Money woes cloud Pakistan infrastructure boom hopes

[SBD-3]

LAHORE: The people are hoping their new prime minister will roll out high-profile projects that became his party’s trademark in Punjab, but the nation’s dire finances threaten the optimism.
The Pakistan Muslim League-N (PML-N) won huge popularity and a reputation for getting things done with a series of big-ticket schemes over the past five years in Punjab.
A metro bus system in Lahore – the first such scheme in the country’s 65-year history – free laptops and solar energy panels for students and a network of high-quality schools in poor rural areas made Punjab the envy of Pakistan.
In the campaign for the May 11 general election, PML-N chief and now Prime Minister Nawaz Sharif and his younger brother Punjab Chief Minister Shahbaz Sharif, promised similar schemes for the whole country.
After five years of listless government under the Pakistan People’s Party (PPP), voters responded to the promise of action and handed the party a majority.
In Lahore, the Metro Bus which opened in February has revolutionised travel around the city, a traffic-clogged mishmash of colonial-era buildings, cheap housing and newer, more upmarket suburbs.
The 27-station network of buses running on dedicated lanes and elevated roadways, run by a Turkish company and carrying 120,000 passengers a day, was built at a cost of $300 million.
Terminals offer a computerised fare system and commuters can use smart cards to avoid the hassle of queueing – a welcome use of technology in a bureaucratic land where paperwork, preferably in triplicate, is still king.
Hira Farhat, a pharmacy student at the University of Punjab, was delighted with the service.
“It’s comfortable and quicker than other means of transport. It has cooling system and takes me to my university in 15 minutes. The government must start it in other cities also,” she said.
The PML-N has promised to take the metro bus to Karachi and Islamabad.
Nawaz’s first speech in his third term as PM last week was strong on talk of investment in infrastructure, particularly a road and rail network to link northern neighbour China to Gwadar, recently taken over by Beijing.
“All development projects will be completed before the completion of our five-years term so that people can get the fruits,” said Nawaz.
But populist projects do not come cheap and Pakistan is in a dire financial predicament, with a fiscal deficit in 2012 of 8.5% of GDP and growth in 2013 forecast at 3.5% – half what economists say is needed to absorb the growing young population into the workforce.
More pressingly, foreign exchange reserves are dwindling, to just $6.6 billion in late May, or less than two months’ export cover, down from $11.3 billion a year earlier.
The opposition in Punjab said the PML-N’s flagship projects were marred by corruption and ran hugely overbudget, leaving other cities and districts under-resourced.
“The Punjab government crossed the initial estimates for Metro Bus and spent 70 billion rupees instead of 30 billion rupees,” claimed Raja Riaz, former PPP opposition leader in Punjab.
“They cut the development funds of other cities for this one project and also diverted the finances of much more important departments like education and health.”
Islamabad is due to repay the International Monetary Fund more than $4 billion by the end of 2014, putting further pressure on currency reserves, and many observers expect Pakistan to have to ask for another loan.
That would come with a host of tough conditions, including boosting Pakistan’s wretched tax collection, which currently brings in less than 10% of GDP.
Nawaz has said he would welcome help from the likes of Turkey and China as he seeks to boost the economy, but analysts are warning the PML-N’s projects could create extra burdens.
“These are good projects but at the same time the government should also be in the business of mobilising resources,” said Ashfaq Hassan Khan, principal of the National University of Science and Technology Business School.
“If resources are not mobilised and yet we go for financing all these kinds of projects nationally, it will lead to a larger budget deficit and accumulation of more debt.”
Economist Kaiser Bengali agreed, saying there was scope to improve existing infrastructure at much lower cost than beginning new schemes.
“For example, we have already a network of circular railway in Karachi and government can use it for better transportation of commuters instead of working on a new project,” he told AFP.
“But our rulers go for new fancy projects and they want to spend money on new schemes.”
Money woes cloud Pakistan infrastructure boom hopes – The Express Tribune

 

[Samlee]

