Pakistan Economy - News & Updates - Archive

[Neo]

Russia to invest in coal mining, power generation

KARACHI (December 23 2006): Russia has planned to invest in coal mining and coal-fired power plants in Pakistan, official sources told Business Recorder. In this regard, a high level delegation from Russia recently visited Pakistan to assess the potential of natural resources and investment environment, sources in the Sindh Mines and Mineral Department said.

They said that the Russian delegation headed by the Chairman Board of Russian Institute of Coal Industries visited the coal-identified areas in Sindh and assured the government of their positive response.

In a communication with officials in the mining department the Russian delegation informed that they had planned to send proposals to government of Pakistan regarding their investment plan in mining and power generation sector, they added. They said that the delegation visited Block 2 and Block 4 in the Thar coal areas, where a Chinese Company had already started work. The Russian delegation also visited Lakhra to watch the coal mining. However, they declined to inform that how much investment from Russia was expected and how many power plants and area for coal mining they had planned.

The sources said that the Russian delegation held meetings with Federal Minister for Petroleum and Natural Resources Amanullah Khan Jadoon, Sindh Minister for Mines and Mineral Irfanullah Khan Marwat and concerned officials in the mining sector. All the officials from the government side had apprised that about 185 billion coal reserves had been discovered in Sindh and several international companies had approached the government and shown their interest in the coal mining and power generation, they said.

The Sindh government had provided all basic infrastructures in the coal areas to develop these areas, which were economically weak. They assured Russian delegation that basic infrastructure had been provided in the coal areas and Sindh has potential of 185 billion tonnes of coal reserves.

The sources said that the Sindh government had attracted several countries for investment in mining and mineral sector. They said that China was the major contributor in the coal mining and setting up coal-fired power plants. Chinese company had started work in Sonda-Jherruk, Thatta for detailed coal geological investigation.

The China National Machinery Import and Export Corporation (CMC) had planned to set up two power plants of 300MW each in the area. Meanwhile, another Chinese company, Shenhua group of companies, had planned to set up 1200MW power plant in Thar with the investment of one billion dollars. The company had finalised its deal with the government and waiting for approval from the Chinese parliament to start the work.

The sources said that the government was committed to enhance the coal-fired power generation share to meet the energy shortfall.

Pakistan is the fourth largest country in the world having the huge quantity of coal reserves but far behind to cash coal for its power demands, they added.

The United States generating 52 percent electricity from coal, the United Kingdom 58 percent, Australia 77 percent, Germany 52.5 percent even India producing 77 percent power from coal while having enough reserves Pakistan could able to generate less than one percent, the source said quoting the figures.

http://www.brecorder.com/index.php?id=510644&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

British firm signs 225 MW power generation agreement

ISLAMABAD (December 22 2006): Halmore Power Generation Company Private Limited (HPGCL), a UK-based company, has signed Implementation Agreement (IA) with the Private Power and Infrastructure Board (PPIB) on Thursday. HPGCL has established its office here to set up 225 MW thermal power plant at Bhikki in Punjab.

The IA document was initialled and exchanged between Managing Director PPIB Khalid Irfan Rahman, and Managing Director of the Company, Shahid Hafeez Ahmed in presence of CEO, of the project Dr Mian M. Sharif, CEO, and other senior officials.

Earlier, on December 20, Power Purchase Agreement (PPA) was initialled between HPGCL and National Transmission and Dispatch Company (NTDC) whereas Gas Supply Agreement (GSA) had already been signed with Sui Northern Gas Pipelines Limited (SNGPL).

Signing of IA concludes the package of agreements ie IA, PPA and GSA, as per objectives requirements of the 2002 power policy, after which the company will proceed with its financial closure and thereon the construction of the power complex.

The project, which will be established with $185 million investment, would start commercial operation in 2008. The power plant is based on combined cycle/gas turbine technology, and capable of operating on dual fuel, it will use gas as the primary fuel.

http://www.brecorder.com/index.php?id=510250&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Gas reserves enough for 22 years

ISLAMABAD: Pakistan has proven gas reserves, which are enough for 22 years.

