Pakistan Economy - News & Updates

[Omar1984]

Businessmen term Trade Policy ‘positive’ ​

ISLAMABAD: The business community on Tuesday termed the new Trade Policy 2009-12 as positive because it provided traders a consistent policy framework for three years along with envisaging relief measures for many sectors.

They also appreciated the overcoming of supply-side constraints and creating different funds to support industries. The zero-rating of all kinds of exports was a good incentive for manufacturers-cum-exporters to improve their profitability, the President of Islamabad Chamber of Commerce and Industry, Mian Shaukat Masood said in a meeting.

He said that although incentives have been provided to light engineering industry in trade policy but government had not identified the specific sectors of light engineering that would benefit from these incentives and asked the government to resolve this vagueness.

He said the government should have announced textile policy immediately after trade policy as delay in announcing textile and monetary policies meant that textile sector would lose first quarter of current financial year to improve exports, which would be a great loss to the economy.

The ICCI chief said the USA and EU had provided duty free access to Bangladesh for textile products which badly affected exports of Pakistani textiles and to avoid further business losses, many Pakistani textile sector businessmen were considering moving their businesses to Bangladesh. He urged the government to immediately take up this matter at hand with Western and European countries to provide same incentives to Pakistan to save textile industry from further damage.

Shaukat said that a long-time demand of the textile sector for incentives on international business travels had again been set aside in the policy despite the fact that the developed countries had issued travel advisories on traveling to their citizens to Pakistan compelling the local exporters to meet their foreign buyers abroad, which increased their international business expenses.

He said the Trade Policy seemed to have focused too much on exports while in the current situation of global economic meltdown triggering significant downfall in exports, promotion of domestic market and trade should have been given proper attention too.

However, he lauded the subsidies announced for fisheries, leather and such sectors and subsidy in inland freight charges, saying that the government was also needed to implement the policy immediately to start achieving its desired goals. staff report

 

[Omar1984]

Govt to spend Rs 35.22bn on Trade Policy initiatives ​

ISLAMABAD: The government intends to spend Rs 35.22 billion on Trade Policy initiatives announced under Trade Policy Framework 2009-12, according to the Trade Policy presentation made to the federal cabinet.

Exporters are forced to pay indirect taxes, estimated to be around 9 percent of the cost of production. Trade Policy 2008 proposed a study to calculate the burden of these taxes and recommended an interim relief to fourteen sectors in shape of additional duty drawback at 1 percent of export value. Though the cabinet approved the proposal, FBR did not allow additional duty drawback.

It has been decided that exports would be completely zero-rated till the decision to give additional duty drawback to specified sectors is implemented. The sectors which will benefit from this measure are tents & canvas, electric machinery, carpets, rugs and mats, sports goods, footwear, surgical/ medical/ veterinary/ beauty care instruments, cutlery, onyx products, electric fans, furniture, auto-parts, handicrafts, jewelry and pharmaceuticals.

Currently exports of all types of pulses are banned due to domestic supply reasons despite growing international demand for this item. It has been decided that exports of pulses obtained on processing of imported inputs to be allowed subject to necessary safeguards against export of indigenous pulses.

Export of motorcycles was facilitated through R&D support of $50 (Rupee Equivalent)/ Unit. However, the disbursement was started in end of FY 2008-09. It has been decided that the support may be continued till June 2010.

A large number of export consignments of rice are being rejected due to aflatoxin infestation; a condition attributed to high moisture contents of paddy. The possibilities of aflatoxin infestation can be minimised by introducing paddy harvesters and paddy dryers, which the farmers are reluctant to procure due to high cost. It has also been decided that matching grants to be given to farmers and rice millers for purchase of paddy harvesters and paddy dryers.

Good Agricultural practices are essential to ensure food safety both locally and in export markets and thereby tend to have better acceptability; our agricultural sector is lacking recognized agricultural practices standards. Thus, It has been decided that PAKGAP (Pakistan Good Agricultural Practices) standards initially for five major horticultural exports (citrus, mango, date, potato and onion) may be worked out by MoST and implemented by MINFA in collaboration with PHDEB.

It was decided in trade policy 2008-09 that a farm-to-port cool chain will be established, till completion of cool chain, support for cool chain and cold storages for horticulture will be given at 8 percent or 50 percent of the markup, whichever is lower. It has been decided that this facility for horticulture to be continued.

Energy efficiency of the boilers being used by our industries can be enhanced by 30 percent thereby, to reduce the cost of production. Service providers for conversion of boilers are available but are reluctant to come to Pakistan. To encourage conversion of boilers for increasing efficiency the government should underwrite the agreement between service providers and the industry.

To promote Gems and Jewelry sector, the Cabinet in Trade Policy 2008, approved waiver of customs duties and sales tax on import of Gold, Diamonds, Silver, Platinum, Palladium and precious stones. The waiver was not extended to pearls and other synthetic or reconstructed precious or semi precious stones although these are increasingly being used in jewelry production. Further FBR did not comprehensively implement the decision. It has been decided to exempt natural pearls and other synthetic or reconstructed precious or semi precious stones from customs duty and sales tax. Implementation of Cabinet decision is to be expedited.