Fact Of The Matter Is That Pakistan Does Not Need A Huge Amount Of Money To Develop A World Class Infrastructure.All It Needs Is Peace and Stability and A Conducive Regime for Investment.In The Recent Past Pakistan Got Massive Investment worth Billions of Dollars In Telecom Sector Do You Think That Was Government Funds. No.It Was Private Money.This Model Can Easily Be Replicated In The Following Sectors:
1.Seaports and Container Terminals
2.Civil Aviation
3.Railways.
4.Highways and Motorways
5.Planned Industrial Real Estates
6.Electric Power and Utilities
7.Urban Mass Transit
You See The Formula Is Simple,a Powerful Regulator, Auctioning of Licenses(Given Pakistan's Strategic Location People Are Going To Pay Up To Their Nose For These) and Then Let The Private Investor Do His Trick.I Give You The Example Of Warid Do You Think World Class Erricson Technology Could Be Financed With PSDP Funds???????

 

[FCPX]

Fact Of The Matter Is That Pakistan Does Not Need A Huge Amount Of Money To Develop A World Class Infrastructure.All It Needs Is Peace and Stability and A Conducive Regime for Investment.In The Recent Past Pakistan Got Massive Investment worth Billions of Dollars In Telecom Sector Do You Think That Was Government Funds. No.It Was Private Money.This Model Can Easily Be Replicated In The Following Sectors:
1.Seaports and Container Terminals
2.Civil Aviation
3.Railways.
4.Highways and Motorways
5.Planned Industrial Real Estates
6.Electric Power and Utilities
You See The Formula Is Simple,a Powerful Regulator, Auctioning of Licenses(Given Pakistan's Strategic Location People Are Going To Pay Up To Their Nose For These) and Then Let The Private Investor Do His Trick.I Give You The Example Of Warid Do You Think World Class Erricson Technology Could Be Financed With PSDP Funds???????

I think this is an overly simplistic and fanciful view and unfortunately will not work for Pakistan since its got massive problems that need political solutions first.

Foreign investors first must have confidence in the country they want to invest. Its one thing for a foreign investor to invest in a few choice low risk high return industries like consumer items, cell phone services, etc. but entirely another thing for them to invest in major high risk long term infrastructure projects like water, power, railways, aviation, ports, highways, etc.

There are so many things that need to be done right first before any major foreign investors for the above areas would even consider Pakistan as an investment destination that they would takes days to write and discuss but suffice to say that Pakistan FIRST needs to fix its own house and get it right. Nothing much will change until that happens. How long will the country survive on handouts, gifts, and donations from other countries and institutions?

I dont envy the challenges of the PML govt or any govt for that matter. Even if they were really sincere to the people of Pakistan, and I have my doubts about that, this is such an uphill task it will take decades before the results are seen.

 

[Samlee]

I think this is an overly simplistic and fanciful view and unfortunately will not work for Pakistan since its got massive problems that need political solutions first.

Foreign investors first must have confidence in the country they want to invest. Its one thing for a foreign investor to invest in a few choice low risk high return industries like consumer items, cell phone services, etc. but entirely another thing for them to invest in major high risk long term infrastructure projects like water, power, railways, aviation, ports, highways, etc.

There are so many things that need to be done right first before any major foreign investors for the above areas would even consider Pakistan as an investment destination that they would takes days to write and discuss but suffice to say that Pakistan FIRST needs to fix its own house and get it right. Nothing much will change until that happens. How long will the country survive on handouts, gifts, and donations from other countries and institutions?

I dont envy the challenges of the PML govt or any govt for that matter. Even if they were really sincere to the people of Pakistan, and I have my doubts about that, this is such an uphill task it will take decades before the results are seen.

Dear Bro,
If You Read My Post Carefully You Will See That I Have Listed These Two Conditions.Peace and Stability As Well As Conducive Investment Environment Is Not Something Which Is Un achievable provided the Government Has Got The Will.Yes Investment In Physical Infrastructure isLong Term and Somewhat Risky but It Will Give A Very Promising Returns Considering Pakistan's Geostrategic Location
Take For Example Seaports,Do You Know That Once Activated Only The Potential Chinese Transit Trade Gwadar Will Run Into Hundreds of Billions Of Dollars and This Is Apart From The Pakistan Afghanistan CARs Use of This Seaport.
Pakistan's Entire Coastline From Khalij e Gvatar to Kutch Basin There 5 to 6 Natural Locations For Deep Sea Ports.In The Past Pakistan Has Received Offers From Many Countries For The Development Of These.Russia Iran USA etc.
The Private Sector Would Drool At The Lucrative Business Opportunity if Allowed to Develop and Operate Seaports Along The Makran Coast or Indus Offshore.They Would Not Mind Investing Long Term.Just Imagine Cities Like Dubai Singpaore and London and Tokyo Rising On Our Coast
This Is Just One Example

