Pakistan Economy - News & Updates - Archive

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Pakistan among top countries for offshore outsourcing: Gartner​

ISLAMABAD: As a result of the policy initiatives taken by the government to position the country as an offshore destination of choice, Pakistan has become a major player in the global Information Technology (IT) industry.

Gartner, the world’s leading information technology research and advisory company has placed Pakistan amongst the top countries of the world in terms of suitability for offshore outsourcing. Pakistan has been recognized by the global community as ‘Market Leaders and Challengers’ and has been placed in the First Category countries in 2007. Previously, in 2006 Pakistan was placed in the Third Category countries.

Gartner, in its recent report ‘Analysis of Pakistan as an Offshore Service Location’ said the major factor behind the progressing status of Pakistan is the lower salaries and better infrastructure advantages than other offshore destinations. “The salaries of IT professionals in Pakistan are approximately 30% lower than those in India, while telecommunication costs are also lower as compared to any other offshore locations, which make Pakistan an attractive outsourcing destination.”

Based on a total of ten criterion, including language, government support, labour pool, infrastructure, education system, cost, political and economic environment, cultural compatibility, global and legal maturity, data and intellectual property security and privacy, Gartner rated Pakistan as ‘very good’ in cost, ‘good’ in language and ‘fair’ in most of the areas despite the prevailing political environment.

According to Gartner research report, government of Pakistan has devised a comprehensive national IT policy, designed to encourage the private sector. In order to drive development, Pakistan Software Export Board (PSEB) plans to construct new IT parks in major cities while 750,000 square feet of space in PSEB-designated parks has already been leased to IT companies.

“The government is doing a great job of initiating activities in positioning Pakistan as an offshore location, however, it needs to take concrete steps to improve its brand image as an offshore destination,” the report adds.

It may be mentioned here that a number of Pakistani IT companies have developed world class software in areas such as car leasing, enterprise application integration, mortgage lien processing, stock market order management, mobile convergence, data and web content management for some of the top most corporations of the world.

Daily Times - Leading News Resource of Pakistan

 

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Shareholders allow HBL to further invest locally, overseas​

KARACHI: Habib Bank Limited has obtained approvals from its shareholders for its plans to invest in local and foreign companies over the next five years.

In an extraordinary general meeting held on December 26, 2007, the shareholders allowed the bank to acquire up to 20 percent shareholding in Urumqi City Commercial Bank, or in any other entity in China. They also allowed the bank to buy up to 26 percent shareholding in Diamond Trust Bank Kenya Limited, and equity in Diamond Trust Bank Uganda, and Diamond Trust Bank Tanzania.

The bank will also be buying 26 percent shareholding in Kyrgyz Investment and Credit Bank, and up to 10 percent stake in New Jubilee Insurance Company and up to 10 percent in New Jubilee Life Insurance Company. The bank will enhance its investments in Habib Allied International Bank Plc., UK, by up to 20 million pounds and make capital investments in strengthening the bank’s international franchise in the international markets where the bank has presence or where the bank wishes to have its presence. The bank will restructure its shareholding in Platinum Habib Bank Plc., Nigeria to maintain a shareholding of up to 15.3 percent. The bank will make investment of up to Rs 2 billion in the micro finance sector in an existing micro finance bank or participating in a new initiative.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Wheat import via Gwadar planned: SPA offers concessional rates​

ISLAMABAD, Jan 3: The government is likely to import 600,000 tons of wheat at Gwadar Port after having received an offer from Singapore Port Authority (SPA) to charge concessional rates for handling the transaction.

The government plans to import wheat within this month to help meet the growing shortage of the commodity across Pakistan.

Official sources told Dawn that SPA, the operators of Gwadar Deep Sea Port, wanted to make the port fully operational by handling the huge quantity of wheat at concessional rates viz-a- viz other ports of the country.

The government was told that although the SPA had started handling ships and vessels at Gwadar, it would be good for the country if it handled “transshipment” like that of the import of 600,000 tons of wheat.

Tenders for importing wheat has just been floated by the government.

When contacted, director-general Gwadar Port Authority Ahmad Bukhsh Lehri confirmed that the operators of the Gwadar Port have offered to charge concessional rates for the import of wheat.

He also said interest of the foreign investors was increasing in the region after the port was inaugurated last year.

He said China had expressed its readiness to connect Gwadar port with Sinkiang and develop a corridor for oil as Gwadar was fast becoming the hub of economic activities.