At present, export of edible oil from Pakistan is allowed in retail packs. The permission for export in bulk should be allowed. There have been export demands for domestic edible oils like sun flower, canola and cotton seed. It has therefore; been decided that export in bulk of these oils (sun flower, canola and cotton seed) may be allowed.

Absence of sui generis law on Geographical Indication (G.I) has exposed Pakistani G.I products particularly Basmati rice to infringements. The draft G.I law is under preparation. It has been decided that that G.I law may be enacted on fast track basis and Trade Development Authority of Pakistan (TDAP) may be given the mandate to apply for and to hold GI registration of Pakistani products.

Presently there is no restriction on import of Poppy seeds as far as the origin is concerned. Single convention binds the signatories to import poppy seeds only from the countries where it is legally produced. In view of the international commitments it has been decided that source of import of opium poppy seeds may be restricted to the countries where it is legally produced.

Import of secondary quality iron and steel sheets/plates / coils is allowed, provided the sizes are over 48” (length) x 20“(width). The size restriction is irrational and difficult to implement. The industrial users face difficulties in getting clearance of unsorted scrap, which adds to the cost of doing business. It has been decided that minimum size restrictions on import of secondary quality iron and steel sheets/plates/coils to be waived off. sajid chaudhry

 

[Omar1984]

Power generation top priority of government; Gilani ​

ISLAMABAD, Jul 28 (APP): Prime Minister Syed Yusuf Raza Gilani Tuesday said increasing power generation was the top priority of the government and development funds have been diverted to meet the shortage.Talking to media after a ceremony to inaugurate a pharmaceutical plant here at the PM Secretariat, Gilani said the leadership of the country was fully cognizant of the problems being faced by the masses.

Gilani said shortage of electricity was a matter of serious concern for both the industry and the public and he would soon convene a meeting of the four Chief Ministers to discuss these matters and austerity measures.
The prime minister to a question said most of the circular debt has been cleared and added that with a cut on the development funds the rest would also be retired.

About the use or rental power, Gilani said the issue of power deficiency was being addressed through a comprehensive strategy and the entire focus of the government was on resolving this serious issue.

He said the leaders of Pakistan stand with their people and as they were enduring load-shedding, he too had ordered strict compliance of no-use of airconditioners before 11 am.

“Even if the army chief or ambassador Anne W Patterson comes to me before that time, we use pedestal fans,” Gilani said.

About the recommendations of the committee on Balochistan submitted to him, he said it comprises all proposals and suggestions clubbed together, with a view to address the grievances of the province.

He said Balochistan has suffered injustices over the past 62 years and his government has resolved to address these. He said it was yet to be decided whether to convene a jirga or an All Parties Conference to discuss these issues with the Baloch people.

Referring to his decision on the local government system, Gilani said he has submitted his recommendations to the President and the MQM was fully onboard.

 

[Hyde]

Four-nation transit agreement: Pakistan to assist Tajikistan in granting access to participants ​

ISLAMABAD (July 29 2009): Pakistan has proposed giving access to Tajikistan in the Quadrilateral Agreement for traffic in transit in a bid to enhance trade activities among contracting countries of the agreement. Pakistan, China, Kyrgyzstan and Kazakhstan have signed Quadrilateral Agreement, which is in operation since 2004.

Sources told Business Recorder that during the meeting of Pak-Tajikistan Joint Economic Commission (JEC) on July 20-21 here in Islamabad, Pakistani officials raised the issue of joining Tajikistan in the Quadrilateral Agreement, and assured full support to the Tajik officials in this regard.

According to sources, Pakistan side in a meeting of JEC assured the Tajik side that Pakistan would assist Tajikistan in granting access to the Quadrilateral Agreement among Kazakhstan, China, Kyrgyzstan and Pakistan.

Sources said that the Tajikistan side was informed that Pakistan is supportive of inclusion of Tajikistan in the Quadrilateral Agreement, and the matter of joining of Tajikistan in the Agreement on Traffic in Transit was also raised by Pakistan side during the expert level meeting held on September 25, 2008 at Astana Republic of Kazakhstan. Pakistan side emphasised that access to Tajikistan to this agreement may result in enhancing and fortifying the existing trade activities within territories of contracting member states.

Due to non-participation of China, an important member state of Quadrilateral Agreement, in the expert level meeting, the other member countries could not consider the matter and it was decided that this issue may be discussed in the next Experts Level meeting. "The joining of Tajikistan in the Quadrilateral Agreement is one of the agenda items of the Expert level meeting which would be shortly held in Kyrgyzstan, sources said.

The present trade volume between Pakistan and Tajikistan is not encouraging, and there is great potential to enhance and strengthen the economic co-operation between the two countries. Pakistan exports cotton fabrics, synthetic fabrics and other textile items and leather products, whereas it imports raw cotton from Tajikistan.

Trade with Tajikistan is negligible due to absence of road communication and high transportation cost limits the ability of exporters to compete prices of Chinese and Iranian goods which now flood the markets of Tajikistan. Preferential Trade Agreement (PTA) between Pakistan and Tajikistan may also result in enhancing trade volume between the two countries, sources added.

Commerce Ministry officials briefed the JEC meeting that high tariff rates prevailing in Tajikistan were another obstacle in enhancing trade between the two countries, and reduction in the tariffs on Pakistan's exportable products could result in boosting trade. PTA can be also helpful in this regard, sources added.

