Pakistan Economy - News & Updates - Archive

[Owais]

Good opportunities for local and foreign investors: Prime Minister


ISLAMABAD (September 21 2006): Prime Minister Shaukat Aziz said on Wednesday that Pakistan, being a country of 160 million people with a huge market, offers attractive investment opportunities particularly in the areas of power, energy, railways, IT & telecom and infrastructure and the government is providing a level playing field and investment friendly environment to local and foreign investors.

He was talking to Kazuhiko Sakamoto of the Marubeni Corporation, who called on him along with a delegation at the Prime Minister's House on Wednesday.

The Prime Minister said the reform agenda of the government is based on the philosophy of privatisation, deregulation and liberalisation and transparency is the hallmark of all government transactions.

He said deregulation and opening up of the IT & telecom sector resulted in big investments making it the fastest growing industry in Pakistan with 37 million cellular phone subscribers at the moment.

The Prime Minister said that as a result of the high growth achieved by the country during the last few years, the demand in power sector is increasing by 10 to 12 percent annually and the government is encouraging investment by the power sector to bridge the gap between demand and supply.

Giving overview of the economy, the Prime Minister said Pakistan's economy maintained a solid pace of expansion in 2005-2006 and achieved 6.6 percent growth despite an extraordinary surge in oil prices and the losses caused by the last year's earthquake. The magnitude of growth that Pakistan has achieved during the last four years in a row has positioned Pakistan as one of the fastest growing economies in the Asian region, he added.

The Prime Minister said the exchange rate is steady, inflation is reducing and credit rating and balance of payment situation has improved.

He said the size of the economy has doubled during the last seven years, per capita income, which is considered one of the main indicators of development, grew by an average rate of 13.9 percent per annum during the last four years rising from $582 in 2003 to $847 in 2006.

Poverty is declining and 12.8 million people were brought out of poverty net during 2002-2005.

Kazuhiko Sakamoto, Senior Executive Vice President of Marubeni Corporation appreciated the economic stability achieved by Pakistan and said they are very optimistic about Pakistan's economic future.

Kazuhiko Sakamoto said his company is planning to increase its presence in Pakistan and will invest in the areas of electricity generation and oil refineries.

The meeting was also attended among others by Minister for Water and Power Liaquat Ali Jatoi, Principal Secretary to the Prime Minister Javed Sadiq Malik and senior officials.

 

[Owais]

'Uninterrupted' power supply during Ramazan assured


KARACHI (September 21 2006): The Karachi Electric Supply Corporation (KESC) is making all out efforts for uninterrupted power supply during the holy month of Ramazan. Briefing media about the power supply situation here on Tuesday, KESC Chief Executive Officer (CEO) Frank Scherschmidt said.

"He could not predict if there would be power breakdowns during Ramazan, but I assure that every effort would be made to ensure uninterrupted power supply during the holy month."

He said the electricity supply situation in the city would definitely improve within next one year as concerted efforts were being made. KESC's Principal Officer, Public Relations Syed Sultan Hasan said the power utility had started load shedding on Tuesday due to shortfall.

At Bin Qasim Power Station (BQPS), 210MW-unit no. 5 was out of order due to shortage of generation of about 100MW, hence the KESC resorted to load shedding for one hour on rotation basis from 2.05 p. m. hours, he said. Sultan said a very low frequency was being experienced by the KESC due to problem at the Wapda's end.

The chief of National Power Control Centre (NPCC), through fax message, requested the KESC to restrict the power import from 700MW to 600MW temporarily, he said, and added because of this the load was being shed at Baldia, Orangi, Lyari, North Karachi, Mauripur, Queen's Road, SITE and Elander Road grid stations.

 

[Neo]

SINGAPORE, Sept 20: Pakistan hopes to benefit from the IMF reforms, as weightage of emerging markets and developing countries increases in the key economic surveillance agency. The focus of the Pakistani delegation, in meetings, was more on narrating the tale of economic success of the country to development partners.

Dr Salman Shah, adviser to the prime minister on finance and leader of the Pakistan delegation to the meeting, was upbeat about the outcome of the meeting. "A more sensitised IMF where the developing world is better represented will be more heedful of our needs so it gels well with our interests," he said in an interview with Dawn after the conclusion of the meeting.

He said members of delegations held a whole array of bilateral meetings with the officials of donors of the last resort. "We got a chance here to meet a number of regional partners and relevant IMF/World Bank officials to discuss issues of mutual interest," he said.

He saw the pledge of member nations to strive to put stalled Doha round of trade talks back on track as a very positive development. "Pakistan is an opening expanding economy and need access to new markets for its rising export surpluses. The current surge of protectionist tendencies poses limit to our access and therefore we favour a level-playing field in trade."

He said there was a growing need to align regional trade agreements such as Asean in Far East or Safta in South Asia with the multilateral WTO. "Ultimately it is going to be the competitiveness of a country that will determine its positioning in trading relationships."