A Chinese company, he said, had also entered an agreement to set up a steel mill in Gwadar.

Responding to a question, Mr Lehri said a survey for laying a railway line had been completed, while 50 beds hospital had already been established at Gwadar. Over 25 banks have opened their branches in Gwadar while more hotels were being opened there, he added. Movement on the coastal highway, he said, was also increasing after its repair. It was hit by floods in 2005.

He said that Gwadar would be connected with other provinces through a network of railway tracks which would be laid along with carpeted roads.

To a question, he said that the PSA had overcome its major problems by having three berths which have successfully started handing the arriving ships at Gwadar port.

Over 20-year tax exemptions had been given to SPA while a 15-year tax holiday in the proposed Export Processing Zone (EPZ) near Gwadar port was also expected to further help attract local and foreign investment there. There would be tax exemption on customs, sales tax and excise duty in the EPZ with a view to promote substantial investment in Gwadar.

Sources said a number of foreign investors have shown interest to establish mega refineries, building storage capacity and undertaking other businesses in Gwadar to help expedite the process of industrialisation in Balochistan.

With the completion of both the phases of Gwadar port, a Special Industrial Development Zone (SIDZ) with an area of 4,000 hectares has also been proposed for setting up various industries. The SIDZ is located on the north of Gwadar town at a distance of about 30 km from the port.

Sources said foreign vessels could come and unload their goods at Gwadar whose first phase of the construction has finished at an upwardly revised cost of $298 million.

The additional funding had been provided by the federal government to install the required equipment, complete the civil work and build roads linking the port with Quetta and other upcoming areas.

The Chinese side had completed its work while the local authorities finished the development of infrastructure, including the building of a road from Gwadar to Karachi.

The second phase of the project is expected to be undertaken in early 2008 at a cost of $865 million and will be completed by 2010.

Phase-1 was built by the public sector with the Chinese assistance and included three multipurpose berths (602m quay length, one service berth (100m length), 4.35 km navigable channel (11.6/12.5m deep), roads, plinths and transit shed, operational craft and equipment, including navigational aids and shore based port buildings and allied facilities.

Concerned officials said completion of phase-2 would help meet strategic needs and standby facility to Port Qasim and Karachi Port in case of emergencies arising out of any mishaps.

The construction of phase-2 would be completed on the basis of Built Operate Own (BOO) and Built Operate Transfer (BOT) basis. However, if the private sector did not respond favourably, public sector financing would be required to develop phase-2 of the port.

The port would generate foreign exchange earning as the vessels registered under foreign flags are required to pay some portion of charges in foreign exchange through their local agents for cargoes.

The amount of foreign exchange earned would not be reflected in Gwadar Port account, but would contribute to national foreign exchange earnings.

At the present rate of Karachi Port Trust (KPT) Tariff, the foreign exchange percentage is estimated at 33 per cent of the charges payable to port authorities.

Officials said that Gwadar had an edge over Port Salalah of Oman and Iran’s proposed up-gradation of Port Chah Bahar. However, Gwadar would have to compete with both the foreign ports.

Gwadar is expected to serve as mother port at the strategic location opposite to Straits of Hormuz and on the mouth of Persian Gulf and provide port, warehousing, transshipment and industrial facilities for trade with over 20 countries including Gulf states, Central Asian Republics (CAR), Iran, East Africa, Red-Sea countries and North West parts of peoples Republic of China and India.

Wheat import via Gwadar planned: SPA offers concessional rates -DAWN - Business; January 04, 2008

 

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Oil import bill reaches $3.768bn​

ISLAMABAD, Jan 3: Pakistan’s oil import bill reached $3.768 billion which is up by 14.75 per cent from $3.284 billion last year, statistics division said on Thursday.

The import bill is the highest ever during the first five months of the current fiscal year.

Taking this as a benchmark, the country’s oil import bill is expected to hover around $10 billion by end June 2008, which will create serious problems in the balance of payments for economic managers of the newly elected government.

Official figures released by the Federal Bureau of Statistics (FBS) showed that share of oil in total import bill reached 26 per cent during the period under review. As oil price in international market crossed the $100 per barrel mark, the share of oil in total imports will reach around 30 per cent in the up-coming months.

On a monthly basis, the import bill of oil has increased by over 39 per cent in November 2007 over last year. It indicates an upward trend in oil import bill which may escalate in the months ahead.

