Pakistan Economy - News & Updates - Archive

[Neo]

Govt to launch $22bn hydroelectric projects ​

Sunday, July 27, 2008

ISLAMABAD: The federal government would develop new multipurpose water reservoirs worth US$22 billion on priority basis to cope with the increasing demand of water and electricity, Infrastructure Project Development Facility (IPDF) head, Ghulam Murtaza Satti said.

“The government would also undertake various run-of-river projects to serve the Indus Basin Irrigation System,” he told journalists here on Saturday. Talking about domestic power needs, he said, Pakistan urgently needs to exploit its hydropower potential estimated at 40,000MW, adding that currently only 15 per cent of this potential was being utilised.

He was of the view that the country was in dire need of significant investments in infrastructure, specifically in energy and water to sustain its recent economic growth in the future. These projects would put a substantial burden on the public sector alone and in consequence the government has decided to explore alternative financing options that include using private sector investments to ease the budgetary constraints, Murtaza Satti said.

The main objectives of these projects are to enhance water availability for irrigation, generate cheap electricity, optimise water resources, develop Indus Basin Irrigation System and overcome energy and water shortages.

He said that IPDF is also in the process of creating a Multi-purpose Water Reservoir Financing Cell to focus on the project structuring and financing of multi-purpose water reservoirs, and build an enabling framework for private sector participation in these projects.

Govt to launch $22bn hydroelectric projects

 

[Neo]

Revival of positive sentiments help KSE gain 797 points ​

Sunday, July 27, 2008

KARACHI: The revival of positive sentiments set Karachi bourse back on rails on fast pace this week ended July 25. Investors from different sections accumulated stocks on upper levels, but overseas investors ones continued to exit from market this week too.

KSE 100-share Index posted a handsome recovery of 797 points or 7.8 per cent this week and closed at 11,032 points.

In the first four sessions of this week, market recovered over nine per cent or 922 points owing to some confidence building measure the financial managers took this week. However, smart recovery ahead of SBP monetary policy announcement on Tuesday, Jul 29, convinced investors to book profits on Friday - the last session of week.

The parallel running junior 30-Index also recovered 1,119 points or 9.8 per cent and concluded at 12,526 points on week-on-week basis.

The return of investors from different walk of life to market and their purchasing of stocks at the upper levels enhanced average turnover in ready market to 140.5 million shares from 115.6 million shares of last week.

Accordingly, the overall market capitalisation also improved by Rs243.6 billion to Rs3.439 trillion this week.

Buying was seen on across the board, but insurance sector closed under selling pressure.

“During the week, buyers remained active almost in all key sectors. Banking sector with a gain of 16 per cent on week-on-week basis remained the top performer followed by cement sector, which registered a gain of 8.7 per cent. On the other hand, strong buying was witnessed in the E&P sector during initial trading sessions, however, correction in international crude oil prices kept the sector under pressure in the later part of the week,” Umer Ayaz at JS Research calculated.

Prior to the start of this week, market had shed over 17 per cent or 2,118 points in the last three consecutive weeks. The 10,000 points proved to be the strong resistance level and invited nominal buying (i.e. gained 22 points) on last weekend, July 18.

Thereafter, the visits by Governor State Bank Dr. Shahshad Akhter and Finance Minister Syed Naveed Qamar to Karachi Stock Exchange (KSE) on Monday and Tuesday, respectively, and announcement of establishing a Rs20 billion Equity Market Opportunity Fund (EMOF) by later restored investors confidence apparently.

The objective of EMOF is to provide stability and liquidity to market in times of stress, which was finally launched on Friday, it was learnt.

In fact, market had discounted nearly by 35 per cent or 5,500 points to more than attractive level by last Thursday, July 17, from 15,676 points all time high of April 18.

The 10,000 points that has proved to be a strong resistance level and triggered buying, also received encouragement by visits of country financial managers to the Exchange, while market support fund restored full confidence among investors, who had lost hope in market, said a leading analyst.

Foreigners, however, remained net sellers in the market as depicted by NCCPL data. As per the data, net foreign selling during the week stood over Rs2 billion (or US$29.6 million). On year to date basis, cumulative selling in 2008 to date stands at US$301.9 million (as of Jul 24, 2008).

