Pakistan Economy - News & Updates - Archive

[Owais]

ADB to give $700 million aid

ISLAMABAD (September 06 2006): The Asian Development Bank (ADB) would provide financial assistance of $700 million for projects in energy, transport and micro-credit sectors. This was stated by Juan Miranda, director-general of Central and West Asia department, ADB, who called on Dr Salman Shah, adviser to prime minister on finance, revenue, economic affairs and statistics here on Tuesday.

The director-general said about $400 million would be available for energy and transport and $300 million for micro-credit. The visiting ADB delegation briefed the adviser about its programme of private-public participation in infrastructure and utility sector development.

Salman Shah appreciated the ADB assistance for Pakistan's development. He hoped the National Highways Authority would be able to self-finance its projects. He said an autonomous company would soon be set up to process and finance projects in the field of urban services, energy, highways and other infrastructure with private sector participation.

He assured the delegation that no undue delays would be allowed in undertaking these projects. He thanked the delegation for the co-operation which, he hoped, would be beneficial to the country. Senior officials of the ADB and of finance ministry attended the meeting.

 

[Neo]

ISLAMABAD (September 06 2006): The Asian Development Bank (ADB) would provide financial assistance of $700 million for projects in energy, transport and micro-credit sectors. This was stated by Juan Miranda, director-general of Central and West Asia department, ADB, who called on Dr Salman Shah, adviser to prime minister on finance, revenue, economic affairs and statistics here on Tuesday.

The director-general said about $400 million would be available for energy and transport and $300 million for micro-credit. The visiting ADB delegation briefed the adviser about its programme of private-public participation in infrastructure and utility sector development.

Salman Shah appreciated the ADB assistance for Pakistan's development. He hoped the National Highways Authority would be able to self-finance its projects. He said an autonomous company would soon be set up to process and finance projects in the field of urban services, energy, highways and other infrastructure with private sector participation.

He assured the delegation that no undue delays would be allowed in undertaking these projects. He thanked the delegation for the co-operation which, he hoped, would be beneficial to the country. Senior officials of the ADB and of finance ministry attended the meeting.

 

[Neo]

LAHORE (September 06 2006): Japanese Ambassador to Pakistan Seiji Kojima has said that the Japanese companies have invested over $100 million in Pakistan in the last three years.

He expressed these views while addressing a seminar on 'Global Challenges for Corporate Sector' organised by Lahore Chamber of Commerce here on Tuesday. Punjab Secretary Commerce and Investment, Saeed Ahmad Alvi and LCCI President Mian Shafqat Ali were also present on the occasion.

The Ambassador hoped that the volume of the Japanese investment in Pakistan, particularly in the automobile sector, would increase further in the near future. He also hoped that with the expanding demand for automobiles in this part of the world, the Japanese vendors and suppliers would also invest here. This would certainly improve the production quality of the local vendor industries that are still dependent upon the old production techniques," he added.

According to him, Pakistan's automobile sector has a great potential for growth. High quality standards would help the Pakistani automobile sector to enter the international market besides meeting the domestic demand. In order to survive in a globalise environment, both Japan and Pakistan need to join hands in order to further promote their bilateral economic relations.

He said that the volume of Japan's exports to Pakistan had increased from $500 million in the year 2001 to $1.5 billion in 2005. However, the volume of Pakistan's exports to Japan has decreased from $600 million in 1995 to only $143 million in 2005, he pointed. Enumerating the ways to rectify this situation, Kojima suggested that the corporate sector must strive towards improving its competitiveness and increase its economic value addition to move up the technological ladder and become more innovative. "Japan International Co-operation Agency (Jica), Japan External Trade Organisation (Jetro), AOTS and other Japanese organisations could assist the Pakistani small and medium enterprises in the human resource development and technology transfer. In this connection, Jica has contributed in imparting technical skills on the plastic mould to Pakistan Industrial Technical Assistance Centre (Pitac) Lahore," he added.

The Ambassador further said that Japan had been the top bilateral donor to Pakistan throughout the previous decade and had contributed $5.16 billion till December 2004. He said that the major projects executed with the Japanese assistance include, Kohat Tunnel Project, Up gradation and Rehabilitation of the Indus Highway, Ghazi Barocha Hydropower Project and The Mother and Child Health Care Centre at PIMS, Islamabad.