Official figures showed that the break-up of oil import bill showed that the crude oil increased by 12.63 per cent to $1.819 billion in July-November period of the current fiscal year against $1.615 billion over the corresponding period last year.

The other component of the oil import bill constituted value added products which reached $1.948 billion during the period under review as against $1.668 billion last year, indicating a growth of 16.78 per cent.

Like last year, import bill of oil would seem to be the prime mover of the trade deficit this year because of greater consumption.

The statistics showed that the second component of import bill is machinery which recorded a marginal growth of 6.12 per cent to $2.773 billion in July-Nov against $2.614 billion over the last year.

However, the depressing aspect is that the import of textile machinery declined by more than 26 per cent during the July-November period of 2006 over the last year.

It showed that textile tycoons have stopped import of machinery for modernising their units to enhance the quality of their products and reduce the cost of doing business for making it competitive with those coming from India and China in the international market.

The import bill of machinery mainly pushed by an increase of 11.56 per cent in power generating machinery, agriculture machinery 31.72pc, construction and mining 24.87pc, electrical machinery 14.30pc, other machinery 8.57pc and telecom 9.39pc.

The agriculture and other chemical group increased by 36.54 per cent to $2.323 billion during the July-Nov period of the current fiscal year against $1.701 billion over the same period of last year. Of these import of fertiliser increased by 160.83pc, plastic material 14.53pc, medicinal products 51.26pc and others 23.70 per cent. However, import of insecticide declined by 6.33 per cent during the period under review.

Oil import bill reaches $3.768bn -DAWN - Business; January 04, 2008

 

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LTFF to help Modernize industries​

RAWALPINDI, Jan 3: The Engineering Development Board (EDB) has called upon the engineering industry, in general, and exports, in particular, to fully utilise the Long-Term Financing Facility (LTFF) for modernising their production infrastructure to gain more competitiveness and innovative production of goods.

Tracing the background of the scheme, the EDB said it had been pursuing the government to provide the facility for the engineering goods industry, which now has been duly incorporated in the development categories of industrial sector. The engineering industry is in a position to make necessary technological development to boost exports.

The EDB has placed the details of LTFF scheme with requisite forms on its website.

Under the scheme, exporters would be able to get loans for a maximum period of 10 years, including a maximum grace period of two years from commercial banks, including Islamic Banks and approved DFIs.

The State Bank has allocated Rs eight billion to banks for January-June 2008 period.

LTFF to help Modernize industries -DAWN - Business; January 04, 2008

 

[Neo]

Reserves rise to $15.74bn​

KARACHI, Jan 3: Pakistan’s foreign exchange reserves rose by $14 million to $15.74 billion in the week that ended on Dec 29, the central bank said on Thursday.

Reserves held by the State Bank of Pakistan rose to $13.50 billion from $13.36 billion a week earlier, while those held by commercial banks were unchanged at $2.24 billion, it said.

Pakistan’s foreign reserves hit an all-time high of $16.39 billion in the week that ended on Nov 10. But they fell because of outflows from the stock market after President Pervez Musharraf imposed emergency rule on Nov 3.

Emergency rule was lifted on Dec 15 but analysts said foreign reserves might come under further pressure due to the tense political situation after the assassination of opposition leader Benazir Bhutto on Dec. 27. —Reuters

Reserves rise to $15.74bn -DAWN - Business; January 04, 2008

 

[Neo]

Removal of Rangers, police bosses sought: Karachi suffered over Rs80bn losses​

KARACHI, Jan 3: The Karachi Chamber of Commerce and Industry (KCCI) has demanded removal of top officials of police and Rangers for their failure to maintain law and order during three days after the assassination of former prime minister Benazir Bhutto.

KCCI president Shamim Ahmed Shamsi and Executive Committee member Siraj Kassam Teli said at a press conference here on Thursday that the business community had suffered a loss of Rs80 billion on account of damage to property, looting of factories and warehouses, torching of vehicles and other acts of violence that had shaken the city.

They warned that if the law-enforcement hierarchy was not changed within a week, the KCCI could give a call for a strike.

They said the Sindh government had failed completely to maintain law and order. When mobs ruled the streets in several areas of Karachi from Thursday to Saturday (last week), police and Rangers were nowhere to be seen. Troops were on standby in the cantonment but the caretaker government did not bother to seek their help.

