Pakistan Economy - News & Updates - Archive

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Pakistan could tighten monetary policy further to fight inflation ​

Thursday, July 10, 2008

KUALA LUMPUR: Pakistan is ready to tighten monetary policy further to fight inflation, a senior finance official said on Wednesday, stressing the authorities’ commitment to getting inflation down from a three-decade high above 19 per cent.

“Some people argue that further monetary tightening may not be very useful, but the whole problem is that we are not willing to compromise on inflation,” said Hina Rabbani Khar, special assistant to the prime minister on finance and economic affairs.

“So if that requires more tightening, yes,” she told Reuters in an interview in the Malaysian capital, Kuala Lumpur.

Many analysts believe an interest rate rise is imminent, but she declined to comment.

“All I am saying is that there are certain things that you are committed to. And more than cheap money and cheap credit, we are more committed to holding on to inflation.”

In May the Pakistani central bank increased its discount rate to 12 per cent from 10.5 per cent to counter inflation and widening fiscal and current account deficits.

It then announced an increase in the cash reserve requirement (CRR), the ratio of cash banks must keep in reserve with the central bank, to 9 per cent from 8 per cent of deposits up to one-year maturity.

Balance of payments: For the 2007/08 fiscal year that ended on June 30, the government expects its budget deficit to be 7 per cent of gross domestic product (GDP), while the current account deficit is likely to be between 7.3 and 7.8 per cent of GDP.

Reflecting this, the rupee is near an all-time low.

“The rupee’s problem is a balance of payments problem more than anything else,” Khar said.

“We will try our very best to hold the slide,” she said, mentioning a tightening of regulations on foreign exchange transactions announced by the State Bank of Pakistan on Tuesday.

The rupee firmed on Wednesday in response to the measures, which included a temporary suspension of forward booking of foreign exchange for imports. It rose 2 per cent to 71.40/60 per dollar.

Khar blamed the caretaker government that took charge temporarily before general elections in February for most of the trouble.

“Within the caretaker set-up, within just three months, because of the huge oil price bill, the sliding down was immense,” she said.

“Whereas your current account deficit was looking OK, your budget deficit was within reach, everything just went haywire.”

But she was hopeful that things would improve. “I see this problem settling down within a year. This year would be a year of stabilisation for the Pakistani economy.”

Pakistan could tighten monetary policy further to fight inflation

 

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Pakistan can compete in milk production ​

Thursday, July 10, 2008

ISLAMABAD: Pakistan has got potential to easily compete with New Zealand and United Kingdom in milk production, however it needs to improve its yield.

This was stated by Executive Director General, Investment Division and Board of Investment (ID&BoI) Major (R) Iqbal Ahmad while talking to UK Deputy High Commissioner Robert Gibson on Wednesday.

Gibson was accompanied by British High Commission Trade & Investment Officer Jason Mumtaz. Pakistan is the 5th largest milk producer, but its real potential remains far behind as its cows produce relatively less, he added.

He informed the delegates that Pakistan and Britain share a historical legacy which is deep-rooted between both the nations. Moreover, Pakistani expatriates who are working in the UK, not only contribute towards the national exchequer of Pakistan but also form a productive workforce of the country, he added.

Government lays a lot of emphasis on the manufacturing sector at present, and the current investment policies support the promotion of investment in manufacturing sector, he said. The financial and services sector after a stellar performance during the last few years has become very competitive for new investment; he said adding that growth opportunities are also available in manufacturing, agriculture and power sectors. Executive director general briefed the delegates about the opportunities that are currently available in large and small scale manufacturing sectors of the country. He said that UK has one of the best known standards in pharmaceutical sector. And Pakistan has tremendous potential to offer UK investors for producing life saving drugs for cancer and diabetic patients.

Pakistan can compete in milk production

 

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Japanese investment in Gwadar sought ​

Thursday, July 10, 2008

ISLAMABAD: Pakistan on Wednesday sought Japanese investment by presenting Gwadar port as an ideal location, where it can explore possibilities of investment in fields like petrochemicals, heavy engineering, food processing, metal works, steel products and other export-oriented industries.