He was of view that there should be a close coordination between the public and private sectors of Pakistan so that resources of the two sectors would be better used in the prioritised areas.

On Safta, the Japanese envoy hoped that Pakistan would benefit from regional trade in the longer run due to the improved competitiveness and access to the large market of South Asia. "As a newly admitted observer of SAARC, Japan could assist SAARC countries," he added. The Punjab Commerce and Investment Secretary highlighted the steps being taken by the provincial government to attract foreign direct investment.

Earlier, in his address, LCCI President Mian Shafqat Ali said that Japan had contributed significantly in the development of Pakistan in the shape of Japanese investment, joint ventures, transfer of technology and education and training. "The spin off and spill over effects of Japanese operations in Pakistan would provide a lot of opportunities of learning.

 

[Neo]

ISLAMABAD (September 06 2006): Balochistan has large reservoirs of marble and other minerals and the marble city built in Gadani would not only boost industrial but also create employment opportunities in the area.

Marble city was the need of the hour and PC one of this project was approved last year in April. Pace of work is very fast and almost three units have started production, PTV reported. Up-till now, there was only trading of marble, but the government made effort that not only it is processed properly but also could get good price in international market.

Everyone knows that there is variety of marble in Balochistan, which is not found any part of the world. So, to get maximum benefit from it, the government is providing every basic facility like water, electricity and road infrastructure.

Almost 56 units had started production and among them five were set up by overseas Pakistanis, and most of the machinery used there would be imported from China, Turkey and Italy. Some units in marble city are preparing tiles and other are preparing every day used items and decoration pieces as these things have great demand in the international market.

In these plants every necessary machinery is available for cutting of marble, making things from them and also to polish them. Most of the industrialists working there belong to Balochistan and they are working with devotion to participate in the development of the country. Under vision 2016,in marble city the number of industrial units would be increased up to 5000.

 

[Neo]

Wednesday, September 06, 2006 http://www.dailytimes.com.pk/print.asp?page=2006\09\06\story_6-9-2006_pg5_1

ISLAMABAD: The damage to standing cotton crop by the heavy monsoon rains and floods could deprive the country of the targeted GDP growth in the current fiscal year, an official said on Tuesday.

"Like the last fiscal, the agriculture sector is likely to continue its dismal performance in the current fiscal and it will miss the target of 4.5 percent growth," the official. This will affect the overall GDP growth, projected at seven percent growth rate for the current fiscal.

The recent rains and floods have benefited the rice and sugarcane crops, but cotton is the real base of the economy and the country's major foreign exchange earner. Cotton crop on around 365,000 acres, mainly in Punjab, has been damaged due to floods. In the last fiscal, the floods destroyed around 260,000 acres of cotton crop, and this factor had largely contributed to the dismal performance of the agriculture sector.

According to the government's estimates, agriculture has been estimated to grow at 4.5 percent in the current fiscal against the last fiscal's growth of 2.5 percent. In the Annual Plan 2006-07, the government admitted that GDP growth in0 fiscal 2005-06 stood at 6.6 percent, which is below the target of 7.3 percent due to a shortfall experienced mainly in the production of major crops and large-scale manufacturing.

The major crops have been estimated to grow at 4.3 percent in the current fiscal year against the negative growth of 3.6 percent in the last fiscal. The official said that due to damage to the cotton crop, there is little chance that the overall target in the agriculture sector can be achieved. In 2004-05 the robust GDP growth of 8.4 percent was largely attributed to overall growth of 17.8 percent in major crops. This factor is not likely to be the same in the current fiscal, the official said.

The cotton crop size has been targeted at 13.8 million bales this fiscal compared with last year's achieved production of 13 million bales. In the 2004-05 fiscal the achieved cotton production was 14.6 million bales.

The official added the recent continuous rains and floods and its negative impact on the major agriculture crops would be assessed in depth at the upcoming meeting of the Federal Committee on Agriculture, which is to meet the next month. The meeting will be presided over by Federal Agriculture Minister Sikandar Hayat Khan Bosan and will be attended by officials from all the four provinces. They will submit their reports on damage to crops and also suggest a compensation package for the severely-hit areas, the official said.

Rains and floods have hit the total cotton crop on 0.2 million acres in total cultivated 6.6 million acres in Punjab, 150,000 acres in 1.5 million acres cultivated land in Sindh and 15,000 acres out of 100,000 acres of cotton crop cultivated in Balochistan and the NWFP. The recent rains and floods have badly hit Mirpurkhas and Sanghar districts in Sindh where the wet spell continued for 20 days without a break.

