Pakistan Economy - News & Updates - Archive

[Owais]

Strong banking system essential for successful economy: PM


ISLAMABAD (updated on: March 13, 2007, 03:12 PST): Prime Minister Shaukat Aziz on Monday said that a strong banking system is an essential ingredient for a successful economy. He was talking to Dr. Shamshad Akhtar, Governor State Bank, who called on him here at the prime minister House this afternoon.

The prime minister said the reforms undertaken in the banking sector during the last seven years have produced excellent results in improving service to customers, introducing new products, use of technology and catering to needs of all sectors including micro-finance, auto leasing, housing, industrial sector, SMEs and trade.

He said that the improvement in the banking system has encouraged several global banks to acquire Pakistani banks which augurs well for the country.

Governor State Bank, Shamshad Akhtar briefed the prime minister on the various monetary policy measures undertaken to control inflation which is showing a positive trend.

The prime minister said that controlling inflation and prices is essential so that the benefits of economic growth are transferred to the people.

He said in addition to the monetary policy, supply side measures and reforms have resulted in reduction of prices of cement, LPG, sugar, ghee and pulses and the government is keeping a close watch on the prices of every day use.

The Governor State Bank also updated the prime minister on the developments in banking system, the operations of State Bank, growth in foreign exchange reserves and the stability in exchange rate.

The prime minister complimented Shamshad Akhtar for making the State Bank an effective regulator and an important part of the overall economic management team of the government.
brecorder.com

 

[Owais]

Malaysia likely to increase investment in Pakistan

ISLAMABAD (March 13 2007): Malaysia is expected to increase its investments in Pakistan, particularly in food manufacturing and oleo chemicals. So far, Malaysia's Felda has been playing a lead role in Karachi with three major projects of combined investments of RM155 million, private TV reported.

The first joint venture in 1995, between Pakistan's Westbury Group of Companies, Felda and IOI Group, was for a storage facility of edible oils at Port Qasim. About RM25 million is being invested in these storage tanks to expand the capacity to 100,000 tonnes by December this year, from 78,000 tonnes currently.

The second collaboration took the form of a modern edible oil refinery that can process 240,000 tonnes of palm oil and 60,000 tonnes of soyaoil, sunflower oil, canola oil and cottonseed oil a year.

Major shareholders Westbury, Felda and Kuala Lumpur Kepong Bhd have invested RM60 million in the refinery, which started operations in July last year. The third joint project between Felda and Westbury involved a liquid cargo terminal at Port Qasim. More than RM70 million has been pumped into this infrastructure, which is expected to start operations by December.

On ways to promote palm oil consumption in Pakistan a 50-member delegation of Malaysia would be leading to Karachi from April 17 to 21 to participate in the Malaysia-Pakistan Palm Oil Trade Seminar (POTS).

This is the third edition of the POTS series organised by the Malaysian Palm Oil Council to generate greater global recognition of the nutritional benefits of palm oil. It is expected that Malaysian palm oil exporters will consider setting up food manufacturing and oleo chemical businesses in Pakistan.


http://brecorder.com/index.php?id=537814&currPageNo=1&query=&search=&term=&supDate=

 

[Owais]

Japanese-Pakistanis for intermediary facility at Gwadar


LAHORE (updated on: March 13, 2007, 03:05 PST): The Pakistani expatriates in Japan have sought government's help for establishment of an intermediary facility at Gwadar Deep Seaport for the re-export of Japan-made vehicles to the other parts of the world.

An eight-member delegation headed by President Pakistan Association Japan, Behlum Shahzad Ali, was talking to LCCI President Shahid Hassan Sheikh here on Monday.

Shahzad said that at the moment the whole business of used vehicles was being carried out in Dubai but Pakistanis in Japan want to make Gwadar a hub of such activity.

The delegates from Japan also showed a keen interest in making investment in petrochemicals and plastic raw materials, as Pakistan has no manufacturing facility in this sector so far.

They were of the view "The land mafia in Pakistan is quite active to undo the efforts of the government which is taking all measures to convert it into an investment-friendly country. There is a need that the government should take all necessary steps to curb these evils once for all."