On the issue of governance, Pakistan's delegation leader says the country favours accountability, as high level of corruption saps the country's capacity. However, he said it should be a two-way process and there should be an equal treatment towards everyone and must not be misused as a tool to pressurise capital-starved economies.

"Our objective is to sustain growth in Pakistan in long haul with stable macro economic management by supporting the competitive and efficient private sector and deliver in terms of achieving the millennium development goals," he said.

When asked as to why Pakistan did not put up the position paper on the IMF agenda when some of much smaller countries made their papers available to press, Dr Shah said the delegation was too preoccupied with its engagements and did not see the need for such a paper. Many members of the delegation, especially Dr Shamshad Akhtar, Governor, State Bank of Pakistan, gave out interviews to a number of media outfits in Singapore who were here to cover the event.

 

[Neo]

Thursday, September 21, 2006javascript:; http://www.dailytimes.com.pk/print.asp?page=2006\09\21\story_21-9-2006_pg5_11

KARACHI: Due to ongoing development projects at the Karachi Port Trust (KPT), it will soon become a regional hub and be able to cater to hassle-free movement of large vessels.

"Mother vessels calling at nearby ports after the completion of development work would give preference to Karachi port owing to its strategic location which would reduce the freight cost on cargoes resulting gross benefit to traders," said KPT Chairman Admiral Ahmad Hayat while briefing French Ambassador to Pakistan Regis de Belenet who visited the KPT head office on Wednesday. Consul-General of France Pierre Seillan was also present on the occasion.

According to a press statement issued by the KPT, briefing the ambassador about details of the development schemes at the KPT, the chairman said that deepening of the channels of the port would cater 16 meters draft vessels and for this purpose and the KPT would reconstruct its existing births in various phases to cater large vessels.

 

[Neo]

Thursday, September 21, 2006javascript:; http://www.dailytimes.com.pk/print.asp?page=2006\09\21\story_21-9-2006_pg5_2

ISLAMABAD: Marubeni Corporation Japan is planning to increase their presence in Pakistan and will invest in the areas of electricity generation and oil refineries.

A delegation of the company called on Prime Minister Shaukat Aziz here on Wednesday. He said that Pakistan being a country of 160 million people with a huge market offers attractive investment opportunities, particularly in the areas of power, energy, railways, IT & telecom and infrastructure and the government is providing a level playing field and investment-friendly environment to local and foreign investors.

Kazuhiko Sakamoto of the Marubeni Corporation led the delegation.

The prime minister said the reform agenda of the government is based on the philosophy of privatization, deregulation and liberalization and transparency is the hallmark of all government transactions.

The prime minister said deregulation and opening up of the IT & telecom sector resulted in big investments making it the fastest growing industry in Pakistan with 37 million cellular phone subscribers at the moment.

He said that as a result of the high growth achieved by the country during the last few years, the demand in power sector is increasing by 10 to 12 percent annually and the government is encouraging investment in the power sector to bridge the gap between demand and supply.

Giving an overview of the economy, the prime minister said Pakistan's economy maintained a solid pace of expansion in 2005-2006 and achieved 6.6% growth despite an extraordinary surge in oil prices and the losses caused by the last year's earthquake. The magnitude of growth that Pakistan has achieved during the last four years in a row has positioned Pakistan as one of the fastest growing economies in the Asian region.

The prime minister said the exchange rate is steady, inflation is coming down and credit rating and balance of payment situation has improved.

He said the size of the economy has doubled during the last seven years. Per capita income, which is considered one of the main indicators of development, grew by an average rate of 13.9% per annum during the last four years rising from $582 in 2003 to $847 in 2006. Poverty is declining.

Kazuhiko Sakamoto, Senior Executive Vice-President of Marubeni Corporation, praised the economic stability achieved by Pakistan and said they are very optimistic about Pakistan's economic future. He said his company is planning to increase their presence in Pakistan and will invest in the areas of electricity generation and oil refineries.

The meeting was also attended, among others, by Minister for Water and Power Liaquat Ali Jatoi, Principal Secretary to the Prime Minister Javed Sadiq Malik and senior officials.

The Japanese company has shown keen interest in four thermal power projects, including 450MW Uch-II power project at Kashmore, 400MW at Faisalabad and 350MW at Chichokimalian being processed through International Competitive Bidding (ICB) by the Private Power Infrastructure Board (PPIB).

Another project, 450MW thermal power plant, is at Chichokimalian.

The intention to participate in tenders was expressed by a six-member Japanese business delegation, headed by Kazuhiko Sakamoto, Sr Executive Vice-President of Marubeni Corporation, at a meeting with Pakistani delegation, led by Federal Minister for Water and Power Liaquat Ali Jatoi, here on Wednesday.