Mian Manzoor Ahmad Wattoo, Adviser to the Prime Minister/Minister for Industries, Production and Special Initiatives in a meeting with the Ambassador of Japan Seiji Kojima, who called on him here, stated Pakistan was strategically located as a regional hub with abundant land and natural resources, strong human resources and large and growing domestic market, which offer tremendous investment opportunities to countries like Japan, says a news statement issued here.

Wattoo further said that Japan is one of the leading donor countries giving economic aid to Pakistan and it has played an important role in Pakistan’s development through economic and technical assistance, thereby promoting strong economic and political relations between the two countries. “We want Japan to bring more investment in Pakistan,” he said.

Export Processing Zone Authority (EPZA) of Pakistan offers attractive incentives/facilities for investment in EPZs. Investment from Japanese investors is welcome where they can set up their own exclusive country zone in Pakistan.

Wattoo also emphasised that as Pakistan’s economy is developing, we need more market access in Japan in the areas where Pakistan has the potential to collaborate in terms of technology tie-ups, co-manufacturing, co-financing and co-export.

The ambassador noted that Japan was already cooperating with SMEDA (Small and Medium Enterprises Development Authority), a subsidiary of the Ministry of Industries and Production on various SME projects.

He further said that Japan is concentrating on the development of infrastructure in Pakistan. The ambassador also informed that a Japanese company, YKK, is setting up two plastic mould centers, one in Karachi and one in Lahore.

Japanese investment in Gwadar sought

 

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Textile industry may get Rs4bn relief​

ISLAMABAD, July 9: The government has decided in principle to provide Rs4 billion relief to the textile industry through reduction in recently announced gas price increase for industrial and captive power plants, it is learnt.

The government had recently increased gas rates for industrial consumers by 31 per cent and for captive power plants of textile units by 68 per cent.

The textile industry has since been protesting over the price increase on the ground that it was losing competition in the international market and had announced to go on strike from July 11.

In an effort to persuade the textile industry to call off planned strike, the ministry of petroleum and natural resources has been directed to increase gas rates for Liberty Power Plant to the extent of Rs4 billion that would reduce government revenue. As a result, textile-specific gas rates for industrial sector and captive power plants would reduce by more than 50 per cent.

Sources said the petroleum ministry had also been asked to look into other possible avenues so that tariff adjustments could be made through containing government’s revenue in the form of gas development surcharge but without affecting gas rates already announced for other consumer categories.

A special ministerial committee on gas rates would consider recommendations of the petroleum ministry within this week and then take the textile industry into confidence about the decisions. The textile industry, the sources said, had assured the government that they would consider to review their strike call after the ministerial committee comes out with a decision. Until then, they would not go on strike as originally announced for July 11, the sources said.

About two dozen businessmen belonging to textile manufacturing chain and exports had a meeting with Federal Minister for Commerce Ahmed Mukhtar on Tuesday where different options were discussed to reduce gas rates without affecting overall revenue requirements of the gas utilities. But the process the government would lose about Rs4 billion in gas development surcharge. The gas development surcharge is shared by the provincial governments on the basis of their gas production.

The sources said the textile industry had been demanded complete withdrawal of recent increase in gas rates for industrial units and captive power plants but was told that such a step may not be possible because of government’s economic constraints. The industrial sector is of the view that it was already paying highest gas rates to compensate cross-subsidies currently available to domestic and fertiliser sectors and hence these subsidies should be withdrawn to ensure equitable gas rates for all consumer categories.

The government, however, is unable to do away with subsidy for fertiliser and domestic sectors because of long-term binding gas supply agreements and political considerations, respectively.

Textile industry may get Rs4bn relief -DAWN - Business; July 10, 2008

 

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Pakistan to get $1.4bn WB loan, ADB to give $810m​

* $1bn WB loan to have 17% interest
* ADB funds for power projects​

ISLAMABAD: The World Bank (WB) and the Asian Development Programme (ADP) will give Pakistan $1.4 billion and $810 million in loans, respectively.

The WB’s $1.4 billion lending programme will support development in various sectors during the current fiscal 2008-09 year, a senior official in the Economic Affairs Division told Daily Times on Wednesday. He said anonymously that the lending programme consisted of $1 billion loan under the International Bank for Reconstruction and Development (IBRD) and $400 million loan under the International Development Association’s (IDA) country assistance programme.

