Pakistan's first sovereign debt default

[SamranAli]

its only light for 2.5 hours here today. And when light came i switched on tv. Saw a ticker that hike in electercity prices is confirmed 1.20 rupee per unit. How sucker naveed qamar proudly announcing..

also where the money of bills goes? We pay whatever it is and then listen due to non payment of dues to oil and gas companies by electercity distribun companies supply is suspended.

 

[AMRITSAR]

Use a dictionary.

need not the guy was asking which ype of default internal default or external default say loan from WB,ADB etc

 

[Jango]

Due to the ignoramus decisions made by our appointed leaders perhaps a "dictator" is needed. Brother i wish there was such a thing as "good dictator" or do "everything nicely" - doesn't exist. Decisions that need to be made will not suit everybody and those it doesn't suit will make noises but that's life. The decisions have simply got to be in the national interests and not done for a popularity boost for the orchestrator.

Sad thing is, that these people then try to justify their bad deeds wit stupid things.

They say that they represent the whole 20 crore nation, but infact, they represent less than 25 percent.

 

[indiatester]

Is this a proper default? I mean its only Rs232 billion. Thats like $2.50 billion.
If its just $2.5 billion, I'm pretty sure GoP could have made an alternative arrangement like part payment and some debt restructuring instead of staring down a Sovereign Debt Default. Or some bonds could have been issued to tide over the crisis temporarily or gold could have been used as a collateral.
I have a small doubt that someone is blowing it out of proportion.

 

[lem34]

Hey, Aryan_B, remember that thread you started that claimed if the US defaulted on a debt we would collapse into chaos and eat each other in the street?

Pakistan's currency is not the reserve currency we do not have the luxury that America has in that they can just turn on the presses. But do not worry there will come a time in the not too distant future when you wont and then you will have to camp at my place lol.

As far as Pakistan is concerned our corrupt leaders know exactly how far they can go and will not allow a full on sovn default. They just take the pi$$

It is interesting you say that, but do we have definitive proof that Imran Khan will win in 2013 after all? There is an opinion poll on on this forum and many seem to think so. But this barely makes up a tenth of the percent of people who will be casting their votes next year. I saw a video that Zakii had posted showing PTI was in the majority in KP, but it also showed PPP with more than 40% predicted (in Islamabad I think). How can this be explained, and if true, what chances that the same people might not return to power?

Some on here are being naive if they think Imran will be a saviour. No one person can be relied on. Look at how excited some were when Obama got elected. I am sure Imran's heart is in the right place and I wish him well but some of our people ar expecting too much of him

 

[illusion8]

Is this a proper default? I mean its only Rs232 billion. Thats like $2.50 billion.
If its just $2.5 billion, I'm pretty sure GoP could have made an alternative arrangement like part payment and some debt restructuring instead of staring down a Sovereign Debt Default. Or some bonds could have been issued to tide over the crisis temporarily or gold could have been used as a collateral.
I have a small doubt that someone is blowing it out of proportion.

Depends on the duration these non payments have been accumulating from? what is Pakistan's energy bill per annum?

 

[indiatester]

Depends on the duration these non payments have been accumulating from? what is Pakistan's energy bill per annum?

From what I read, the total amount due was Rs232 billion which I feel is not so big that Pakistan cannot afford.

 

[illusion8]

From what I read, the total amount due was Rs232 billion which I feel is not so big that Pakistan cannot afford.

These nine IPPs started operations in 2004 and their total receivables amount to almost Rs232 billion.

The dues have accumulated over the years.

Despite clearing payment backlog in two attempts, the government has been unable to resolve the circular debt in the energy sector in the last four years. While the government is reluctant to disclose the exact size of the circular debt, some estimates suggest it is above Rs400 billion.

local banks have an exposure of Rs120 billion to the power sector and the default may also affect their balance sheets.

The IPP advisory committee said that some other power producers, currently operating under the 1994 policy, may also invoke sovereign guarantees.

Its a circular debt, eating into the capital of the power generators resulting in the shortage of power production faced by Pakistan currently.

 

[Al Bhatti]

Lets have a think - this is a little of what Zardari has amalgamated as his personal wealth - where has it come from??