 

[Omar1984]

Cabinet Ministers Committee on Energy Crisis discusses KESC ​

KARACHI, July 29 (APP): The Federal Cabinet Ministers Committee on Energy Crisis in the country met here at Governor House to exclusively discuss the issue of KESC and decided to summon KESC’s management owners next Wednesday to explain their company’s financial viability, their financial problems and deficit areas. The meeting, which continued for over four hours, was attended by Sindh Governor Dr Ishrat‑ul‑Ebad Khan, Chief Minister Syed Qaim Ali Shah besides Federal Ministers Raja Parvez Ashraf, Qamaruzaman Kaira, Naveed Qamar and Syed Khurshid Ahmed Shah and concerned senior officers.

Later briefing the journalists, Information Minister Qamar Zaman Kaira said that although this committee has been established for energy crisis of whole country but in today’s meeting KESC related matters were discussed in detail.

He said three major areas of generation, transmission and distribution problems were mainly focussed besides their requirements for oil, gas and IPP related issues.

He said after detailed discussion it was decided that the Cabinet Committee will hold another meeting next Wednesday with the KESC’s Executive Board and the company owners, who have also been called to provide company’s financial inputs, cash flow and if they are facing any deficit, then how to meet it so that their financial problems too are resolved.

Kaira said that the agreements which are to take place between KESC, SSGC and other organizations, if pending, would be finalized within a week while SSGC has ensured to constantly meet the 276 MMCF gas requirement of KESC which would help increase the generation by 100‑150 MW.

He said final decision was taken with MD SSGC who was also invited to the meeting.

The Federal Minister said that PSO has been directed to ensure smooth oil supply to KESC with 90 days credit and in case of any problem of difference, the same would be handled by Ministry of Finance.

On the issues with IPPs, he informed the KESC has assured that their supplies would not suffer in case there was problem of non‑payment and they would supply 1750 MW non‑stop.

Besides, he said MD PEPCO also attended the meeting and Raja Parvez Ashraf clearly told him that they have to maintain their supplies non‑stop to KESC which is about 650 MW and plus.

He said that although there is electricity crisis in the whole country, but keeping the importance of Karachi in view, the supply from PEPCO will continue non‑stop.

Kaira referred to a 80 MW DHA power project, which was held up for quite some time, would supply electricity for backup support and this additional generation will be supplied to Karachi next month.

He said this project would accrue another benefit to Karachi by way of additional supply of 3 mgd drinking water which would prove to be a big relief.

Touching upon the KESC’s transmission issue, the Federal Information Minister pointed out that generation issue is comparatively lesser than transmission and distribution issues. He said since the present management took over KESC they planned the upgradation of existing 650 MV grid stations, instal and replace the transformers and construct new grid stations and started work thereon.

He said in order to improve the transmission line, they have installed 650 MV transformers. He said if transmission will not improve the distribution problem will remain, notwithstanding the generation of power. He said the required demand would be met, but it is most essential to upgrade the distribution system and complete 490 MV installations in grid stations by december.

Mr Kaira said that KESC was told to instal high powered transmission and distribution transformers as soo as possible on war footing and if they don’t have the required transformers they can be helped in getting them from WAPDA for the time being until they import their own so that Karachi’s urgent needs are met with. He said that till December last, KESC had replaced 10 percent lines of 62 year old distribution network and their effort is to completely revamp the network within one year.

The Information Minister said that in today’s meeting KESC was directed to take up Gulshan‑e‑Iqbal, Gulberg and Shah Faisal as model towns and revamp their entire transmission and distribution networks by August 31 whereafter other Towns will be taken up for similar purpose.

He said that their financial commitment in this regard will be fulfilled and it was for this purpose that their owners have been called for a meeting on coming Wednesday.

He said that this committee and the government will fully watch their work in this regard and in the presence of Governor and Chief Minister assured to provide them 100 percent support of the provincial and city governments and the police and August 31 will be the last date whereafter no delay will be tolerated. He said that by December, as is being said, load‑shedding will be controller throughout the country and also the urgent needs of Karachi will be met by that time.

Pointing out that power load in houses in Karachi is much more than the sanctioned load and, therefore, the demand which is generating is also to be met. He said the system after revamping will not only meet the present crisis but also meet the future one. He said that both Governor and Chief Minister graciously decided to form a committee which, along with KESC. launch a crackdown against power theft and kunda system will be wiped out for which police support would be fully made available.

The Minister said that it was decided to provide free of cost meters to those who are using electricity illegally and power theft in any form will not be tolerated. He appealed to people of Karachi to identify those who steal power for which people pay for the same.

“It is last warning for them to get their power supply system regularised”.

 

[Omar1984]

Pakistan, Tajikistan to initiate strategic dialogue, cooperate in energy ​

DUSHANBE (Tajikistan), July 29 (APP): Pakistan and Tajikistan on Wednesday agreed to initiate a strategic dialogue on regional peace, security and development, besides cooperation in energy sector.President Asif Ali Zardari and his Tajik counterpart Emomali Rahmon in their wide-ranging talks held at Qasr-e-Millet - Palace of the Nation, also agreed to establish regional electricity networks and early implementation of the Central Asia South Asia 1000 MW project.