The large-scale manufacturing also is not expected to perform well in the current fiscal as energy supply and other factors responsible for rapid growth are not in keeping with the demands of the industrial sector, especially in the country's industrial and commercial hub Karachi. This will leave the government with the option of depending on the services sector, which helped the government manage the GDP growth of 6.6 percent in the last fiscal.

 

[Neo]

KARACHI: National Bank of Pakistan (NBP) has set 12 per cent mark-up rate for the first year for its President’s Rozgar Scheme (PRS), which was formally launched by President General Pervez Musharraf on Tuesday.

It was stated in a press note of the NBP, issued here. It said, under the PRS, five types of financing facilities will be available from September 6, throughout Pakistan and duly filled-in form will be taken back from September 13.

The applicant must be minimum matriculate with an age limit of 18-40 years.

The eligible borrowers will be required to make down payment of 15 per cent and it will include first year’s asset insurance premium. The cost of life and disability insurance will be borne by Government of Pakistan.

After first year, the mark-up rate will be Karachi Inter-bank Offered Rate plus 2 per cent.

Fifty per cent of this mark-up will be paid by the borrower, which means 6 per cent mark-up will be paid by borrower and remaining 6 per cent will be borne by government. The first 10 per cent loan losses, under the scheme, will be taken up by govt.

Females will not be allowed financing facility for the establishment of PCO and Tele-Centre.

The first product, NBP Karobar Utility Store, under Utility Store Corporation franchise for setting up small-scale retail outlet or mobile utility store. USC will give its franchise. The average financing facility will be Rs1,00,000 for 5 years with grace period of 3 months.

The borrower will purchase the stocks. The financing facility can be used for purchase of furniture and fixtures, payment of security deposit, advance rent under franchise from USC.

The facility can also be used to purchase 2-3 wheeler, 4 stroke petrol or CNG, LPG vehicle, auto scooter, motor cycle rickshaw with attached loader body to carry USC goods for retail sale.

Under second product named as NBP Karobar Mobile USC, the limit of financing facility will be Rs1,00,000.

The third product named as NBP Karobar Transport is designed to finance 2-3 wheeler, 4 stroke petrol, CNG, LPG vehicle, auto scooter, motor cycle rickshaw. The average size of loan will be Rs1,00,000 for 5 years with grace period of 3 months.

Under NBP Karobar PCO the financing facility will be limited to Rs5,000 for a maximum period of 2 years with a grace period of 3 months. The last product named as NBP Karobar Tele-Centre will be for the setting up Tele-Centre.

The maximum facility will be Rs50,000 for a maximum period of 2 years with grace period of 3 months.

 

[Neo]

LAHORE: CEO Engineering Development Board Imtiaz Rastgar has said establishment of Pakistan Iron and Steel Institute will go a long way in meeting the demand of the industry and will especially ease the dearth of skilled manpower.

He was addressing a meeting of founder members of the Iron and Steel Institute here on Tuesday.

Imtiaz Rastgar, who is also chairman of the institute, underlined the importance of steel sector in the development of the country, adding the industry was facing severe shortage of skilled manpower and the institute would go a long way in meeting the demand of the industry.

He reiterated the support of the Engineering Development Board for the development of steel industry and its linkages with world supply chain.

The institute, the first of its kind in Pakistan, is being established under publicñprivate partnership and each founder member has contributed Rs1 million for this purpose.

The government had earlier announced a matching grant for the project.

The meeting decided to expedite the completion of formalities and directed the draft articles and memorandum of the institute should be finalised for discussion in the next meeting in the first week of October.

The Pakistan Iron and Steel Institute is being established in the wake of a proposal floated by Jahangir Khan Tareen, Minister for Industries, Production and Special Initiatives in August last year.

He advised the industry to have a world class steel research and development institute. Since then, the industry has been striving hard to set up the institute. The EDB is assisting the founder members in this regard.

 

[Neo]

KARACHI, Sept 5: The large-scale manufacturing (LSM) sector growth fell by 46 per cent during the last fiscal year ended June 30, 2006, final figures released here on Tuesday showed.

The important constituents of the LSM were in trouble and the heavy-weight textile sector was the worst performer when compared with its performance the previous year.