LCCI president Shahid Hassan Sheikh briefed the delegation on investment scenario in Pakistan. He said that Pakistan is now on the road to economic stability and it needs a positive response of foreign investors to prove its worth as an attractive investment destination.

He said that development of Gwadar Deep Sea Port and industrial estates all over the country provide best possible infrastructural facilities to foreign investors.


brecorder.com

 

[Owais]

Exports showing four percent growth: Humayun

LAHORE (March 13 2007): Commerce Minister Humayun Akhtar has said that there is no decline in the country's exports, rather there has been 4 percent growth in exports so far, which would rise further in the remaining five months of the current financial year.

He stated this while talking to newsmen after chairing the 19th meeting of the Board of Directors of Pakistan School of Fashion Design (PSFD) at the Trade Development Authority of Pakistan (TDAP) office here on Monday.

He said that imports have shown growth rate of 9 percent. Regarding Indian allegations of non-compliance of Safta, he said that Pakistan was fully complying with it, and would settle all other issues, including non-tariff issues, with India bilaterally.

About the PSFD, he said the institution would be reorganised in two phases. In the first phase, a new campus would be constructed, at a cost of Rs 669 million. In the second phase, Rs 800 million would be spent on training, development of curriculum, etc. The project would be completed by 2008, he added. He said the insurance sector was being revamped, and soon a presentation in this regard would be given to the Prime Minister.

About slowdown in textiles, the Minister said that this sector contributes 60 percent of total exports, and the government was looking into the factors that led to recession in this sector.

Earlier, the Principal of PSFD briefed the Board members on financial updates as on February 28, 2007, award of Federal Charter, construction of new campus at Johar Town, Lahore, and establishment of campuses at Islamabad and Karachi.

The Minister, who is also Chairman of the Board, appreciated the performance of the PSFD and advised it to expedite the formalities regarding award of Charter to PSFD.

http://brecorder.com/index.php?id=537791&currPageNo=1&query=&search=&term=&supDate=

 

[Janbaz]

Current account deficit crosses $5bn

By our correspondent

ISLAMABAD: Fuelled by huge trade deficit, Pakistan’s current account deficit (CAD), excluding official transfers, during July-January 2006-07 has reached a worrisome level of $5.029 billion or 3.5 percent of the gross domestic product (GDP).

The CAD is rising at an alarming pace and it is feared that if the current pace persists it would breach the government’s set target of $6.3 billion or 4.3 percent of GDP by the end of this fiscal.

The State Bank of Pakistan (SBP) data released Monday revealed that the current account imbalance was due to trade deficit (in goods and services) jumping to $8.66 billion during July-January 2006-07 from just $7.35 billion during same period of the last fiscal. The trade deficit figures are evaluated by using the free-on-board value of imports and exports.

A larger current account deficit, as a share of economy and in dollar terms may pose threat to the economy simultaneously on both internal and external fronts. During seven months, CAD has grown by more than 39.31 percent to $5.029 billion as against $3.61 billion recorded in corresponding period of last fiscal.

It is worth mentioning that last year, owing to higher than expected trade deficit, the Finance Ministry had revised target for current account deficit and set it at $5.137 billion (4.2 percent of GDP) against $2.7 billion (2.19 percent of GDP) for the FY 2005-06.

Independent economists say that this external disequilibrium may also affect economic activity and growth. While, on the other hand the government’s economists are of the view that Pakistan is enjoying an economic boom and the current account was manageable.

The Central Bank’s data revealed that imports stood at $15.81 billion whereas exports totalled $9.71 billion thus leaving a trade imbalance of $6.11 billion. The services account also witnessed a large imbalance of $2.557 billion during July-January 2007 as inflows under this account stood at $2.305 billion whereas outflows totalled $4.86 billion.

The factors responsible for this huge deficit included higher outflows on account of transportation, travel, insurance, construction services, royalties and licence fees. Pakistan had to spend $1.847 billion on transportation account whereas its earning under this head was only $673 million. Thus, the net deficit in the service account due to chartering of vessels for imports, exports shipment was $1.174 billion.

Another factor responsible for big services’ account deficit was a net outflow of $842 million on account of overseas travelling. Pakistan had to spend $998 million to finance personal and business-related travelling abroad of individuals and groups whereas it earned only $156 million under this account. Hence the services account deficit in July-January 2007. The same applies on spending on insurance and royalties and licence fees paid to international organizations and their employees operating in Pakistan.