The company said it has successfully implemented and executed a number of power projects the world over in a span of three decades and is interested in investing handsome capital in the power sector in Pakistan. As of today, the company has completed EPC projects with an aggregate capacity of about 69,000 MW, and is currently constructing 20 power plant projects around the world. The company is also interested in increasing its exports of electrical equipment such as generators, turbines and other machinery to Pakistan. The company had participated in the ICB for three thermal power projects and is confident to give a competitive and responsive bid, it was further informed.

While welcoming the Japanese delegation, the water and power minister informed about the simplified procedure made by the government under the directions of the president and the prime minister for facilitating foreign investment in Pakistan, particularly in power sector. The delegation was further informed that a flexible regime for foreign investment exists in the country and no procedural problem would impede them from investing in power sector which would provide a win-win situation to the investors.

The minister apprised the delegation that the power sector in Pakistan had a great potential and viable future for making profitable investment as the growing demand for power has been registered at 10-12 percent. The minister said that Pakistan has very old and cordial economic relations with Japan and the visit of the delegation to Pakistan would further boost the trade and economic cooperation between the two countries.

The leader of the Japanese delegation expressed satisfaction with the economic situation of Pakistan and apprised the Pakistani side that the Japanese company had a vast experience in the power sector.

The minister assured the delegation of his full support to facilitate the company in investing in the power sector and invited the company to participate in the ICB of other power projects.

 

[Owais]

Pakistan's strategic oil reserves insufficient: World Bank



ISLAMABAD (September 22 2006): The World Bank has termed Pakistan's strategic oil storage capacity insufficient to ensure its energy security and proposed to build it up to an optimal level to cater to defence and other needs.

The bank also suggested Pakistan to make a distinction between oil marketing companies (OMCs), commercial inventories and strategic stocks to make a difference between its various needs and ensure supply during any unforeseen event.

Sources said the issue was raised by a World Bank mission during its meetings with policy-makers in Islamabad. The mission headed by Mrs M. Heitner had visited Islamabad from September 4 to 15.

The mission proposed in order to develop a framework for strategic oil stocks, detailed analysis followed by feasibility studies should be carried out. The mission has drafted Terms of Reference (ToR) to define a framework responsive to Pakistan's environment and priorities.

The mission noted strategic stocks of crude oil and petroleum products provide a cushion against unforeseen events and are vital for energy security of any country.

It added the level of strategic stocks (different from commercial inventories of oil marketing companies (OMCs)) is a function of proximity to supply sources, pattern of consumption of different products, availability of transport infrastructure and defence needs. In Europe and North America, average strategic stocks are equal to about 90 days of consumption, while it is 60 days in the UK.

The mission maintained in Pakistan there was no distinction between commercial inventories and strategic stocks and its total cover varies between 21-28 days of consumption for different products. Under the current international oil market volatility, and other security concerns, strategic stocks have assumed an even greater importance.

The mission was of the view Pakistan needs to address the issue of strategic oil stocks from several viewpoints: (a) commercial considerations (product-wise demand in different market segments, proximity of supply sources to the market, cost of foregone demand); (b) financial implications (capital and operating cost, cost of dead inventory, financial levy on the consumer, etc); (c) technical issues (recycling/refreshing of stocks, volumetric losses, etc); (d) institutional set-up, ie, ownership of the 'strategic stocks entity' and sharing of risks and rewards; and (e) legal and regulatory issues.

It arguments were that different countries adopt different strategies for oil reserves handling. Usually, the mission said industry involvement is highly desirable given the necessity to recycle stocks from time to time. Hence, they have to be up to industry standards.

 

[Owais]

$30.97 million cargo contracts for DAP imports cancelled


KARACHI (September 22 2006): Importers of DAP fertiliser are in a fix as their three import cargo contracts worth around $30.97 million have been cancelled due to uncertainty regarding subsidy announcement on DAP imports by the government, sources said.

Sources said approximately three months back, the federal government had announced to give subsidy on DAP import after getting approval from the economic co-ordination committee (ECC) of the cabinet; however, the decision has not been implemented yet.

"The ECC had decided to give subsidy of Rs 285 per 50 kilogram bag on imported DAP fertiliser. However, the said decision has not been implemented yet," industry sources said.

"Importers had made contracts of around 105,000MT of DAP fertiliser at an average cost of $295 per MT and they were in the process of opening up LCs. However, banks refused to open up LCs as the subsidy issue was not resolved till that time," sources said. They said banks were of the view the government has not yet allowed to give subsidy on DAP imports and they could not provide guarantees to any importer till the matter gets resolved.

Highlighting contract details, sources said cancelled contracts were made in the United States for shipment in September and the booked fertiliser was due to arrive here in October. "The fertiliser was booked for Rabi crop season as farmers usually start sowing wheat during this season (from October onwards)," they remarked.