The LSM sector grew at 10.68 per cent during FY2006 as against 15.6 per cent the previous year, showing a fall of 46 per cent.

The textile sector posted a growth of just 4.27 per cent compared to 24.7 per cent the previous year. Its weight in the LSM sector also fell to 24.49 per cent from 32.62 per cent. The poor performance of the textile sector was the main reason for the fall of overall LSM growth in the FY2006.

Cotton yarn and cotton cloth having a weight of 13.06 per cent and 7.54pc in the LSM grew by 11.46 per cent 0.61 per cent during the fiscal year 2006.

The automobile sector growth fell to 25.7 per cent from 32.6 per cent and its weight in the LSM dipped to 3.95pc from 5.27 per cent. Car and jeeps (2.53pc weight) grew by 27pc and motorcycle (0.13pc weight) by 30.4 per cent during FY 2006.

The growth in the electronics also fell to 36.5 per cent during 2006 from 44 per cent the previous year. Its weight also dropped to 2.48 per cent from 3.31 per cent.

The air-conditioners production showed remarkable growth of 99.78pc but its weight in the LSM remained just 0.074 per cent. The production of TV sets showed a growth of 6.34 per cent but with just 0.266pc weight in the LSM.

Similarly, the production of refrigerators grew 9.82 per cent while its weight was 0.58 per cent in the LSM.

The government has made the production of motorcycles, TV sets, air-conditioners and refrigerators as reference for high economic growth but all of these items have less than one per cent weight in the LSM.

Growth of petroleum products fell to 2.24pc from 9.4 per cent in 2005. Food and beverages having a weight of 14.35 per cent posted a growth of 5.28pc. The sector had a weightage of 19.12pc but growth was minus 2pc in 2005.

The growth in the production of fertiliser dropped to 5.14pc in 2006 from 25.7 per cent the previous year.

However, pharmaceutical and chemical sectors growth improved to 12.94pc and 11.16pc respectively from 4pc and 3.4pc the previous year.

The most concerning issue is the textile sector which earns 60 per cent foreign exchange for the country. Credit intake of the sector had dropped last year and the information shows that the current year is also sluggish for the sector.

The SBP has provided attractive refinancing facility to the textile sector and slashed the export refinance rate to get a better result.

http://www.dawn.com/2006/09/06/ebr1.htm

 

[Owais]

Orient Power signs accord for 225MW thermal plant


ISLAMABAD (September 07 2006): The Private Power Infrastructure Board (PPIB) and Orient Power Company on Wednesday inked the 'Implementation Agreement' (IA) for setting up 225MW Thermal Power Plant at Balloki.

This is the first private sector power project, which has matured after 1995, especially with the intervention of President Pervez Musharraf, Prime Minister Shaukat Aziz and Minister for Water and Power Liaquat Ali Jatoi.

PPIB Managing Director Khalid Rehman signed the agreement on behalf of GoP, and Nadeem Babar, Chief Executive Officer, represented the Orient Power Company.

The signing ceremony was witnessed by Minister for Water and Power Liaquat Ali Jatoi and officials of the Ministry, PPIB and the Orient Power Company.

The Power Purchase Agreement (PPA) and the Gas Supply Agreement (GSA) were earlier initialled by National Transmission and Dispatch Co (NTDC), and Sui Northern Gas Pipelines (SNGPL), respectively.

The Orient Power Company is the first independent power producer (IPP) to initial the agreement under the 'Policy for Power Generation Projects 2002'. This project will be capable of operating on dual fuel, based on combined cycle technology. It will use gas as fuel, and will be established at an estimated cost of $170 million. The power plant is expected to provide electricity by 2008.

On this occasion, Jatoi said that the Government was making all efforts to induct power into the system to support rapid economic development in the country. While all available options are being looked into to produce more electricity, the government is stressing and encouraging utilisation its indigenous fuels and resources for power generation, he said.

He said that due to the economic and investment-friendly policies of President General Pervez Musharraf and Prime Minister Shaukat Aziz, the private sector has expressed interest to invest particularly in the power sector.

Jatoi said that recently the PPIB had advertised seven raw site hydropower projects internationally, soliciting proposals for these projects, including Statement of Qualification (SoQs).

These are in addition to the seven raw hydel sites advertised by PPIB last year. Encouraging response was received as 16 prominent local and foreign sponsors from US, UAE, Malaysia, Iran, Czech Republic had submitted their detailed proposals. These hydropower projects envisage a total capacity of around 1,620 MW, and would draw an investment of more than $2 billion.

