Pakistan Economy - News & Updates - Archive

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$6-7bn to be spent on infrastructure​

ISLAMABAD, June 22: Prime Minister Shaukat Aziz said has said that $6-7 billion will be spent on infrastructure development in Pakistan during the next five years.

Chairing a meeting to review the steps required to improve the logistics chain in the country, the premier said this year the federal government would spend Rs60 billion on infrastructure development and transportation.

The amount spent by the provincial governments in these sectors will be in addition to this, he added.

He said under the National Trade Corridor (NTC) Plan, the government is focusing on improving the end to end logistics chain to improve productivity and competitiveness of industrial sector.

Under NTC, he said improvements are being made in the system of railways, roads and highways.

Processes at the ports, airports and land borders have been simplified to reduce the clearance time. The completion of NTC plan and building of North-South Corridor would remove the road blocks to our industrial development and trade enhancement, he added.

“We want to jump the curve and do the right things rightly to improve our productivity and competitiveness,” he said.

The meeting decided that the Planning Commission and the Asian Development Bank (ADB) would jointly prepare a strategic framework to improve the business enabling infrastructure in Pakistan.

The Planning Commission will coordinate with all related departments to prepare the framework. The study that will be carried by a world class consulting firm will focus on determining the future growth requirements in Pakistan.

It will be completed within a year and will have five stages; assessing the current situation, setting growth priorities, critical enablers and alignments to NTC, syndication and stakeholders’ management, implementation, planning and institutionalisation.

Mr Aziz said the initiative is well timed and the first essential step to operationalise the vision 2030 approved by the National Economic Council (NEC) in its meeting held on May 31, 2007.

ADB Country Director, Peter L. Fedon said the strategic framework, to be jointly prepared by the ADB and Pakistan government, will focus on improving the competitive advantage of Pakistan. It will identify steps to bring improvements in terms of competitiveness and optimal utilisation of resources.

http://www.dawn.com/2007/06/23/ebr2.htm

 

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Karachi — world’s 2nd least expensive city​

Karachi, June 22: Expanding both vertically and horizontally, home to one of the most heterogeneous mix of population, Karachi, the port city of Pakistan, has maintained its position as the second least expensive city of the world, says a recently released study by global human resources advisory and research firm Mercer HR Consulting.

Comparatively cheaper rental rates, probably discounted for the high property prices in Karachi, enabled it to offer more value for each dollar spent by expatriates in the city.

According to the study available on the website, Karachi is placed at 142nd position in the worldwide ranking of 143 cities.

The study has ranked the cities based on cost of basic necessities, including housing, transport and food among others during the 12-month period ending March 2007.

The list is topped by Moscow, which has retained its position as the costliest city for expats, followed by London, Seoul, Tokyo and Hong Kong among the top five. Asuncion in Paraguay is the least expensive city, while Quito in Ecuador, Montevideo in Uruguay and Argentina's Buenos Aires were the other three least expensive cities.

In India Mumbai is at 52nd, Delhi at 68th, Chennai at 133rd and Bangalore is placed at 134th position in the current survey.

While London moved up to second from fifth rank last year, Seoul, Tokyo and Hong Kong moved down the rankings.

Even Dhaka is costlier than Karachi.

The survey covered 143 cities across six continents and measured the comparative cost of over 200 items in each location, including housing, transport, food, clothing, household goods and entertainment.

http://www.dawn.com/2007/06/23/ebr12.htm

 

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$900m ADB loan for Punjab​

RAWALPINDI, June 22: The Asian Development Bank (ADB) will provide a multi-tranche $900 million loan to Punjab for improving water resources and increasing agricultural productivity in the province.

A signing ceremony in this connection was held on Friday at the Economic Affairs Division (EAD) by Secretary EAD Akram Malik, Secretary Irrigation and Power Arif Nadeem and ADB’s country director Peter Fedon.

Punjab’s irrigated agriculture accounts for over a quarter of its gross domestic product and employs half of its labour force using more than 90 per cent of the water resources.

“The programme takes a holistic and integrated approach to improve sector performances supported by infrastructure investment and combined with institutional reform,” Thomas Panella, ADB’s senior water resources management specialist, said.