The announcement of monetary policy by the central bank on Tuesday, Jul 29, for the first half of just started fiscal year 2009, is said to be the crucial one for future course of market. SBP is likely to increases key discount rate in range of 50 basis points to 100bps to control inflation in country that had reached to a 30 years high level.

It was a rollover week that started with open interest at Rs7.2 billion. However, only Rs3.2 billion (44 per cent) was settled during the week with Rs4 billion (56 per cent) remaining unsettled. In the CFS market, investment during the week stood at Rs27 billion versus Rs27.2 billion last week depicting a meager decline of 0.7 per cent. Similarly, CFS rate declined to 14.5 per cent down 66bps on week-on-week basis.

Weekly Movement in Blue Chips
Symbols Open on Close on Difference
Monday (Rs.) Friday (Rs.) (Rs.)

Adamjee Insur. 207.64 230.1 22.46
Attock Refine. 181 220.5 39.5
DGKC 48.6 60.25 11.65
EFU Gen.Insur. 326.04 265.62 -60.42
ENGRO 211 217.52 6.52
FFBL 26.5 28.8 2.3
HBL 166.36 187.5 21.14
LUCK 75.5 87 11.5
MCB 233.08 269.13 36.05
NBP 109.99 133 23.01
OGDCL 108.3 115.75 7.45
Pak Reinsur. 63.28 56.03 -7.25
POL 271.02 313 41.98
PPL 205.27 228 22.73
PSO 386 405.03 19.03
PTCL 35.49 37.13 1.64

Revival of positive sentiments help KSE gain 797 points

 

[Neo]

150MW power station for Balochistan soon: Wapda chairman​

QUETTA, July 26: Wapda chairman Shakeel Ahmed Durrani said on Saturday that Quetta would soon have a 150MW rental powerhouse and work on the Dadu-Khuzdar, Kot Addo and Dera Ghazi Khan-Loralai transmission lines would start shortly.

Mr Durrani informed a high-level meeting which was presided over by Chief Minister Nawab Mohammad Aslam Raisani that the authority was trying its best to complete the project in the minimum possible time.

The meeting was informed that four small- and medium-sized dams would be constructed in Balochistan — Hingol and Winder dams in Lasbela, new long dam in Jhal Magsi and Iskalnji dam in the Bolan district.

The construction of the dams would cost between Rs23 million and Rs38 million. An additional 145,000 acres of land would be cultivated in the areas served by the dams and they would produce 4.3MW electricity.

The meeting was informed that first phase of the Kachhi canal project would be completed till end of 2009 and the government was making efforts to complete other phases of the project in minimum possible time. Around 500km long Kachhi canal would have around 713,000 acres command area.

It was decided that Wapda, provincial government and other departments concerned would evolve a joint strategy for removing hurdles in the construction of the project.

With the completion of Kachhi canal, Balochistan would have 6,000 cusecs additional water from Indus river that would bring a revolution in the agriculture sector of the province.

Wapda officials informed the meeting that Balochistan was presently receiving 650MW electricity and it needed 1,050MW more to fulfil the requirement. They said Wapda was covering the shortage of electricity through load-shedding.

The meeting decided that power load supplying to the tube wells would be jointly checked by Wapda and provincial government officials. Senior Minister Maulana Abdul Wasey, Chief Secretary Nasir Mehmood Khosa and senior officials of Wapda attended the meeting.

150MW power station for Balochistan soon: Wapda chairman -DAWN - National; July 27, 2008

 

[Neo]

Govt to spend Rs 520bn on NTC by 2012​

ISLAMABAD: The government will spend Rs 520 billion by 2012 to develop National Trade Corridor (NTC) in order to boost trade activities and exports. A source in the Ministry of Communications told APP Saturday that NTC would link upper parts of the country in the north with ports in the south to reduce travel time and fuel cost by improving existing road network and introducing new highways and motorways by 2012. The development of NTC would cause multifaceted benefits, reduce the losses and significantly contribute to the national exchequer, he added.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Molasses exports reach $54 million​

KARACHI: Rising global demand of ethanol has fueled country’s molasses export, which registered an impressive 94 percent growth in the outgoing fiscal year 2007-08.