The Minster said: "We are confident that these projects will materialise and will be helpful in meeting the projected power deficit in the country. All these projects are based on indigenous fuel/resources, and are a cheaper option compared to oil based power plants."

Orient Power CEO Nadeem Babar appreciated the support of the Minister and the PPIB and said that all of them had facilitated the Company to resolve the outstanding issues enabling it to invest in the power sector. He said that the company would also expand the project in the second phase, after 2008, to further generate 225 MW power. He also hailed the policies of the government regarding incentives for investors and reforms in the power sector.

The Minister said that agreements were also being issued for negotiations to sponsors of the 225 MW Muridke Power Project by Sapphire Group and 225 MW Sahiwal Power Project by Saif Group within a week.

 

[Owais]

Economic growth forecast revised downward: development outlook issued


ISLAMABAD (September 07 2006): The Asian Development Bank (ADB) on Wednesday reduced the economic growth forecast for Pakistan in FY2006-07 to 7 percent, 30 basis points below its own yearly forecast in April 2006. Pinpointing the 'grey' areas of economy, it has projected that the current account deficit would touch $7.9 billion (5.5 percent of GDP).

However, it sees greater progress in reducing inflation. The ADB in its 'Asian Development Outlook (ADO) 2006 Update', an economic report issued on Wednesday, said that "the burgeoning current account deficit, continuing high inflation, and latent power shortages are potential risks to the country's medium-term economic prospects. Moreover, additions to the pro-poor measures, already announced in the FY2006-07 budget may, in the lead-up to the 2006-07 general elections, further weaken the budgetary position in the coming year".

Pakistan's economy is advancing strongly, despite the shocks of the earthquake and the continued upsurge in international oil prices. Economic activity remains dynamic and social indicators have improved, which together augur well for continued rapid development.

Inflation is forecast to decline in FY2006-07 to average 6.5 percent. However, this moderation depends crucially on central bank's implementing a tighter monetary policy to keep domestic demand in check. Already, in July, SBP tightened its stance by raising its policy rate (the 3-day repo rate, which is its rediscount rate) from nine percent to 9.5 percent, and adjusted upward both the bank's cash-reserve requirement ratio and their statutory liquidity requirement ratio.

These measures are likely to impact domestic demand, but only with a lag. SBP's Monetary Policy Statement for July-December 2006 set a program for FY2007 that envisages lowering growth in monetary assets (M2) to 13.5 percent and plans a reduction in private sector credit growth to 18.4 percent. Achieving these targets, aimed at reducing inflation to 6.5 percent, will again require SBP to focus on money market conditions to control reserve money appropriately.

The Bank says that "most important, the update's forecasts presuppose that SBP will carry out monetary tightening and that budget reliance on SBP finance will be consistent with attainment of the monetary objectives".

"FY2007 production conditions in the main commodity-producing sectors are expected to improve from FY2006. A positive outlook is also underpinned by a substantial strengthening in investment in FY2006 and forecasts of yet further increases the following year", it added.

Substantial public sector investment in irrigation in the last few years and a sharp increase in imports of agricultural machinery in FY2006 are seen as boosting agricultural output. Assuming normal weather conditions, agriculture is projected to grow by 4.5 percent in FY2006-07.

Growth in industry is expected to rebound to 9.1 percent. New investments, especially in the textile, cement and fertiliser sub-sectors, and incentives provided in the FY2006-07 budget for exports of leather and footwear goods, and marble, as well as for rice-processing plants, should buoy output.

In services, heavy foreign investment in telecoms in recent years will help the sub-sector maintain fast momentum in FY2006-07. Strengthened by reforms and privatisation, the financial services industry will also maintain robust growth. Nevertheless, services sector growth as a whole is projected to slow to a more sustainable 7.1 percent in FY2006, following the very rapid rises of last two years.

In the FY2006-07 budget, extension of the tax net to real estate transactions and raised tax rates on some financial services is expected to increase receipts at a very healthy double-digit rate, while non-tax receipts are likely to exceed the budget estimate. Current expenditure, however, may exceed the budget target for two main reasons: a likely overrun in defence expenditure due to ongoing operations against militants; and possibly, greater domestic debt servicing.