The imbalances in the trade and services were so large in July-January 2007 that the current account turned negative despite a strong build-up in current transfers. Net current transfers rose to $5.92 billion during the period, from $5.52 billion in corresponding period last fiscal.

Current transfers went up as Pakistan received $2.96 billion in workers’ remittances or foreign exchange sent back home by overseas Pakistanis during this period, up from $2.45 billion in a year-ago period. However, the foreign currency deposits held by the resident deposit holders declined to only $51 million against $295 million in corresponding period.

The News.
http://thenews.jang.com.pk/daily_detail.asp?id=46591

 

[Janbaz]

Why, everyday we say some deficit on the climb. This is worrysome as the economy growth and the hike in deficits might catch up and damage future plans. Can anyone clarify this.

 

[Neo]

CSF sets goal to achieve 60th rank in GCI

ISLAMABAD (March 13 2007): Pakistan's global competitive index (GCI) can improve from the present 91 to 60 by 2010 provided the government takes several steps to improve its competitiveness. These steps include, among other things, active efforts by the government and private sector.

But a large number of the suggestions are not more than generalities so often agitated the multilateral agencies, the government itself and a plenty of development economists. The Competitive Support Fund (CSF), a joint initiative of the Ministry of Finance and the USAID aimed to shape a more competitive economy, on Monday released its 86page report on the State of Pakistan's Competitiveness 2007, amidst considerable fanfare.

The Competitiveness Support Fund has set the goal of moving Pakistan from its rank of 91 to a rank between 60 and 65 by 2010 by improving its competitiveness.

On behalf of the government, the Fund has suggested that it should implement reforms in the macro and micro economic business environment, and the private sector should improve its business strategies and operations, compliance with global standards and that business leaders should reposition their industries and companies in world markets. It is also necessary to prepare a new generation of business managers and entrepreneurs.

It states that by improving its competitiveness, higher growth and higher level of employment would be ensured. As regards improving the Macroeconomic Environment it suggests the Ministry of Finance, must maintain and improve the sound macroeconomic policies. To achieve higher rates of growth, inflation must be kept within single digit; the budget deficit must now be reduced; fiscal and monetary policy should help in increasing federal savings and investment as a percentage of GDP. Increased foreign remittances and increased foreign investment will ensure growth in foreign currency reserves and improve balance of payment position.

It adds, through tax modernisation, the government will be seeking increased revenues while lowering the rates and expanding the base and simplifying compliance. This will set the macroeconomic environment for growth.

With a good macro economic environment, it is also essential to have an excellent microeconomic environment. This can be achieved by reducing the obstacles to the formation of new business and the growth of small and medium enterprises. Smeda is playing a very useful role in fostering development of competitive industry clusters and growth of small businesses.

The government will need to focus on continued progress in judicial reforms and the effective application of the rule of law to commerce, including the enforcement of contracts and the fair resolution of disputes.

The country must improve enrolment rates at all levels of education while improving the relevance of this education. Schools should focus on equipping students with marketable skills, as it is important to equip young people with the aptitudes as well as the attitudes needed to secure employment. Education leaders have a vital role to work more together to define skill gaps, skill standards, current deficiencies and new training programmes.

It further suggests that technological readiness and innovation can be fostered by improved linkages, among research institutes and their respective industries. Policies need to be in placed that lead to rapid expansion of digital technologies. The government should follow the Chinese example of one child one computer.

In the words of the report, the private sector has critical role to play. Productivity can only be delivered by real individuals that improve their productivity and real companies that improve their strategies and operations. Therefore, private firms must play a leadership role in boosting Pakistan's competitiveness. Corporate governance and accountability must improve among Pakistan's private companies.

The Government can reform its tax policy, lower rates and reduce the cost of compliance, but the private sector must respond to this with a culture of voluntary compliance. Private companies need to modernise their use of human resources, use incentives and invest in training.