The first two loans would finance the Lower Bari Doab Canal Improvement Project (LBDC) that would also improve the Balloki Barrage which supplies irrigation water to 700,000 hectares.

The Punjab Irrigation and Power Department, responsible for the management of surface irrigation system covering 8.4 million hectares in the province, would be the executing agency for the programme.

The ADB would extend the financing through a multi-tranche facility over 10 years that could be converted into separate loans.

http://www.dawn.com/2007/06/23/top11.htm

 

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Pakistan to raise $650 mln through UBL sale ​

Saturday June 23, 2007

ISLAMABAD (Reuters) - Pakistan will raise $650.3 million through the sale of a 25 percent stake in United Bank Ltd. (UBL), the country's third largest bank, through an issue of global depositary receipts, a minister said on Saturday.

The offer was priced at 195 rupees per share and $12.85 per GDR, with each GDR representing four shares, Privatisation Minister Zahid Hamid told a news conference.

Conditional trading of the GDR on the London Stock Exchange will begin on Monday, while full trading will start on Friday, Hamid said.

"The transaction attracted gross demand of over $2.5 billion from a mix of top quality global funds," Hamid said, and added that it was the largest-ever book for a Pakistan equity offering.

The government plans global listing of National Bank of Pakistan, Habib Bank Ltd. and Kot Addu Power Co.

A consortium of Merrill Lynch and local KASB Securities managed the transaction, which was completed in 11 weeks.

"The offer price represents a premium of 2.6 percent to the average price of the 30 days price, a premium of 9.2 percent to the 60 days price and a discount of about 5.3 percent to Friday's local closing," Hamid said.

UBL shares closed at 205.60 rupees on the Karachi Stock Exchange on Friday.

http://in.news.yahoo.com/070623/137/6hb5f.html

 

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CCoP endorses $650.3 million UBL GDRs: PSO sell-off date shortly, says Zahid ​

ISLAMABAD (June 24 2007): The government has raised $650.3 million from the sale of United Bank Limited (UBL) global depository receipts (GDRs). The Cabinet Committee on Privatisation )CCoP) endorsed the outcome of UBL GDRs.

Later on, Privatisation Minister Zahid Hamid told a press conference that CCoP had approved UBL GDRs and Habib Bank Limited (HBL) initial public offering (IPO).

He said that the Privatisation Commission held roadshows encompassing global financial centers including Hong Kong, Singapore, London, Dubai and New York for UBL GDRs and their outcome was highly encouraging. Zahid Hamid said UBL GDRs would start conditional trading on London Stock Exchange (LSE) from June 25 and this would be followed by full trading from June 29.

He said this launch has marked another landmark transaction of the privatisation program in the international market after the listing of OGDC at LSE in December last year, which attracted $811 million.

Zahid said that international investors from US, UK, continental Europe, Middle East and Asia bought GDRs equivalent to UBE shares priced at Rs 195 a share, amounting to divestment of a 25 percent of the total paid up capital of UBL.

Each GDR represents four underlying shares of UBL. The GDRs price was S 12.8543 each. The transaction attracted gross demand of over $2.5 billion from a mix of to quality global funds, Asian funds and financial sector dedicated specialists, the largest ever book for a Pakistan equity offering.

The GDR was attractively priced at approximately 5.Ox '06 price to book value per share, which is higher than the valuation of similar transactions elsewhere/globally.

He said the offer price represented premium of 2.6 percent to the average price of the 30 days price, 9.2 percent to 60 days price and discount of about 5.3 percent to Friday's local closing price of Rs 206 per share. He said CCoP approved HBL IPO of 5 percent of total shares with a green shoe option of 2.5 percent (51.75m shares) at an offer price Rs 235 per share and the total size would be Rs 12.2 billion.

HBL offer for sale by shares will be the largest offering in Pakistan in terms of both value and number of shares offered. He said for the first time ever shares are being offered in lots of 100 and multiples of 100 up to 500 shares, thereafter multiples of 500 shares.

The marketable lot for trading in the Stock Exchanges will be 100 shares, allowing case of entry and exit to successful applicants of 100 shares. The application size of 100 shares would make the subscription affordable for the common citizens and would allow them an opportunity to become a shareholder of one of the largest banks of Pakistan. This structure will potentially benefit over 517,000 investors, the largest number ever in such transactions.