The two leaders also vowed to explore and establish transit and transportation corridors, including direct air flights to link the two countries.
President Zardari who is in the Central Asian Republic on a three-day visit, also had a joint press stakeout along with his Tajik counterpart and termed terrorism and militancy as the biggest threat to the 21st century.

“We stand together against this threat and have decided to cooperate in other areas as well,” President Zardari said.

He said the two countries have agreed to enhance cooperation in banking and transportation sectors, with the sole intention to bring the two people closer.

President Zardari and President Rahmon also stressed the importance of having greater interaction between the private sectors of the two countries. He said Tajikistan has rich natural resources and the two countries can gain a lot from increased cooperation.

President Zardari said Tajikistan can make a use of Pakistan’s land routes and ports Pakistan, which will bring trade and economic benefit to the nations.

President Zardari and Tajik President also had an exclusive meeting before the delegations of the two sides joined them at the bilateral talks.

During the bilateral talks President Zardari was assisted by Foreign Minister Shah Mehmood Qureshi, Interior Minister Rehman Malik, Commerce Minister Makhdoom Amin Fahim, Minister for Industries and Production Mian Manzoor Ahmad Watoo, Spokesman to the President former Senator Farhatullah Babar and senior officials.

A joint statement issued at the end of the talks said the two countries will take joint measures to realise full potential of their bilateral trade and economic relations on mutually beneficial projects.

The two countries also agreed on the need of expediting and establishing regional electricity networks. They stressed for early implementation of the CASA 1000 MW project.

“Both sides agreed to undertake further studies and measures needed for its implementation and invited international organizations and financial institutions to contribute funding to the project,” said the joint statement that was signed by the two leaders at a ceremony here after the talks.

The foreign ministers of two countries also signed two bilateral documents including a Protocol on exchange of Instruments of Ratification of Agreement between Pakistan and Tajikistan on the Promotion and Protection of Investments; and an agreement for cooperation - in different areas of bilateral interest - between their ministries of foreign affairs for the years 2009-2012.The Presidents of Pakistan and Tajikistan witnessed the signing of bilateral documents.

Separately the two sides also signed a framework cooperation agreement between the Federation of Pakistan Chambers of Commerce and Industry and Tajikistan Chamber of Industry for strengthening bilateral cooperation between the private sectors of the two countries.

The Joint Statement said both President Zardari and President Rahmon expressed their desire to further improve brotherly relations and enhance mutually beneficial cooperation between the two countries.

The two leaders affirmed that strengthened Pak-Tajik bilateral relations will contribute to regional peace, security and development. The two sides also took into consideration the principles enshrined in the Charter of the United Nations, the May 2004 Joint Declaration of Pakistan and Tajikistan on further development of friendly relations as well as other bilateral documents.

The two sides agreed that shared cultural affinities and historic experiences, economic complimentarities and geographic proximity have made Tajikistan and Pakistan virtual neighbors. Better relations were in mutual interest of both countries and region, the joint statement said.

To comprehensively upgrade cooperation in all spheres and fields, the two sides will enter into an enhanced partnership based on the principles of the UN Charter, including respect for sovereignty and territorial integrity and non-interference in each other’s internal affairs.

The two countries agreed to initiate a strategic dialogue on regional peace, security and development, with a view to developing greater understanding on issues of common interest and mutual benefit.

The leaders of Pakistan and Tajikistan agreed to take joint measures to realize the full potential of bilateral trade and economic relations, and undertake mutually beneficial projects in the areas of infrastructure, communications, energy and industry.

The two countries will take appropriate measures to enhance bilateral trade including early implementation of the ECO Trade Agreement (ECOTA), to which both are parties.

Pakistan and Tajikistan will promote business linkages, and to this end facilitate interaction among their respective corporate sectors through exchange of business delegations and establishment of joint business forums.

The two sides were satisfied at the outcome of 3rd Pak-Tajik Joint Economic Commission held in Islamabad on July 20-21. The two sides will vigorously pursue agreements and understandings reached at the Commission.

Pakistan and Tajikistan, the joint statement said, will work jointly to explore and establish transit transport corridors linking the two countries, and also take measures to revive direct air links.

The two leaders agreed on the need to expedite establishment of regional electricity networks. The two sides emphasized in particular, early implementation of the CASA-1000 project. To this end, both sides agreed to undertake further studies and measures needed for its implementation, and invited the international organizations and financial institutions to contribute funds for the project.

Pakistan and Tajikistan, the joint statement said, condemn terrorism and extremism in all forms and manifestations and expressed their readiness to cooperate closely, bilaterally and within regional frameworks in combating these twin threats, through among other means, arresting flow of arms and ammunitions and eliminating sources of terror funding.

The two countries were also concerned on the increase of illegal turnover of narcotics drugs, psychotropic substances and precursors and the organized crime. In this regard, the two sides will strengthen bilateral cooperation including by promoting exchange of information among relevant authorities.

Tajik President further appreciated Pakistan for its sacrifices in the fight against terrorism, and expressed full confidence in Pakistan’s ability to effectively deal with this menace.