Pakistani firms must lead the way as export champions and position themselves as compliant with global labour, consumer and environmental standards. It warns that failure to adopt world class labour standards will risk erosion of confidence from international investors, and buyers. Since these are being demanded by the foreign investors and buyers, Pakistan can position itself in the world economy as a country in full compliance with such standards.

http://brecorder.com/index.php?id=537692&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

President directs completion of small power projects

ISLAMABAD (March 13 2007): President General Pervez Musharraf has directed the Ministry of Water and Power to expedite completion of small power generation projects to help meet the demand of expanding industrial and agriculture sectors on fast track basis.

Chairing a meeting on the status of short-term energy projects in Rawalpindi here on Monday he stressed the need for facilitating the private sector, including local and foreign entrepreneurs, in setting up small power plants in the short term.

The President underlined that these new units should be completed within the stipulated period for continued supply of energy to the industrial units.

He said that industrial and engineering sectors were rapidly expanding, resulting in steep increase in the demand for electricity. He said energy would also be imported from the regional countries and alternative sources, including coal, residual fuel oil, and wind mills would be utilised to ensure supply of energy on sustainable basis for the country's economic development.

The President was informed that several foreign companies were planning to set up power plants to generate around 1100 mw additional electricity by the end of this year.

Official sources told Business Recorder that the meeting was further informed that these projects would help meet the country's rising energy demand due to the booming industrial sector and would help reduce load shedding for domestic consumers. Import of electricity from Iran would be increased to around 600 mw to meet the requirements in the bordering areas.

Minister for Water and Power Liaquat Ali Jatoi later told reporters that the rise in demand of electricity was due to the influx of foreign investment in various sectors and new units for fertilisers and cement that were being set up in the private sector.

He said that for the first time private investors have been invited to invest in hydel energy projects. He said the robust industrial growth was the result of President Musharraf's vision of an industrially developed Pakistan.

http://brecorder.com/index.php?id=537718&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

9,100 villages provided electricity in last 7 months

LAHORE (March 12 2007): Wapda on the special directive of the Prime Minister Shaukat Aziz has provided electricity to a record number of 9,100 villages during the first seven months of the current fiscal year.

Member (Power) Wapda Engineer Chaudhry Muhammad Anwar Khalid told APP here on Sunday that out of total annual target of 15,000 villages, 9100 have so far been provided electricity, which reflects the excellent performance of the Wapda.

He hoped that annual target of village electrification will be achieved comfortably. He said that the chief executives of the all power distribution companies have been directed to ensure the timely achievements of the targets set by the authority.

FOLLOWING IS THE BREAK UP OF THE VILLAGE ELECTRIFICATION UP TO FEBRUARY 2007:

Fesco 1568 Gepco 205 Iesco 799 Lesco 440 Mepco 3217 Hesco 1208 Pesco 1156 Quesco 507.

About the grant of new tubewell connections during the period under review, he said that a record number of 9,128 tubewell connections out of a total annual target of 12,000 for agriculture purpose have been given throughout the country.

http://brecorder.com/index.php?id=537523&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Food inflation close to double digits

By Israr Khan

ISLAMABAD: Though, the general inflation measured by Consumer Price Index (CPI), is still on the decline, the food inflation is hovering about in double digit and snatching the purchasing power of the low-income group, which is a challenge for the economic managers.

The Federal Bureau of Statistics (FBS) on Monday reported that the CPI in February 2007 stood at 7.39 per cent against what it was 8.05 per cent during the corresponding month of the last year, while the inflation of eight-month (July-February 2006-07) has gone down to 8.04 per cent over the corresponding period of last year (8.42 per cent).

More interestingly, the food and beverages, having 40.34 per cent weightage in CPI basket, is unevenly affecting the purchasing power of low-income group, increased by 1.42 per cent in February 2007 over January 2007.

The monthly CPI bulletin further reveals that besides other commodities, the prices of food and beverages; education and medicare charges; fuel and lighting and house rent year-on-year basis during February were exorbitant as compared to the corresponding month of last year.

According to the data, in February 2007, prices of food and beverages rose by 9.99 per cent, education was expensive by 8.32 per cent, medicare charges rose by 9.32 per cent, fuel and lighting 6.53 per cent and house rent increased by 6.27 per cent over February 2006.