Interest: He said the $1 billion IBRD loan would be provided on market rate, elaborating that market rate loans had an interest rate of 17 percent. He added that the $400 million IDA loan would be a soft loan, which is likely to have one percent interest rate, and would be for technical assistance.

Sources in the Finance Ministry say Pakistan is facing problems to return WB loans as there is a condition that they will be returned in any currency (dollor or euro), which has a higher value.

The official said there was no money for mega power projects, such as Basha and Munda dams, in the lending programme.

A WB official said anonymously Pakistan was negotiating for mega power projects with the bank. The WB official said Pakistan had also asked the WB to finance three other reservoirs, including Tarbela-IV, Munda Dam and Kohala Dam, and that Pakistan would need $3 billion for these projects. The Water and Power Ministry held a meeting with a WB team in June in this regard. These projects will generate 3,000 megawatts of electricity daily.

He said that there was however an allocation for power distribution companies in the loan. He said the loan for power companies would bind Pakistan to end subsidy on electricity and that the WB had previously set December as the deadline to end electricity subsidy.

The official said the government was working to expand the Tarbela Dam under the name of Tarbela IV following WB’s suggestion it could be operational earlier than other big power projects.

The sources in the ministry said the visiting WB team was also informed that the construction of these new projects would reduce Pakistan’s dependency on oil imports.

Power projects: The ADB loan will be for power projects, and the inflows are expected to begin in September, an official told Reuters anonymously. “The facility to be implemented over the next 10 years has been negotiated with power distribution companies and the formal approval by the bank is expected in August,” the official said, adding that “disbursement is likely to start from September or October”. zafar bhutta/reuters

Daily Times - Leading News Resource of Pakistan

 

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Power plant feasibility study deadline: Chinese investors turn to ministry against PPIB move ​

ISLAMABAD (July 09 2008): Chinese investors have sought the foreign ministry's assistance against the Private Power Infrastructure Board decision not to further extend the date of submission of a feasibility study of 250MW coal-based power plant, sources in the PPIB told Business Recorder.

The sources said that China National Machinery Import and Export Corporation (CMC), which is currently working on Sonda-Jherruck coal mine and power project, wrote a letter to Foreign Affairs Secretary Salman Bashir, reminding him of his endeavours to attract foreign investment, an objective that has been compromised by the PPIB decision.

Bashir was Pakistan's ambassador to China before being promoted to Foreign Affairs Secretary. He enjoys good relations with the Chinese government and investors in his personal capacity.

"As the project is the first of its kind in Pakistan and also the first for the CMC on BOT basis, there are host of complex issues that need to be resolved between the company and relevant organisations both in China and Pakistan," the sources quoted the company's Vice President Qin Ruijuan as stating in the letter.

The firm had also written a letter to the PPIB Managing Director, in which it said that the board decision might harm bilateral relations between the two countries. The sources said that a senior diplomat in the Chinese embassy has met with Water and Power Secretary Ismail Qureshi and conveyed him the Chinese government's reservations about the PPIB decision.

Giving the background development engagements, CMC, in its letter clarified that it was working for long time with relevant government agencies in Pakistan to develop the integrated coal mine and power project at Sonda-Jherruck in Thatta (Sindh) on BOT basis.

According to the company, detailed coal geological investigation for the project had already been completed in 2007 whereas feasibility study for the coal mines was completed and based on that, the mining licence was granted by Sindh government and lease deed was signed with the provincial government in 2008.

After signing the lease deed, the company was in the process of undertaking further hydro-geological investigative work to determine whether the adequacy of water resources for the power plant as the river nearby was unable to cater to the needs during the dry season.

"We have to look forward and we are preparing the second draft of technical and commercial proposals for review by the PPIB and other government authorities concerned," the sources quoted the company as saying. The company had submitted the first draft a couple of months ago to the organisations concerned.

According to the letter, the company has claimed that it was also working on a financial model for tariff which would be submitted to the National Electric Power Regulatory Authority (Nepra) for their information and comments. However, the company has admitted that as foreign investors, they lack experience and to some extent underestimated the situation, which led to the delay in submission of the feasibility study.