They said the loss of life, incidents of looting and lawlessness would have been 50 per cent less if police and Rangers had remained vigilant and performed their duty. They said the government should seriously consider deputing senior local officials of police and Rangers in Karachi instead of bringing officers from other parts of the country. Both the departments whose duty was to curb violence had let down not only the citizens but also the business community by leaving the city at the mercy of mobs and angry protesters, the KCCI leaders said. They said more than 1,500 trailers had been burnt down in interior Sindh and over 1,000 vehicles in Karachi.

Removal of Rangers, police bosses sought: Karachi suffered over Rs80bn losses -DAWN - Top Stories; January 04, 2008

 

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NTCHIP Vision 2030: government plans to double the trade to GDP ratio ​

FAISALABAD (January 04 2008): Under the strategic framework of National Trade Corridor Highway Investment Programme "Vision 2030" government has planned to raise the trade to gross domestic product (GDP) ratio from 30 percent to about 60 percent, which would be equivalent to $600 billion by 2030.

When programme fully is implemented, these efforts will save $5-$7.5 billion per annum that are currently lost because of inefficient logistics. To achieve this target, National Highway Authority (NHA) sources mentioned that key actions under the strategy would be improving trade competitiveness and export diversification.

Logistics are currently seen as a key constraint to enhancing competitiveness and attract private sector investment. They are also a bottleneck to increasing productivity as well as to deepening and diversifying the industrial base both of which are necessary to provide sustainable jobs for a growing population. Several actions are planned or underway to address the logistics and investment gap. One of these is a comprehensive road network investment programme, sources mentioned.

NHA sources stated that an enhanced road network will cut the time and cost of moving goods and services along the entire logistical chain. Specifically, government intends to double the road density from 0.32 km per-sq-km (km/km2) at present to 0.64 km/km2 by 2030.

In addition to improvements to physical infrastructure, the initiative includes meaningful policy and institutional actions aimed at providing a better enabling environment for investment, for industrial diversification, and for the logistics industry as a whole.

NHA sources said that Pakistan's domestic trade flows are concentrated in one major north-south transport corridor. The proposed actions, while aimed at making this corridor more efficient, will also have a major and broader impact on the performance of the entire transport sector and thus on the economy overall.

This comprehensive approach is embodied in a special initiative called the National Trade Corridor Improvement Program (NTCIP). The Government views NTCIP as a key success factor to the country's growth prospects, to inclusiveness, to employment creation and social service renewal, and to the execution of second generation sector and macroeconomic reforms.

NTCIP represents a flagship endeavour by the Government and the private sector to bring about better connectivity and trade facilitation. Beside roads, the initiative covers ports, railways, airports, customs clearing procedures, tariffs, and the trucking industry.

The rationale for NTCIP is embedded in and emanates from plans for growth, job creation, and trade, said NHA sources. Presently, the NHA is responsible for the operation, maintenance, and development of the national highway system. NHA manages 11,400 km of roads, of which 30 percent are already toll roads.

The efficiency of the road network has been constrained by slow moving traffic, poor quality surfaces, and non-vehicular traffic. Currently, it takes 72 hours to travel between Peshawar and Karachi, a distance of about 1,700-km. The investment in the backbone of the national trade corridor is expected to reduce this travel time to 36 hours after completion.

As a core component of NTCIP, NHA has developed the National Trade Corridor highway investment plan (NTC highway investment plan). It covers the corridor backbone from Peshawar to Karachi and the outlying links that connect Pakistan to the People's Republic of China and Gwadar Port in Balochistan. The initiative includes not only new road construction but also the improvement of over 3,500 km of roads, national highways, expressways, and motorways.

According to official sources, the Asian Development Bank (ADB) is an active partner of the Government in the road sector and is involved in policy formulation including the National Transport Policy.

ADB is currently supporting the engagement of an advisor to formulate a national trade corridor strategy. In view of this long-standing relationship in the sector, the Government has approached ADB along with other financing agencies to finance the investment plan for the medium term.

ADB's proposed share of the NTC highway investment represents about 20 percent of the total. Key sections of the motorway and expressway network will be financed through the National Trade Corridor Highway Investment Programme and key sections of highways will be financed through the National Highway Development Sector Investment Programme (NHDSIP) approved in 2005. The NTC highway investment plan has an estimated economic internal rate of return of 39 percent and a total average economic savings estimated at Rs 200 billion per year.

A road sector development framework (RSDF) was agreed with the Government in 2005. This road map addresses major policy and institutional issues. Some targeted milestones have been completed, others are on schedule, and some have faced delays.