In one month, general inflation increased by 1.04 per cent, food inflation by 1.42 per cent, apparel textile and footwear increased by 2.15 per cent, fuel and lighting 1.40 per cent and education expenses rose by 0.95 per cent in February 2007 over previous January.

Detailed analysis of CPI data showed that under food and beverages, the items, which became dearer in February 2007, were: fresh fruit 18.86 per cent, chicken (farm) 11.4 per cent, rice 8.48 per cent, spices 5.57 per cent and the price of onions increased by 5.44 per cent in one month over January 2007.

The other indicator of inflation i.e. the general wholesale price index (WPI) was satisfactory during February 2007 (5.09 per cent) over the corresponding month of the last fiscal. However, prices of some commodities are still high i.e. the prices of food increased by 8.70 per cent, raw materials 13.09 per cent and building materials were expensive by 11.58 per cent over same month of the last fiscal.

The FBS data revealed that the WPI during February 2007 was up by 0.51 per cent over previous month. However, during the month under review, it declined to 5.09 per cent over corresponding February 2006 (9.94 per cent), which signifies decline in the coming months. This indicates that in the coming months the prices of raw materials and its products and the cost of construction building would go up and be out of the grasp of common man.

http://www.thenews.com.pk/daily_detail.asp?id=46587

 

[Neo]

Why, everyday we say some deficit on the climb. This is worrysome as the economy growth and the hike in deficits might catch up and damage future plans. Can anyone clarify this.

March 13, 2007
Changes in monetary policy suggested: Deficits unsustainable

By Ihtashamul Haque

ISLAMABAD, March 12: Pakistan's current account and trade deficits are "unsustainable" in the long run and will require adjustments in monetary or exchange rate policies, says a latest Pakistan-USAID joint report.

The report “State of Pakistan's Competitiveness-2007”, prepared by the Competitive Support Fund (CSF), launched here on Monday by Prime Minister Shaukat Aziz at the PM Secretariat, warned that continued vigilance, discipline and careful management were required to lower the twin deficits.

The CSF report, a joint venture of the ministry of finance and the United States Agency for International Development (USAID) said, "High growth of domestic demand has led to a significant increase in the current account and trade deficits.

“Currently the deficits are being financed through one-off investment flows- this is unsustainable in the long run".

It also said that despite recent improvements in the poverty picture, nearly one-quarter of Pakistan's population continued to live below the poverty line, and reducing this figure constitutes the foremost challenge for the authorities.

It further said that the weak points in the private sector are related to corporate governance and modern management and motivation of the workforce.

"It appears that the private sector also needs some reforms, especially in the area of corporate governance and modern approaches to the workforce".

The report believed that macroeconomic and governance issues were affecting all the provinces to more or less the same degree.

However, each province was also affected by factors that were specific to it, such as location, in relation to the main markets, distance from the sea, the area of the province, the size of its population, the status of its human development indicators and access to natural resources.

It said that GDP growth must be higher in order to cut the backlog of unemployment.

"At some risk of oversimplification, therefore, one could say that the overall challenge for the provinces is to increase their GDPs to around 6.5 per cent annually."

Pakistan's energy supplies were highly dependent on oil imports, the cost of which accounted for a large share of the country's total import bill. In addition, national power demand is outstripping supply. This is a trend likely for some time, given that Pakistan's productivity capacity needs are projected to reach a level of 162,590 megawatts by 2030, from a level of 15,500 MW in 2005.

Only 55 per cent of Pakistan's population has access to electricity from the national grid.

"In fact, Pakistan has one of the lowest per capita consumption of energy in the world", the report added.

The prime minister in his speech noted that the first State of Pakistan's Competitiveness Report was an important step to focus the energies of the nation around the common goal of making the country a stronger economy.

He also said that CSF would work in partnership with the World Economic Forum (WEF) and the US Competition Council and the Lisbon Agenda of the European Union (EU).

Prof. Michael Porter, Harvard's expert on competitiveness and engineer of one of the business competitiveness index said Pakistan showed impressive movement in some of the most dynamic indicators which boded well for future economic growth.

Prime Minister's Advisor on Finance Dr Salman Shah said on that CSF sought to finance practical initiatives to reposition Pakistan's economy regionally and globally and set it on more competitive footing.