Industry sources maintained if the government allows subsidy on DAP imports now, local importers would see viability of the trade and if find DAP prices higher in the international market, they would not go for more imports. "The government's decision of not clarifying subsidy issue could put an adverse effect on wheat sowing this year," they estimated.

They said 0.5 million MT stocks of phosphatic fertiliser is in the importers' and manufacturers' hand, however, the country would need 0.7 million MT of fertiliser during Rabi season for wheat sowing, and currently it depicts a shortage of 0.2 million MT.

Trade sources have pointed out imports of DAP fertiliser have almost come to a halt as the end-consumer are reluctant to procure fertiliser in anticipation of steep decline in DAP prices in the days to come. "Farmers and our distributors have refused to procure and sell DAP fertiliser as they are anticipation implementation of the decision regarding subsidy, which would bring down its prices in the domestic market," sources elaborated.

Underlining the situation of current DAP imports, they said, "the import process has badly hit due to confusion over subsidy and this could be gauged from the fact that only 65,000 MT of DAP fertiliser is on the way for Rabi crop compared to 0.3 million MT, which was imported during the corresponding period last year.

In this connection it is pertinent to mention here that country's annual consumption of DAP fertiliser currently stands at 1.2 million MT, of which 0.3 million MT is produced locally by Fauji Fertiliser Bin Qasim while the remaining gap is to be met through imports mainly from the United States, Russia, China, Australia and Tunisia.

 

[Owais]

Non-food inflation declines to 7.4 percent


KARACHI (September 22 2006): Non-food inflation has declined to 7.4 percent in August 2006 from 8.8 percent in the corresponding period last year, according to the State Bank's monthly publication 'Inflation Monitor', released on its website here on Thursday.

However, the headline inflation increased in the second month of the current fiscal year primarily due to an upsurge in food inflation coming from supply disturbances on the back of recent rains and floods that not only affected production, but also transportation of commodities from farm and mills to the markets.

Consumer price inflation has been recorded at 8.9 percent YoY in August 2006 compared with 8.4 percent in the same month last year. Food inflation has been registered at 11.1 percent - the highest of the last 13 months.

After being recorded at less than 7 percent on average during FY06, food inflation increased significantly to 11 percent YoY in August 2006, driven mainly by increase in prices of wheat flour, bread, cooking oil and ghee, chicken, eggs and vegetables, including onion, tomatoes, and green chillies along with persistent pressure on prices of some pulses.

Contrary to food inflation, non-food inflation declined from 8.8 percent in August 2005 to 7.4 percent in the month under review primarily due to decline in inflation of transport and communication sub-index and continued deceleration in house rent index, says the Inflation Monitor.

Core inflation measured as non-food and non-energy declined from 6.3 percent in July to 6.2 percent in August 2006, while trimmed mean core inflation showed an increase from 6 percent at the end of FY06 to 6.5 percent in August 2006. The rise in trimmed mean core inflation is due to some key food and energy items, having very high weight and high inflation, like fresh milk, beef, mutton, potatoes and petrol supper. Thus, the recent inflation has primary been coming from supply factors, while the demand factors still remained under control with the deceleration in money and credit growth during the initial months of FY07 and rise in interest rates.

Wages of construction workers showed a deceleration due to temporary slowdown in the construction work because of rains during the month under review. Wage inflation has been recorded at 15.9 percent in August 2006 compared with 17 percent in the preceding month. However, it was higher than that recorded in the corresponding month last year.

On the dis-aggregated level, wages of skilled workers increased by 15.7 percent, and those of labourers by 16.9 percent, which were lower as compared with July. As the nominal wages decelerated and CPI inflation increased, real wage inflation went down significantly and recorded at 6.9 percent in August 2006 compared with a higher rate of 9.4 percent during a month earlier, according to the Inflation Monitor.-PR

 

[Owais]

US companies evince great interest in energy sector


NEW YORK (September 22 2006): President Pervez Musharraf has said discussions with US companies on investment in energy sector in Pakistan are in various stages and concrete proposals are likely to be formulated in the near future.

Addressing a crowded press conference at the United Nations headquarters on Wednesday, President Musharraf said he would be going back to Pakistan with optimism as major companies in different sectors had shown interest in investment in Pakistan.

"They have shown great interest in energy sector and I am optimistic of better response," he added. The President said economic growth of Pakistan had attracted them and some of the potential investors were in different stages of discussion with "us" on investment proposals. He said that as far as investments from the United States were concerned, they were flowing to Pakistan regularly.

To a question, the President said that he wanted to develop consensus on the Women Empowerment Bill before pushing it through parliament. There should be no misunderstanding that the government had yielded to pressure rather it had adopted a reconciliatory attitude, he added.

He said that many previous governments could not dare take up the bill, and added: "Even the woman prime minister could not touch it." President Musharraf said taking up such issues where two groups, liberals and obscurantist, were dagger drawn with each other and one wanted us to repeal the Hudood Ordinance altogether or it would come on the streets and protest.