Pakistan has fetched around $54.63 million from molasses exports till the closing of last fiscal year as compared with $28.08 million 2006-07, figures released by the Federal Board of Statistics (FBS) show.

Industry people said the increased in exports values are due to its appreciating prices in global market coupled with significant surge in its export quantity.

They said that sugar production registered magnificent growth in the last Rabi season that yielded an increase of energy grain raw material (molasses) from sugar mills. The production of sugar was recorded at 4.9 million tonne in the last crop season.

According to FBS, the export quantity has also grown by 118 percent to 0.81 million tonne in 2007-08. The molasses exports ranked the fourth most growing sector followed by Jewellery and cement.

Furthermore, industry people said the prices of molasses have reached to $100 per tonne in international market which were at $70 per tonne during last year.

Former Central Chairman, Pakistan Sugar Miller Association (PSM), Chaudhry Zaka Ashraf told the demand of Pakistan’s molasses have increased manifold due to its high consumption in ethanol production by European countries.

He predicted that molasses exports would constantly surge as the number of orders had increased. “Some US companies have offered lucrative deals to local firms for the manufacturing of ethanol,” he added.

He also told the exports will also be increasing to European countries as they are consuming 10 percent ethanol blended gasoline all over the continent.

Pakistan has around 10 to 12 molasses exporters that deal with North American and European countries while some 80 sugar millers are also exporting molasses.

Ashraf said the installation of 16 distilleries has enhanced the quality of the molasses and he believes that it will be the primary reason behind attracting more foreign orders in the future.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Foreign investors withdraw another $29.593 million​

KARACHI (July 27 2008): Foreign investors continued their cautious stance due to prevailing political and economic situation in the country and withdrew another $29.593 million from the Pakistan's equity market during the outgoing week ended July 25, 2008.

The cumulative net outflow of the current month from July 1 to July 25 stood at $72.768 million while the cumulative figures of current calendar year (January 1, 2008 to July 18, 2008) were recorded at negative 314.204 million.

According to data released by the National Clearing Company of Pakistan (NCCPL) a net inflow was witnessed only on Monday as $404,757 million came in the country's equity market on the first day of the week, however, an outflow was seen during the remaining four trading sessions.

The data shows that an outflow of over $5.897 million was witnessed on Tuesday, over $9.902 million on Wednesday, $2.990 million on Thursday and over $11.207 million on Friday.

The prevailing geo-political situation and weakening economic indicators are the main reasons, which forced the foreign investors to offload their holdings, a leading analyst said, adding that various measures taken by the SECP and KSE board to support the local share market failed to revive the investor confidence during the outgoing week.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Country falls short of wheat output target​

ISLAMABAD (July 27 2008): The country is short of 2.4 million tons of wheat production target of 24 million tons fixed for 2007-08, and the country has barely achieved 21.6 million tons production, according to the third and final estimate for 2007-08 wheat production, sources told Business Recorder here on Saturday.

The average wheat yield in Pakistan has been stagnant for the last seven years while the population has increased significantly, widening the gap between demand and supply of this staple food. Flawed policies in the past led to wheat shortages in the domestic market in spite of a surplus crop. In 2006-07, the government announced a bumper crop of 23 million tons, which was in excess of domestic demand.

The government, therefore, decided to export 0.5 million tons of surplus wheat. At that time wheat prices in the domestic market were around Rs 430-435 per 40 kilograms, while in the international market it was being sold at RS. 415 per ton.

The price differential between the domestic and international market was too high and profiteers - the mill owners as well as government officials - entered the market. This led to the hoarding and smuggling of the commodity, the main reason for wheat shortage in the country.

According to a senior official of the Food Ministry, 0.8 million tons of wheat was exported, while 1.5 million tons was hoarded and around two million tons was smuggled out of the country. Throughout the government behaved like a silent spectator and when wheat prices reached Rs 780-800 per 40 kilogram in the market, the former government decided to import wheat.

The farmers did not gain anything out of this as they sold their wheat at the support price fixed by the government at Rs 425 per 40 kilograms, but the commodity was being sold at Rs 780-800 per 40 kilograms in the market.