"We are making every effort to expedite the process but some issues were new to CMC as well as the authorities concerned, and are beyond our control and expectation," the company added.

The company has assured the Foreign Secretary that it would not like to enter any argument with regard to the 'reasons for delay', as it would cause unnecessary unpleasantness. However, the company was serious in undertaking the project as it has already invested $10 million and is making every effort to finalise the feasibility study as soon as possible.

On the other hand, PPIB is unwilling to further extend the deadline maintaining that such promises were made by the CMC through its representatives during their visit to Islamabad in the past, promises that were never fulfilled. However, if the company submits a bankable feasibility study for the project, then the PPIB, without any financial or legal obligation on its part, may review the study.

Business Recorder [Pakistan's First Financial Daily]

 

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Japan offered opportunities for investments ​

ISLAMABAD (July 10 2008): Pakistan is strategically located at a regional hub with abundant land and natural resources, strong human resources, large and growing domestic market, which offer tremendous investment opportunities to countries like Japan.

This was stated by Mian Manzoor Ahmad Wattoo, Adviser to Prime Minister for Industries, Production and Special Initiatives in a meeting with Ambassador of Japan Seiji Kojima who called on him here on Wednesday.

Wattoo further said that Japan was one of the leading donor countries giving economic aid to Pakistan and it had played an important role in Pakistan's development through economic and technical assistance thereby promoting strong economic and political relations between the two countries. "We want Japan to bring more investment in Pakistan", said Wattoo.

Wattoo said that Gwadar Port was an ideal location, where Japan could explore the possibility of investment in the fields of petrochemicals, heavy engineering, food processing, metal works, steel products and other export-oriented industries.

Export Processing Zone Authority (EPZA) of Pakistan offers attractive incentives/facilities for investment in EPZs. Investment from Japanese investors is welcome where they can set up their own exclusive country zone in Pakistan. Wattoo also emphasised that as Pakistan's economy was developing, we needed more market access in Japan in the areas where Pakistan had the potential to collaborate in terms of technology tie-ups, co-manufacturing, co-financing and co-export.

Business Recorder [Pakistan's First Financial Daily]

 

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FBR loses Rs13bn revenue due to energy crisis ​

Friday, July 11, 2008

ISLAMABAD: The Federal Board of Revenue (FBR) lost Rs13 billion in revenues during fiscal year 2007-08 due to unprecedented energy crisis that hit hard the manufacturing sector and dampened its growth.

Its sluggish growth resultantly deprived the Federal Board of Revenue (FBR) of Rs7 billion sales tax and Rs6 billion federal excise duty, which could have been collected had the situation been favourable and there had been no shortage of energy for the industrial units.

The FBR official spokesperson and member FATE, Khawar Khurshid Butt while talking to journalists here on Thursday said the crisis worsened since January 2008, adding “we expected that the energy shortage would affect the whole economy in monetary terms by Rs35 billion but due to appropriate measures losses were reduced to Rs23 billion.”

Butt said the ongoing fiscal year 2008-09 was very tough for the FBR in collecting Rs1,250 billion target keeping in view higher oil prices and expected slow economic growth. However, he assured that the government was taking appropriate steps for meeting the revenue target.

He termed the amnesty scheme voluntary aimed at enhancing economic activities and fetching investment by bringing money in the market. The FBR through this scheme would be able to collect about Rs2 billion. So far, a good response has been witnessed even when the scheme was just in initial stages and claimed that appropriate steps have been taken so that no one may misuse this scheme.

Member Fiscal Research and Statistics (FRS), Dr Athar Masood, Saeedullah Khan Chief Income Tax and other officials of the board accompanied him during the press conference. The FBR would conduct analytic audit of the corporate sector, with particular focus on banking, oil and gas sectors. To this effect the decision was taken during the Board-in Council meeting, which was held under the chairmanship of FBR Chairman M Abdullah Yusuf. He said 33 per cent of corporate business showed losses, 33 per cent showed no income while only 34 per cent declared income from the business.

The FBR wanted to know reasons behind the losses and no income in business, he maintained.

The analytic audit would particularly remain focused on banking, oil and gas sectors, Butt said adding that the aim was to come up with objective analysis of revenue potential and the revenue collection from these sectors.