Those who favoured the existing Ordinance had said if the bill was adopted, they would stage protest, he said. "It is me who could take the initiative and come up with the proposal to bring about improvement through the Women Empowerment Bill. And please do not forget, I could do so only because I am in uniform."

He said he wanted consensus to develop on this bill. "I do not want political disruption on any issue. We do not want political turmoil."

PALESTINE ISSUE The President said that Palestine issue is the core of problems. Once this issue is settled, much of the peace process would succeed and normalcy would return. "It will have positive effect elsewhere as well," he said.

He said that double standards were dividing the world into factions. "There is a perception that the United States of America is siding and favouring Israel. Unless the Palestinian issue is resolved, there would be no peace in the Middle East," he said.

Muslims World would continue to protest and doubt the American approach toward the Middle East issue, he said, adding they thought the American approach was in favour of Israel.

To another question, the President said that Afghan President Karzai should find out Mullah Omer in Afghanistan as he had never been to Pakistan since 1995.

President Musharraf said that blame game should now come to an end and there should be realisation of ground realities.

He said that the agreement "we have entered into with the elders of North Waziristan should not be misinterpreted. The agreement is not with the Taliban," he said with emphasis.

The President explained in detail the Afghan situation, Taliban factor and terrorism, and said that the situation was complex and needed multifaceted solutions.

"We are doing it through an agreement of peace with the elders of the tribal belt bordering Afghanistan. If this succeeds, it may be replicated on the other side of the border," he said. To yet another question, the President said relations with India were improving and there was room for more good work.

He said that there was a desire to find out a viable solution to Kashmir issue, acceptable to Kashmiris, India and Pakistan. "India does not want redefining of the border and Pakistan is sticking to its stand that the Line of Control (LoC) is not final."

The President said the realisation of irritants was a positive sign and it brought hope. "With right amount of will, a solution is possible," he added.

President General Pervez Musharraf has said there is consensus that the United Nations Security Council's composition should be enlarged and made more representative of "current realities".

He was speaking at a dinner meeting co-hosted by the President of Pakistan and the Prime Minister of Italy for an exchange of views to promote agreement on Security Council Reform-Ideas for a way forward at Roosevelt Hotel on Wednesday.

President Musharraf said: "Perhaps an equitable formula for rotation could offer the answer-perhaps regional representation combined with rotation could offer the answer."

He said current realities are complex. "Certainly it involves greater representation for some major states." In this context, the African proposal for regional seats for Africa, selected by Africa, is an interesting approach. This may be worthy of emulation with suitable adjustment for other regions also, he added.

He said but there are some other actors, including the middle-sized states whose aspiration also needs to be accommodated and hasten to add the smaller states constitute the vast majority of UN membership and they, too, have an important contribution to make to the working of the Security Council.

He said: "We will have to accommodate as far as possible the interest of all."

Therefore, there is a need to explore ways and means to promote frequent representation for larger, middle-sized and smaller states.

President Musharraf said the reform of the Security Council's working methods-making it more transparent, accountable and effective-is equally important. He said for smaller states, in particular, this aspect of reform of the council may well be more important than its composition.

He said several interesting proposals are on the table. "We need to find agreement on these in the context of a comprehensive reform of the Security Council." He said Italy, Pakistan, and other like-minded countries are convinced that the reforms of the Security Council, to be effective, will have to be achieved by the widest possible agreement. "This will, among other things, ensure early ratification of a charter amendment."

He said over the last decade, we have discussed and debated Security Council reforms. "We have not explored compromises through sustained negotiations. Once, there is a genuine desire to compromise, to build widest possible agreement, I believe, all countries could explore more freely the possible options for an agreed solution."

He said Prime Minister Prodi and he, together with other like-minded countries, extended the invitation to this event (dinner meeting at Roosevelt) to all UN member states to underline our commitment to explore, with political flexibility and diplomatic creativity, and through a negotiation process, possible options for a solution to Security Council reform that can command the widest possible agreement.

He said, "We believe that, today, when the Council's role is central to the maintenance of international peace and security, it is incumbent upon member states to make a serious and sincere endeavour to achieve an early general agreement on this vital issue." In his remarks, Secretary General Kofi Anan said the world has changed dramatically since 1945 and the Security Council must change too.

He said without an expansion of its power base, it's hard to see how we are going to go on meeting the demands that member states make on us, particularly in the area of peacekeeping.

He said rising troops for peacekeeping is far from being the only problem. "The Council also needs greater political participation of all regions if it is to be accepted as fully legitimate by all-as it must be, in order to address major challenges to the Middle East peace process, and in Iran, Iraq, Sudan, Afghanistan, and many corners of my own continent." He said while everyone agrees on the need for expansion of the Security Council, there is still no agreement on how to do it.

Later, addressing a joint press conference after the dinner Musharraf and Italian Prime Minister Romano Prodi said it is the beginning of process and ideas are being gathered. More such meetings would follow to develop consensus on reforms procedure.

