Dr Arbab Alamgir Khan Khalil on Saturday said that work is soon going to start on Northern Bypass and the Federal government has sanctioned an initial sum of Rs 2 billion for the project. For the initial phase of this important highway, a seven-km of land has been procured, he said while addressing a press conference here.

The Minister said that the meeting between President Asif Ali Zardari and Mian Muhammad Nawaz Sharif is a welcome development and a good omen for democracy, adding that the present democratic government is taking all democratic forces along for the sake of democracy and the country.

The Minister said that the government is working for the rehabilitation of the areas affected by terrorism. He said that unprecedented increase in population has increased our problems many times over, but in spite of all this, the government is utilising all its resources to solve people's problems.

While answering a question, the minister said that the meeting between the President and Nawaz Sharif is part of the democratic tradition. "The present democratic set-up is the most precious gift to our nation by Shaheed Mohtarma Benazir Bhutto and in line with her mission the government intends to solve all issues through parliament", he maintained.

Dr Arbab Alamgir said that the government with the strong support of Pakistan Army, has been able to overcome all crises one by one and after eradication of militancy, the repatriation of the affectees of Swat and Malakand is in full swing and life will be back to these areas in its full colours.

The minister said that the roads and bridges destroyed in Swat by the cowardly acts of terrorism will be rehabilitated and a sum of Rs 500 million has been provided to FWO for the purpose. Replying to a question, Dr Arbab Alamgir acknowledged that load-shedding is a serious problem because neither any dam was built in the country for the last 20 years neither any mega project was started in this regard and maintained that construction of new dams in indispensable to get rid of load shedding.

The minister said that the Luwari Rail Tunnel is a project of immense importance and work will soon resume for its early completion because they want to ensure Chitral's link with the rest of the country throughout the year. Dr Arbab Alamgir Khan Khalil said that they are also working on Southern Bypass so that traffic load from Kohat could be shared and for the purpose Rs 10 million has been provided to the concerned authorities for road from Kohat to Takhtabeg.

On this occasion, the Federal Minister issued instructions to GM NHA, NWFP Region Yousaf Ali to pay attention to the construction of road from Kohat to Darra Adma Khel and due consideration should be given to the quality of this important highway. The minister said that one of his prime responsibilities is to serve people of his constituency NA-2 and he is determined to provide gas and electricity to each and every locality and street of this constituency.

The Federal Minister urged the media to lend a helping hand to the government to solve peoples' problems. Later on, the minister made a detailed tour of his home constituency and inaugurated gas supply schemes in a number of localities and issued immediate instructions on applications submitted to him by the people.

Business Recorder [Pakistan's First Financial Daily]

 

[Hyde]

Since NEO is here no longer with us, i think i should take a charge now and keep posting the good stuff here?

Lo gi Insha'Alalh from today i am going to post economic news and continue the work of NEO until he is back hopefully

 

[Hyde]

Pakistani, Kashmiri expatriates urged to invest in Pakistan
​

ISLAMABAD (July 22 2009): AJK President, Zulqarnain Khan, has called upon Pakistanis and Kashmiris living abroad to invest in the projects of alternative energy, tourism and hydel, saying that these sector offer immense business opportunities in Pakistan. He commended the valuable contributions of Pakistani and Kashmiri expatriates, and said that they were playing a pivotal role in the progress and prosperity of their country.

Addressing a reception in New York, he urged the international community and other human rights organisations to stop India from committing genocide of innocent Kashmiri people in the Occupied Valley. He asked the world to act upon UN resolutions, international norms with regard to holding plebiscite in IHK and human rights violations.

 

[Hyde]

Punjab offers many incentives for foreign investors ​

LAHORE (July 22 2009): Consultant to Chief Minister Punjab on Economic Affairs Pir Saad Ahsanuddin said that the Punjab government was providing a conducive and business-friendly atmosphere to foreign investors, and that the province had plenty of potential, resources and opportunities for foreign investors. He was talking to a three-member delegation of Exim Bank, Malaysia, here on Tuesday, disclosed an official.

Pir Saad Ahsanuddin said that the government was in contact with foreign ambassadors, diplomatic missions and business icons of other countries so that foreign investment could be enhanced in the province. "Trade policies of the early 90's, when Mian Nawaz Sharif was the Prime Minister, were still being implemented," he added.

He told the Malaysian delegation that as the largest of the four provinces, Punjab enjoyed 60 percent share in the GDP and, like wise, was in a position to provide better options and opportunities in many fields, like energy, agriculture, industry and livestock, for foreign investors.

He said that economic co-operation between Muslim countries was the need of the hour, to benefit from reciprocal experiences. Pakistan, as the largest Muslim country, had many attractions for Malaysian investors. Members of the delegation, while lauding the steps taken by the government, stated that Malaysia wanted to invest in water treatment and other sectors.