ZARDARI’S LOCAL ASSETS

1. Plot no. 121, Phase VIII, DHA Karachi.

2. Agricultural land situated in Deh Dali Wadi, Taluka, Tando Allah Yar.

3. Agricultural property located in Deh Tahooki Taluka, District Hyderabad measuring 65.15 acres.

4. Agricultural land falling in Deh 76-Nusrat, Taluka, District Nawabshah measuring 827.14 acres

5. Agricultural land situated in Deh 76-Nusrat, Taluka, District Nawabshah measuring 293.18 acres

6. Residential plot No 3 (Now House) Block No B-I, City Survey No 2268 Ward-A Nawabshah

7. Huma Heights (Asif Apartments) 133, Depot Lines, Commissariat Road, Karachi

8. Trade Tower Building 3/CL/V Abdullah Haroon Road, Karachi

9. House No 8, St 9, F-8/2, Islamabad

10. Agricultural land in Deh 42 Dad Taluka/ District Nawabshah

11. Agricultural land in Deh 51 Dad Taluka Distt Nawabshah

12. Plot No 3 & 4 Sikni (residential) Near Housing Society Ltd. Nawabshah

13. CafT Sheraz (C.S No.. 2231/2 & 2231/3) Nawabshah

14. Agricultural land in Deh 23-Deh Taluka & District Nawabshah

15. Agricultural property in Deh 72-A, Nusrat Taluka, Nawabshah

16. Agricultural land in Deh 76-Nusrat Taluka, Nawabshah

17. Plot No. A/136 Survey No 2346 Ward A Government Employee’s Cooperative Housing Society Ltd, Nawabshah

18. Agricultural land in Deh Jaryoon Taluka Tando Allah Yar, Distt. Hyderabad

19. Agricultural land in Deh Aroro Taluka Tando Allah Yar, Distt. Hyderabad

20. Agricultural land in Deh Nondani Taluka Tando Allah Yar, Distt. Hyderabad

21. Agricultural land in Deh Lotko Taluka Tando Allah Yar, Distt. Hyderabad

22. Agricultural land in Deh Jhol Taluka Tando Allah Yar, Distt. Hyderabad

23. Agricultural land in Deh Kandari Taluka Tando Allah Yar, Distt. Hyderabad

24. Agricultural land in Deh Deghi Taluka Tando Mohammad Khan

25. Agricultural land in Deh Rahooki Taluka, Hyderabad

26. Property in Deh Charo Taluka, Badin

27. Agricultural property in Deh Dali Wadi Taluka, Hyderabad

28. Five acres prime land allotted by DG KDA in 1995/96

29. 4,000 kanals on Simli Dam

30. 80 acres of land at Hawkes Bay

31. 13 acres of land at Maj Gulradi (KPT Land)

32. One acre plot, GCI, Clifton

33. One acre of land, State Life (International Center, Sadar)

34. FEBCs worth Rs. 4 million

SHARES IN SUGAR MILLS INCLUDE

1. Sakrand Sugar Mills Nawabshah

2. Ansari Sugar

3. Mills Hyderabad

4. Mirza Sugar Mills Badin

5. Pangrio Sugar Mills Thatta

6. Bachani Sugar Mills Sanghar

FRONT COMPANIES IN FOREIGN COUNTRIES

1. Bomer Fiannce Inc, British Virgin Islands

2. Mariston Securities Inc, British Virgin Islands

3. Marleton Business S A, British Virgin Islands

4. Capricorn Trading S A, British Virgin Islands

5. Fagarita Consulting INc, British Virgin Islands

6. Marvil Associated Inc, British Virgin Islands

7. Pawnbury Finance Ltd, British Virgin Islands

8. Oxton Trading Limited, British Virgin Islands

9. Brinslen Invest S A, British Virgin Islands

10. Chimitex Holding S A, British Virgin Islands

11. Elkins Holding S A, British Virgin Islands

12. Minister Invest Ltd, British Virgin Islands

13. Silvernut Investment Inc, British Virgin Islands

14. Tacolen Investment Ltd, British Virgin Islands

15. Marlcrdon Invest S A, British Virgin Islands

16. Dustan Trading Inc, British Virgin Islands

17. Reconstruction and Development Finance Inc, British Virgin Islands

18. Nassam Alexander Inc.

19. Westminster Securities Inc.

20. Laptworth Investment Inc 202, Saint Martin Drive, West Jacksonville

21. Intra Foods Inc. 3376, Lomrel Grove, Jacksonville, Florida

22. Dynatel Trading Co, Florida

23. A..S Realty Inc. Palm Beach Gardens Florida

24. Bon Voyage Travel Consultancy Inc, Florida

ZARDARI’S PROPERTIES IN UK

1. 355 acre Rockwood Estate, Surrey (Now stands admitted)