Rashid Lone, MD Sui Northern Gas Pipelines said this during his presentation before the National Assembly Standing Committee on Planning, which met a few days ago.

The production of gas currently stands at 1.3 tcfd and the government made the plan for aggressive drilling of oil and gas across the country.

Lone said: ìIn the last two years we have managed to inject additional one billion cubic feet gas into the national grid system.î However, he said that in Balochistan there are huge oil and gas reserves, which we have assessed apart from the proven 33 tcfd gas reserves.

He said that government is also planning to import gas from Iran and Turkmenistan and LNG from Qatar. Out of the proven gas reserves, only 25 per cent of the gas has been explored while 75 per cent is still unexplored.

Pakistan is fulfilling its gas needs 70 per cent from Sindh, 23 per cent from Balochistan, 6 per cent from NWFP and remaining from Punjab and other areas, he said, adding, the new discoveries are also in the pipeline, which will enhance the production capacity of gas to a reasonable level. He also informed that federal government under the Constitution collects the 12.5 per cent of wellhead price as gas royalty and passed on it to the concerned province.

He informed the NA committee that SNGPL is undertaking the project for supply of gas to different localities of its franchised areas since 2002-2003 under Tameer-e-Want programme for allocation against MNAsí funds and PMís directive.

Lone said that consumers of Sui Northern stand at 2.7 million in Punjab, NWFP and AJK.

Talking about the project for supply of gas to southern districts of Punjab, he said that three district headquarters, two towns or villages and 11 Tehsil headquarters will be provided gas by mid of 2007 at a cost of Rs2.717 billion.

About plan for supply of gas to southern districts of NWFP, he said that 6 districts including Karak, Bannu, Hango, DI Khan, Tank and Lakki Marwat, would be provided gas facility by the mid of next year at a cost of Rs2.108 billion.

http://www.thenews.com.pk/daily_detail.asp?id=36623

 

[Neo]

Pakistan to build five dams: Aziz

Saturday December 23

Islamabad, Dec.23 (ANI): Prime Minister Shaukat Aziz said today that his government has cleared a proposal to build five dams.

He said the Bhasha Dam would be the first to built because no one has raised objection on its construction.

Addressing an inaugural function of the Jinnah Pilot project near Jinnah Barrage here on Saturday, Aziz said that before President Musharraf's tenure, Pakistan was recognized as the country carrying begging bowl, but now the situation has been changed and Pakistan has emerged as a self-reliant country.

He also confirmed that Pakistan is planning to purchase power and gas from Iran, adding that his government has set the target of providing electricity to 3,000 villages annually which was revised and now 15,000 villages would be provided power annually.

http://in.news.yahoo.com/061223/139/6ajoq.html

 

[Owais]

building of these dams is a good idea but opposition and some government allies have conflicts on that matter.

 

[Owais]

UAE group makes huge investment in property
ISLAMABAD (December 24 2006): The UAE-based Al Ghurair Giga Group has made investment in property worth Rs95 billion in Islamabad. This was disclosed during a presentation on Saturday.

The participants were given a detailed presentation on these projects at Defence Housing Authority (DHA) after the eldest son of the ruler of Ajman and Chairman of Ajman Planning Department Sheikh Rashid Bin Humaid Al Nauimi's visit to the multi-million dollar gold-crest housing project in DHA Islamabad.

He said that President Pervez Musharraf's government has given a confidence to foreign investors which will play a vital role in the economic progress and development of Pakistan.

Sheikh Rashid Bin Humaid Al Nauimi who is visiting Pakistan on a special request of Al Ghurair Giga Group also inaugurated the largest concrete batching plant in Pakistan, which has a capacity of producing 120 cubic meters per hour or 20 trucks in an hour.

The plant has been set up with an estimated cost of $1.5 million by the Malaysian IJM company, which has presence in all continents of the world. The participants were told that Gold Crest DHA is a residential project of in DHA Phase II in Islamabad. The project comprises of construction seventeen 17 high rise towers with combination of studios, one, two, three and four-bed luxury apartments and penthouses.