Usually, the government fixes the wheat support price for the next crop in September to encourage the growers, but in spite of the fact that the Food Ministry sent the proposal for wheat support price three times (in September, October and November), yet at all times the proposed wheat support price of Rs 500 per 40 kilograms was rejected by the government. This became the main reason for two percent lower acreage under wheat cultivation in 2007-08.

The high prices of inputs also contributed to reduced production. The prices of DAP increased to Rs 3200 per 50 kilograms at the time of crop cultivation. That resulted in an unbalanced use of fertilisers by the growers. The government provided Rs 400 subsidy on fertilisers despite several recommendations to increase the subsidy to Rs 800-1000 per 50 kilograms, made by the National Assembly Standing Committee.

In March 2008, wheat support price was fixed by the caretaker government at Rs 510 per 40 kilograms that was lower than the cost of production per 40 kilograms of wheat. Soon after the formation of the new government, Prime Minister Syed Yousuf Raza Gilani announced wheat support price of Rs 625 per 40 kilograms from the previous price of Rs 510 per 40 kilograms.

At the time of wheat procurement, the government fixed the price at Rs 625 per 40 kilograms. But, according to the details of wheat procurement operations submitted to the Economic Co-ordination Committee (ECC) on July 15, the country was able to achieve just 78.4 percent wheat procurement target fixed for 2007-08 fiscal year.

The reason: high procurement price of Rs 650-655 per 40 kilograms paid by the private sector to the growers. By taking an overview of the situation, one can easily conclude that the flawed policies of the government have resulted in the possibility of wheat shortage in the new year also.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Services trade deficit hits new peak of $6 billion​

KARACHI (July 27 2008): The country's services trade deficit has widened by 50 percent to hit a new peak of six billion dollars in FY08 due to decline in exports and high import payments of transportation, construction, financial, computers services and royalties.

Statistics revealed on Saturday that overall services sector exports stood at 3.590 billion dollars against the imports of 9.892 billion dollars during FY08, depicting a deficit of 6.302 billion dollars. The deficit in 2008 is some 50 percent higher than FY07, as during this year it stood at 4.170 billion dollars against 6.302 billion dollars in 2008.

The service exports declined by 13 percent to 3.590 billion dollars in 2008 over the exports of 4.14 billion dollars in 2007. While on the other hand imports of service trade have surged by 19 percent to 9.892 billion dollars from 8.31 billion dollars.

Major contribution in services trade deficit was witnessed by transportation services, travel services and royalties, as only transportation sector has contributed around 45 percent share in the overall deficit. Two-sector transportation and travel services' deficit contributed 62 percent in overall deficit and mounted to 3.953 billion dollars in last fiscal year as compared to 3.423 billion dollars in FY07.

"Rising imports played a prominent role in the services sector deficit, while raise in the shipping lines tariff is also another leading factor," economists said. Transportation service exports stood at 1.050 billion dollars against the imports of 3.686 billion dollars. Travel imports amounted to 1.58 billion dollars over the exports of 263 million dollars, while communication sector exports stood at 117 million dollars against the imports of 107 million dollars.

Healthy increase has been witnessed in government service exports, which have contributed around 38 percent of total exports. The government sector shows a surplus income of 945 million dollars, as government services exports have reached 1.374 billion dollars against the imports of 429 million dollars.

In addition, the country has paid some 130 million dollars on account of royalties and licence fee against the earning of 51 million dollars. Month-on-month basis during June 2008, services trade has faced a deficit of 204 million dollars with 663 million dollars exports and some 867 million dollars imports.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

'Solar power plants must to overcome energy crisis'​

LAHORE (July 27 2008): Technical Enercon Manager Engr. Asif Masood has said Pakistan needs solar power plants to overcome its energy crisis because the sun energy reaching the earth in just 70 minutes is equivalent to annual global energy consumption and the potential for solar power is virtually unlimited.

He said the concentrating solar power capacity (CSP) expected to double every 16 months over the next five years and world-wide installed CSP capacity would reach 6,400 megawatts in 2012-14 times the current capacity.

"Pakistan is one of few countries in the world which are blessed with maximum solar radiation. Most areas in Pakistan receive ample amount of sunshine, averaging about 300 sunny days in a year," he told Business Recorder. He said the increases in the petroleum prices, escalating concerns about global climate change and fresh economic incentives were renewing interest in this technology world-wide.

