Pakistan Economy - News & Updates - Archive

[Neo]

FPI outflow of $37.872 million witnessed​

KARACHI (January 03 2009): A fresh outflow of 37.872 million dollars of foreign portfolio investment (FPI) from the country's equity market was witnessed during the outgoing week ended January 02, 2009. According to the National Clearing Company of Pakistan Limited (NCCPL) data, a massive outflow of 23.474 million dollars of this mode of investment was witnessed only on the last day of the week.

The data shows that the foreign investors withdrew 2.977 million dollars on Monday, 6.973 million dollars on Tuesday, 3.533 million dollars on Wednesday, 0.915 million dollars on Thursday and 23.474 million dollars on Friday.

 

[Neo]

SPI inflation surges by 21.08 percent​

ISLAMABAD (January 03 2009): The SPI inflation surged by 21.08 percent on week ending on January 1 over the same period of last year, but it has declined by 0.58 percent during the week, according to statistics released by the Federal Bureau of Statistics (FBS) here on Friday.

The weekly inflation measured through SPI has declined marginally during the week with official figures, showing it decreasing from 23.61 percent previous week to 21.08 percent on week ending on January 1.

With 0.58 percent decline, the combined SPI has come down from 205.68 percent to 204.49 percent during the week. The dearness for the lowest income group up to Rs 3,000 was recorded 20.52 percent during the week followed by 21 percent for group ranging between Rs 3,001 and Rs 5,000 and 21.81 percent for families bracketed in Rs 5001 to Rs 12, 000 income group.

The SPI was recorded 21.03 percent for the families above Rs 12, 000 monthly income group. The SPI bulletin, based on data of 53 items collected from 17 urban centres showed increase in prices of 17 essential commodities, decline in 13, while the prices of 23 commodities remained stable during the week.

The price of 11-kilogram cylinder of liquefied petroleum gas (LPG) has increased from Rs 707.509 to Rs 788.38 during the week; sugar from Rs 34.68 to Rs 36.10; chicken (farm) from Rs 86.73 to Rs 89.97; gur from Rs 38.59 to Rs 39.84; gram pulse (washed) from Rs 57.37 to Rs 59.10; vegetable ghee (loose) per kilogram from Rs 90.36 to Rs 91.96; bananas (dozen) from Rs 33.55 to Rs 34.02; kerosene (liter) from Rs 63.62 to Rs 64.18; tea (prepared) per cup from Rs 8.38 to Rs 8.44, electricity bulb (60 wats) each from Rs 14.31 to Rs 14.40, firewood (40 kilograms) from Rs 268.05 to Rs 269.52; mash pulse (washed) per kilogram from Rs 75.59 to Rs 75.92; masoor pulse (washed) from Rs 128.01 to Rs 128.47; mustard oil per kilogram from Rs 141.22 to Rs 141.69.

Average prices of the following 13 items that registered decrease included onions per kilogram: Rs 24.18 from Rs 27.27; tomatoes per kilogram: Rs 25.41 from Rs 27.71; tea packet 250 gm: Rs 100 from Rs 107.65; egg hen (farm) per dozen: Rs 66.54 from Rs 71.42; vegetable ghee (2.5 kilogram tin): Rs 331.47 from Rs 355; cooking oil (2.5 litre tin): Rs 351.47 from Rs 375.00; potatoes per kilogram: Rs 17.24 from Rs 17.56; wheat average quality per kilogram: Rs 24.55 from Rs 24.75; Red chillies per kilogram: Rs 136.61 from Rs 137.73; moong pulse washed per kilogram: Rs 48.05 from Rs 48.41; rice basmati broken per kilogram: Rs 45.03 from Rs 45.33; rice irri-6 per kilogram: Rs 36.50 from Rs 36.70; and wheat flour average quality per kilogram: Rs 25.92 from Rs 26.01.

 

[Neo]

Load shedding adversely affecting investment: Nasreen​

KARACHI (January 03 2009): Acting City Nazim Nasreen Jalil on Friday said that Nazim Karachi Syed Mustafa Kamal had worked day and night to create better and conducive environment for investment opportunities in Karachi but the continuous load shedding of electricity and gas was adversely affecting the investment activities in the city.

She expressed these views while addressing a 82-member delegation of National Security College/University Islamabad at Civic Center here on Friday. The acting Nazim said the present local government system has proved beneficial for Karachi.