The Minister said HBL IPO will be made in 2-3 weeks. The minister added that the CCOP was also apprised of the suggestions and proposals came out of the deliberations of the pre-qualified bidders during the pre-bid conference of PSO transaction and said that all stakeholders have been asked to expedite the resolution of all the issues in this regard. He said Privatisation Commission is going to announce PSO bidding shortly.

http://www.brecorder.com/index.php?id=582147&currPageNo=1&query=&search=&term=&supDate=

 

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Portfolio investment hits new high ​

KARACHI (June 24 2007): The portfolio investment in the country's equity market with fresh increase of around $18 million on June 22 has reached at its high ever level of $924.771 million on the back of massive inflow from Germany, Hong Kong, Switzerland, UK and USA.

The net inflow of portfolio investment of $17,996,846 was registered only on June 22, 2007 out of which $12,301,394 came from UK, $3,232,567 came from Switzerland, $1,567,873 came from Hong Kong, $1,062,173 came from USA and $81,649 came from Germany.

According to figures released by State Bank of Pakistan after recent inflow of portfolio investment, the total figure in this account has reached at its all time high level of $924,771,594 on the said date.

http://www.brecorder.com/index.php?id=582179&currPageNo=2&query=&search=&term=&supDate=

 

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Kasuri encourages US entrepreneurs for investment ​

CHICAGO (June 24 2007): Foreign Minister Khurshid Kasuri, highlighting Pakistan's tremendous economic potential and its key strategic location to serve as regional hub of trade and economic activity, encouraged American entrepreneurs to take advantage of the vast business opportunities existing in the country on the back of its sustained high growth.

Addressing a gathering of corporate leaders at the World Trade Centre in Chicago, the foreign minister apprised them of an attractive business climate and liberal investment policies that saw the country pull in a record foreign direct investment (FDI) of six billion dollars last year, signalling international investors firm confidence in Pakistan's tremendous growth prospects.

The foreign minister informed the gathering that more than 60 American companies were operating in Pakistan and posting handsome profits. He listed diverse sectors of economy including oil and gas, mining and energy, IT and telecom, tourism and hotel industry, real estate and infrastructure development as presenting enormous opportunities.

Khurshid Kasuri also referred to the fact that Pakistan-US bilateral trade had boosted rapidly in the last few years. Pakistan's exports to the United States have swelled to 3.66 billion dollars in 2005-06 from two billion dollars in 2001 and likewise the country's imports from the US have increased to 1.6 billion dollars in 2005-06 from 565 million dollars 2001.

"Pakistan's economic relations with the US are of central importance to us and the US is Pakistan's largest trading partner." The two countries, he said, signed a trade and investment framework in 2003 and had a mechanism in place to promote economic co-operation.

The EXIM Bank is a major partner in guaranteeing air fleet replenishment from Boeing for Pakistan's national airlines, and is willing to offer similar support in other areas. Overseas Employment National Corporation is increasing its activities in Pakistan. Pakistan has also established an organisation to protect intellectual property rights.

He said Pakistan had proposed to the US government that the two countries should begin negotiations for a free trade agreement. It is believed that the conclusion of such an agreement would bolster Pakistan-US trade substantially and provide a win-win environment for businessmen of both countries including those from textile.

He said accelerated economic growth and the opportunities that had been unleashed had created an enabling environment for expanding investment and trade between the two countries.

Drawing American investors' attention to the country's ranking in the top 10 reforms in 2006 World Bank Report of Doing Business and its inclusion in the club of next level by Goldman and Saches, he said Pakistan had become investors' destination by choice due to very liberal investment policies that allowed repatriation of capital, royalty and dividends and 100 percent equity participation.

Speaking in the context of Pakistan's upbeat economic scenario, he informed the gathering that the national economy had grown at an average growth of seven percent during the last five years, positioning itself as one of the fastest growing economies in Asia. This strong growth momentum is underpinned by broad-based comprehensive structural reforms, dynamism in industry, agriculture and services sectors.

He observed that despite shock of soaring oil prices putting constraints on the country's trade balance as well as the staggering 2005 earthquake, Pakistan's economy continued to demonstrate resilience and was again expected to follow high growth trajectory next year also.