He said the board-in-council meeting also decided to soften section 177 of Income Tax Ordinance 2001 so that non-corporate taxpayers were not harassed, adding that the FBR would soon issue instructions to regional commissioners for implementation of the decision.

He said during the meeting, the FBR chairman directed the members to prepare a comprehensive strategy to collect additional Rs15 billion through administrative measures. Five billion each would be collected from customs duty, direct taxes and sales tax.

The meeting also lauded the improvement in 2007-08 revenue collection as the updated figures showed that the collection had reached to Rs1,004 billion against the provisional collection of Rs1,002 billion.

He said the FBR meeting also expressed satisfaction over crossing the psychological mark of Rs1 trillion revenue collections against the revised target of Rs990 billion.

FBR loses Rs13bn revenue due to energy crisis

 

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Weak economy offers investment avenues ​

Govt fails to capitalise on opportunities​

Friday, July 11, 2008

LAHORE: Some economists and investors have expressed disappointment at the failure of the government to cash in on the opportunities provided by the sluggish economy for prudent investments in energy, telecoms and agriculture.

They say every economic crisis brings opportunities that could take the economy forward in depressing times. Sensible governments seek transparent solutions to the economic downturn instead of following conventional policies. In Pakistan’s case, they assert, the urgent need is to motivate investors to commit their resources in fields that would ensure them better returns while fulfilling immediate requirements of the nation.

Engineering expert Almas Hyder, commenting on the issue, says energy crisis is a challenge that should have been tackled in a rational way to convert it into an opportunity. He says the government is paying billions in subsidy on electricity while generating one megawatt of energy requires an average investment of a little over $1 million. He points out that energy savers could save the country 1,200-1,500 megawatts of electricity if they replace conventional bulbs and tube lights.

He says the government resorted to the conventional solution by withdrawing all duties on energy savers to motivate consumers to shift to the savers. A bolder and more prudent approach would have been to encourage the investors to establish energy saver plants in the country.

The government, he says, could offer free land and infrastructure to seven or eight investors for establishing energy saver units in different regions of the country. The replacement of conventional lights with energy savers would take decades with the present policy and only two to three years after establishment of local plants.

Similarly, he adds, the local industry has the capacity and capability to manufacture 50MW thermal power plants. Both Heavy Mechanical Complex and Millat Tractor could produce these plants at competitive rates. However, the government has allowed duty-free import of generators which would flood the country with diversified products. “Solutions planned in haste have a very high cost overrun.”

Dubai-based chartered accountant Faisal Qamar says Pakistan imports mobile phones worth $1-1.5 billion every year. The regulators should approve five or six specifications of mobile phones and facilitate the investors in manufacturing local brands.

Pakistan has many times more mobile users than Finland, Germany, Holland, Singapore and Taiwan, all of whom export mobile phones. He says with economies of scale available in the domestic market, a dedicated approach towards local production of quality mobiles could place Pakistan among cellphone exporters.

CNG dispenser and kits’ importer Group Captain Naeem A Khan deplores the government has neglected the fact that Pakistan is the second largest user of CNG vehicles and has not taken any initiative to establish at least a CNG kit manufacturing plant. Governments the world over grab such opportunities and facilitates the investors in establishing local plants and saves foreign exchange.

Textile exporter Adil Butt says Pakistan’s textile industry exports 85 per cent of its products and is hardly able to market remaining 15 per cent in the local market. In China and India, more than 75 per cent of their textile production is consumed domestically. He says policy flaws have encouraged consumption of imported textiles in Pakistan as local gents and children-wear market is in the hands of producers in the Far East and China while women fabric comes from China (both legally and smuggled) and from India through smuggling. Old clothing is another big source of imported textiles. He says a paradigm shift in textile policy is imperative to ensure sustainability of the local textile sector without much dependence on exports. The government should study how India, Bangladesh and even China manage to restrict foreign textiles in their markets.

Weak economy offers investment avenues

 

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$4bn investment needed under ​

PPP to develop infrastructure​

Friday, July 11, 2008

ISLAMABAD: Pakistan needs US$3.5 billion to $4 billion per annum investment on infrastructure to maintain the healthy growth and for this purpose private public partnership (PPP) is the only viable option to meet this challenge, as available public funds are able to meet only half of the requirement.