President General Pervez Musharraf received US Vice-President Dick Cheney, Defence Secretary Donald Rumsfeld, Commerce Secretary Carlos Gutierrez and Energy Secretary Samuel Bodman at Blair House Thursday morning and discussed matters of mutual interests.

It is learnt, the President discussed civilian nuclear needs of Pakistan and the extent of co-operation in related technical matter, defence affairs and energy requirements with Cheney, Rumsfeld and Bodman. He also discussed matters related to trade and commerce and business co-operation between the businessmen of the two countries with Gutierrez.

Sources said the meeting with the Vice-President and three secretaries of states was fruitful and they have assured Pakistan of their fullest co-operation in achieving its goal in related sectors.

APP adds: United States Secretary of State Condoleezza Rice called on President General Pervez Musharraf here on Wednesday. They discussed US-Pakistan relations and exchanged views on regional and international issues of common interest during the meeting. Foreign Minister Khurshid M Kasuri was also present.

President Pervez Musharraf paid high tributes to United Nation Secretary General Kofi Annan, who leaves his post at the end of this year after completing two five-year terms. In his opening remarks at a press conference, the President said that Annan was a "pillar of hope in the turbulent decade of the 90s" who worked hard to move the UN forward and to bring peace and harmony in the world. "We wish him well in future," he said.

 

[Owais]

Government considering allowing used power plants


ISLAMABAD (September 22 2006): The federal government is considering allowing the use of refurbished thermal power plants to meet future power requirements provided that the National Electric Power Regulatory Authority (Nepra) clears the proposal, official sources told Business Recorder here on Thursday.

Two private sector firms, the Glimmer (Pvt) Limited and the Associated Group, have come forward to set up thermal power plants of 150 MW and 400 MW, respectively, using refurbished and used equipment. "The Glimmer's plant which has already been used for 10,000 hours can be commissioned by October 2008 provided that all formalities are completed by December 2006," the sources added.

The water and power ministry is of the view that proposal is attractive, but the Power Policy - 2002 does not allow the use of refurbished and used equipment, adding that the proposal has been forwarded to Nepra to fix initial cost of used plant.

Another company, the Associated Group has also proposed setting up a 400 MW thermal power plant based on imported natural gas with refurbished equipment near Karachi, after a go-ahead signal of the regulator, the sources maintained. Sources also said that most of the proposed fast track projects have been withdrawn by the leading business houses due to non-availability of gas or controversial tariff given by Nepra.

Only Taiyo Hills has submitted a detailed proposal for a 120 MW project at Eminabad near Gujrwanwala and the sponsors have finalised the site of project in consultation with the Water and Power Development Authority (Wapda), the sources added.

The firm has not only confirmed on-site delivery of Caterpillar engines by January 2008, but also commissioning by June 2008, besides, providing financial strengths to implement the proposed project and accepting Nepra's upfront tariff.

Sources said recently the PPIB has received ten new expression of interests (EoIs) with a cumulative capacity of 2,000 MW and the sponsors have been asked to approach power purchase (National Transmission and Dispatch Company (NTDC) for the endorsement of size, technology, and exact location of their proposed projects.

The sponsors have also been asked to examine the draft project agreements uploaded by the PPIB on its website and the upfront tariff before submission of the detailed proposals to the government.

The proposed projects are: Taiyo Hills, 120 MW (Eminabad), Gulf Power, 129 MW (Gakkhar Mandi), Wisdom & Cecex, 117 MW (Lahore), Kohinoor Maple Leaf, 200 MW (Lahore/Gujranwala), Gharibwal Cement, 150 MW (Chakwal), Jabbar Utilities Limited, 400 MW (not indentified), Bestway Group, 200 MW (Rawat near Rawalpindi), and Universal Power, 150 MW (Lahore).

 

[Owais]

Foreigners invited to invest in Hyderabad


HYDERABAD (September 22 2006): The Zila Nazim Hyderabad Kanwar Naveed Jamil has invited foreign investors for their investment in Hyderabad and said that Hyderabad has good potential for the investment in industrial as well as agriculture sector.

He said this while holding a meeting with the Ambassador of France to Pakistan Regis De-Belenet and Consul General of France at Karachi Pierre Seillan at Circuit House Hyderabad this morning.

The Zila Naib Nazim Hyderabad. Zaffar Rajput, MPA Aslam Perwaiz, DCO Hyderabad Muhammad Hussain Syed and Vice Chairman Hyderabad SITE Association of Trade and Industries Mohammad Shoaib were present in the meeting.

Zila Nazim Hyderabad Kanwar Naveed said Hyderabad was the second largest city of the province and was rapidly expending due to its industrial potential and population influx. He said that considering standard infrastructure as essential for investment and living standard of people, the district government Hyderabad has prepared a Master Plan on the basis of needs up to 2025. He said that this master plan of development was being implemented and different mega-projects especially pertaining to drainage and communication field have been tendered. He said that after the completion of all projects of master plan, the situation of Hyderabad city would be much better in all respects.