RSDF has been updated to reflect current concerns and lessons learned from those delays and from other ADB projects in the sector. The sequencing of interventions is well focused, the package of modalities includes private and public sector actions, and the policy framework is defined and endorsed by the authorities.

The support components of the Programme are needed not only for best practice purposes in safeguards but also to underpin the reform momentum for the sector and for the RSDF. Specifically, under the Programme assistance will be provided to enable NHA's experienced team to manage the expanded portfolio of assets planned under the NTC highway investment plan. Various actions are also included to reinforce capacity development and thus the implementation of the RSDF.

To advance the concept of industrial diversification and commercial activity along the national trade corridor and to maximise traffic flows, a framework for spatial planning and investment planning along the corridor is required.

An NTC team with representatives from the private sector (eg, business groups and chambers of commerce), government agencies, and academia will be established for this purpose. This team would co-ordinate the development of an NTC highway business plan.

ADB will provide a technical assistance grant of $500,000 equivalent in conjunction with the Programme to develop a business plan for the motorways and expressways between Peshawar and Faisalabad-Khanewal. Meanwhile, ADB is providing support for private sector involvement in the road sector by pursuing pilot projects and advisory work.

In this support and other interventions, ADB's private sector operations department and public sector department will work together to assist the Government. Pilot projects will incorporate lessons learned in structuring and implementation from the recent public-private partnership (PPP) projects in the road sector in Pakistan.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Productivity enhancement: Minfal to launch Rs 18 billion water conservation programme ​

ISLAMABD (January 04 2008): Ministry of Food, Agriculture and Livestock (Minfal) will launch a programme for water conservation at the cost of Rs 18 billion for productivity enhancement through high efficiency irrigation system. The project envisages for high efficiency irrigation system, which are micro and sprinkler irrigation systems.

High value crop production especially the horticulture sector will be the main beneficiary of this intervention, sources told Business Recorder here on Thursday. Government attaches top priority to the development of water resources to maximise crop production.

This has been done through progressively increasing surface water supplies and conserving water using the latest technologies and protecting land and infrastructure from water logging, salinity, floods and soil erosion, they maintained.

They said the main objectives of the project are to overcome scarcity of water through augmentation and conservation by constructing medium and large dams, efficient utilisation of irrigation water and restoring the productivity of agricultural land through controlling water logging, salinity and floods.

They said about 8.12 million hectares of land falls in the category of culturable wasteland out of which 1.22 and 4.0 million hectares are in NWFP and Balochistan, respectively.

They said the federal government would facilitate the governments of NWFP and Balochistan by providing bulldozers (200 for Balochistan and 100 for NWFP, which would be hired out to the farmers on no profit-no loss basis.

They said around 219,375 hectares of culturable wasteland (NWFP 73,125 and Balochistan 146,250 hectares) would be reclaimed through the use of 300 bulldozers. This will enhance agricultural production in the NWFP and Balochistan provinces.

An integrated programme approach for water management has also been adopted. On-Farm Water Management (OFWM) projects have been implemented on community participation basis in all the four provinces, AJ&K and Federal Agencies, they added.

They said water conservation is being ensured under the President's programme for the improvement and lining of watercourses. This programme envisaged lining improvement of 87,000 watercourses at a cost of Rs 66 billion within 3-4 years.

The initiative will significantly improve water supply at the farm-gate through reduction in the seepage losses. During 2006-07, 18,390 watercourses have been lined and renovated against the target of 18,000 watercourses, the sources informed.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Wheat output may miss 24 million tons target ​

ISLAMABAD (January 04 2008): The wheat production target for 2007-08 could not be met if rains do not start in the next 10 days, sources told Business Recorder on Thursday. The contribution of Barani area to wheat production may reduce from 20 to 12 percent if it does not rain in next 10 days.

Sources said the wheat sowing is in process in the country as most of the farmers start sowing after the winter rains, that usually start at the end of November or the first week of December, but this season even after passing December, the winter rains have not started.

The wheat production in 2006-07 surpassed the target by harvesting 23.5 million tonnes. So the government set the wheat production target of 24 million tonnes for 2007-08. It is noteworthy that the factors like favourable weather, timely rains adoption of good agricultural practices by the farmers and balanced use of fertilisers are the primary inputs that help in achieving bumper crop.

The situation has totally changed now as first of all, the winter rains that may be termed as the 'gold water' for the appropriate production of wheat crop, did not start in time.