Various measures favouring low-income groups announced in the FY2006-07 budget may also raise current spending. On balance, the fiscal deficit, targeted at 4.2 percent of GDP in FY2006-07, including 0.6 percent for earthquake expenditure, is likely to increase to 5.0 percent of GDP, with the budget as a whole continuing to impart a strong expansionary impetus to the economy, the report said.

 

[Owais]

Pakistan ranked 74th in friendly economy ratings

SINGAPORE (September 07 2006): Pakistan is the 74th easiest place in the world to do business in. According to the annual "Doing Business" report of the World Bank, which ranked 175 economies in terms of regulations that enhance or constrain business, Pakistan's overall ranking declined from its 66th place in the previous report.

But the Bank praised the country for a new customs clearance process that cut the number of days to import goods to 19 days from 39, said the report released ahead of the bank's joint meetings with the International Monetary Fund (IMF) here next week.

 

[Owais]

Inflows from US push up SCRAs


KARACHI (September 07 2006): USA's withdrawals from Special Convertible Rupee Accounts (SCRAs), an indicator reflecting portfolio investment climate in Pakistan, stood reduced from $6.3 million on September 1 to $1.4 million on September 4, indicating arrival of some $4.8 million in fresh funds from that country.

Switzerland also pumped in a small amount, while a small outflow occurred in the case of UK. All in all, there was an increase of about $5 million in SCRAs, pushing up the outstanding balances of all countries to $16.4 million on September 4.

Singapore, in the meanwhile, continues to be the main driving force in the case of SCRAs during FY07 so far. Its holdings in these accounts amounted to $41.3 million on September 4, the same as on September 1. The second positioner, Liberia, had only a small positive balance.

Of the 14 active players during FY07 so far, all other countries had net withdrawals between $0.03 million (Qatar) and $14.2 million (Switzerland) despite a small fresh arrival recorded in the case of the latter.

The KSE 100 Index, which stood at 10,064 on August 31, in the meanwhile, declined to 10,002 on September 4. Profit taking in banking and energy sectors, besides uncertainties on both internal and external fronts, were stated to be the factors forcing the investors to offload part of their holdings. Updates on SBP General Index of Share Prices and aggregate market capitalisation, which stood at 428 and Rs 2,815 billion, respectively on September 1, were not available.

 

[Owais]

Pakistan's economy advancing strongly: ADB

ISLAMABAD: Pakistan economy is advancing fast despite the devastation of the October earthquake and the continued upsurge in international oil prices Economic activity remains dynamic and social indicators have improved, which augurs well for continued rapid development, reports Asian Development Bank.

The ADB's Asian Development Outlook Update 2006 confirms the continuation of the fast growth stemming from the Government's far reaching macroeconomic and structural reforms initiated in 2001, which subsequently propelled the economy to annual expansion of about 7% over 4 years.

The report also stressed the main macroeconomic challenges, like bringing down inflation and containing the growing trade and current account deficits.

The ADB Update is a supplement to ADB's annual flagship publication, Asian Development Outlook 2006, which was published in April and forecasts economic trends in the region.

According to the report, developing Asia's strong economic expansion is expected to continue, with growth projected at 7.7% in 2006 before easing to 7.1% in 2007.

"The outlook for Asian growth is quite positive as both domestic and external conditions remain favorable," said Mr.Ifzal Ali, ADB's Chief Economist at the launch of the ADO Update 2006.

"The region should act now to lay defenses against potential risks and ensure the region's rapid growth is sustained." "The region should take advantage of this strength to act in three areas that could undermine growth if not addressed the need to complete the adjustment to high oil prices, he need to pick up the pace of fiscal
consolidation and the need to stimulate investment," he said.

The 7.1% growth forecast for 2006 represents a 0.5 percentage point increase form the April forecast.

The upward revision significantly reflects accelerated growth in the People's Republic of China (PRC) due to booming investments and exports. ADO Update forecasts 10.4% growth for PRC in 2006.

Upward revision to growth forecasts of the three larger South Asian economies. Bangladesh, India, and Pakistan on the back of strong export growth also fed the upward adjustment.

For 2007, ADO Update forecasts growth of 7.1% for developing Asia, up marginally from the 7.0% forecast in April.

The easing form 2006 growth is anticipated based on expected slower demand from industrial countries and continuing high oil prices.