"The results will be higher productivity, increased innovation and an economy that is integrated into global value chains and can compete internationally", he said.

Mr Arthur Bayhan, CEO of the CSF in his presentation briefed the audience about the WEF's global competitiveness report and other countries.

In particular, he highlighted the importance of the provincial and local leaders to be part of the competitive dialogue.

The CSF, he said, was working directly with each region in addressing the key competitiveness issues at the regional level.

"The challenge of building competitiveness went beyond what could be accomplished by the government's economic team alone and required the active support and participation of regional and local leaders, academia and the private sector", noted Bayhan.Pakistan, he said, was consistently improving in terms of competitiveness and dynamism.

However, he said that the private sector of Pakistan needed to work more on developing the medium and long term strategies as one of the many steps to improve its competitiveness.

He also urged the government agencies and NGOs to update the data and submit it to international source.

http://www.dawn.com/2007/03/13/ebr1.htm

 

[Neo]

Tuesday, March 13, 2007

Oil and gas production increases marginally

KARACHI: Oil and gas production has increased marginally during the first seven months of the current financial year.

It stood at 157.14mnboe as against 155.99mnboe during the corresponding month of the previous year, registering a growth of 0.74 percent.

According to data released by Pakistan Petroleum Information Service (PPIS), the flat production growth is even because of lower increase in the country’s gas and oil production during the period under review. Gas output remained at 143mnboe, 0.7 percent higher as against 142mnboe previously. The depletion of Sui gas field output, lower production from the Pindori and shutdown of other fields like Uch etc were the major reasons behind overall stagnant gas production figures. However, this negative impact, to some extent, is being offset by the increase in the production from Adhi and Tal block.

Oil production also remained intact at 14.14mnbbl, depicting a one percent increase as compared with 13.99mnbbl previously. During the period, the production from Pakistan Oilfields’ Pindori field has declined mainly because of problem in water flow.

Analyst Hussain Yasar at Firstcapital attributed this marginal growth in oil production to increased production from existing fields like Tal Block, Adhi, Chanda etc. Furthermore, LPG production of the country improved by two percent to 323bntons as against 317bntons in the same period last year.

The month-wise figures show that oil and gas production witnessed a slight increase in January, depicting an increase of two percent to 24.32mnboe as compared with 23.84mnboe during December 2006. Oil production depicted a growth of three percent while gas production showed a modest growth of two percent. However the production during January 2007 was the highest during the current financial year.

The production in January 2007 was two percent higher as against 23.82mnboe in the same month of the last fiscal. During the month, oil production increased by two percent to 2.11mnbbl while gas output at 22.21mnboe was also up two percent as against 21.76mnboe. According to report prepared by Ambereen Jiwani at Investcap, the Oil production of Pakistan Oilfields Ltd. (POL) declined by 13.1 percent during July-January of this fiscal.

The decline has been attributed to production enhancement process underway and water spill issues in POL’s two major fields (Pindori & Pariwali), which have been operating at a slower pace. The process has been completed in Pariwali and increase in production has been witnessed since November. The gas production of POL has increased marginally by 1.1 percent. The four percent increase in oil production of Oil & Gas Development Co. Ltd. (OGDCL) was mainly due to higher production from its major oil fields (Bobi, Chanda, Kunnar, Sono, Pasakhi North and East). Gas production on the other hand, declined by 2.7 percent during the period due to maintenance shut down in Uch and Pirkoh during the first two months of this year. However, the production has picked up since then.

The Pakistan Petroleum Ltd (PPL)’s oil production grew significantly by 31.7 percent to 2.5k bpd during the seven months of this as compared with 1.8k in the corresponding period last year. Higher production from Adhi and the impact of production from Makori field in the Tal block are the major contributors towards the growth.

While the decline in gas production is due to declining production in Sui, analyst said.

http://www.dailytimes.com.pk/default.asp?page=2007\03\13\story_13-3-2007_pg5_3

 

[Owais]

Pakistan, Uzbekistan to augment trade, transport, energy, security coopeartion


TASHKENT (updated on: March 14, 2007, 02:08 PST): Pakistan and Uzbekistan on Wednesday vowed to enhance co-operation in three vital areas of trade, transport and energy, besides strengthening ties in diplomatic, political matters and collaboration in security issues.