The rest would be required from the private sector and for this the newly elected government is focusing more in public private partnership to execute the projects.

Gen (retd) Muhammad Zubair, member Infrastructure Management Unit came up with these views in a thought-provoking seminar on “Public Private Partnership: Public Sector Role in Management” held here on Thursday.

The prime purpose of organising this seminar was to sensitise senior Federal and provincial government officials about the concept of public private partnership.

Deputy Chairman, Planning Commission, senior officials from the Ministry of Finance, the Planning Commission and provincial governments attended the seminar.

Gen Zubair in his presentation on ‘Integration and Streamlining PPP in Planning Process (InStePP)’ highlighted the importance of the private public partnership in developing the country’s world-class infrastructure.

He said that PPP has been recognised as an essential mode of infrastructure service delivery and this unique idea has been given a specific focus in the Medium Term Development Framework (MTDF) 200-10 with a view to establish a policy framework and coordinating the PPP programme across government agencies, establishing core center of expertise, reviewing and establishing legal framework, identifying prospective projects in line with market capacity and identifying funding mechanism.

He disclosed that the core center of expertise on PPP would be established in the Planning Commission and to this effect an American company’s team is due some time in October, which will give training to Pakistani officers on PPP.

“We will select some of them who will impart further training to the young officers in provincial and local government level on PPP,” Zubair told the participants of the seminar.

As an in-charge of the project, Zubair visualises that in the future the PPP unit would be installed in the Planning Commission, which will examine every project with regard to assessing it as to whether it is viable under PPP or not. If viable under PPP, then the unit will recommend the project to IPDF (Infrastructure Project Development Facility) for arranging the financing.

Gen Zubair said in PPP units would be established in all the ministries, which would prepare the PC in keeping in view the PPP model. The government would initiate and execute only those projects, which are strategically important for the masses and the funding could not be arranged from private resources.

The participants also came up with suggestions with regard to making the future PPP cell in the Planning Commission more vibrant and efficient.

They also raised the issue of sharing risks between public and private entities, while completing the projects and stressed for transparent law making to ensure a competitive environment for the private parties, which intend to participate in various projects.

Some participants also warned the government officials not to make the rules and regulations specifically for those private parities, who rub the shoulders of the people at the helm of affairs, to get the laws suited to them approved.

They stressed that the rules and regulations should be the same for all private parties for alluring investment in the projects based on PPP. It is also stressed that local investors need to be encouraged for investment in the projects based on PPP.

Secretary Planning Division emphasised on the need to encourage and motivate private sector participation through various measures in infrastructure development, as the government alone cannot deliver.

Deputy Chairman, Planning Commission Salman Faruqui earlier said public private partnerships can play a key role in increasing resources and improving efficiencies, by helping the country access not just finance, but also managerial expertise, new technologies, better project design and implementation and more efficient use of resources.

Infrastructure Management Unit (IMU), Planning Commission is currently implementing the project “Infrastructure Institutional Capacity Building and Project Preparatory Facility” through technical assistance from Asian Development Bank.

The objective of the project is to assist the country in enhancing and enabling the environment for Infrastructure Investment by the private sector, developing public private partnership modalities and supporting institutional capacity building.

IMU conducted a diagnostic study in 2007 on “Constraints to Private Sector Investment in Infrastructure” to identify these constraints.

$4bn investment needed under

 

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Work on hydropower projects being accelerated ​

Friday, July 11, 2008

LAHORE: Member WAPDA (Water) Syed Raghib Abbas Shah has said full attention is being paid to accelerate the pace of work on hydropower projects as the country is in dire need of both water as well as hydropower.

Chairing a meeting on hydropower projects, he said bids for the construction of Winder Dam located in Balochistan had been called and would be opened on July 24.

He asked project directors to rehash implementation plans in coordination with construction firms and consultants and get the work done as envisaged in the schedule. “Quantity, quality and financial control should be the key in execution of the projects,” he added.

The meeting was told that the Mangla Dam raising project is nearing completion.