The foreign minister said driven by policy of deregulation, liberalisation and privatisation, Pakistan was moving fast towards market economy. The trade volume has shot up to 41.4 billion in 2005-06 from 17.8 billion dollars in 1999 and is likely to rise further this year.

He said the country's foreign exchange reserves had increased manifold in the last five years, covering seven months of imports and the public debt had also declined significantly in terms of gross domestic product (GDP) percentage.

Referring to decreasing poverty, declining unemployment, rising income level, demographic advantages and a growing middle class, he said the strategically located country of 160 million people had the confidence of four vital sub-regions of Asia - the Gulf, Central Asia, South Asia and West Asia.

Boeing Vice President Kim Malishenjo lauded Pakistan's economic development in the last several years. Earlier, the foreign minister also visited Board of Trade Chicago where its director briefed him.

http://www.brecorder.com/index.php?id=582211&currPageNo=1&query=&search=&term=&supDate=

 

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Petroleum import bill swells to $6.637bn​

ISLAMABAD, June 23: The country’s import bill of petroleum products rose by 11.15 per cent to $6.637 billion during the July-May period of outgoing fiscal year as against $5.971 billion the same period last year.

The share of oil group in the total import bill also soared to 24 per cent from 23 per cent earlier. This indicates it continues to be the single biggest contributor to import bill despite decline in international oil prices.

Statistics released by the Federal Bureau of Statistics (FBS) here on Saturday showed that the import of petroleum based products increased by 33.76 per cent to $3.430 billion as against $2.564 billion the same period last year.

However, the imports of petroleum crude declined by 5.87 per cent to $3.207 billion during the first 11 months of the outgoing fiscal year as against $3.407 billion in corresponding period of last year.

The second biggest component of the import bill in value terms was the machinery group. Its imports increased by 12.02 per cent to $6.045 billion during the period under review as against $5.39 billion the same period last year.

The break-up showed that the import bill of power generating machinery witnessed an increase of 40.88 per cent, office machines 8.53 per cent, construction machinery 14.21 per cent and agriculture machinery 39.19 per cent. However, the import of textile machinery declined by more than 35.92 per cent during July-May 2006-07 over the corresponding period of last year.

In the telecom sector, the import of mobile phones increased by 27.58 per cent and other apparatus 27.58 per cent during the period under review over the same period last year.

The textile group imports jumped 19.64 per cent to $1.383 billion during the July-May as against $1.156 billion over the same period last year.

Of these imports of raw cotton up by 64.08 per cent, synthetic and artificial yarn 2.46 per cent, worn clothing 16.69 per cent and other textile items 4.36 per cent.

The import of agriculture and other chemical groups rose by 3.70 per cent to $3.914 billion. These include plastic materials up by 13.63 per cent, medicinal products 29.47 per cent and others 10.22 per cent. However, import of fertiliser manufactured declined by 41.57 per cent and 13.83 per cent in insecticides.

http://www.dawn.com/2007/06/24/ebr7.htm

 

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Textile exports to reach $11bn​

ISLAMABAD, June 23: The textile export target has been projected at more than $13 billion for the fiscal year 2007-08 up by 20 per cent from the current fiscal year target, says Textile Minister Mushtaq Ali Cheema.

It has been estimated that the textile exports will reach $11 billion during the fiscal 2006-07.

Textile exports reached $9.816 billion during the 11 months of the current fiscal against $9.257 billion over the same period of last year, indicating a growth of 6 per cent.

Talking to Dawn here on Saturday the minister said that the low growth in textile products was mainly because of the high cost of production. The six per cent Research and Development (R&D) subsidy will help the industry to finance the additional cost incurred on account of innovation of products and improving skills of the employees.

“I am sure that the growth in textile products will be around 20 per cent in 2007-08 as against the average growth of six per cent in the year 2006-07,” the minister claimed.

The share of textile products in total exports reached 63.3 per cent in the 11 months of the current fiscal as against 61.9 per cent during the same period last year.

Official figures compiled by the Federal Bureau of Statistics (FBS) showed that the export of almost all products excluding raw cotton, cotton cloth, and bed wear recorded marginal growth during the first 11 months of the current fiscal over the last year.