Prime Minister Shaukat Aziz held an informal round of talks immediately after his arrival at the historical city of Tashkent with his Uzbek counterpart Shavkat Mirziyayev.

The two leaders noted that there was wide scope of further strengthening co-operation in economic areas and said their strong relations need to be translated into deeper interaction.

The Uzbek Prime Minister termed Prime Minister Aziz's visit a "landmark' in their ties and said both need to bring in their private sectors for the benefit of the two countries. He said both the countries could learn a great deal from each others' experiences. He said at the time of his country's independence it only exported raw material, but was now setting up industrial units.

Prime Minister Aziz informed the Uzbek leader of the economic reforms over the past six years and said these were part of an unending process.

Earlier the Prime Minister was accorded a warm reception and a red carpet rolled out as he arrived here Tuesday for a two- day official visit. He was received here at the airport by Prime Minister Shavkat Mirziyayev and members of the Uzbek cabinet and senior officials.

Uzbekistan with a 27 million population is a dry, landlocked country. It is world's second-largest cotton exporter and fifth largest producer; it relies heavily on cotton production as the major source of export earnings. Other major export earners include gold, natural gas, and oil. Along with Liechtenstein it is one of the only two doubly landlocked countries in the world.

President General Pervez Musharraf visited Uzbekistan in 2005 and later there was a follow up visit by President Islam Karimov last year. The two countries have signed several agreements to boost their economic and trade ties.

Pakistan provides multiple corridors for co-operation in energy, trade and transportation sectors, which would create opportunities for the entire region including Uzbekistan.

Tashkent has also been supportive of Pakistan's full membership to the Shanghai Co-operation Organisation.

Uzbek ambassador to Pakistan, Oybek Arif Usmanov earlier told APP that the two countries have signed at least 29 agreements of co-operation in various fields.

He said that at present three direct flights from Lahore to Tashkent had been initiated, while similar flights from Karachi to Tashkent were on the cards.

Pakistan and Uzbekistan have also agreed to establish joint ventures in pharmaceutical industry, manufacturing of medical equipment and exchange of technology in health sector during the 3rd session of Pakistan-Uzbekistan Joint Ministerial Commission (JMC). During the meeting Pakistan offered export of engineering goods, medical equipment, sports goods, and textile fabrics, while the Uzbek side offered export of cotton fibre, silk, minerals, fertilisers, cables, construction material, agriculture machinery, chemicals and aircraft to Pakistan.

The Pakistan side also invited Uzbek investors to join hands with Pakistani businessmen in Oil and Gas, Textiles, Agriculture, Leather, Banking and Finance, Sports goods, Pharmaceuticals, Surgical goods, Furniture, Gemstone, Jewellery, Marble and Food processing sectors. Both sides agreed to take necessary measures to facilitate the private sector interaction.


brecorder.com

 

[Owais]

Singapore operator to take over Gwadar Port today

KARACHI (March 14 2007): Port of Singapore Authority (PSA) will formally take over the assets and management of Gwadar Port on Wednesday to formally start its operation in the third week of March. In this regard, an eight-member team of PSA Gwadar Limited, led by Managing Director of Teh Lim Chai would arrived at Gwadar on Wednesday morning to take charge of the port premises, equipments and buildings.

Sources told Business Recorder on Tuesday that PSA Gwadar Limited would start port operations on March 20, after its formal operation commencement by President of Pakistan General Pervez Musharraf.

Sources said that the assets and equipments include two shore cranes of 40-ton capacity, one crane of 25-ton capacity, two cranes of 15-ton capacity, two Rubber Tyre Gantries (RTG), eight bagging plants, one reach stacker, two pilot boats, two tugs of 26 Bollard Pull Towage, one survey boat, one mooring boat and one working boat.

The other assets include desalination plant, control tower, office building, gatehouse, two multi-purpose berths of 602 metres length, 100 RoRo berth and 10 metres service berth and three mega watt generator with another backup generator of 450kv.

The PSA Gwadar has also ordered equipments for the handling of transshipment of containers, which would arrive at the port before August this year from Singapore. The equipment includes two Post Panamax Gantry Cranes of 45 tons capacity, four Rubber Tyre Gantries (RTGs), six tractor-trailers and one reach stacker, sources said, adding that the port equipment refurbishment is going on presently by specialised companies.