The middle class leadership has shown excellent performance in the resolution of citizens problems. Not only the World Economic Forum acknowledged Karachi as a fast emerging mega city but City Nazim Syed Mustafa Kamal was also declared as among worlds best mayors at the moment.

Nasreen Jalil said the people in Karachi have felt positive and refreshing change due to the development works carried out over the last three years. However, she added the city is being controlled by 13 different organisations and City Nazim has only 31 percent of total city area under his control. She said that being a most important city of the country, Karachi must not be deprived of its funds at any level.

She said Haq Parast leadership has worked in city's every area without any discrimination and for the first time in the history, potable water was supplied to those areas, which were always deprived of such a basic need of life. The city government, she said, has paid special attention on education and health sectors and upgraded CDGK-run hospitals. She said Nazim Karachi introduced a 24-hour working culture in Karachi.

Nasreen Jalil pointed out that due to having control on only 31 percent of Karachi, the city government was presently facing many challenges and therefore all the civic agencies must be brought under one command.

Speaking on the occasion, leader of the delegation Rear Admiral Tayyab Ali Dogar said acknowledged that city government has rendered exemplary performance and the transport problems were solved rapidly in Karachi. He said that a visible change has been felt in Karachi due to the development works performed by Haq Parast leadership in last three years. DCO Karachi Javed Hanif thanked the delegation for visiting City Government Karachi.

 

[Neo]

'Pakistan's vending industry making auto parts of highest world standard'​

M RAFIQUE GORAYA

LAHORE (January 03 2009): Pakistan's vending industry is highly developed and modernised as it manufactures automotive parts and accessories of international standard. This was disclosed by former Chairman of Pakistan Association of Automotive Parts and Accessories Manufacturers (Paapam) M. A. Malik while talking to Business Recorder here on Friday.

He said that the quality and the standard of parts and accessories, manufactured by Pakistani vendors, was monitored and approved by the international licensees and principals. Malik said it was a matter of pride and prestige for Pakistan that the local tractor parts were being exported to European and American countries because of their high quality and standard.

He lamented that some elements were undermining the quality of Pakistani manufactured products for their petty motives and benefits. "The industrialists have invested billions of rupees in over 800 vending units to make Pakistan self-sufficient and exporter of tractors, cars and trucks," he added. About the reported short supply of tractors in the local market, Malik said the tractor manufacturers had already contradicted such malicious reports.

"In their meeting with Federal Industries Minister Manzoor Wattoo recently, tractor manufacturers made it clear that anybody could buy any number of tractors from the market," he added. Malik said the local manufacturers and vendors had the capacity to assemble at least 80,000 to 100,000 tractors of the highest quality per annum, and if someone wanted to buy 100 locally manufactured tractors, he should contact him.

Malik said that the price of the Pakistan-made tractor was the lowest in the region and the industry was saving millions of dollars in the foreign exchange. He said after huge investments in the local automotive parts and accessories manufacturing units, they were in a position to provide auto parts to 0.5 million cars, trucks, tractors etc per annum.

He said the import of tractors at almost double the price of the locally manufactured tractors in foreign exchange, hence it would be a disservice to the local industry and hundreds of thousands of skilled, semi-skilled and other workers who get their livelihood from this essential industry. He said instead of relying on imports, the government should implement a plan for hundred percent deletion and transfer of technology of auto industry.

 

[Neo]

200 megawatts rental power project to be set up in Balochistan: minister​

ISLAMABAD (January 03 2009): Federal Minister for Water and Power, Raja Pervez Ashraf has said that federal government is taking all possible steps to provide basic amenities to the people and development of Balochistan. He said this while talking to Chief Minister of Balochistan, Nawab Muhammad Aslam Khan Raisani who called on him here on Friday in his office.

The Provincial Minister for Finance and Revenue, Asim Kurd Gillo and Adviser Ministry of Water and Power, Riaz Ahmed Khan were also present. The minister said that different water and power sector projects with special allocations have been planned in various parts of Balochistan to meet electricity and water requirements. Raja Pervez Ashraf said a rental power project of 200 MW is being set up at Quetta while the feasibility study of four dams namely Hingol, Winder, Sukleji and Naolong has been completed by Wapda.

Construction work on Hingol dam will be started soon. He said that after completion of proposed four dams, plenty of water will be available for irrigation purpose. The minister and the Chief Minister discussed the current power situation, future water and power projects and progress of import of power from Iran.