ADO Update's forecast for 2007 rests heavily on the assumptions that policy adjustments in PRC will slow the economy to a more moderate 9.5% expansion and that India continues to grow at 7.8%.

Growth in South Asia in 2006 is projected at 7.5% up from 7.3% forecast in April Since 2002 South Asian growth has averaged 7.7% almost matching that of East Asia and two percentage points above growth in Southeast Asia.

Increasingly vibrant manufacturing activities in Pakistan Bangladesh and India, are lifting exports, which contributed to some upgrading of growth estimates in 2006.

In Nepal, the restoration of Parliament and a broadened political process have improved the economic situation and prospects ADO Update also raised growth estimates for Afghanistan and Sri Lanka despite continuing security issues.

ADO Update includes a section on trade issues that may have implications for the longer term, as well as a theme chapter on developing Asia's raising influence in world commodity markets.

 

[Neo]

ISLAMABAD, September 07, 2006: The Asian Development Bank (ADB) is to invest $3 billion in the local water and power projects over the next three to five years, government officials said on Thursday.

The country's growing economy needs more energy and water to support the world's sixth-largest population.

A seven-member ADB team, led by Juan Miranda, made the pledge during a meeting with Minister for Water and Power Liaqat Ali Jatoi.

The ministry said the ADB would focus on financial assistance of $500 million for renewable energy development, $1.2 billion on improving power transmission, $250 million on improving distribution and $800 million on irrigation projects.

"To achieve economic growth targets set by the government, the power sector needs to increase its generation capacity, efficiency and coverage," the ministry quoted Jatoi as saying.

ADB officials were not immediately available for comment.

President Pervez Musharraf has often warned of looming energy and water shortages choking growth and wants to build five dams on the Indus river system.

One of the five, the Kalabagh dam, has stirred fierce opposition from downstream provinces that fear it will rob them of water.

The Manila-based ADB would discuss with the World Bank the financing of big water projects, the ministry said

 

[Neo]

KARACHI: September 07, 2006: Karachi Electric Supply Corporation (KESC) would set up a $420 million power plant of about 750 megawatts capacity at the existing Korangi Thermal Power Plant (KTPP).

This was informed by CEO KESC Frank Scherschmidt during a facilitation visit of media persons to KTPS on Thursday. Construction site of new power plant was also shown.

Frank informed that construction of new plant was an integral part of KESC's two-year layout through which Rs 50 billion would be spent for rectification and enhancement of power supply system.

He mentioned that Rs 25 billion would be spent in one year, while rest of the amount would be spent next year.

During his briefing, he also explained power generation system of KESC. He said the total efficiency of power generation of a steam power plant was near about 40 percent while of a gas power was about 33 percent. He apprised new power plant would be a 'combined cycle' power station with conjunction of both steam and gas plants.

"It's efficiency would be around 50 percent", he added.

He also pledged for arranging a media person's trip to Bin Qasim Power Station.

Sultan Ahmed, spokesman of KESC, informed that during 2006-07, 14 new grid stations would be established in the city for better distribution of power.

"After completion of new power plant it would become inevitable to enhance power distribution system as old system has become outdated and not capable to bear extra load", he said, adding "45 kilometres long transmission lines would also be installed to facilitate new power station".

The media persons were told that new power project at KTPP comprises of four Gas Turbines (GTs), each having capacity of about 122 MW. These will subsequently be converted into high efficient combine cycle blocks by adding two steam turbines of 131 MW each, which means each block of combined cycle would be of about 375 MW.

The expected commissioning dates of GT Units would be:

Unit-1 from April 2007, Unit-2 from May 2007, Unit-3 from July 2007 and Unit-4 from August 2007.

After completion of four units 488 MW power is expected to be injected into KESC system by next summer which would minimise demand and supply gap to great extent.

The expected commissioning dates of Steam Turbine Units would be as Unit-1 from February, 2008 (First Combined Cycle Block) and Unit-2 from June 2008 (Second Combined Cycle Block).

According to KESC officials work had already been taken in hand and soil investigation work was completed. The construction activities are expected to commence from December/January 2007.

It may be recalled that the new plant would be initiated alongside old Korangi Power Plant, which has installed capacity of 382 MW while its existing capacity is around 192 MW. The installed capacity of Unit-1 and 2 out of its four units were 66 MW each while those of Unit-3 and 4 were 125 MW each.

The Unit-2, commissioned in November 1965 was accidentally damaged in September 1996.