Unlike solar photovoltaic, which use semi-conductors to convert sunlight directly into electricity, CSP plants generate electricity-using heat. Much like a magnifying glass, reflectors focus sunlight onto a fluid-filled vessel. The heat absorbed by the fluid is used to generate steam that drives a turbine to produce electricity.

Power generation after sunset is possible by storing excess heat in large, insulated tanks filled with molten salt. Since CSP plants require high levels of direct solar radiation to operate efficiently. Deserts are ideal locations for such power plants," he added. About advantages, Engr. Asif Masood said there were two big advantages of CSP over conventional power plants. "First, the electricity generation is clean and carbon-free and, since the sun is the energy source, there are no fuel costs. Secondly, energy storage in the form of heat is also significantly cheaper than battery storage of electricity, providing CSP with an economical means to overcome intermittence and deliver dispatch able power," he said.

He also said solar power plants were feasible in Pakistan although, adoption of solar energy had not taken place yet in Pakistan. "This is mainly because of the high cost of PV and thermal panels. Solar energy's use is also limited because of lots of practical issues, such as energy conversion and storage, mismatched supply and load profiles and maintenance costs. Moreover, an absence of a clear-cut policy and lack of fiscal support mechanisms for promoting local manufactures of low cost dispersed systems have also contributed to its limited use. Solar water pumps for drinking water, refrigeration systems for cooling buildings and for hot water for domestic use are the other applications of energy from sun.

He said the solar energy is much viable in Balochistan, desert of Punjab and Sindh, especially in villages, which are spread over large distances and do not have road connections. The transmission connections in such areas are also not economically viable due to higher cost," he added.

On the use of solar energy in the world, he said the United States and Spain were leading the world in developing solar thermal power with a combined total of over 5,600 megawatts of new capacity expected to come online by 2012.

Representing over 90 percent of the projected new capacity by 2012, the output from these plants would be enough to meet the electrical needs of more than 1.7 million homes. The reason for the renewed interest in CSP in the US was the economic and policy incentives, which include a 30-percent federal investment tax credit for solar plants which has good prospects for being extended, he added.

"In the US, the cost of electricity from CSP plants (including the federal ITC) is roughly 13 to 17 cents per kilowatt-hour, meaning that CSP with thermal storage is competitive today with simple-cycle natural gas-fired power plants," he added.

Engr. Asif Masood said these countries would be expected to generate 3,200 megawatts of CSP by 2020 because of the regulatory incentives in France, Greece, Italy, and Portugal. China anticipated building 1,000 megawatts by that time. Other countries developing CSP include Australia, Algeria, Egypt, Iran, Israel, Jordan, Mexico, Morocco, South Africa, and the United Arab Emirates. "Using CSP plants to power electric vehicles could further reduce carbon dioxide emissions and provide strategic advantages by relaxing dependence on oil," he added.

He also said solar energy was environment-friendly because local environmental and health impacts of fossil fuel powered electricity generation could be largely circumvented through clean renewable energy alternatives. "Power generation through solar energy carries several advantages like clean development mechanism, control on greenhouse gases and adherence to the Kyoto Protocol. The option of obtaining carbon credit can also be explored. These power plants will also help in reducing and increasing dependence on import of fuel oil," he said.

Engr. Asif Masood said Pakistan's present low per capita consumption of energy could be elevated through greater renewable energy use. "Issues relating to social equity such as equal rights and access for all citizens to modern energy supplies and poverty alleviation amongst deprived section of society can also be addressed significantly through widespread renewable energy deployment," he added.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Inflation is being made worse by PPP-led government: Rs 240 billion borrowed from SBP in 13 weeks​

KARACHI (July 28 2008): The present coalition government has printed more currency notes to finance its budgetary needs than the Shaukat Aziz-led government or the caretaker set-up headed by Mohammedmian Soomro.

A weekly breakdown of government borrowing from the State Bank and commercial banks shows that in 20 weeks - from July 1st to November 15, 2007 - Federal Government under Shaukat Aziz borrowed Rs 75 billion from the central bank and Rs 62 billion from commercial banks, totalling Rs 137 billion.