The dredging of Gwadar Port's 4.5 km approach channel has been completed in mid-February and the berth draught is 14.5 metres. The China Harbour has also deployed navigational buoys including fairway buoy. The Concession-Holder Company (CHC), PSA Gwadar Limited has been established and three separate operating companies formed which includes, PSA Gwadar Terminals Limited, Gwadar Marine Services Limited and Gwadar Free Zone Company Limited.

Sources said that the Gwadar port is ready to handle fertiliser and rice shipments for export, as proper bagging infrastructure is available at the proximity of the port. The Gwadar Port will contribute $42.2 billion, in terms of investment, revenues and income received from its entire operations to the exchequer, over a period of 40 years.

The concession agreement was inked on February 6 between the Gwadar Port Authority (GPA) representing Government of Pakistan, and the Concession-Holder Company (CHC), which is a subsidiary of PSA (Port of Singapore Authority) International PTE Limited.

The agreement has a duration of 40 years. Besides, it regulates the rights and obligations of both parties. The GPA will receive revenues (not profit) from the PSA over a period of 40 years. The investment, revenues and income received from Gwadar port's entire operations are between $23.6 billion to $42.2 billion.

Firstly, the GPA expects $5 billion to $8 billion foreign investment in the area of multi-purpose (MP) terminal and related equipment's to cost PSA at Gwadar Port which would be $1 billion to $1.5 billion; container terminal and others $2billion to $4 billion; the cost of Free Zone development $1.5 billion to 2.5 billion; while the marine services and others would cost $0.5 billion.

Secondly, the GPA is expected to receive between $17 billion and $31 billion revenues from CHC over next 40 years. The expected revenues, generated from containers and others, would be $10 billion to $18 billion. Free Zone will generate $3 billion to $6 billion; while the MP terminal and others would produce $4 billion to $8 billion revenues during the period.

Thirdly, the GPA would receive income from PSA over the period of four decades between $1.6 billion and $3.2 billion, in which the CHC of containers and others would give $0.9 billion to $1.6 billion (9 percent of CHC revenue); Free Zone $0.45 billion to $0.9 billion (15 percent of CHC revenue); and the MP terminal and others would provide $0.36 billion to $0.72 billion (9 percent of CHC revenues).
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[Owais]

$700 million pumped into Pakistan: CEO China Mobile


ISLAMABAD (updated on: March 14, 2007, 02:50 PST): China Mobile has already pumped $700 million into Pakistan's telecom sector after taking over the Paktel operations in the country.

"We have come to Pakistan with serious business plans to ensure that Paktel emerges as one of the leading telecom operators in the country within the next couple of years," informed Chief Executive Officer (CEO) China Mobile Pakistan, Guo Yonghong to Minister for Information Technology, Awais Ahmad Khan Leghari in a meeting held here on Tuesday.

The CEO China Mobile briefed the minister about his company's plans for infrastructure development and investment in the expansion of Paktel which has recently been taken over by the China Mobile.

He said his company believed in a healthy competition and quality of service being offered to the subscribers and added the company had already made plans to add around 2500 new basic transmission stations every year to achieve maximum coverage and make itself competitive in the market.

Guo Yonghong told the minister that China Mobile considered Pakistan a valuable partner and the company would work towards strengthening this relationship further in the coming days. He lauded the support and incentives offered by the government to the telecom players already active in the market.

Awais Leghari welcomed China Mobile's decision to come to Pakistan in a big way and assured all possible support and help to the company in extending its operations and its day-to-day interaction with the civic agencies for the purpose of building company's infrastructure in the country.

He said Pakistan's telecom sector was growing at a fast pace with new exciting opportunities coming up for big players like China Mobile to capitalise on a growing hunger for value-added telecom services in the country.

"As the market grows, issues such as quality of service and the provision of value-added services are bound to define the nature of competition that is set to sweep the telecom sector with the arrival of world's biggest telecom company China Mobile in Pakistan," Awais said.

Secretary IT Farrakh Qayyum, Member Telecom Nooruddin Baqai and senior officials from the ministry were also present.

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