Likewise, the second power house of Satpara Dam is expected to be commissioned in September this year, while the whole project is likely to be completed by the first quarter of 2009.

The meeting was briefed that detailed engineering designs and tender documents of Hingol and Naulang Dams would be finalised up to December this year. In addition, the detailed engineering design of Nai Gaj Dam would be completed in February 2009.

Work on hydropower projects being accelerated

 

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Energy sector, airline industry ​

Pakistan seeks UAE cooperation​

Friday, July 11, 2008

DUBAI: Pakistan has sought assistance from United Arab Emirates to overcome ongoing energy crisis in the country and for the development of airline industry.

Prime Minister Syed Yousuf Raza Gilani who called on UAE’s Vice President and Prime Minister Sheikh Mohammad bin Rashid Al-Maktoum, asked him for cooperation in various fields of infrastructure development.

The PM said Pakistan also sought UAE’s expertise in port sector, particularly for the functioning of Gwadar Port. Al-Maktoum assured all-out support and said the UAE would encourage its private sector to make further investments in Pakistan in various fields, particularly the energy and real estate sectors.

The meeting also attended by PPP Co-chairman Asif Ali Zardari, Federal Ministers Sherry Rehman, Syed Khurshid Ahmad Shah and Qamar-uz-Zaman Kaira, also discussed Pakistan’s role in war against terrorism and the increased economic cooperation between Pakistan and the UAE.

Gilani urged international community to extend support to Pakistan, which was playing the role of a frontline state in war against terrorism. He said the new democratic government in the country was following the three-pronged strategy to deal with the menace of terrorism and extremism.

The strategy comprises dialogue with non-militants and those who lay down their arms, besides increased development activities with focus on the socio-economic uplift of the people of areas along the border, he added.

The premier said the use of force would be the last option in case of violation of agreements from the other side.

Gilani said a stable Afghanistan was in the interest of Pakistan as well as for the region and the world. He said the country needs increased trade and not aid from the world to help tackle issues of socio-economic development, poverty, and joblessness, which are root causes of terrorism and extremism. He also referred to presence of three million Afghan refugees on Pakistani soil and said it was also one of the causes of difficulties in checking illegal cross border movement along Pak-Afghan border.

He invited Al-Maktoum to visit the country, which he accepted and said he considered Pakistan his second home.

The UAE PM appreciated Pakistan’s role in war against terror and its credible intelligence sharing to curb terrorism and extremism posing a threat to the world peace.

He also lauded the positive role of Pakistan expatriates in the socio-economic development of UAE. He apprised Gilani of his new charity project ‘Dubai Care’ under which five million Muslim students from across the Ummah including Pakistan would get the free education.

Energy sector, airline industry

 

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OGDC plans aggressive exploration​

ISLAMABAD, July 10: A Senate body was informed on Thursday that the Oil and Gas Development Company Limited (OGDCL) has chalked out an aggressive oil and gas exploration programme to meet the growing energy demands of the country.

OGDCL Chairman Arshad Nasir informed the Senate Standing Committee on Petroleum and Natural Resources that there would be a focus on replicating international best practices and innovative thinking.

He also gave a detailed overview of the contribution made by the OGDCL to the national exchequer and said that the company was able to contribute Rs82.87 billion in the year 2007-08 to the national kitty, which was higher than 2006-07.

The committee assured support to the OGDCL in removing hurdles in the way to expedite oil and gas exploration in the country, particularly in Balochistan.

The OGDCL chairman informed the committee about steps taken to improve the working and performance of the OGDCL and new discoveries of oil and gas made during last few years.

He said that all-out efforts were being made with a strong vision and passion to enhance the energy security of the country and go beyond geographical boundaries for exploration and production opportunities.

He said that agreements have been signed with international firms to further increase technical prowess in the on-shore exploration and production, as well as to a more challenging area of the offshore exploration.

He stated that OGDCL was contributing 42 per cent of the total production of gas from Balochistan.

He apprised the members of the committee of various reasons for halt in the exploration activities in Balochistan and said that due to non-clearance of security from the government of Balochistan, new activities could not be launched.