2. Flat 6, 11 Queensgate Terrace, London SW7

3. 26 Palace Mansions, Hammersmith Road, London W14

4. 27 Pont Street, London, SW1

5. 20 Wilton Crescent, London SW1

6. 23 Lord Chancellor Walk, Coombe Hill, Kingston, Surrey

7. The Mansion, Warren Lane, West Hampstead, London

8. A flat at Queensgate Terrace, London

9. Houses at Hammersmith Road, Wilton Crescent, Kingston and in Hampstead.

ZARDARI’S PROPERTIES IN BELGIUM

1. 12-3 Boulevard De-Nieuport, 1000, Brussels, (Building containing 4 shops and 2 large apartments)

2. Chausee De-Mons, 1670, Brussels

ZARDARI’S PROPERTIES IN FRANCE

1. La Manoir De La Reine Blanche and property in Cannes

ZARDARI’S PROPERTIES IN USA, in the name of Asif Zardari and managed by Shimmy Qureshi, are:

1. Stud farm in Texas

2. Wellington Club East, West Palm Beach

3. 12165 West Forest Hills, Florida

4. Escue Farm 13,524 India Mound, West Palm Beach

5. 3,220 Santa Barbara Drive, Wellington Florida

6. 13,254 Polo Club Road, West Palm Beach Florida

7. 3,000 North Ocean Drive, Singer Islands, Florida

8. 525 South Flager Driver, West Palm Beach, Florida

9. Holiday Inn Houston Owned by Asif Ali Zardari, Iqbal Memon and Sadar-ud-Din Hashwani

ZARDARI’S BANK ACCOUNTS IN FOREGN COMPANIES

1. Union Bank of Switzerland (Account No. 552.343, 257.556.60Q, 433.142.60V, 216.393.60T)

2. Citibank Private Limited (SWZ) (Account No. 342034)

3. Citibank N A Dubai (Account No. 818097)

4. Barclays Bank (Suisse) (Account No. 62290209)

5. Barclays Bank (Suisse) (Account No. 62274400)

6. Banque Centrade Ormard Burrus S A

7. Banque Pache S A

8. Banque Pictet & Cie

9. Banque La Henin, Paris (Account No. 00101953552)

10. Bank Natinede Paris in Geneva (Account NO.. 563.726.9)

11. Swiss Bank Corporation

12. Chase Manhattan Bank Switzerland

13. American Express Bank Switzerland

14. Societe De Banque Swissee

15. Barclays Bank (Knightsbridge Branch) (Account No. 90991473)

16. Barclays Bank, Kingston and Chelsea Branch, (Sort Code 20-47-34135)

17. National Westminster Bank, Alwych Branch (Account No. 9683230)

18. Habib Bank (Pall Mall Branch).

19. National Westminster Bank, Barking Branch, (Account No. 28558999).

20. Habib Bank AG, Moorgate, London EC2

21. National Westminster Bank, Edgware Road, London

22. Banque Financiei E Dela Citee, Credit Suisse

23. Habib Bank AG Zurich, Switzerland

24. Pictet Et Cie, Geneva

25. Credit Agricole, Paris

26. Credit Agridolf, Branch 11, Place Brevier, 76440, Forges Les Faux

27. Credit Agricole, Branch Haute – Normandie, 76230, Boise Chillaum

Now - tell me was his father blessed and passed it onto him or is he a thieving begerath? I will let you guys decide?

I don't see Dubai there?

Surely he has taken all measures to just show only 10% of "his" actual assets

------

They got into power on a wave of "sympathy voting" along with the standard empty promises. The question is how do we move forward and turn this in our favor?

Firstly educating and making aware the a man on the street to whats happened and showing them something is going to be done about it. Mentions of honest government and perhaps IK are on the horizon?

It needs to be made clear - whoever does come into power must have the full support in the decisions taken. Strong harsh decisions need to be made and they will need patience. To change the economy from where it is could take 4 to 8 years.
The first thing i would do is accountability starting from the top. Show us where you have accrued your wealth and where the money came from - otherwise hand it over to the treasury.
Secondly stop the people like Zardari EVER having the opportunity to plunder the coffers again - and i mean STOP. Not go to exile - trial them and sentence them if found guilty.

This would be the start - then start rebuilding. International respect would immediately come when these steps were taken along with foreign investment and long term stability.
Rome wasn't built in a day - 1 step at a time.