The project will be built on international standards and all towers will be earthquake resistant in a cover area of 320 kanals. Platinum Square, a commercial project from Al-Ghirair Giga in Phase II, Islamabad comprising a 5-Star hotel, 5 office towers and a world class shopping mall, which spreads over 330 kanals. Soan Riverine Marina will have commercial as well as residential projects.

Each neighbourhood consisting of amazing buildings, villas and hotels spreading over 5.5 kilometers with an estimated investment of Rs 35 billion. Residential and commercial strips both are worth an estimated value of Rs95 billion.

The towers of the Gold-Crest housing project have been designed keeping in line with latest seismic proofing techniques and would rise from 20 to 36 floors. Piling work for the towers have started and construction machinery has arrived on the site from different parts of the world for rapid deployment at the project. Al Ghurair Giga Pakistan has set a target date of December 2008 for the contractors to complete the complex.

The project consists modern high-rise towers that are being built to give an exhilarating experience in the 21st century to urbane upwardly mobile professionals. The project will consist of seventeen 17 high-rise towers with all modern day amenities and facilities provided to the communities.

UAE-based Al Ghurair Giga Group is one of the fastest growing real estate developers in the Gulf, with a host of successful projects in the Middle East and around the world.

Mohammadmian Soomro, Chairman Senate of Pakistan wished a success to the group in Pakistan and said that due to the investors friendly policies of the present government foreign investors are investing in Pakistan with full confidence. Haji Rafiq Giga, president of UAE based company Al-Ghurair Giga said that he is confident that their project in Pakistan would be a success.

 

[Janbaz]

Exports up by 5pc

KARACHI: Exports recorded 5.09 per cent increase to $6.928 billion during July-November 2006 compared to $6.592 billion during the corresponding period of last year.

According to the provisional figures compiled by the Federal Bureau of Statistics, the exports in rupee terms surged by 6.45 per cent to Rs418.937 billion during the same period as against Rs393.548 billion during the corresponding period of last year.

Exports during November, 2006 amounted to Rs83.805 billion as against Rs77,688 million in October, 2006 and Rs66.546 billion during November, 2005 showing an increase of 7.87 per cent over October, 2006 and of 25.94 per cent over November, 2005.

In terms of dollars the exports increased by 7.64 per cent in November, 2006 to $1.380 billion when compared with October, 2006 $1.282 billion and by 23.94 per cent as compared to November, 2005 $1.114 billion.

Main commodities of exports during November, 2006 were bedwear (Rs9,413 million), knitwear (Rs9,303 million), cotton cloth (Rs8,731 million), cotton yarn (Rs6,910 million), readymade garments (Rs.6,089 million), art, silk and synthetic textile (Rs4,017 million), rice basmati (Rs2,932 million), rice others (Rs2,795 million), towels (Rs2,618 million) and petroleum products (excl top Naptha) (Rs2,122 million).

Imports during July-November, 2006 totalled at $12.333 billion as against $11.176 billion during the corresponding period of last year showing an increase of 10.35 per cent.

In terms of rupee, imports during July-November, 2006 stood at Rs745.989 billion as against Rs667.277 billion during the corresponding period of last year showing an increase of 11.80 per cent.

Imports into Pakistan during November, 2006 amounted to Rs168.433 billion as against Rs129.170 billion in October, 2006 and Rs137.400 billion during November, 2005 showing an increase of 30.40 per cent over October, 2006 and of 22.59 per cent over November, 2005.

In terms of US dollars the imports increased by 30.11 per cent in November, 2006 $2.774 billion as compared to October, 2006 $2.132 billion and by 20.64 per cent as compared to November, 2005 $2.299 billion.