In 17 weeks - from November 15, 2007 to March 25, 2008 - the 'caretakers' borrowed Rs 289 billion from State Bank. However, during this period, they also retired Rs 111 billion of treasury bills from commercial banks. In effect, the total borrowing for the budget under Mohammadmian Soomro was higher than it was under Shaukat Aziz as it stood at Rs 178 billion.

The PPP-led government despite crying foul about the high note printing by the Shaukat Aziz-Salman Shah combination resulting in sky rocketing inflation of nearly 20 percent has, however, done the same. Contrary to tall claims of being highly conscientious in relation to its responsibility towards the economic situation and holding its predecessors responsible for the present economic woes PM Gilani's government not only has stayed the same course, it has, in fact, moved one step forward by getting more currency notes printed.

In 13 weeks, ie from March 25 to June 30, 2008, the Gilani government borrowed Rs 325 billion from SBP, while it retired Rs 85 billion borrowings from commercial banks. As a consequence, the net borrowing of the present set-up is the highest ever - Rs 240 billion - in a surprisingly shorter period of only 13 weeks as compared to that of 20 weeks of Shaukat Aziz and 17 weeks of Soomro.

The present government went on a borrowing spree from SBP in the closing week of the financial year as it was committing that it wouldn't borrow "in net terms" from SBP in the next financial year. On the very last day alone, government borrowed as much Rs 55 billion from the central bank.

For the entire 2007-08 fiscal year, the Federal Government borrowed Rs 689 billion from SBP while retiring Rs 134 billion from commercial banks. As a consequence, thereof Rs 555 billion of fresh stock of Treasury Bills or money creation was undertaken by SBP.

The government has made a firm commitment that it will not borrow on net basis from the SBP and the banking system and instead finance its fiscal gap from non-bank sources. Unfortunately, however, it was within the first three weeks of the current financial year - from July 1st to July 23rd - that the government borrowed as much as Rs 34.1 billion from SBP.

This amount is in addition to drawdown of deposits by provincial governments from their balances with the central bank, which had risen due to grants provided to the provinces by the Federal government.

The only relief the central bank has received is the placement of $500 million by Bank of China with SBP. Central bank, despite protest from the Ministry of Finance, has reduced Rs 37 billion of government borrowed stock against the placement.

The State Bank can effectively drain off excess liquidity by raising the Credit Reserve Ratio (CRR) as well as Statutory Liquidity Ratio (SLR) in one go. But with the tap on (all the time) with currency printing it is forced to mop up this excess inflow through frequent open market operations (OMOs). Because of this, the overnight borrowing rate instead of reflecting a tight monetary policy shows a yo-yo movement. In case government's expenditure remains out of control and the borrowing for the budget from the central bank does not stop, SBP may need to hold daily OMO auctions to drain the liquidity out in order to keep the overnight bank rate close to its own policy rate.

At the present T-bill yields even the banks are feeling shy in lending more money to the government. With the T-bill yields within 25 bps of SBP policy rate, SBP cannot offload its stock of T-bills onto the banks unless it further raises the discount rate. Banks have already taken this into account and raised KIBOR by 350 bps as against 150 bps rise in SBP in SBP policy rate on May 22nd, 2008.

SBP wants the government to retire Rs 21 billion of existing stock at the end of every quarter. By borrowing throughout the quarter and then retiring on the last day with the help of external loans or sudden bulky inflow does not help matters. Once SBP lends to the government and then creates the T-bills - then subsequently tries to offload them through OMO, the T-bill stock of banks rises which enables them to lend more. This defeats the very purpose of a tight monetary stance aimed at containing inflation.

The argument that raising the discount rate to check inflation being fuelled by external sources ie oil and food becomes meaningless. Oil consumption reduction would help in keeping price rises in check. Raising food productivity would also reduce the fuelling of CPI because of high weightage of food.

Even if oil drops to $80 a barrel and the rise in wheat and other items in CPI is arrested - inflation cannot be reversed unless the government reduces expenditure or raises resources and brings the fiscal deficit to 3.5 percent or lower in real terms.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

'Control of Thar coal will remain with Sindh government'​

KARACHI (July 28 2008): The control of coal will remain with the provincial government. An announcement to this effect was made in an official statement issued here on Sunday.