The senate body, which met at the OGDCL Head Office under the chairmanship of Senator Syed Dilawar Abbas, underlined the need for intensifying efforts to explore new reserves of oil and gas to meet the growing demand and to bridge the supply and demand gap to protect the common man from the impact of unprecedented hike in the prices of petroleum products.

It was pointed out that oil prices have far greater consequences for developing countries, like Pakistan, than the developed ones.

Members of the committee were of the view that there was a dire need of intensifying search for new reserves as the previous ones have been depleting at a fast pace.

They recommended that the OGDCL should also go for off-shore ventures as there was a huge potential in this area to meet the future demands of the country.

The committee noted that Balochistan has great potential for oil and gas reserves and called for making the environment conducive to carry out exploration activities in an appropriate manner and suggested that parliamentarians and tribal elders should play their due role in facilitating the OGDCL in exploration activities.

It also constituted a sub-committee which will comprise senators from Balochistan with a view to remove bottle-necks in the way and address security concerns.

OGDC plans aggressive exploration -DAWN - Business; July 11, 2008

 

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Credit Swiss comes to Pakistan​

KARACHI, July 10: Credit Suisse Group, Switzerland’s second-biggest bank, has announced to start equity research business in Pakistan. The group has planned to introduce broking services next year to benefit from a stock market that surged to a value of $46 billion from $5 billion in 2001.

Credit Swiss is hopeful to exploit the potential in Pakistan for economic growth.

Credit Swiss comes to Pakistan -DAWN - Business; July 11, 2008

 

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Gas pipeline from Iran: Senate committee urges govt to sign deal sans India ​

* Warns of gas reserves depletion by 2012
* Urges to impose discipline on gas marketing companies to control CNG, LPG prices​

ISLAMABAD: Chairman Senate Standing Committee on Petroleum and Natural Resources, Senator Dilawar Abbas, Thursday criticised India for delaying Iran-Pakistan-India (IPI) gas pipeline mega project and urged government to sign the agreement even without India.

He was talking to media persons after the meeting of the senate body on Petroleum that met in Oil and Gas Development Company Limited (OGDCL) office. The senate body also constituted 4-member sub-committee comprising Balochistan senators Saeed Hashmi, senator Naseer Mengal, Muhammad Khan Maree and Shahid Hussain Bugti. The said sub-committee would work for security clearance to initiate drilling activities in six sensitive areas of Balochistan. The meeting was held on the exploration activities of OGDCL and the next meeting would be held on the gas prices to inquire about Oil and Gas Regulatory Authority’s activities (OGRA).

Chairman senate body warned that gas reserves in Pakistan would deplete by 2012 and there would be no gas in the country. “India is delaying the IPI gas pipeline in one way or the other,” he said, and added “Pakistan should go ahead on the gas pipeline project even without India.” He hoped the signing of the project during the current year.

While hinting at the rising oil prices, he emphasised that current margin mechanism of the Oil Marketing Companies (OMCs) must be revised to stabilise prices in the country. He also said that senate body on the petroleum has also recommended rationalising the sales tax and margin of the OMCs. “Government should find ways to provide relief to the consumers after the oil prices continue upward rally,” he recommended. Replying to a question, he said that government should impose discipline on the marketing companies and dealers to control the Compressed Natural Gas (CNG) prices in the country. He alleged that the dealers were making windfall gains from the recent hike in CNG prices.

After de-linking the prices of Liquefied Petroleum Gas (LPG) with international prices, government should take proper measures to control the prices and there should be no hike. Six areas including Dera Bugti, Maree area, Uch, DG Khan bordering areas and Ghal Mugasi had been identified where security problems existed, barring the exploration activities. There were threats from some groups in these areas to halt the exploration of oil and gas activities. He further said that sub committee would suggest security measures by involving security agencies and local representatives in Balochistan province.

He informed that senators from Balochistan during the meeting had demanded to adjust around 200 trainees in OGDCL and the committee has recommended giving employment opportunities to these young people at the gas and oil exploration activities sites in Balochistan. He further said that the sub committee would work with provincial and federal government authorities to clear the security so that the exploration activities in Balochistan province could be initiated. He said that OGDCL has been directed to expand the drilling activities either individually or work in joint ventures to enhance the oil and gas production in the current scenario when their prices are sky rocketing day by day.

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