 

[Hyde]

Three-year trade policy: Commerce mulling 25 percent growth in exports ​

ISLAMABAD (July 22 2009): Commerce Ministry is said to be proposing 25 percent growth in exports in three years in Trade Policy 2009-12, which was discussed with top representatives of industry and business community here on Tuesday. A consultative meeting was held with key chambers of commerce and industry, including FPCCI, KCCI, LCCI, ICCI, RCCI, FCCI and SCCI, under the chairmanship of Commerce Minister Amin Fahim.

Advisor to Prime Minister on Petroleum, Dr Asim, was also present in the meeting. Commerce Secretary Suleman Ghani and Joint Secretary Exports Azhar Ali briefed the participants about exports' encouraging measures being proposed in the first ever three-year Trade Policy to be announced on July 29.

"Commerce Ministry has projected 5 percent growth in exports during 2009-10, followed by 10 percent in 2001-11 and 2011-12. This means that exports target for the current fiscal year will be around $19.5 billion," said one participant while talking to Business Recorder exclusively.

Participants spent most of their time on energy crisis in the country due to which industry is shutting down and rendering workers jobless. Sources said that representatives of chambers were of the view that the government should encourage power self-generation for the industry and, in this regard, Commerce Ministry must announce subsidy for machinery import.

The government is also considering to penalise power distribution company (discos) for not supplying power to the industry as per the agreement signed at the time of connection. Other main proposals which came under discussion were establishment of a hedge to suck up any revision in interest rate, insurance of foreign buyers, subsidy on inland freight charges and credit availability for the industrial sector, sources said.

One Commerce Ministry official, who was present in the meeting, confirmed that incentives for petrochemical industry are included in the Trade Policy. Performance of foreign missions was also part of deliberations, and Commerce Minister promised to convene another meeting to discuss this issue. Sources said that some businessmen wanted ban on import of Indian drugs, but the Commerce Secretary turned down the proposal with the argument that import of drugs was part of positive list, which Pakistan cannot change.

Giving argument against the proposal, Secretary Commerce said that when the businessmen import Indian goods through Dubai illegally they do not make hue and cry, and if something is coming through legal channels they are raising objections.

In his opening remarks, Commerce Minister said that for the first time extensive consultations were held with all chambers and associations to get maximum input in the formulation of Trade Policy. Secretary Commerce told the meeting that a broad guideline was given to the chambers and associations, on which proposals and suggestions were sought.

According to Secretary Commerce, the Ministry received more than 1,000 proposals and suggestions and all were processed to incorporate them in the draft of Trade Policy. He briefed the participants regarding main features of the policy that is, it would be a strategic framework document for three years. The policy aims to improving competitiveness on micro level and sectoral level. It asks for achieving higher level of sophistication.

According to an official statement, representatives of chambers were of the view that a prompt solution to power problem is eminent. President of Islamabad Chamber appreciated the efforts being done by the Ministry in formulation of trade policy, and appreciated the idea of introducing the policy for 3 years' term.

He was of the view that all initiatives of the policy needed coherent co-ordination with respective ministries. Commerce Minister, whose presence in this Ministry is also doubtful, assured the participants that he would personally oversee implementation on the measures to be announced in the Trade Policy.

 

[Hyde]

Govt to take 3,300 MW power plants on rent​

KARACHI: Government has planned to take power plants having 3,300 MW capacity with a view to ease the energy crisis in the country.

Most of the plants will operate on furnace oil, therefore, 2.8 to 3.3 million tonnes of additional furnace oil will have to be imported. This quantity forms one third of the country’s total demand of furnace oil.

These plants will begin their operations in the next 6 months.

 

[Hyde]

Pakistan, Tajikistan sign joint protocol​

ISLAMABAD: Pakistan and Tajikistan on Tuesday signed a joint protocol at the end of Pak-Tajik Joint Economic Commission (JEC) meeting for further cooperation in many areas.

The protocol was signed by Minister for Water and Power Raja Pervez Ashraf and Tajik Minister for Energy and Industry Gul Sherali.

Both sides decided to establish Joint Business Forum between the business community of both countries. Tajik Government invited businessmen from Pakistan to participate in exhibition in Dushanbe to be held in late part of this year.

Both sides agreed to sign the Preferential Trade Agreement (PTA) 2009.

To facilitate trade between the two countries Tajik side offered warehouse facility to Pakistan at Panji Poyon and requested for similar facility for Tajik business community at Gwadar Port. Pakistani side noted the request for further action.

Both sides agreed to implement on fast track the Project Electricity transmission line between Tajikistan, Afghanistan and Pakistan, (CASA 1000).

Pakistan side offered training facilities to Tajik Geo-scientists and technicians in the field of Instrumental analysis in the Geo-science.