Export of readymade garments witnessed a growth of 5.35 per cent to $1.254 billion during the July-May period of the current fiscal as against $1.190 billion over the same period last year.

Statistics showed that export of knitwear also recorded a growth of 12.94 per cent during July-May 2006-07 to $1.773 billion as against $1.570 billion over the same period last year.

Export of raw cotton, cotton cloth, and bed wear recorded a negative growth by 21.73 per cent, 4.10 per cent and 3.10 per cent, respectively, during July-May 2006-07 over the same months of the last year.

Export of cotton yarn, cotton carded and yarn other than cotton yarn, was up by 4.21 per cent, 3.92 per cent, 82.59 per cent, towels 2.43 per cent, tents, canvas 99.06 per cent, art silk and synthetic textile 122.12 per cent, made-up articles 13.45 per cent and other textile materials 17.42 per cent during the period under review over last year.

http://www.dawn.com/2007/06/24/ebr10.htm

 

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Exports of traditional products plunge​

ISLAMABAD, June 23: Pakistan’s export of traditional products — rice, carpets, sports, leather and footwear — recorded double digits decline during the first 11 months (July-May) of the outgoing fiscal year compared to corresponding period of last year.

Latest figures released by the commerce ministry here on Saturday showed that the export of other commodities like cement, gur and gur products, jewellery, gems and engineering goods recorded a marginal growth during the period under review.

Despite the falling exports of these traditional products, the government had failed to announce any special measures in the new budget to arrest the trend.

The figures showed that the export of rice dipped 3.07pc during the period under review over the last year. The foreign sales of basmati rice rose by 19.91pc while other varieties declined by 18.29pc during July-May 2006-07.

The overall export of sport goods declined 16.86pc during the period over last year as footballs saw a major drop of 26.38pc. However, the export of gloves rose by 196.93pc.

The carpets, rugs and mats exports recorded a negative growth of 10.43pc; and leather goods (garments and gloves) by 25.36pc during the first 11 months of the outgoing year. The export of leather garments fell 24.15pc, leather gloves dipped 17.89pc and other leather manufactures plunged by 49.71pc.

Export of footwear declined by 19.69pc during the July-May 2007-06. Leather footwear dipped 14.36pc, canvas footwear 42.32pc and other footwear 40.21pc. The export of surgical instruments and medical equipment, however, jumped by 10.85pc.

The export of engineering goods up by 8.70pc, auto parts by 21.74pc, cement by 32.44pc, gems by 17.04pc, jewellery by 128.19pc, gur and gur products by 23.80pc during period under review over the last year.

http://www.dawn.com/2007/06/24/ebr11.htm

 

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UK-US investment stands at $2.683 billion ​

KARACHI (June 25 2007): Investments by USA and UK in Pakistan have gone up by 107 percent and 690 percent, respectively, together touching the high level of $2.683 billion during July-May period of current fiscal year, making 42 percent of overall investment in the country against 21 percent of the same period of last fiscal year.

SBP statistics show that USA and UK investment is gradually increasing here, as Pakistan is a strategic partner of USA and UK in the war against terrorism for about last six years.

Statistics show that after 9/11, during current year Pakistan's economy for the first time has benefited in real manner by USA and United Kingdom through their investments.

Among foreign investor countries USA is on top with $1.544 billion investment, while UK with $1.139 billion, is the second and Netherlands is the third with $765.8 million this year.

UK and USA share in total foreign investment (foreign direct investment and portfolio investment) this year has increased by $1.795 billion to $2.683 billion as compared to $888 million of the same period of last fiscal year.

According to central bank statistics, during the period under review USA investment stood at $1.544 billion against $744.6 million of last year, depicting a raise of $800 million or 107 percent.

USA investors' share was $750.4 million in portfolio investment and $794.4 million as foreign direct investment (FDI). UK foreign investment grew by $995 million, or 690 percent, to $1.139 billion against $144.2 million.

FDI by UK witnessed a growth of 369 percent to $780.9 million during current fiscal.

Economic experts expect more investment from both countries in future but believe that it would depend on the relations of both countries and demand of USA in war against terrorism. Other leading countries in foreign investment were Netherlands, China, United Arab Emirate, Australia, Japan, Saudi Arabia, Singapore and Switzerland.