Moreover, the contribution of Barani areas that is almost 20 percent to the wheat production may reduce 12 percent if the rains do not fall within the next 10 days. Secondly, the farmers are not making balanced use of fertilisers. In order to get the desired per acre yield, the farmers must use two bags of urea and one bag of DAP.

Due to increased DAP prices in domestic market, the farmers are using five bags of urea with one bag of DAP. If the farmers use five bags of urea they must at least use two and a half bags of DAP. This imbalanced use of inputs may lead to the low production of wheat for the next year.

Sources in the Food Ministry told this scribe that it is quite possible that Pakistan may miss the wheat production target for 2007-08 by getting just 20 million tonnes production. It seems the country will have to import more wheat as compared to 2007-08.

Business Recorder [Pakistan's First Financial Daily]

 

[Proud to be Pakistani]

BUYING SPREE CONTINUES AS KSE-100 GAINS 263.18, CLOSES AT 14259.60

KARACHI (January 05, 2008)

Buying spree continued on the Karachi share market on the second consecutive day on Friday and the benchmark KSE-100 index gained another 263.18 points to close at 14,259.60 points' level. "The rally was mainly led by retail investors, coupled with institutional support on the back of easing law and order and political situation in the country", an analyst said.


Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Power outages cause heavy production losses ​

Friday, January 04, 2008

LAHORE: The failure of the Ministries of Commerce, Industries and Water and Power to coordinate a planned schedule for uninterrupted electricity supply to the industries in order to ensure efficient production without wastages has played havoc with industrial activities.

After suffering huge production losses due to three-day closure after Benazir Bhutto’s death, the industrial wheel in Punjab and NWFP has almost halted again this time due to power and energy supply mismanagement. The idea to manage electricity shortage through half-hour load-shedding after every one hour of power supply may work for domestic and commercial consumers, but is not practicable for the industrial sector that in most of the processes for completion of a chain production cycle needs uninterrupted power supply for five to six hours.

After unscheduled load-shedding for short duration in recent weeks, both the small and large industries saw their production graph decline sharply and wastages increase enormously. All Pakistan Textile Mills Association (Punjab Zone) Chairman Akber Sheikh said “the spinning industry suffers production and raw material losses every time the process gets stopped due to power failure.

“It takes 15 to 20 minutes to restart the spinning process as with abrupt suspension of production the yarn in different stages of production is broken and has to be reloaded at many points.”

He said the textile processing industry had been devastated, particularly the dyeing industry as the stoppage of the process due to power failure destroyed the entire lot that was in various stages of dyeing.

He said the processing industry had, in fact, completely stopped production in the uncertain electricity supply situation, adding that resulted in shortage of weaving material and fabric needed by the apparel sector.

Leading knitwear exporter Adil Butt, commenting on the issue, said the stitching and packing process could not be continued under current circumstances when electricity was switched off for 30 minutes after every hour. The workers could not remain sitting on the machines in the dark and left their stations at the time of load-shedding and took 15 to 20 minutes to reassemble when electricity supply was restored, he said, adding “as they find their rhythm, the power goes off after 40 minutes again.”

The industrialists expressed their dismay over the indifferent attitude of the ministries established to facilitate the manufacturing sector. They alleged that the ministries had not kept liaison either within the government departments or with the industrial sector. Whenever any industrial sector faced problem, they said, it had to move from pillar to post to get it resolved. Ideally, the ministry concerned should adopt a proactive approach and resolve the problem at the initial stage.

They said though the power crisis had been on the horizon, its actual impact was known only to the Ministry of Water and Power and the Water and Power Development Authority. However, they said, both the institutions never bothered to take either the Ministry of Industries or the local industries into confidence to chalk out a contingency plan to minimise the impact of power shortage.

They said the Pakistan Electric Power Company (PEPCO) finally realised its mistake and contacted different industrial sectors to provide them a plan for uninterrupted supply for shorter duration.

The All Pakistan Textile Mills Association (APTMA) was informed that there would be no power supply to its industries from 5pm to 10pm when the electricity demand would be at the peak. The association was assured that after that there would be uninterrupted power supply, they said.

However, the textile millers complained that even after closing their industries during peak consumption hours they still faced periodic power shutdown after short durations which had upset their entire production schedule. The wastage in the industry had increased at a time when the textile sector was under stress due to high cost of doing business, they added.