 

[FCPX]

Dear Bro,
If You Read My Post Carefully You Will See That I Have Listed These Two Conditions.Peace and Stability As Well As Conducive Investment Environment Is Not Something Which Is Un achievable provided the Government Has Got The Will.Yes Investment In Physical Infrastructure isLong Term and Somewhat Risky but It Will Give A Very Promising Returns Considering Pakistan's Geostrategic Location
Take For Example Seaports,Do You Know That Once Activated Only The Potential Chinese Transit Trade Gwadar Will Run Into Hundreds of Billions Of Dollars and This Is Apart From The Pakistan Afghanistan CARs Use of This Seaport.
Pakistan's Entire Coastline From Khalij e Gvatar to Kutch Basin There 5 to 6 Natural Locations For Deep Sea Ports.In The Past Pakistan Has Received Offers From Many Countries For The Development Of These.Russia Iran USA etc.
The Private Sector Would Drool At The Lucrative Business Opportunity if Allowed to Develop and Operate Seaports Along The Makran Coast or Indus Offshore.They Would Not Mind Investing Long Term.Just Imagine Cities Like Dubai Singpaore and London and Tokyo Rising On Our Coast
This Is Just One Example

Brother sadly even "peace" and "stability" on their own are not enough to lure scarce investment $'s these days. Take the example of Iran.

Granted Pakistan has huge potential but thats what it will remain until its own house is bought in to order by its own people.

 

[Armstrong]

So its all Speculation ?

 

[Samlee]

Brother sadly even "peace" and "stability" on their own are not enough to lure scarce investment $'s these days. Take the example of Iran.

Granted Pakistan has huge potential but thats what it will remain until its own house is bought in to order by its own people.

Brother Fortunately or Unfortunately Lack Peace and Stability and A Conducive Environment is All Pakistan Suffers From.We Do Not Suffer From The Isolation of Iran.Remember The Days Of Musharraf They Were Golden Days For The Economy.They Were Able To Guarantee The Above Two and Investment Poured In From East and West.The Telecom Boom Came During Those Days(Which Is Now Being Strangled By These ******Politicians).I Owe Myself Writing On PDF to His Policies.It Was Only During The Latter Part Of His Reign That Things Started To Go Wrong.
I Still Have Faith That Things Can Be Made Right Again

 

[Samlee]

So its all Speculation ?

No It Is Not Speculation.It Is Proposal Inspired By Global Practices That I Have Studied.My Proposal Is To Auction Licenses to Private Sector to Build and Operate Seaports Airports Rail Links and Motorways As Well as Dry Ports,Container Terminals and Multi Modal Facilities By Independent Regulators in The Following Sector
1.Seaports and Shipping
2.Civil Aviation
3.Railways
4.Urban Mass Transit
5.Highways and Motorways
Given The Massive Potential of Pakistan and It's Geostrategic Location as A Transit Trade Corridor.The Private Sector Would Love To Take This Opportunity With Both Hands
My Motto Is to Give The Private Sector A Chance.
Why Spend Billion in Public Money For Gwadar Port Motorways or Metro Bus When You Can Get Billions into Government's Kitty(License Fees and Taxes)
I Actually Appeal to Pakistani Members of PDF To Spread These Ideas

 

[FCPX]

Brother Fortunately or Unfortunately Lack Peace and Stability and A Conducive Environment is All Pakistan Suffers From.We Do Not Suffer From The Isolation of Iran.Remember The Days Of Musharraf They Were Golden Days For The Economy.They Were Able To Guarantee The Above Two and Investment Poured In From East and West.The Telecom Boom Came During Those Days(Which Is Now Being Strangled By These ******Politicians).I Owe Myself Writing On PDF to His Policies.It Was Only During The Latter Part Of His Reign That Things Started To Go Wrong.
I Still Have Faith That Things Can Be Made Right Again

Then brother we will agree to disagree and I do really wish one day Pakistan is able to get out of these crushing difficulties.