The minister also asked the Chief Minister to use his good offices for recovery of long outstanding dues from public and private sectors. The Chief Minister also discussed political, social and other matters of mutual interest for development of Balochistan with the minister.

He expressed the hope that with allocation of special funds by the federal government, the people of Balochistan will get all basic facilities. He thanked the minister for setting up of rental power projects and early construction of dams.

 

[Neo]

Earthquake-hit zone: 617 high power transformers handed over to AJK​

MIRPUR (January 03 2009): A sum of Rs 110 million 617 high power transformers imported from China, were handed over to AJK Electricity Department for installation in earthquake-hit zone in AJK under the ongoing reconstruction and rehabilitation program in the affected areas.

The transformers having strength of 50, 100 and 200 kilowatt were delivered to the state Electricity department under the Earthquake Emergency Assistance Programme at a ceremony held here on Thursday evening, says a press release issued by the State earthquake Reconstruction and Rehabilitation Agency.

The transformers will be supplied to earthquake hit districts including Muzaffarabad, Bagh, Rawalakot and Sudhanoti for installation to ensure the smooth supply of electricity to the consumers. Head of State Earthquake Reconstruction and Rehabilitation Authority (SERA) Dr Sayed Asif Hussain and other officials of the AJK Electricity Department were present on this occasion. Speaking on the occasion the SERA Chief Dr Sayed Asif Hussain said that it was the first-ever arrival of the latest imported power equipment in such a big quantity in Azad Jammu and Kashmir.

 

[Neo]

Power situation likely to improve by end of January​

ISLAMABAD (January 02 2009): Director General Pakistan Electric Power Company (Pepco) Tahir Basharat Cheema on Thursday said that the power situation is likely to improve in the country by the end of January when the present canal closure is expected to end.

Around 2,000 MW electricity would be sustained within month, which would ease the power position and expressed the hope that load shedding hours would also be decreased from the mid of this month, DG Pepco said while talking to APP. He said 300MW Chashnup Power Plant at Chashma is also expected to join in and would commence generation from January 17, which was closed due to maintenance work.

He said the company is in the process of adding fast track power to the system in addition to the up-coming new power generation projects for 2009 and 2010. He said now the canal closure has taken place, all efforts are underway to compensate for the loss of hydro generation through full use of Pepco's own Generation Companies (GENCOs) and the Independent Power Producers (IPPs), which are moving ahead at full steam.

Additionally, Pepco has to arrange alternate power against 550MW of lost power due to continued non-availability of gas to the two rental plants of 250MW capacity located at Bhiki and Sheikhupura (near Lahore), the 210MW Gas Turbine Power Station (GTPS) at Faisalabad and 90 MW machines of the Kotri Power Station near Hyderabad.

He said in order to resolve the power crises 546 MW electricity has been added with system during 2008, which includes 300MW on account of efficiency enhancement of existing Pepco GENCO plants, 81MW Malakand-III hydro project and 165MW Attock power and others which have already achieved financial close etc. The hydro generation with an installed capacity of 6500MW has plummeted sharply from the last two week due to canal closure and reduction of water releases from Tarbela and Mangla reservoirs.

Commenting on the situation, the DG Pepco said that the situation has led to a power shortage of 1500MW during early day time, nearly 2500MW in the mid day and early evening and 3300MW during the peak hours of 1700 to 2300 hours. He appealed electricity customers to conserve energy in order to reduce the quantum of power deficits thereby reducing load shedding. He also appealed the customers to use power sparingly and to ensure that not even one light point or bulb is being unnecessarily used.

 

[Neo]

Fog will have positive impact on wheat crop​

MULTAN (January 03 2009): The current foggy weather would have a positive impact on the wheat crops, agriculturists told here on Friday. They said that the fog would not only have a positive impact on the wheat crop but it would also help in getting better yield. However, they feared that unavailability of water could affect the crop.

Director and Chief Co-ordinator Farmers Associates Pakistan Dr Muhammad Tariq Buccha said that to observe the affects of fog, it is very necessary that one should know about the early and late sowing of wheat. He said that in such weather, late sowing of wheat helps, as the colder the temperature is, the better the yield would be.

"Fortunately, this year wheat was sowed late and current weather is better for the crop," Bucha said adding besides good weather, other factors are very negative. "The fuel is getting scarce and running tube wells and watering crop is difficult," he said. Bucha said that the current weather impacts the vegetables negatively. "The potato and other vegetables could spoil from the intense cold," he added.