China invested $711.1 million, United Arab Emirate $429 million, Singapore $139.5 million, Saudi Arabia $105.3 million, and Switzerland $66.6 million.

In addition, India's investment stood at 0.1 million with 77 percent decline' Canada invested $10.8 million, Australia $59.8 million, Japan $57.4 million and Kuwait $83.9 million.

It may be mentioned here that country's total foreign investment witnessed a growth of 50 percent at 6.282 billion dollars 11 months of current fiscal year against $4.177 billion of last year.

http://www.brecorder.com/index.php?id=582992&currPageNo=1&query=&search=&term=&supDate=

 

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US to provide over $1.5 billion uplift assistance over next 5 years ​

WASHINGTON (June 25 2007): Underscoring US commitment to an enduring and broad-based relationship with Pakistan, a senior administration official has said the United States would provide more than $1.5 billion in development assistance over next five years to help the key South Asian ally develop in the fields of education, health, governance and economic growth.

Including $750 million for programs in the Federally Administered Tribal Areas Assistant Secretary of State for South Asia Richard Boucher described US ties with Pakistan as "one of America's most vital relationships." He cited examples of multifarious and long-term ties and stated the "US has a continuing commitment to Pakistan's defence needs."

"The sale of F-16s to Pakistan late last year, a regular schedule of bilateral military exercises, and the recent delivery of Cobra helicopters demonstrate the long-term commitment of the United States to its strategic partnership with Pakistan," he stated on the occasion of 15th annual US-Pakistan Friendship Day.

Referring to expanding cooperation in the field of education he noted that in just four years, funding for the bilateral Fulbright program has grown from $1 million per year to over $20 million per year. More than 200 Pakistanis are currently studying for Masters and PhD's in the United States under this program, making it the largest Fulbright program in the world in terms of U.S. government funding.

In the field of basic education, he said over the past five years, the US government has spent over $200 million in support of the government of Pakistan's education reform strategy by working with it to strengthen education policy and planning at the federal, provincial and district levels; improve the skills and performance of teachers and administrators; increase youth and adult literacy; expand public-private partnerships; and provide school improvement grants and involve parents and communities in public schools.

In addition, the United States is also helping Pakistan in its recovery efforts in areas hit by a staggering earthquake in October 2005. He said the US has pledged $206 million for earthquake reconstruction over the next four years. Last winter the US assistance helped Pakistani ensure that those living in earthquake areas had adequate shelter and clothing, he added.

"We say often that Pakistan is a key ally in the war on terror, and that is true. More than that, however, the United States and Pakistan have developed a strong, multi-dimensional, strategic partnership. Our commitment to the Pakistani people is illustrated by our comprehensive development programs in health, education, and economic development," he observed at a gathering organised by Pakistani American Congress. Boucher also cited new facets in US-Pakistan relationship including discussions of education initiatives and a high-level Joint Committee on Science and Technology.

"We are also concluding consultations with Congress on Reconstruction Opportunity Zones and hope that legislation will be voted on in the coming months.

With US support we will be providing $150 million this year in development assistance to Pakistan to support its Sustainable Development Plan for the Federally Administered Tribal Areas, where Pakistan is implementing a strategy to strengthen governance, promote economic development and improve security."

He said Pakistan's strategy has two goals: making Pakistan and the region more stable, open and prosperous; and reducing extremism and thereby eliminating the Taliban and al Qaeda presence in areas bordering Afghanistan.

"The United States shares those goals and is working closely with Pakistan to make them a reality, including working to find additional resources to support efforts to strengthen the Frontier Corps."

The US Assistant Secretary acknowledged President Musharraf's reform efforts in the last several years. "We applaud President Musharraf's efforts to build a modern, democratic, and prosperous nation. The passage of the Women's Protection Bill in November 2006 was an important indicator of President Musharraf's commitment to that goal."