He said that under the Master Plan drainage and communication was being given priority, besides district government Hyderabad has also planned to establish a five star hotel in the city and added that it was good opportunity for the investment by French investors. The Zila Nazim also invited the foreign diplomat for establishing French Art Centre and French language learning centre at Hyderabad. While briefing the diplomats about recent torrential rain fall in Hyderabad, the Zila Nazim informed them that his district falls in low rain zone with receiving 2" rain fall usual but unfortunately this year we received up to 18" rain fall against all expectation and previous record. He said that though this situation was beyond the capacity of concerned department but we successfully faced it with courage as such up to 99 percent rain water has been drained out and now the situation was totally under control.

Zila Nazim said that though preservation of historical places and monuments was the job of Federal Government but due to our interest, the district government Hyderabad have evolved joint mechanism and also has earmarked Rs 30 million for the preservation of historical places and monuments of Hyderabad.

The ambassador of France to Pakistan talking on the occasion said many companies of his country were already investing in Pakistan in different sectors. He said that they were also interested in the hotel industry but due to high land rates in big cities of Pakistan they were facing problems. He said that his country was also providing higher education facilities to Pakistani students as such there was considerable number of students studying for their higher education in France.

 

[Owais]

Trade talks: Lamy seeks Pakistan's help in breaking deadlock

ISLAMABAD (September 22 2006): The Director General World Trade Organisation (WTO), Pascal Lamy, has sought the help of Commerce Minister Humayun Akhtar Khan to break the deadlock in talks among the member states.

Lamy placed this request to Humayun Akhtar at a meeting in Australia, where he is attending the meeting of Cairns Group, comprising 17 countries and have sound voice in trade negotiations. The Cairns Group of agricultural exporting nations, which account for over 25 percent of the world's agricultural exports, celebrates 20 years of concentrated efforts to liberalise trade in agriculture.

The meeting brought together trade ministers, officials and farm industry bodies from all the Cairns Group countries Argentina, Australia, Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Guatemala, Indonesia, Malaysia, New Zeeland, Pakistan, Paraguay, the Philippines, South Africa, Thailand and Uruguay.

As the first significant gathering of ministers since the suspension of the WTO Doha round of negotiations, the Cairns Group Ministerial Meeting provided a useful opportunity to discuss how to receive global trade talks.

During the current Doha negotiations the Cairns Group has continued to push for the liberalisation of trade in agricultural exports, a cause that unites the group across language, cultural and geographic boundaries, made up of developed and developing countries across five continents. The group is committed to achieving free and fair trade in agriculture that provides real and sustainable benefits for the developing world.

 

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ISLAMABAD, Sept 21: Pakistan and the United States have agreed to move forward for early finalisation of reconstruction opportunity zones (ROZs) and Bilateral Investment Treaty (BIT).

“Both Pakistan's Commerce Minister Humayun Akhtar Khan and US Trade Representative Susan Shawab have showed their resolve to move forward on the ROZs and BIT in a positive manner,” said an official announcement issued here on Thursday by the commerce ministry.

The commerce minister met the US trade representative at the sidelines of the Cairns group meeting held in Australia. Trade ministers and representatives of 17 other than Cairns Group countries are attending the meeting to kick-start the stalled negotiation on Doha Development Agenda (DDA).

The meeting provided a useful opportunity to discuss how to receive global trade talks. During the current Doha negotiations, the Cairns Group has continued to push for the liberalisation of trade in agricultural exports.

The commerce minister also held bilateral meetings with WTO director general Pascal Lamy and New Zeland Trade Minister Phil Goff.

The WTO DG asked Mr Khan to play his role as a lead mediator to break the dead lock in talks.

The Cairns Group include countries Argentina, Australia, Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Guatemala, Indonesia Malaysia, New Zeeland, Pakistan, Paraguay, the Philippines, South Africa, Thailand and Uruguay.

 

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ISLAMABAD, Sept 21: Pakistan ranks 95th among 127 countries in terms of economic freedom, mainly due to an ineffective implementation of legal system, security of Property Rights and access to sound money.

Pakistan even stands behind many under-developed and developing countries such as Madagascar, Senegal, Uganda and some African countries, says Economic Freedom of the World--2006 annul report.

The report, a copy of which was made available to Dawn, indicated that among the South Asian countries India had the highest ranking of 53 followed by Sri Lanka and Bangladesh standing at 83 and 95, respectively. The Nepal has the worst ranking of 118 in the region.

Pakistan, according to the report, has the worst ranking in legal structure and security of Property Rights (119); as against India’s rank of 44, suggesting clearly the need for independent judiciary, availability of a trusted legal framework for private businesses to challenge the legality of government actions, protection of Intellectual Property Rights and non-military interference in the rule of law and political process.