Pakistan and Tajikistan, the statement said, support the role of Shanghai Cooperation Organization in promoting peace, stability and socio-economic development in the region. “Tajikistan will contribute to Pakistan’s participation in programmes and initiatives within the framework of SCO.”

The two countries extended their support to the government of Afghanistan to achieve peace and solid stability in the country, to improve economic and social conditions and to establish an independent and democratic society that embodies the interests of the people.

They called upon the international community and international financial institutions to channel all assistance directly through the Government of Afghanistan, on projects identified by Afghan authorities.

President Zardari expressing gratitude for the warm hospitality, invited the President of Tajikistan to pay an official visit to Pakistan, who accepted the invitation. The date of visit will be coordinated through the diplomatic channel.

Earlier on his arrival at the Qasr-e-Millat, President Zardari was warmly received by the Tajik President Emomali. A contingent of Tajik army presented guard of honour to President Zardari. National anthems of the two countries were played.

President Zardari also received the Chairman of the Upper House (Majlis-e Milli) Mahmadsaid Ubayduloev and met Prime Minister of Tajikistan Okil Okillov.

The President is also scheduled to hold trilateral and quadrilateral meetings with the leaders of Tajikistan, Afghanistan and the Russian Federation.

 

[Omar1984]

PM urges world not to attach strings with economic aid ​

ISLAMABAD, Jul 29 (APP): Prime Minister Yusuf Raza Gilani Wednesday urged the international community “not to attach any strings” with the provision of financial assistance to Pakistan.“I ask the international community to help Pakistan in overcoming its problems rather than creating hurdles,” the Prime Minister told the media after a surprise visit to the National Database and Registration Authority (Nadra) centre here.

Gilani stressed that any economic aid to Pakistan including the Kerry Lugar bill should not be made conditional.
He said Pakistan is a sovereign country and added that “we would never compromise on its honour, dignity and self respect.”

About his visit to the Nadra Centre in G-8 sector, Prime Minister Gilani said he had directed the authorities to reduce the delivery time of Computerized National Identity Cards (CNICs) from one month to 15 days.

He directed that the contract employees of Nadra be regularized, as has been done in all the departments and directed the Ministry of Interior to send a summary to the cabinet committee in this regard.

Earlier, the Prime Minister went around different sections of the centre and asked the people their problems. Regarding the complaints for long wait time, the Prime Minister directed the NADRA officials to take urgent steps to facilitate the people and increase the number of counters to entertain maximum number of applicants at a time.

The Prime Minister said his visit was to personally see the problems being faced by the people in getting CNICs. He directed that the waiting period for standing in long queue be reduced.

The people asked the Prime Minister to send the prepared cards to them through mail or couriers so that they do not have to waste their time.

When pointed out about some lacunae found in the CNICs of Afghan refugees, the Prime Minister said such cases must be brought to notice so that immediate action be taken.

 

[Omar1984]

Exploitation of resources to lead to prosperity: Zardari ​

DUSHANBE, Tajikistan, July 29 (APP): President Asif Ali Zardari on Wednesday said that Pakistan, Tajikistan and Afghanistan are resource-rich neighbours and there is a need to exploit these resources through mutual cooperation which will lead to region's prosperity. Speaking at a banquet hosted by Tajik President Emomali Rahmon for the presidents of Pakistan and Afghanistan, Asif Zardari said that the friendship between the three countries will further strengthen regional cooperation.

"It is ages old wisdom that you cannot change your neighbours.

It is time for Central Asian countries and the countries of south Asia to sit together and improve their relations and enhance cooperation for the benefit to its peoples," he said.

"The three countries can make a difference in this world."

President Zardari appreciated Tajik President for the efforts which brought them together in Dushanbe and said the friendship of the three countries will go a long way in promoting regional cooperation and prosperity.

"You will not find Pakistan lacking in all its endeavours," the President remarked.

He said Pakistan will cooperate in every way to augment the efforts for regional cooperation so that the three countries can realize their potential in economic and various other fields.

Tajik President Emomali Rahmon referred to the cultural and historic ties between the three countries which he said, were a natural binding force.

Tajikistan, he added, will support every effort for peace in Pakistan, Afghanistan and Asia at large.

Afghan President Hamid Karzai said that the trilateral trade and economic cooperation can take the people of the three countries towards prosperity and progress. He appreciated Tajik President for his efforts in this regard.

"It reflects aspirations and initiatives of the leaders to make efforts for peace and progress in the region," he stated.

The three Presidents were seated at the main table alongwith Tajikistan's Prime Minister Okil Okilov and Chairman of the Upper House Makhmadsaid Ubaiduloev.

The Pakistani delegation comprising ministers Shah Mahmood Qureshi, Rehman Malik, Makhdoom Amin Faheem and President'sspokesman Farhatullah Babar also attended the banquet.

 

[Omar1984]

Financial year 2008-09: Pakistan’s oil production drops by 6%, gas up 0.5% ​

Staff Report

KARACHI: Pakistan’s oil production witnessed a sharp decline of 6.2 percent in 2008-09 to 66,678bpd (barrels per day) against 71,120bpd for the previous year.

As per the production data released by PPIS for 11MFY09 and weekly data of Jun-09, the major oil producing fields such as Adhi, Chanda and Pindori witnessed reduction of output by 8 percent, 18.3 percent and 73 percent, respectively.