Boucher also noted that Pakistan has made significant progress under the Pakistani leader toward a fully free media and said media organisations have flourished. "We believe it is critical for Pakistan's democratic development, its domestic stability, and its international reputation that this progress continues."

http://www.brecorder.com/index.php?id=583056&currPageNo=1&query=&search=&term=&supDate=

 

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Neelum-Jhelum project contract to be awarded next week: Wapda chief ​

ISLAMABAD (June 25 2007): Chairman Wapda Tariq Hameed said the contract of 960 MW Neelum-Jhelum hydro power project would be awarded next week to lowest bidder a Chinese company. "The tendering process of seven years project has already been completed," he told PTV.

He said Mangla raising project would start storing 2.9 million extra water from April 2008.Also 190 MW additional power would be generated from Mangla raising project next year. WAPDA has spent a sum of Rs 21 billion on improving its distribution system Grid Station of 500 kv has been established in Sahiwal, direct line has also been laid from Lahore to Rawat, distribution system in Muzaffargarh has been improved greatly.

These measures help decreasing losses to 6.6 from 7.5 percent, he said. As many as 33 power transformers have been set up in Lahore city with the cost of Rs 1.6 billion.

http://www.brecorder.com/index.php?id=583015&currPageNo=1&query=&search=&term=&supDate=

 

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Rs 4.779 billion hotel financing deal signed ​

KARACHI (June 26 2007): A signing ceremony for the largest hotel financing in the history of Pakistan was held here on Monday for the Avari Islamabad Hotel Project. This has a total project cost of Rs 4.779 billion, which is being financed through Rs 3.750 billion rated privately placed Term Finance Certificates (TFCs).

Byram D Avari, Chairman Avari Group, Badar Kazmi President Standard Chartered Bank Pakistan Limited, Mansoor Ali Khan head of Saudi Pak Bank and Muneer Kamal of KASB Bank sign the agreement.

The Standard Chartered Bank and Saudi Pak Commercial Bank were the mandated lead arrangers for the issue and KASB Bank acted as co-arranger. The 7-year issue has been rated single 'A minus' by JCR-VIS rating agency. These TFCs are being issued on the rate of 3.25 percent over KIBOR. The issue received an overwhelming response from the market and a diverse Investor base including banks, non-banks and funds invested in the TFC.

Speaking on the occasion Byram D. Avari, Chairman, Avari Group said the Avari family has been known in the hospitality business since 1944 when his late father Dinshaw B A vari purchased the Bristol Hotel in Karachi. Today, his sons Dinshaw and Xerxes, the new generation, are spearheading operations with lateral thinking and dynamic ideas.

Islamabad will be the height of "Luxury" being the first 417 all-suite hotel of Pakistan, with each room being 750 sq.ft, with two LCD TV's, separate spas for ladies and gents, a covered swimming pool, state of the art meeting rooms, a 1500 persons ballroom and 400 underground car park.

He said as many as 700 men and 300 women will be employed by the hotel and these 1000 persons will in turn be able to support their families of 10,000 persons.

http://www.brecorder.com/index.php?id=583268&currPageNo=2&query=&search=&term=&supDate=

 

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Manufacturing sector growth targeted at 10.9 percent ​

FAISALABAD (June 25 2007): In order to achieve the goal to sustain industrialisation, a growth rate of 10.9 percent has been targeted for the manufacturing sector including 12.5 percent for large-scale manufacturing and 7.5 percent for small scale manufacturing for next year 2007-08.

According to planning commission sources, an allocation of Rs 18.75 billions has been earmarked for the industry, textile and commerce sectors which is the highest one ever made in these sectors.

MAJOR PROJECTS TO BE CARRIED OUT IN INDUSTRY SECTOR DURING 2007-08 INCLUDE: agro-food processing facilities at Multan (Rs 69.86 million), Aik Hunar Aik Nagar (Ahan) (Rs 60.369 million), Gujranwala Business Centre, Gujranwala, (Rs 13 million), sports industries development centre Sialkot (Rs 168.74 million), technical up-gradation of garment industry all over Pakistan (Rs 100 million), five advanced CAD/CAM training centres (Rs 139.4 million), Gujranwala tools, dies and moulds centre (Rs 295.000 million), 2MGD water desalination project Gawadar, Balochistan (Rs 178.86 million).

Major projects in the textile sector include three garment cities at Lahore, Faisalabad and Karachi, implementation of export plan and establishment of two fibre testing laboratories.