Main commodities of imports during November, 2006 were Petroleum crude (Rs21,552 million), Petroleum Products (Rs18,195 million), Other Apparatus (Telecom) (Rs8,310 million), Iron and Steel (Rs6,901 million), Palm oil (Rs5,064 million), Plastic Materials (Rs.4,978 million), Mobile phone (Rs4,718 million) Electrical Machinery and apparatus (Rs4,073 million), Raw Cotton (Rs3,022 million) and textile machinery (Rs2,856 million).

Based on the provisional figures of imports and exports the balance of trade in November, 2006 was (-) 84.628 billion in terms of rupees and (-) 1.394 billion in US dollars.

The balance of trade figures cumulative from July-November, 2006were (-) 327.052 billion in terms of rupees and (-) 5.406 billion in US dollars.

The News.

 

[Neo]

Methane gas discovery deal approved

KARACHI (December 24 2006): Sindh Cabinet which met here on Saturday under the chairmanship of Chief Minister Dr Arbab Ghulam Rahim gave approval in principle to an agreement for discovery of Methane gas under the layers of coal reserves in Sindh.

It may be mentioned here that a MoU in this regard was signed on November 27 during the US visit of President Pervez Musharraf. The agreement was concluded with a joint US-Canadian Company "Soneri" whereby it will carry out a survey of coal reserves in which the help of PC-3 Orien aircraft will also be obtained.

Briefing newsmen after the Cabinet meeting, the Advisor Information Salahuddin Haider pointed out that it was for the first time that Pakistan government entrusted an authority to Sindh government to undertake a survey of gas reserves and also issue licence in this regard, which, otherwise, was the federal government subject.

He said that in the first phase, the company would make a stupendous investment of 5 billion dollars. The advisor said that there had been no law with regard to gas discoveries and, therefore, Sindh government has made some rules. However, before their enforcement, the Cabinet decided their further scrutiny so that no legal hitch remains.

In this regard the Cabinet formed a committee comprising of Secretaries Law, Mines and Minderal Development, Finance and Industries and directed it to carry out vetting of the rules and submit its report within two days. Provincial Minister Mines, Irfanullah Khan Marwat informed the Cabinet that no law in Pakistan existed to explore and develop coal-based Methan gas.

Salahuddin Haider said that according to an estimate there are 25 trillion cubic feet of Methane gas reserves. He said this gas could be used as piped gas and also converted into petrol, diesel and used in the production of chemical.

He said the company will bring entire equipment for gas exploration and Sindh government could levy excise and other taxes, which previously was the subject of federal government. To a question, he said, the issue of IX-X composite examination was not on the agenda of today's cabinet meeting.

However, he said, a meeting has been convened to be held after Eidul Azha, which would also be attended by representatives of federal government and educational experts to take a decision on the issue.

http://www.brecorder.com/index.php?id=510967&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

building of these dams is a good idea but opposition and some government allies have conflicts on that matter.

Conflics and hurdles can be solved and overwon with a feasible plan to serve all comodities.
Its in our comon interest to build these dams or face further desertification of our soil which will create bigger problems in future.

These dams will not only save millions of mcf of water which is currently lost to the see, it will also help to irrigate 22 million acres of new arable land.

 

[Neo]

$1bn investment planned for weaving sector

ISLAMABAD, Dec 23: The Textile ministry has proposed more than $1 billion private sector investment in the weaving sector for setting up of 40,000 new looms to enhance the production of quality fabrics.

The initiative is expected to boost production of quality fabrics used in the manufacturing of home-textile and garments in the value-added chain as currently in the weaving sector only 10,000 looms were operating for manufacturing quality fabrics.

Well-placed sources told Dawn on Saturday that the proposal among others worked out by a sub-committee constituted by the textile ministry was moved to the prime minister secretariat for formal approval.

The sources said that it was also recommended to declare fabrics as raw material in the value-added sector for manufacturing of home textile and garments. Currently, natural fibre and man made fibre were declared as raw materials since 1970s.

The sources said that it was estimated that in case of installing of these additional looms, the volume of the current textile exports would be doubled easily in the years ahead without any other efforts for enhancing the overall capacity of the entire chains of the sector.