However, output of Mela, Kunar, Dahkni and Pashki fields was up by 10.7 percent, 25.3 percent, 23.3 percent and 38.2 percent, respectively.

On the other hand, the gas production marginally grew by 0.5 percent to 4058mmcfd in FY09. This was on account of enhanced year-on-year production from gas fields of Adhi up by 2.1 percent; Bhit up by 9.7 percent; Dakhni up by 44.4 percent ; Loti up by 4.4 percent; Kandkot up by 21.6 percent and Qadirpur up by 3.46 percent.

The said incremental effect mitigated the decline in production from Sawan, which decline by 17 percent and stagnant production from Sui. Apart from the above-mentioned fields, another major field Zamzama, also witnessed a decline.

The Exploration and Production (E&P) companies of oil and gas witnessed mixed trend in output of energy resources. Pakistan Petroleum Limited (PPL) oil as well as gas production diminished by 0.4 percent and 4 percent, respectively. On the other hand, oil and Gas Development Company (OGDC) gas production surged by 6.1 percent due to completion of development activity in Qadirpur, however, its oil production diminished by 6.1 percent.

Pakistan Oilfield Limited (POL) was the worst performer amongst its peers as its oil production declined massively by 23 percent owing to the decline in production in its major field Pindori. Further, a fall of 13 percent in Makori field also contributed to POL’s total decline.

Pakistan’s drilling activity in FY09 remained tilted towards the appraisal/development of wells, with 59 wells being drilled against a target of 50 wells. 27 exploratory wells were spud in the mentioned period against a target of 40 wells. OGDC exceeded its development wells target as it spud 18 wells (target of 15). Three of OGDC’s wells were plugged and abandoned, which is expected to increase company’s exploration costs for 4QFY09. Moreover, drilling activity is expected to get a boost from the MoP’s recent foray into the international market in order to attract foreign investment by offering an additional 53 blocks.

 

[Omar1984]

WAPDA focused on hydropower, water uplift: Durrani ​

LAHORE: In the wake of WAPDA's bifurcation in 2007, it is fully focused on the development of water and hydropower resources in the country.

This was stated by Chairman WAPDA Shakil Durrani while addressing a delegation of the 6th Mid Career Management Course of the National Institute of Management, Peshawar, on Wednesday at WAPDA House. WAPDA Member (Water) Syed Raghib Abbas Shah, Managing Director (Administration) Naveed Akram Cheema and senior WAPDA officers were also present on the occasion.

WAPDA chairman said that both water and hydropower sectors were neglected during the last three decades. But at present, WAPDA is working on a number of water and hydropower projects to cope up with the increasing demand of water and electricity in the country. Construction work on Diamer Bhasha Dam will start next year. It is a mega water sector project with a live water storage capacity of 6.4 million-acre feet.

Besides providing water for agriculture, Diamer Bhasha Dam will also generate 4,500 megawatts (MW) electricity, he added. The chairman further said that construction of 969MW Neelum-Jhelum Hydroelectric Project (NJHEP) is progressing satisfactorily. Earlier, General Manager (NJHEP) Hasnain Afzal, briefing the delegation said that WAPDA is constructing five dams, three mega canals, five hydropower and two drainage projects under Vision 2025. staff report

 

[Omar1984]

‘2 power generation units to arrive before December’ ​

KARACHI: Federal Minister for Water and Power Raja Parvez Ashraf has said that two ship-mounted power generation units of 235 megawatts (MW) of a Turkish company would arrive here before December 2009 and are linked to the city’s power supply system.

Addressing a press conference after a meeting of Cabinet Ministers Committee on Energy crisis, which discussed Karachi Electric Supply Company (KESC) issue exclusively, the minister told journalists that tariff of the company has been approved by National Electric Power Regulatory Authority (NEPRA).

He pointed out that at present the generation cost comes to Rs 8.37 per unit while electricity is being supplied to people at Rs 5.37 and thus the government is subsidising the energy to the tune of Rs 140 billion per year or Rs 12 billion per month. “We want to first overcome this shortfall as the government does not want to put pressure on the people.” He said that under the plan, the government is going for thermal, rather than for Jhelum and Bhasha Hydel and to coal and solar energy. He pointed out that the present government has inherited the energy shortfall of 3000MW to 3500MW.

He said that of this shortfall, 1,500MW would be procured from held up or slow-going IPPs and for another 1500MW, the owners of various companies have assured that they are bringing their projects on time.

Replying a question that power meters installed or fast, Ashraf said that he would get these meters tested from PEPCO experts and if found defective, these would be replaced.

Regarding rental power units, he said these would arrive before December 2009. He said these rental units have been obtained on 3 to 5 years contract through international bidding. app

 

[Omar1984]

Marble industry rejects trade policy ​

ISLAMABAD: All Pakistan Marble Industry Association has rejected the new Strategic Trade Policy Framework as it failed to provide solutions to the problems of marble industry, which has suffered badly because of unrest in the frontier province.

The executive body of the marble association met here on Tuesday under the chair of Furrukh Majeed, president of the association. The meeting reviewed the announcement made in the trade policy.