Other industries like plastic goods’ manufacturers, light engineering industries, auto parts’ manufacturers and steel re-rolling mills have been in more difficult condition as they need constant power supply to process raw material put in the machines or suffer total loss. Even the printing presses are facing production losses.

Some large manufacturers having furnace oil or gas-run power generation facilities are managing their production but medium-sized industries having diesel/gas are dependent on inconsistent electricity supply from the WAPDA and are suffering badly.

Gas connection to all the industries has been severed while producing electricity from diesel costs Rs11 per unit. According to the manufacturers, the cost is too high to remain competitive.

http://www.thenews.com.pk/arc_news.asp?id=3

 

[Neo]

Water, food crises loom ​

Friday, January 04, 2008

By Khalid Mustafa

ISLAMABAD: Pakistan’s food security is in extreme danger, as Rabi crops may not get last watering imperative for maturity of crops as the government had forced the Indus River System Authority (Irsa) to release 18,000 cusecs of water from Tarbela Dam for three days for power generation. The move came soon after the assassination of Benazir Bhutto, apparently to avoid any further wrath of masses, who were in shock over the tragedy.

The provinces want release of 3,000 cusecs of water per day, but the water regulator has placed the maturity of Rabi crops in the red zone by excessive release of water. Irsa released 18,000 cusecs of water for three days and is now releasing 10,000 cusecs.

Irsa released excessive water, about 2 million acre feet (MAF), during the Sept 15 to October 20 period, when the water regulator had no members and water distribution was managed by irrigation secretaries of the four provinces.

The loss of 2 million acre feet of water during this period has also aggravated the situation in the country. The inflow in Tarbela dam has also dwindled in the last two days by over 2,000 cusecs per day from 17,000 cusecs to 15,000 cusecs because of less than normal snowfall in the catchment areas of both Tarbela and Mangla dams, which has further worsened When contacted Irsa chief Bashir Ahmad Dhahr said that right now country has 1.7 million acre feet of stored water, much less than the stored water in last year, but better that that of 2004, 2005. He admitted that Irsa released excessive water during three days on December 28-30, but he was quick to add that Irsa will be able to store 60 feet more water in Tarbela and Mangla to ensure the last watering.

When asked as to why Irsa was releasing 10,000 cusecs of water from Tarbela against the demand of only 3,000 cusecs per day, he said that release of that much water was necessary to make Ghazi Barotha Hydropower project operational.

He recalled that two years back, because of less water release from Tarbela reservoir, the Ghazi Barotha Project had to experience some damages. He said, “We are hopeful that country would receive winter rains as forecast by the Met Office from today (January 4) and this will improve the water situation.” Now we are banking on weather to wriggle the country out of impending water crisis, he said

Bashir Dhahr said that wheat-sowing targets have been met and now the issue is to ensure the last watering for maturity of crops. He said this task would also be met keeping in view the winter rains that hopefully are likely to start from today (Jan 4).

He said that Irsa would continue to release 10,000 cusecs of water from Tarbela and 8,000 cusecs from Mangla despite pressure from Pakistan Electric Power Company (Pepco) that wants 15,000 cusecs of water released from Tarbela.

“However, Irsa would enhance water release up to 30,000 cusecs by January 25 as barrages will be opened and closure of canals would end by that time, and in the meanwhile we will be able to store massive water as the country would start receiving winter rain from today (Jan 4) up to Jan 12,” Dhahr said.

“The country, which is already facing 22 percent water shortage and right now, has all time low stored water in reservoirs that stands at 1.76 million acre feet of water. The said quantum of stored water is not enough for last watering of the Rabi crops in all four provinces,” a senior official told The News.

“We are also 100 percent sure that for early Kharif season, Pakistan will be facing the worst ever water crisis, as Irsa will not be able to mange any water as carryover stock for early Kharif, if the existing scenario is kept in view.”

In case, Pakistan receives the winter rains as forecast by the Met Office from today (January 4 to 12), the situation will improve, otherwise the country has no option, but to face massive water deficit that would endanger food security.

The government, which has miserably failed to enhance power generation capacity during the last 8 years, is now left with no option but to risk even the available food security at the cost of unjustified hydro electricity generation despite the fact that dams are built mainly to cater to irrigational requirements of the county.

“We received orders from government to release up to 18,000 cusecs from Tarbela for three days (Dec 28-30) in a bid to bridge electricity deficit so that politically charged masses following the death of Ms Bhutto may not become more aggressive in case of power outages. Now the Pepco is going for 10 to 12 hour load-shedding, but it could not afford such massive load shedding soon after the tragedy.