The inefficiency of the weaving sector was attributed one of the reason in the report for the down slide in the exports of the textile products during the last five months of the current fiscal year.

“We can not expect to raise export of textile products beyond an average 10 per cent due to low capacity of the weaving sector. We do not have the capacity for increasing the overall exports from the sector,” a senior official of the textile ministry said on condition of anonymity.

He said that due to the poor performance of the weaving sector, the total export of yarn stood at more than $1.47 billion during the fiscal year 2005-06. Not only this yarn could be diverted to the value addition chain but more yarn could also be imported for manufacturing of fabrics in the country, he added.

Most of the investment in the last years was made only in the spinning sector for production of yarn without any up gradation of the weaving sector. This lack of improper investment only encouraged the export of yarn as a commodity at the cost of developing the value addition chain.

The production of value added products like garments also declined, which ultimately resulted into lower exports. Moreover, the shortage of yarn also resulted into upsurge in the price of fabrics, which would also increase the price of the end-products rendered it less competitive with those coming from other countries, added the official.

http://www.dawn.com/2006/12/24/ebr17.htm

 

[Neo]

ADB to provide $227.8 million for water projects

FAISALABAD (December 25 2006): Lower Bari Doab Canal Improvement Project and Punjab Irrigated Agriculture Project will be completed with financial assistance of Asian Development Bank. ADB will provide $217.8 million from Ordinary Capital Resources, while $10.0 million from Asian Development Fund.

According to official sources, the project would upgrade the Lower Bari Doab Canal System in the province and rehabilitate infrastructure from the head works of Baloki Barrage to minor canals as well as addressing on-farm water management activities.

This will involve about 700,000 ha of irrigated area. The project will result in civil works for irrigation infrastructure as well as training and support services for the agriculture.

Significant capacity development activities for farmer organisations will be an important part of the project.

The project will promote economic growth, increase farm incomes and improve resource sustainability through enhanced productivity of irrigated agriculture and improve management of Punjab's water resources.

The project components include rehabilitation and upgrading of Baloki Barrage, Lower Bari Daub Canal and BS Link canal head regulators.

The Punjab irrigated agriculture project preparation facility will ensure that the forthcoming projects are expeditiously prepared to fully utilise programme resources, future projects are well designed and meet ADB guidelines.

http://www.brecorder.com/index.php?id=511206&currPageNo=1&query=&search=&term=&supDate=

 

[Janbaz]

Rs2 billion sanctioned for NWFP development

ISLAMABAD: Federal Minister for Industries, Production and Special Initiatives, Jahangir Khan Tareen has said that the President has sanctioned Rs2 billion for industrial development in the NWFP over the next three years.

He was addressing an interactive session with industrialists of the NWFP, organised by the Industrialists Association Peshawar, a press release said here on Tuesday.

The minister also witnessed the signing of an MoU between Sarhad Development Authority and Pakistan Stone Development Company for the acquisition of land for a marble city in Risalpur to be set up by the company.

Elaborating various initiatives taken by the federal government for industrial development in the province, the minister said that the marble city would have an industrial estate, common facility and training centres and marble warehouses so that the processing industry was located near the sources of raw materials and the industrialists had access to HR development facilities and marble stone deposits.

The minister also held meetings with the NWFP government to discuss the Clean Drinking Water Project.

The minister said that Sporting and Hunting Arms Development Company had been set up to establish an industrial estate in Darra Adam Khel to properly exploit the export potential of arms and ammunition manufactured in the area. The government would provide technical support, training and quality raw materials to make the indigenous arms industry competitive in the international market.

The minister informed that similar projects would be initiated for gemstone sector and an MoU will be signed with Geological Survey of Pakistan for the provision of operational funding to carry out extensive surveys of mineral resources.

Tareen remarked that the hydroelectric resources of NWFP should play a key role in the development and expansion of industrial infrastructure and the federal minister supported the use of electricity of the Malakand-3 project by the local industry.

Tareen invited the provincial government to provide a matching grant of Rs500 million for the rehabilitation of the industrial estates in the province.