Pakistan side offered 10 seats for Tajik students in the field of Information Technology at National University of Modern languages.

Pakistan side also informed that National University of Science and Technology of Pakistan NUST is exploring the possibility and formulation of tangible projects for enhancement of cooperation with Tajikistan. The Tajik side will be kept posted of the progress in due course of time.

Both governments agreed to the proposal to transport arrangements between the two countries through an agreement. The agreement is expected to be finalized soon.

To activate air transport both sides agreed to hold early talks in the last week of August, 2009 in Dushanbe for conclusion of a fresh air services agreement.

Moreover, both sides agreed for early finalization of agreements included MoU on cooperation in field of public health, MoU on Pharmaceutical, Cultural Exchange Programme (CEP) for next two years 2010-2012, MoU for cooperation in the field of sports, MoU on expansion of cooperation in the field of agriculture and food industry and establishment of a Working Group on livestock.

Both the parties have agreed to enhance cooperation between national tourism bodies, respective enterprises and associations of both countries.

Both side also agreed for the formation of the Working group that will promote the investments in the hotel and tourism in Pakistan.

In order to implement the MoU signed between the two countries on Combating against narcotics/drugs, both sides agreed to make arrangements of posting of drug liaison offices in their respective embassies for quick information sharing within one month.

Pakistan side offered package to Tajik side to further ease the terms of credit amounting to US $ 13 million extended by Pakistan, keeping in view the economic difficulties of Tajikistan due to recent recession and close relations with them.

 

[Hyde]

DHA Cogen Plant to be online by August​

KARACHI: The much delayed DHA Cogen Power and Desalination Plant, located in Karachi’s Defence Housing Authority, will be online by August, DHA Administrator Brigadier Khalid Tirmizi told The News on Tuesday.

The 80-megawatt gas-fired plant was slated to start production earlier this year but was delayed owing to a number of reasons.

This announcement has been welcomed because of the ongoing power crisis in Karachi, where rioters have damaged property worth millions of rupees over the past couple of days following a major power outage. The outage came on the heels of a record downpour in Pakistan’s largest city on Saturday, which left civic services in a mess.

Brigadier Tirmizi said the fact that the plant has been brought back on track has to do with the efforts made by officials as well as all stakeholders. “We wanted to show that the project would succeed. And I am happy to say that Secretary Defence, the Corps Commander and senior officials of the Water and Power Ministry have played a vital part.”

Apart from a shortage in power generation capacity, Karachi’s local power utility also suffers from an outdated power transmission and distribution system. Enhancement of local power generation facilities is being seen as a step towards improving the power situation in the country in the coming years.

However, negotiations still have to be finalised with the Karachi Electric Supply Company over the sale of power from the plant to the utility. Brigadier Tirmizi said negotiations with Sui Southern Gas Company had been completed and now the plant was entering its testing phase.

It may be recalled that DHA Cogen is the first power and water project of its kind in the country. It started supply of water and electricity to people of Karachi in April 2008. DHA Cogeneration Plant is a project undertaken as a joint venture with foreign investment.

In June 2008, AEI Asia Limited (Hong Kong), a subsidiary of Ashmore Funds (USA), acquired a controlling interest in DCL. The group operates in more than 20 countries.

DHA Cogen Limited (DCL), which was supplying three MGD water to the city and 80 MW of electricity to KESC since April 2008, stopped working owing to a technical fault. The plant stopped power production after strong recommendations by Siemens Pakistan, the project designer, which investigated some technical problems in the gas turbine.

The plant was to provide three million gallons of water per day to residents of Defence and Clifton, and 80 megawatts power to the Karachi Electric Supply Company (KESC).

Earlier this year, banks agreed to provide 50 per cent of the plant’s repair cost after the contractor asked for an extra $10 million for repair and revival of the plant. This was the bone of contention between the contractor and the operating company.

Under a deal worked out with banks, the remaining 50pc extra cost would be borne by DCL, a company in which the Defence Housing Authority has a stake.

The executive board of DHA was briefed in January 2009 that the plant, which fell into disrepair on September 12, 2008, would restart its functioning by early March after repair and replacement of its damaged parts. This date has now been moved to August. Under the second phase of the plant, power production will be enhanced to 105 MW while desalination of water will rise to 5 MGD.

 

[Hyde]

Rental plants - a short-term solution to power shortage​

ISLAMABAD: Pakistan Electric Power Company Managing Director Tahir Basharat Cheema stunned the nation the other day when he said power shortage would not be completely removed by December this year.