Similarly, Pakistan has the most horrible rank of 117 in access to sound money, thus proposing that to earn a high rating in this area, it must follow policies and adopt institutions that lead to low and stable rates of inflation and avoid regulations that limit the use of alternative currencies, should the citizens want to use them.

Despite opening up the international trade unilaterally, Pakistan still has a long way to go as indicated by its rank of 106 under the freedom to trade internationally. This showed that Pakistan’s trade faced a wide variety of restraints like high tariffs, quotas, hidden administrative restraints, exchange rates and capital controls.

The report suggested that for achieving a higher rating in this area, a country must have low tariffs, a trade sector larger than expected, efficient administration of customs, a freely convertible currency and few controls on the movement of capital.

Pakistan has a better rank in credit market regulation (61), labour market regulations (10), among the South Asian countries. However, the report recommended for an effective private banking system to allocate credit to private parties and to refrain from controlling interest rates to receive higher rating for this component of the regulatory area.

Moreover, Pakistan should allow market forces to determine wages and establish the conditions for dismissal of workers, avoid excessive unemployment benefits — that undermine work incentives — and refrain from the use of conscription.

However, in terms of business regulations, Pakistan ranks 88. This showed high restraints and bureaucratic procedures that retard entry into business, which lead to high cost of doing business.

The report recommends that countries like Pakistan must allow markets to determine prices and refrain from regulatory activities that retard entry into business and increase the cost of manufacturing products. They also must refrain from playing favourites, that is, from using their power to extract financial payments and reward some businesses at the expense of others.

According to the report, Hong Kong and Singapore occupy the top two positions. The other nations in the top 10 countries are: New Zealand, Switzerland, United States, Ireland, United Kingdom, Canada, and Luxembourg.

 

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Friday, September 22, 2006javascript:; http://www.dailytimes.com.pk/print.asp?page=2006\09\22\story_22-9-2006_pg5_1

ISLAMABAD: Pakistan and Iran have agreed to a proposal relating to passenger and commercial cargo carriage by private shipping lines between Iranian port of Chabahar and Pakistani port Gwadar, a senior government official told the Daily Times on Thursday.

Both countries have agreed to constitute a study group of experts to investigate the economic feasibility of establishing a joint venture between Iranian and Pakistani private sectors, in coordination with the respective government authorities. In this regard both countries have also agreed to nominate their representatives on the proposed study group through diplomatic channels within three months, the official added.

This consensus was reached at the first meeting of Joint Committee on Port-Maritime Cooperation between Pakistan and Iran held at Tehran. The meeting was arranged in pursuance of a MoU signed at the 14th session of the Pakistan Iran Joint Economic Commission in year 2005.

Keeping in view the interest of both sides to broaden cooperation regarding passenger and commercial cargo carriage between Pakistani and Iranian ports these proposals were discussed at the meeting.

Both sides also agreed to promote cooperation between the ports of Chabhar and Gwadar and possibly ports of Shahid Jajaee and Karachi as well. In this regard both the delegations agreed to facilitate exchange of information and delegations from the respective ports.

The Iranian side expressed their desire to visit Gwadar Port in near future. The Pakistan side agreed to refer this matter to the authorities of Gwadar Port in order to officially invite the Iranian ports and shipping authorities.

The Iranian side emphasized early finalization of draft MoU on search and rescue operation to promote bilateral cooperation in this field. The Iranian side was informed that the draft MoU was under consideration in coordination with the relevant authorities. However, the Pakistani side agreed to convey its comments on the MoU in due course through diplomatic channels.

In view of maritime location of Pakistan close to the Indian Ocean and the experience of Iran in the Indian Ocean, in the MoU on Port State Control, it was proposed to the Pakistan side to consider joining the said MoU. The Pakistan side agreed to examine the proposal.

While emphasizing the significance of cooperation among neighbouring countries in prevention of maritime pollution, cleaning up of seas and providing requisite facilities such as technical training as well as the necessity of proper implementation of MARPOL and OPRC Conventions, of which both countries are members, the Iranian side proposed signing of MoU on Prevention of Maritime Pollution between the two countries. The Pakistan side welcomed the proposal and announced its readiness to examine the draft of the MoU and convey their comments at the next meeting. With a view to improving maritime environment the two sides agreed to expedite the process of ratification of the CLC Convention.

It was further agreed that both sides would exchange sample certification of their classification institutes to facilitate recognition of documents of non-conventional vessels. Both sides also agreed to facilitate and promote cooperation among their shipping companies and it was further agreed to exchange lists of interested private shipping companies to organize their meetings to facilitate business activity.

The Iranian side informed that there is a 50% discount on port dues at Imam Khomeini Port for any vessel carrying transit cargo to Iraq. They invited the Pakistani side to avail of the facility.