Responding to a query the minister announced that government is working on a public-private partnership venture to produce one hundred thousand additional skilled workers to meet the demand of industry.

The News Pakistan.

 

[Neo]

July-November FDI up by 105.26 percent

ISLAMABAD (December 27 2006): Foreign direct investment (FDI) during five months (July-November) of 2006-07 soared by 96.25 percent year-on-year to $1.476 billion from $752.1 million, and portfolio investment rose by 130.27 percent to $623.8 million $270.9 million, according to the State Bank report on Tuesday.

Therefore, on balance, total foreign private investment in five months increased by 105.26 percent to $2.099 billion from $1.023 million of corresponding period of last fiscal year. It is hoped that this fiscal year total investment inflow would cross last year's $3.872 billion. A significant feature of the data is that though FDI inflow followed steep path right from the beginning of the new fiscal year and increased enormously, portfolio investment has been showing an up and down trend from the beginning. However, during the period under review it has shown a huge growth.

According to break-up of the investment, by region, total investment from developed countries was $1.457 billion, including $964.5 million FDI, and $492.3 million portfolio investment, and the developing economies invested $510.8 million (FDI $379.6 million and portfolio investment $131.1 million).

Among developed countries, Western Europe made a total investment (FDI and portfolio) of $731.5 million and European Union $709.8 million, against last year's $239.6 million and $150.7 million, respectively. Besides, under unspecified head (investment by IFIs and other n.s.e) was $132.2 million. This included FDI of $131.9 million and $0.3 million in portfolio.

Among developing economies, Caribbean Islands invested $11.8 million as FDI and $1.3 million portfolio investment; and Africa, including Libya, Egypt, Mauritius, South Africa and other African countries, invested $49.3 million.

Asian countries (West Asia, South, East and South East Asia) made total investment of $447.4 million, including $327.4 million FDI and $119.9 million portfolio investment.

The investment of $666.7 million from the United States (US) was the biggest which included $363.7 million FDI and $303 million portfolio investment. United Kingdom (UK) was the next with total investment of $640.4 million, including FDI of $423.7 million and portfolio investment of 216.7 million dollars. United Arab Emirates (UAE) was third with total investment of $226.3 million, injected $233.1 million FDI and withdrew $6.8 million portfolio investment.

Singapore was the only country, which made a sizeable investment of $116.1 million during July-November 2006-07 against only $2.5 million in corresponding period of last fiscal year. This included $107.1 million portfolio investment and $9 million FDI, against last year's $-0.8 million and $3.3 million, respectively.

http://www.brecorder.com/index.php?i... rm=&supDate=

 

[Neo]

Over $13 million equity-based investment made abroad in July-September: ECC to be briefed today

ISLAMABAD (December 27 2006): The Finance Division will inform the Economic Co-ordination Committee (ECC) of the Cabinet that the nine resident companies/investors have made equity-based investment of $13,145,454 in foreign companies during July-September 2006-07.

Sources said on Tuesday that the Finance Division would present the data on equity-based investment abroad by Resident Pakistanis in its meeting on December 27.

The State Bank of Pakistan (SBP) had allowed the Pakistani residents, including firms and companies, to make equity-based investment (other than portfolio investment) in companies (whether incorporated or not)/joint ventures abroad on repatriable basis, with prior permission of the SBP.

The Cabinet had approved the proposal of the Finance Division to allow equity-based investment abroad by resident Pakistanis with a view to further liberalising economy and deregulating control over the foreign exchange. Subsequently, the ECC had decided that the SBP should approve proposals costing up to $5 million each, and that proposals costing more than $5 million each be submitted to ECC for approval.

The ECC had also directed the SBP to submit a summary statement on quarterly basis to the ECC regarding cases approved by them costing up to $5 million. The State Bank has submitted a summary statement of investment approved by them for the first quarter of fiscal ie July 1 2006-September 30, 2006. The statement showed that the SBP granted permission to nine cases involving a total remittance of $13,145,454.