The meeting concluded that the provincial government of NWFP has banned the blasting for mining purposes, which has stopped the supply of raw material. Moreover all the marble cutting and polishing units in NWFP are closed due to ongoing military operation in the area.

Furrukh Majeed told that the marble industry has to import raw material from Lesbeela, Lora Lai, Karachi, Mainwali and Kalabagh, which has doubled the freight charges.

In a press briefing, Furrukh informed that despite the difficulties and hurdles the marble export has grown by 40 percent during previous fiscal year. According to him, during 2007-08 the country made marble exports of $25 million which have grown to $40 million in 2008-09. He said that United States, Italy, Middle East, China, Malaysia and Russia were potential markets for marble export.

Majeed said that the association has submitted its recommendations for consideration in trade policy and not a single proposal was accepted. He said they proposed ministry of commerce to facilitate marble sector in holding marble exhibition in potential markets to introduce the precious verities of marble. The association had also asked government to give marble industry participation in trade delegation to world market. Furrukh said that the exhibitions and exchange visits help a lot in attracting international buyers.

Abdul Sami, Ex Chairman of Marble Association, pointed out that due to growing unrest in the country international reluctant to visit Pakistan to place orders therefore the exhibitions and trade delegations are essential to capture export orders. Main Sami criticized the role of Trade Development Authority and said that instead of facilitating exporters the authority has banned holding of industrial fair and exhibitions, which also gave negative signals to potential buyers.

The Marble Association has also demanded industry status for the mining sector. President Marble Association said the investors couldn’t invest in mining sector with modern drilling and blasting technologies because the sector doesn’t have status of industry and Banks not provide loaning facility. Moreover the mining rules were also not provide equal investment opportunities in mining of marble as it reserves for local people of specific area.

Abdul Muneeb, Chairman of the Association said that the country doesn’t have modern trucks for transportation of heavy weights like marble and normal trucks are being used for transportation of marble raw material which added into the cost of business. They asked government to allow duty free import of heavy weight modern trucks and excel to facilitate marble and other industry.

 

[Omar1984]

‘Poverty reduced by 13% in PPAF targeted areas’ ​

ISLAMABAD: There is a reduction of 13 percent in poverty alleviation in those areas where Pakistan Poverty Alleviation Fund (PPAF) partner organisations have extend micro-credit facilities, Chief Executive Officer, PPAF, Kamal Hyat expressed these views during an interview with Daily Times here on Wednesday. He

said the figures were revealed by the study carried out by the Gallup survey on PPAF activities.

Like other government organisations, he said the PPAF had also the same objective of poverty alleviation and improving standard of living of people at grass root level. He said the PPAF was a new model on public private partnership with objective strengthening people at community level. It was a private entity fully sponsored by the government with provision of full autonomy. He said the organisation mainly deals with micro-credit through partner-organisations for the last 10 years. The PPAF covers 4500 villages through its network and 90 percent districts across the country benefited from micro finance scheme.

Since establishment of the organisation, the PPAF chief said that 19,000 infrastructure schemes were initiated and going on successfully till now. It established 100,000 Community Social Mobilizers (CSM), who worked with the partner organisations in the development of respective areas. Most of the development schemes were carried out through these social mobilizers.

Usually, he said, the donors come for a project and after completion they wind up every thing but the situation in PPAF was different. When the organisation completed PPAF-I with $90 million, the World Bank asked for another project PPAF-II and now again sponsored for PPAF-III. He said through partner organisations, the PPAF disbursed $533 million micro-credit and the default ratio was zero and 100 percent success.

After such success stories, the World Bank had rated the PPAF ‘AAA’ rate, which was rare in the South Asia, he claimed. At the back of WB, several international financial institutions like EFAD, KFW, USDA, USAID also contacted PPAF and carried out several developmental schemes at gross root level in the country.

About funding, the MD PPAF said that through government (Economic Affairs Division) negotiations the donors forward their funding, which he claimed was spending judiciously. He said the PPAF never directly negotiate with donor agencies for financial assistance. Adviser to Prime Minister on Finance, Shaukat Tareen, said that he wanted to spend all government funds through PPAF due to track record, he claimed. “Not only donors but the government also trusts us.”

“We work for Social Mobilization of community and through it we inform the community about their constitutional rights and create awareness among them”, he added. Under this programme, the people were informed about rights of a person in constitutions and their responsibilities in the economic development of the country. Main purpose of the social mobilization was to narrow the gap between state and citizen.

About proper monitoring, Kamal Hyat said the PPAF had own evaluation, research and development cell, which visited after every three months and get critical reports from partners’ organisations. Two studies were also carried out by Gallup research organisation, to find out economic impact of the PPAF activities. They termed the performance of the PPAF excellent. The studies also pointed out some flaws, which were removed accordingly.

Answering another question, the MD PPAF said the organisation recent started works on to arrange finance locally from chambers of commerce and philanthropists with in the country. “We want to reduce whole dependency on international donor agencies and seek financing from Gulf and Middle East countries as well as locally”.

Recently, he said the PPAF contribute Rs 140 million in different mode for Internally Displaced Peoples of Buner, Malakand and Swat and expressed the hope that the organisation would contribute in rehabilitation process subject to restoration of peace there. For this purpose, he said the organisation would need intervention of local partners from the concerned affected areas.