The water regulator is still under pressure to release 10,000 cusecs of water daily against the demand of federating units of only 3,000 cusecs, just to make Ghazi Barotha Hydropower project operational. But on the other hand, the country’ stored water is fast depleting and may not have water for last watering of Rabi crops.

The official said that below average rains will not provide the required solace to Irsa as it is experiencing 22 per cent water shortage and has no sufficient carryover stocks. Therefore we will have to depend more on nature and pray for more rains, he said.

http://www.thenews.com.pk/arc_default.asp

 

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Punjab government plans to establish SME industrial estates ​

SIALKOT (January 05 2008): Punjab government has evolved a strategy for the establishment of SME industrial estates in major industrial towns of the province. Reliable sources informed Business Recorder here on Friday that under the plan SME industrial estates would be set up in major industrial towns including Sialkot and work on the plan would be initiated in near future.

Sources said that the step was being taken to redress the problems confronting the SME sector, which is the backbone of the national economy. All basic facilities would be ensured to the SMEs in these proposed SME estates, sources added.

Special attention is being paid to the development of industrial sector on modern and scientific lines aimed at enhancing export volume and to bring industrial revolution through setting up large-scale industries including agro-based industries in the Province, sources informed.

Sources said that under the programme government has introduced certain schemes for the development of small and medium industries besides loan facility was also being extended to the small and medium businessmen enabling them to upgrade their industrial units and for setting up new industrial projects in the province.

More than one billion rupees had been set aside for diminishing the financial problems being faced by the businessmen engaged with small and medium industries as well as for removing the hitches which were hindering the process of setting up of new industrial projects, they said.

Apart from this, government was also providing loan facilities for the advancement and expansion of agro-based industries and dairy development, engineering and information technology in Punjab, sources added.

Sources said that the prime aim of setting up of large-scale industries was to ensure strong industrial base and to keep the economic wheel in to gear in the province. The establishment of these industries would not only help in doubling the export volume but also create large number of job opportunities, sources added.

Business Recorder [Pakistan's First Financial Daily]

 

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2000 to 2007: cellular industry posts robust growth of 119 percent ​

KARACHI (January 05 2008): The country's cellular industry has posted a robust growth of 119 percent in terms of subscription during the last seven years from 2000 to 2007, said Mohammed Ali, an economist at the Investment Capital and Securities (Pvt) Ltd on Friday.

He, however, held the absence of direct listing of the prominent cellular operators' in the stock market as major factor that restricted the opportunities for investors to extract financial benefits from their growth. He pointed out that the cellular industry presently grabbing over 74 million subscriptions has witnessed an average addition of more than 2 million subscription ever month during the last two years.

Mobilink is leading the cellular market followed by Ufone- a 100 percent owned cellular subsidiary of the Pakistan Telecommunication Company Limited (PTCL).

The emerging interest in the country's fast growing cellular industry is obvious from the acquisition of Paktel (89 percent shares) by China Mobile -CM Pak at an enterprise value (EV) of $460 million and Warid Telecom (30 percent shares) by Singapore Telecommunication Ltd (Singtel) for EV of $2.9 billion.

The CM Pak's aggressive future strategy on the country's market can be well gauged by its initial launch of $700 million cellular expansion plan, which will be followed by an estimated investment of $400 million a year in Pakistan, Muhammad Ali said.

He called the Mobilink, Ufone, and Telenor the chief market players in terms of cellular subscription. He added that the parent companies of these cellular operators had been listed in Egypt, Pakistan and Norway.

He pointed out that Mobilink had already injected more than $2.5 billion in the country's telecom sector, and still plans for further investment in the future. It's 6,5000 km optic fiber with the plan of further expansion for 2,000 km will help it improve quality of services.

Ufone posted a revenue growth of more than 40 percent in the fiscal year 2007 and was observed to contribute (in PTCL's group revenue) around 20 percent in the fiscal year 2007 as compared to 14 percent in the last fiscal year 2006. The infrastructure-sharing agreement for 10 years between Ufone and Telenor is also expected to generate beneficial results.

Telenor Pak has more than doubled its subscribers base to about 14 million over a year's period (November 2006-07). The growth was also accompanied by the operator's rising market share from around 14 percent to 19 percent over the same period.

Business Recorder [Pakistan's First Financial Daily]