According to the statement showing details of equity-based investment abroad allowed to resident Pakistanis by the SBP from July 1, 2006 to September 30, 2006: Novatex Limited invested $5,000,000 in foreign company (the Novatex Inc USA); Descon Engineering Ltd, $140,058 in the Descon Engineering Quarter Ltd; the KASB Securities Ltd $325,717 in the Envolvence Capital Ltd, British Virgin Islands; Muhammad Shafi Tanneries (Pvt) Limited $1,000,000 in Sihui Shafi Leather China, Co China; Descon Engineering Ltd $40,850 in Descon Engineering FZE, UAE; Crescent Bahuman Ltd, $60,000 in the Crescent Bahuman Ltd Dubai, UAE; Pakistan Mobile Communication (Pvt) Ltd $5,000,000 in Global Enterprise for Telecom Trade Dubai, UAE; Beaconhouse Public School (Pvt) Limited, UK, $663,047 in the Beaconhouse Educational Service Ltd, UK.

Employer Contribution to Stock Option Schemes: the Ericsson Pakistan (Pvt) Limited made investment of $339,156 in the Telenokitebolaget LM Ericsson, Sweden; Philips Electrical Industries of Pakistan, $12,680 in the Royal Philips Electronics NV, Netherlands; Abbot Laboratories (Pak) Ltd $33,475 in the Abbot Laboratories Inc USA, and the Procter and Gamble Pakistan (Pvt), Limited made investment of $530,471 in M/s Procter and Gamble International Operations, USA in first quarter fiscal 2006-2007.

http://www.brecorder.com/index.php?id=511653&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Govt urged to develop mineral sector

ISLAMABAD, Dec 26: The World Bank has asked Pakistan to improve its legal (regulatory) and fiscal (taxation) regimes and to have in place an institutional framework in order to attract foreign investment in the mineral sector of the country.

Official sources told Dawn that the WB maintained that the lack of institutional arrangements was impeding progress to adequately develop the mineral sector and hence attracting foreign investment. It also wanted incorporation of social and environmental aspects.

In this behalf, the Bank has urged the government to urgently go for institutional strengthening and capacity building of the Mineral Wing of the ministry of petroleum and natural resources without which it would be difficult to attract considerable foreign investment in the country's neglected mineral sector.

For the development of the mineral sector, the World Bank said, international investment was required to be coordinated at the federal level. Since formulation of policies on mineral development is in the federal domain, considerable capacity improvements are needed to enable establishing mineral frameworks that are consistent at federal and provincial levels.

The Bank also called for facilitating the preparation of provincial Mineral Concession rules and regulations and coordinating development of the provincial mineral cadre systems.

The government, sources said, was asked to coordinate and promote mineral investments, develop and disseminate basic geological information and improve economic conditions of small scale minerals including coal, gemstone and dimension stones.

The Bank is also of the view that a database is pre-requisite to develop mineral sector through foreign investment and that constant monitoring is required to maintain the progress being made by multinational mining companies.

Sources said the international companies interested in making investment in the mineral sector have demanded of the government to have data in digital form. Currently, the mineral wing of the ministry has no facility of data bank and subsequent dissemination to the interested parties. "The establishment of Mineral Data Bank (MDB) is essential", a source said.

The Bank of the view that the mineral wing is under-staffed, which is why it cannot carry out all the required functions.The core function of the mineral wing, the WB believed, should be the correct registration of private companies, maintenance of export and import, data of minerals and dissemination data to different agencies as per their requirement.

The officials of the mineral wing were asked to make efforts for the development of mineral sector by coordinating efforts with the Balochistan Mineral Development Programme, which is likely to be sponsored by international donor agencies.

Initially, the World Bank, sources said, has promised considerable financial assistance to help implement mineral sector development programme.

The government was told that the mineral exploration is "high risk" capital investment. The risk in generation of basic geological data and identification of exploration targets are high, therefore, the private sector, even in developed countries, do not contribute in this phase of mineral exploration and the governments through geological surveys have to undertake these activities.

http://www.dawn.com/2006/12/27/ebr6.htm