About future target, he said the organisation needed huge funding to cover the whole country in next 10 years.

 

[Omar1984]

Rental power producers to generate 2,200MW ​

LAHORE: Rental power producers have renewed their commitment to swiftly producing 2,200 megawatts of affordable electricity to power the country’s homes and industries.

According to a joint statement issued on Wednesday by local and foreign companies setting up fast-track rental power projects to help Pakistan meet its emergency requirements, the rental power producers agreed “to collectively and meaningfully inform the public about rental power to counter a misinformation campaign questioning these necessary and nationally-important projects.”

They noted with concern that the campaign against rental power producers was reminiscent of a vilification campaign in the 1990s against independent power producers (IPPs), without which Pakistan would have plunged into darkness.

“All rental plants were transparently and competitively bid for and were technically evaluated to gauge suitability and affordability under a policy that has been approved by three successive governments,” said the joint statement.

“Pakistan must work on sustainable and long-term options based on hydel, coal, wind and nuclear plants,” said the producers. “Rental plants based on brand new, zero-rated and also secondary-market plant and machinery through a variety of global technology, EPCC, O&M (operation and management) and equity partnerships provide an immediate solution to Pakistan’s energy needs and are set up in six to eight months after the contract of commissioning.” The IPPs take three to four years and hydel projects significantly longer.

“Rental contracts have a term of three to five years and hence carry a higher risk for rental power producers. However, rental power tariffs are mostly lower than those for new IPPs despite the fact that loan repayments, interests on loans, O&M (operation and management) and other costs are amortised over three to five years instead of 10 years for IPPs,” said the producers. “Rental tariffs compare favourably with tariffs for upcoming IPPs.”

The rental power producers also pointed out that Pakistan Electric Power Company (PEPCO) paid only for power that was produced and delivered, and that too 60 days in arrears. “Critically, gas-run rental plants are required to achieve an availability of 92 per cent and RFO-based rental plants are required to achieve an availability of 85 per cent,” said the producers. “Failure to achieve these availability requirements attracts financial penalties calculated on the basis of 1.5 times of the tariff for the shortfall.”

The producers said there were no government guarantees or support for raising funds for rental power projects. “The risk and responsibility are wholly assumed by rental power companies and not the government. The government guarantee is issued exclusively to cover any performance default on part of PEPCO or the state-owned company purchasing rental power.”

The producers also emphasised that the 7-14 per cent mobilisation advances given to rental plants were secured against bank guarantee.

A meeting of rental power producers held the other day was attended by representatives of Techno Engineering Services, Young Gen Power, Gulf Rental Power Project, Ruba Energy, Reshma Power, Premier Energy, Pakistan Power Resources and Walters Power International.

 

[Omar1984]

No loadshedding in Karachi by Dec, says cabinet panel ​

KARACHI: The Ministerial Committee on Energy Crisis has claimed that loadshedding will be eliminated from Karachi by the coming December as it had succeeded in resolving the issues between all the stakeholders — ranging from the gas company, the oil company, to power generating units and the KESC management.

Members of the cabinet committee, including Minister for Water and Power Raja Pervez Ashraf, Information Minister Qamar Zaman Kaira, Minister for Privatisation Naveed Qamar and Syed Khurshid Shah, announced this on Wednesday at the Governor’s House after a detailed meeting with all the stakeholders.

Raja Pervez Ashraf told the media that Wapda would continue to supply 650 megawatts of electricity to the KESC despite a power crisis in the country while PSO had been advised to provide non-stop supply of oil on 90 daysí credit to all the power generating units and the Sui Southern Gas Company will also be giving the required 276 mmcft non-stop supply of gas, which will help in generating 100-150 megawatt additional electricity in the system.

The cabinet committee met at the Governor’s House to discuss in detail the power crisis in Karachi, the commercial hub of the country. Sindh Governor Dr Ishrat-ul-Ebad Khan and Chief Minister Syed Qaim Ali Shah also attended the meeting.

The committee summoned the KESC management to discuss the issues facing the power utility and the issues regarding the IPPs. After the discussion, the committee identified the problems — generation, transmission and distribution — to improve the performance of the power utility. It was decided that the committee would meet again next week and the KESC would brief it on the financial management of the utility.

Information Minister Qamar Zaman Kaira told the media that these measures would help the KESC generate 1,750 megawatt non-stop electricity, while Raja Pervez Ashraf directed the Pepco to continue supplying 650 megawatt power to the KESC to cater to its needs.

Kaira said CEOs of two IPPs were present at the Governor’s House to sign an agreement with the KESC that would add 80 megawatt power in the system of the utility in August. He said due to this addition, the people of Karachi would get 3 MGD more water. As a role model, the utility has been given the task to completely revamp the distribution and transmission in three towns — Gulshan-e-Iqbal, Gulberg and Shah Faisal by the end of August. The Sindh government will provide full assistance in revamping of these three role model towns.

It was decided to eliminate power theft and Kunda system, for which the police will assist the utility in rooting out this menace. Power theft will not be tolerated and the government will not allow a handful of people to hold the entire city hostage, Kaira warned and appealed to the citizens to identify power thieves and cooperate with the KESC.