This strengthened the talk that many rental power plants, which are part of a fast-track plan to eliminate the power deficit of 3,500 megawatts, are still on papers and no work has started at all. But in advertisements published in leading newspapers recently, PEPCO claims it will be able to eliminate the power deficit. Many rental power plants will not be able to come on stream by December this year as the government has failed to make down payment to various companies. This may leave a power deficit of 1,200 to 1,500 megawatts in December.

Walters rental project of 205MW and Karkey rental project of 232MW, scheduled to be commissioned in June this year in Karachi, have been delayed because the government has failed to make initial payments.

Besides the two plants, Independent Power project of 200MW, scheduled to come on line in August in Gojra, Cavaliar Energy project of 156MW at the Port Qasim, Progas Energy plant of 210MW, expected to start working in August and Ruba Energy project of 107MW at Gujranwala, expected to come on stream in December, are likely to face further delay because of no downpayments due to which the companies have not been able to open letters of credit.

Likewise, Bhikki (Halmore) power project of 150MW is also likely to be delayed and may not come on line by December this year. Muridiki (Sapphire) power plant of 225MW, scheduled to come on stream in October, is also likely to be delayed as so far no steam turbine has been imported. HRG machine has gone out of order during its transportation. A rental power plant of 225MW at Ballocki has also run into snags as its EPC contractor from the Czech Republic has abandoned the project due to non-payment.

Guddu project of 110MW, expected to come on stream in October, is also very much delayed as machinery and plants have not so far been brought from abroad. This plant will start functioning in March 2010 if the machinery lands in Pakistan by October as some payments for the plants have been given to the seller. However, if the elected government wants to restore its credibility, it has no option but to install rental power plants as these can start generating electricity within a short span of four to six months. But it requires a will, availability of finances and assurance of reasonable tariff to the companies, which want to facilitate the government by installing the rental power plants.

No doubt it is a very hard choice for the government. Earlier, the Musharraf government did not take any step to ensure hydrogenation, coal-based electricity and even did not explore alternative areas to generate electricity keeping in view future needs of the country.

Former finance adviser Dr Salman Shah, who worked with the previous government, has also admitted that the then government failed to match electricity generation with increasing demand. The government should support the companies which are keen to install rental power plants. This model is employed in many countries around the world including Bangladesh, Sri Lanka, US, UK, Iraq, India, Kuwait and Turkey.

The government should explore every source of electricity including rental, independent power producers (IPPs), solar, hydropower and nuclear, but ensure the electricity mix at affordable prices. Some experts oppose rental power plants on the ground that their tariff is so high, but there is no other option as hydropower, wind power and coal power projects take years to complete. Power tariffs of many rental power plants are reasonably lower than the IPPs, which are also in the pipeline.

The power deficit is not only inflicting injury to the economy, but also increasing unemployment as many textile and steel-related industries have almost been closed.

Keeping in view all these, the government should come forward and immediately make down payments so that the rental power companies which had made contracts with the government in 2008 could bring their machinery required for the power plants.

The government needs to go one step forward and allow the rental power plants of General Electric and Siemens of 2005, 2006 and 2008 model, which are lying in China. Beijing is encouraging rental power plants because of many other sources of generating electricity. Pakistan can benefit from the opportunity and allow private parties to import the second hand rental power plants, which are in excellent condition. There is some impression that kickbacks and bad deals are always involved, but these apprehensions should be erased as the rental tariff is arrived at through a competitive bidding process.

 

[Hyde]

Benazir Mass Transit Train Programme: Zardari directs Railways to expedite project
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ISLAMABAD (July 23 2009): President Asif Ali Zardari has directed the high ups of Pakistan Railways to expedite implementation on the project of Benazir Mass Transit Train Programme for twin cities of Rawalpindi and Islamabad. Pakistan Railways should make early finalisation of cases for procurement of engines and coaches to overcome its operational problems, the President said.

While addressing a briefing by Pakistan Railways on revamping of railways. Secretary Railways Sami ul Haq Khilji briefed the President and other participants of the meeting. The President advised to form a committee headed by Secretary Railways including representative of Capital Development Authority (CDA), Rawalpindi Development Authority (RDA) and provincial government.

He noted that it is time to make a serious review of the railways that has accumulated losses of over Rs 40 billion in the past three years and more than half of its rolling stock was overage and unserviceable. President Zardari called for an integrated policy on transportation sector and a workable plan for brining railways back on track. He asked the government to prepare plans to reorient railways from a traditional passenger service handicapped by public sector constraints to a major cargo transportation business operating on commercial lines.

The meeting was attended by Minister for Railways Ghulam Ahmed Bilour, Secretary General to the President M Salman Faruqui, Deputy Chairman Planning Commission Sardar Aseff Ahmed Ali, Secretary Finance Salman Siddique, Secretary EAD Farrukh Qayyum and senior government officials. Former Secretary of Railways and long retired from service Naseer Ahmad was also invited to give his suggestions.