 

[aks18]

LAHORE: The people are hoping their new prime minister will roll out high-profile projects that became his party’s trademark in Punjab, but the nation’s dire finances threaten the optimism.
The Pakistan Muslim League-N (PML-N) won huge popularity and a reputation for getting things done with a series of big-ticket schemes over the past five years in Punjab.
A metro bus system in Lahore – the first such scheme in the country’s 65-year history – free laptops and solar energy panels for students and a network of high-quality schools in poor rural areas made Punjab the envy of Pakistan.
In the campaign for the May 11 general election, PML-N chief and now Prime Minister Nawaz Sharif and his younger brother Punjab Chief Minister Shahbaz Sharif, promised similar schemes for the whole country.
After five years of listless government under the Pakistan People’s Party (PPP), voters responded to the promise of action and handed the party a majority.
In Lahore, the Metro Bus which opened in February has revolutionised travel around the city, a traffic-clogged mishmash of colonial-era buildings, cheap housing and newer, more upmarket suburbs.
The 27-station network of buses running on dedicated lanes and elevated roadways, run by a Turkish company and carrying 120,000 passengers a day, was built at a cost of $300 million.
Terminals offer a computerised fare system and commuters can use smart cards to avoid the hassle of queueing – a welcome use of technology in a bureaucratic land where paperwork, preferably in triplicate, is still king.
Hira Farhat, a pharmacy student at the University of Punjab, was delighted with the service.
“It’s comfortable and quicker than other means of transport. It has cooling system and takes me to my university in 15 minutes. The government must start it in other cities also,” she said.
The PML-N has promised to take the metro bus to Karachi and Islamabad.
Nawaz’s first speech in his third term as PM last week was strong on talk of investment in infrastructure, particularly a road and rail network to link northern neighbour China to Gwadar, recently taken over by Beijing.
“All development projects will be completed before the completion of our five-years term so that people can get the fruits,” said Nawaz.
But populist projects do not come cheap and Pakistan is in a dire financial predicament, with a fiscal deficit in 2012 of 8.5% of GDP and growth in 2013 forecast at 3.5% – half what economists say is needed to absorb the growing young population into the workforce.
More pressingly, foreign exchange reserves are dwindling, to just $6.6 billion in late May, or less than two months’ export cover, down from $11.3 billion a year earlier.
The opposition in Punjab said the PML-N’s flagship projects were marred by corruption and ran hugely overbudget, leaving other cities and districts under-resourced.
“The Punjab government crossed the initial estimates for Metro Bus and spent 70 billion rupees instead of 30 billion rupees,” claimed Raja Riaz, former PPP opposition leader in Punjab.
“They cut the development funds of other cities for this one project and also diverted the finances of much more important departments like education and health.”
Islamabad is due to repay the International Monetary Fund more than $4 billion by the end of 2014, putting further pressure on currency reserves, and many observers expect Pakistan to have to ask for another loan.
That would come with a host of tough conditions, including boosting Pakistan’s wretched tax collection, which currently brings in less than 10% of GDP.
Nawaz has said he would welcome help from the likes of Turkey and China as he seeks to boost the economy, but analysts are warning the PML-N’s projects could create extra burdens.
“These are good projects but at the same time the government should also be in the business of mobilising resources,” said Ashfaq Hassan Khan, principal of the National University of Science and Technology Business School.
“If resources are not mobilised and yet we go for financing all these kinds of projects nationally, it will lead to a larger budget deficit and accumulation of more debt.”
Economist Kaiser Bengali agreed, saying there was scope to improve existing infrastructure at much lower cost than beginning new schemes.
“For example, we have already a network of circular railway in Karachi and government can use it for better transportation of commuters instead of working on a new project,” he told AFP.
“But our rulers go for new fancy projects and they want to spend money on new schemes.”
Money woes cloud Pakistan infrastructure boom hopes – The Express Tribune

whole article revolves around METRO BUS dont waste your time on reading it