Major projects to be carried out in commerce sector include SA-8000, Pakistan School of Fashion Design, Lahore, Trade and Facilitation Project and Expo Centre, Lahore.

In view of anticipated competition with countries like China and India in the global market, particularly in the backdrop of opening of Chinese export of textile and clothing in European Union and USA in 2008, efforts are being made to make the textile and clothing sector to be more dynamic and competitive. To achieve this objective, a separate textile industry ministry was created and a number of projects including Lahore, Faisalabad, Karachi cities and Karachi textile city projects have been planned in the public sector with an investment of over Rs 3.5 billions, of which two projects Lahore Garment and Faisalabad Garment Cities have been initiated during 2006-07 with an investment of Rs 997 million, said official sources.

In order to accelerate export, planning commission sources mentioned, an investment of around Rs 3 billion was planned in the commerce sector. A number of projects including social accountability SA-8000, Expo Centre Lahore, Pakistan School of Fashion Design, Lahore and Trade and Transport Facilitation projects were initiated during the year under review.

An investment of Rs 1,986 million is estimated for these projects during FY 2006-07. Two major projects of Pakistan School of Fashion Design Lahore and Expo Centre, Lahore are expected to be completed by June 2008.

Commenting over the reforms in the textile sector, ministry of textile industry said that that ministry is currently in the process of implementing and finalising various initiatives in the following areas; contamination-free cotton to cater to the demand of quality raw material for the finished products; technological up-gradation at the ginning, weaving, processing and garment production level; product diversification and value-addition through better materials, accessories and design inputs; up gradation of the weaving sector with air jet and water jet looms along with zero rated duties; encouragement of integrated as well as horizontal garment industries on the basis of R&D and technological support for the garments sector; introduction of cotton hedge trading to promote marketing of cotton; testing facilities for increasing compliance and conformity assessment; and augmenting the institutional capacity in the field of research by setting up of R&D cell within the ministry.

In order to accelerate the growth of textile sector and to resolve issues of supply chain management and value addition, textile ministry has taken a number of proactive measures since its inspection.

THESE INCLUDE: Pakistan Textile City Project; The principal objective of the textile city is to develop and manage a state-of-the-art industrial zone on 1,250 acres dedicated to value added textile units in order to avail the opportunities arising out of the decision to remove of quota's applicable in the WTO agreement on textile and clothing from January 2005. For this project 700 acres were acquired in the start of 2006 while remaining 550 acres were made available in January 2007.

The government also announced the setting up of three garment cities at Karachi, Lahore and Faisalabad under the Trade Policy. The purpose of these projects is to provide facilities and necessary infrastructure to the textile sector with a view to promoting value added garments (woven and knitted), home textiles, made ups and accessories to the international markets. The EDF board approved a sum of Rs 1.425 billion for three garment cities.

This project is expected to attract foreign investors who would be willing to rent state-of-the art manufacturing factory space rather than commit their capital in land, utilities and construction. It will also increase the proportion of value added products in textile exports, generate employment and lead to higher per capita productivity and reduced wastage because of in house training and laboratory testing facilities provided by the project.

The Textile Garments Skill Development Board; was set up in October, 2005 and is primarily charged with carrying out skill development of workers for the garments industry within the garment units including the objectives of production of contamination-free cotton, project financing for small and medium entrepreneurs in high value added textile sectors, review of domestic and international prices of cotton to ensure a fair return to growers, maintaining stability in domestic prices and establishing liaison with all stakeholders from cotton growers to textile exporters for removing any bottlenecks in implementation of the recommendations. It is expected to train 10,000-12,000 stitching machine operators in these units in the span of just one year to build a critical mass of skilled workers.

The scope of these training programmes is to be widened to terry towel and bed linen sectors during the current financial year. Presently, the training programme is continuing in 30 units, which are enrolling candidates in consecutive batches.

Textile industry sources mentioned that contamination of cotton is a very serious problem affecting the local spinning industry and the export of textile relatively. In order to tackle this problem, it was decided by the government to launch the Clean Cotton Programme in collaboration with Trading Corporation of Pakistan and provincial agriculture departments, which included payment of premium at Rs 50 per mound to growers directly. The government had sanctioned an amount of Rs 35 million for this purpose.

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