It said that the Sindh government issued the statement to `clarify its position' with regard to certain news item that appeared in a section of press that are erroneous and not based on facts, relating to control of Thar coal by provincial government.

In the statement issued here Sunday, the Sindh government spokesman stated that both the federal government and the government of Sindh are totally committed to the principle of provincial autonomy as such there should be no ambiguity that coal and other mineral resources are within the domain and control of provincial government.

It said that a notification has been issued by the government of Sindh with regard to establishment of Thar Coal and Energy Board under the chairmanship of Chief Minister Sindh with six members from the province and four from the federal government.

The members from the federal government include Federal Minister for Water and Power, Minister for Law and that they have been included with a view to primarily get support from the federal government on matters such as tariff and other relating to power generation as development of coal depends on establishment of power projects which require federal support. This Coal Board, the spokesman added, is a facilitation Board and not an authority.

The fact that the notification has been issued by the government of Sindh, the spokesman said, clearly establishes that the control of coal will remain with the provincial government. He further said and clarified that Thar Coal Board is not being abolished.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Four more dams to be built in Balochistan​

LAHORE (July 28 2008): After the completion of Mirani and Sabakzai dams during the last couple of years, four other dams, including Winder, Hingol, Naulan and Sukleji would also be constructed in Balochistan. This was stated in a briefing given to the Balochistan Chief Minister Nawab Muhammad Aslam Raisani.

Wapda Chairman Shakil Durrani, Balochistan chief secretary, FC inspector general, FWO director general, and other senior officers concerned attended the meeting. Speaking on the occasion, Shakil Durrani said that a number of water as well as power projects are being executed in Balochistan and Wapda is gearing up its efforts for completion of these projects.

The meeting was briefed that the bids for construction of the Winder Dam Project would be opened on August 29, 2008. The detailed engineering design of the Naulang Dam Project is likely to be completed in December this year, while the investigations for Sukleji Dam are in progress.

It was decided in the meeting that the reservations of various stakeholders would be addressed before initiating construction work on the Hingol Dam Project.

The law and order situation in the project areas was also discussed in detail. Further improvement in security measures, especially in the construction areas of Kachhi Canal, was emphasised that the project could be completed in shortest possible time. It is pertinent to mention that the first phase of Kachhi Canal Project is in advanced stage of its completion. It was further told in the meeting that a Rs 5 billion contract for construction of 300-km-long 220 kV Dadu-Khuzdar Transmission Line has been awarded.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Foreign investors withdraw another​

$29.593 million

KARACHI (July 27 2008): Foreign investors continued their cautious stance due to prevailing political and economic situation in the country and withdrew another $29.593 million from the Pakistan's equity market during the outgoing week ended July 25, 2008.

The cumulative net outflow of the current month from July 1 to July 25 stood at $72.768 million while the cumulative figures of current calendar year (January 1, 2008 to July 18, 2008) were recorded at negative 314.204 million.

According to data released by the National Clearing Company of Pakistan (NCCPL) a net inflow was witnessed only on Monday as $404,757 million came in the country's equity market on the first day of the week, however, an outflow was seen during the remaining four trading sessions.

The data shows that an outflow of over $5.897 million was witnessed on Tuesday, over $9.902 million on Wednesday, $2.990 million on Thursday and over $11.207 million on Friday.

The prevailing geo-political situation and weakening economic indicators are the main reasons, which forced the foreign investors to offload their holdings, a leading analyst said, adding that various measures taken by the SECP and KSE board to support the local share market failed to revive the investor confidence during the outgoing week.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Foreign diplomats stress bilateral trade and investment​

MULTAN (July 28 2008): 'Best bilateral ties and mutual co-operation can enhance trade, investment and technological development among the countries,' said ambassadors of Italy, Mexico, Brazil, Afghanistan, Philippine and South Korea.

They stressed the need of strong economic ties, exchange of business and educationalist delegations, transfer of technology and interaction in different sectors like power, gas, housing, food and agriculture.

The diplomats shared their views during a dinner reception hosted in their honour by the Multan Chamber of Commerce and Industry (MCCI) on Saturday night.