Just think if after all this a new face (Imran Khan) comes, he will have to climb a K-2 of problems.

 

[cricketrulez]

Sovereign default: IPPs to serve fresh notices to govt for outstanding dues – The Express Tribune

Sovereign default: IPPs to serve fresh notices to govt for outstanding dues

LAHORE:*Eight Independent Power Producers (IPPs) with a combined generation capacity of 1,700 megawatts (MW) of electricity are currently producing only 700MW; as the Ministry of Water and Power is sitting on Rs18 billion provided by the Ministry of Finance for a partial payment against a sovereign default of over Rs50 billion. The advisory council had, earlier this month, filed a case against the government for defaulting on payments, but delayed proceedings upon the latter’s request. The government had asked for time till the Economic Coordination Committee (ECC) meeting scheduled on May 15.*
The ECC had approved an immediate payment of Rs18.54 billion to the IPPs. It additionally issued guidelines to the National Electric Power Regulatory Authority for enhancing the pool of funds used to make payments to IPPs, in order that they may be able to purchase fuel and keep in operation. Lastly, it also recommended the addition of some clauses to the agreements signed with IPPs. Unfortunately, none of these decisions has been implemented so far, much to the annoyance of the IPPs’ Advisory Council.
“IPPs are currently not legally-bound to supply electricity to the government, as the government has defaulted on its sovereign guarantee and is still hesitant to clear dues,” IPPs’ Advisory Council Chairman Abdullah Yousaf has said.
“We are managing to operate IPPs from daily payments received from the government, but this practice has reduced generation capacity by up to 50%. If the situation persists, we will not be able to resume operations.”
“We will wait another week from now: if the government is able to clear dues, then it will be ok for us. Otherwise we, the eight IPPs, will serve another legal notice to the government,” Yousaf warned. “Although we held a couple of meetings with ministry officials, nothing has been done yet,” he said.
It has been learnt that the ECC had decided on plans to generate Rs82 billion for the power sector to clear dues of these eight IPPs and Pakistan State Oil. Sources in the Ministry of Water and Power reveal that the Rs18.54 billion approved in the ECC meeting can be released from the finance ministry without hassle, but some influentials are reluctant to release the amount for unknown reasons.
The IPPs face a dilemma on how to force the government to honour its sovereign guaranty. “We do not want to drag our government to international courts, as it would ruin the reputation of our country,” said an IPP manager. But he also reiterated that it was not possible for any IPP to go on producing power without receiving any payments. “We are defaulting on our lenders due to non-payments from the government. No scheduled bank is interested in financing us further for the purchase of fuel,” he complained.
He said the government first defaulted on a lump sum payment of Rs34 billion to the IPPs; then it defaulted on a further amount of Rs9 billion after all notices and formalities were completed. Notices for Rs3.5 billion in defaults by the government have also lapsed. Another further default amounting to Rs12.5 billion will be actualised on June 2.
The IP manager lamented that the government was taking these defaults lightly. He said the attitude has effectively barred foreign investors from committing their resources in Pakistan.
“How can they invest in a country where the largest defaulter is the Government of Pakistan itself?” he asked.
Published in The Express Tribune, May 31st, 2012.

 

[AbhimanyuShrivastav]

And we have Pakistani members dissing India's 6.1 % growth and talking about account deficit while their govt has started down the tube of sovereign defaults.. Talk about being clueless...

 

[SamantK]

What was the state economy before PPP came into power?

Also I would like to know since Musharraf was in bed with US and was getting good funding from US your economy was sustaining, this is a impression I have got from listening to Ahsan Iqbal, i do not know his credentials but his pov looked reasonable.. anyone?

 

[Icewolf]

@samantk

1 billion a year in aid is not likely to get 8% growth dearie. Musharaf only did his work, there's no reason to call the growth on aid. It's a major misconception with you guys.

 

[AbhimanyuShrivastav]

What was the state economy before PPP came into power?

Also I would like to know since Musharraf was in bed with US and was getting good funding from US your economy was sustaining, this is a impression I have got from listening to Ahsan Iqbal, i do not know his credentials but his pov looked reasonable.. anyone?

But you are missing out on 10% worth of double counting that probably happened during the time of Musharraf that gave an impression of economy doing well in his time

Double-counting: GDP overestimated, may be slashed by 10% – The Express Tribune

 

[Icewolf]

@Abhimanyu

Double counting happened in Zardari period. Besides, youre bringing out a Express Tribune link? B&%#* please.