The President, MCCI, Khawaja Muhammad Jalaluddin Roomi chaired the reception while former Speaker of National Assembly, Syed Fakhar Imam, President FPCCI, Mian Tanvir Ahmed Shaikh, City District Nazim, Mian Faisal Mukhtar and, President of Mango Growers Association, Syed Zaid Hussain Gardezi were present as chief guests.

Italian Ambassador, Vincenzo Prati said that his country had established different trade ties with Pakistan. 'We have declared Multan a twin city of Rome,' as it is the ancient city of the world.' He also said that Italy had recently supplied modern machinery worth of 7million Euros for fruit and vegetable processing plant of Multan while the embassy will organise a seminar on durable mango preservation.

The Deputy Head of Mission of Brazil, Gustavo Da Veiga Guimarass, said that his country had friendly and economic relations with Pakistan and assured to strengthen it further.

He said, 'We are co-operating in different sectors for the prosperity of Pakistan to increase the trade volume.' The South Korea Ambassador, Shin Un said that there were more than 1000 varieties of mangoes in the world and our mango season was not a short term and remains from January to September ( nine month) however, mangoes of Multan retains there sweetness.

Further, South Korea would continue its co-operation in training, provision of social and economic infrastructure, power sector, science and technology and transport. Shin also said that his country was supporting Pakistan to build a University of Science and Technology while the Prime Minister, Syed Yousaf Raza Gilani has asked to develop housing schemes for low-income people as well.

Philippine's Ambassador Jaime J Yambao said that it was great honour for him that he was invited to attend a mega event of Mango Festival in Multan. He said that Philippine itself was a big producer of Mango and its 'Manila' variety was popular in the world. He hoped that this festival would help in exchanging view and technology among the mango growers and transfer of technology. He also said that his country was enjoying good relations with Pakistan for the last six decades.

'However we should promote our business ties in future,' he added. Afghan Ambassador, Muhammad Anwar Anwarzai said that Multan is a city of spiritual saints and Sufis and he was highly impressed by the hospitality of Multanites. He further said that Afghanistan had cultural, political and trade- relations with the sub-continent for thousands of years. He said that entire world was facing the scarcity of energy, fuel and food.

'At this stage we should adopt a common strategy to meet these challenges,' he said. Mexican Ambassador, Arturo Hernandez Basave said to the gathering that Mexico was helping Pakistan in oil and gas exploration, agriculture and other sectors. He had given incentives to the investors in Mexico and a number of investors of Sialkot and Karachi were doing their business in his country.

Further, Basave said that Pakistan's President, Pervez Musharraf had visited Mexico and highly appreciated Mexico's co-operation in different sectors and an economic commission was formed for bilateral trade with Pakistan.

He informed the gentry that Mexico had trade relations with 44 countries of the world and his country stood fourth in Mango production and first in mango exports.

Roomi said in his welcome address, 'Multan is a city of shrines and mausoleums of spiritual saints and has been an important trade centre and gateway to the Central Asian States (CAS). This area is known as southern Punjab that produces 80 percent of total cotton produced in Pakistan.' Multan is blessed with ample manpower offer lucrative potential for industrialisation in joint venture in different spheres, Roomi said.

'We can collaborate successfully in the areas of power, gas, agriculture, footwear, leather products, minerals and automobiles to strengthen our co-operation and bilateral trade. Furthermore, the climate for foreign investment in Pakistan is very conducive with tremendous opportunities of foreign investment and this area has all the necessary ingredients desired by prospective investors, the MCCI President added.

Business Recorder [Pakistan's First Financial Daily]

 

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Bush urged to accord free market access to Pakistani traders​

LAHORE (July 28 2008): The Federation of Pakistan Chambers of Commerce and Industry, with all its affiliated trade bodies and associations across the country on Sunday urged US President George Bush to announce, during the visit of Prime Minister Yousaf Raza Gilani, lifting of all economic sanctions and to provide direct free market access to Pakistan exporters, especially in textile and garment sectors.

FPCCI President Tanvir Ahmad, all Vice Presidents of FPCCI, President of LCCI Muhammad Ali and Iftikhar Ali said this in a statement issued on behalf of the business and traders' community of Pakistan. Tanvir said that Prime Minister Yousaf Raza Gilani had always attached great importance to further developing strong and durable cordial friendly relations with USA.

Business Recorder [Pakistan's First Financial Daily]