President of Kissan Board Punjab Khurshid Kanju said that tillering (grow shoots in the form of stools or tillers) of wheat would get better. He said that the government should concentrate on other factors like availability of water and fertilisers. The government has fixed wheat target at 25 million tonnes with a support price of Rs 950 per maund. The wheat was sowed late in majority of areas of Punjab due to later crushing of sugarcane crop and delay in picking of cotton.

 

[Neo]

Pakistan explores new seafood markets​

KARACHI (January 03 2009): After failing to mend fences with EU, Pakistan has now explored new substantial markets - Egypt, Lebanon, South Africa and Turkey, for seafood export. As a result, exports rose by over 16 percent during July-November period of the current fiscal year, as compared to exports during the same period last fiscal year 2007-08, exporters told Business Recorder on Friday.

Middle East also has emerged as a potential seafood market that has enhanced the country's seafood export, they said and added that if this tempo also continued for EU, the export could touch $250 million. With a view to halt the falling trend in the fisheries sector, search of new markets has become imperative.

"Ban on the country's seafood export is unlikely to be lifted for some more years because the concerned government authorities are not taking interest, they said. Pakistan exported $21.558 million, worth of sea food in November 2008 as compared to export of $19.870 million worth in November 2007, depicting a rise of 1.688 million or 8.50 percent.

Similarly, the country registered a robust growth of $11.56 million or 16.18 percent during the July-November period of the current fiscal year. The country exported seafood worth $83.001 million during the July-November 2008 period as compared to export of $71.441 million during July-November period of the last fiscal year, 2007-08.

But, on a monthly basis, the country's seafood export was reduced by $5.172 million or 19.35 percent in November 2008 as compared to exports in October 2008 ($26.730 million), according to the Federal Bureau of Statistics. Talking to Business Recorder, former Chairman of Pakistan Seafood Industries Association (PSIA) Sardar Muhammad Hanif Khan said that Pakistani seafood products are cheaper than that of other exporting countries to EU.

But, more expensive than seafood items of China and Japan. He said that these newly explored markets are good for Pakistan and efforts are under way to make it more lucrative to scale down the losses incurred after the EU put its ban.

"If these new export venues -Egypt, Lebanon, South Africa and Turkey become stable for us then there would be no loss from losing the bigger market, EU," he said. Pakistan is benefiting from the other aspect as seafood sent to these new markets is re-exported to EU and other developed countries.

Hanif Khan said that the prospects are dim for the removal of EU ban, as the government's concerned agencies, like Karachi Fish Harbour Authority and Marine Fisheries Department are lacking in expertise and planning and the will to complete the assignments of modifications. Almost a decade has passed that there is no progress on the modification project, although the government has announced huge amounts for the relief of local fishermen, he added.

 

[Neo]

Tarin must also focus on microeconomic policy​

The Advisor to the Prime Minister on Finance, Shaukat Tarin, has revealed that the government expects one billion dollars within the month - half a billion dollars from China by the 4th or 5th of January and another half a billion dollars from the World Bank.

This inflow, after the release of the first tranche of the International Monetary Fund's (IMF) standby facility agreed last month is expected to further ease the pressure on the balance of payments position as well as the country's foreign exchange reserves. And, as part of the IMF conditionalities, the government of Pakistan is concurrently on a reform agenda, which includes no borrowing from the State Bank of Pakistan till the end of the current fiscal year, eliminating the inter-corporate debt which would ease the pressure on the supply of electricity somewhat and other monetary policy steps designed to reduce the impact of inflationary pressures and oil the wheels of production at the same time.

Revenue generation has been handsomely assisted by the government charging a hefty petroleum development levy as well as general sales tax on oil and products that had allowed it to generate billions of rupees by not passing on the over 70 percent decline in the international price of oil to domestic consumers. This, in turn, would bring the budget deficit to sustainable levels which would translate into improved macroeconomic indicators in the coming months. One would hope that the government would focus on reducing non-development expenditure as opposed to development expenditure to further reduce the budget deficit.

Be that as it may, the economy is likely to be out of the woods within the next year and half and with the IMF monitoring the process it is likely that macroeconomic indicators will further improve. Therefore, it is imperative at this stage for the Special Advisor on Finance to turn his attention to microeconomic aspects of the economy that require his immediate attention.

First and foremost, Tarin must focus on promoting private sector activity both in the industrial as well as the agriculture sectors. The government, civilian and military, needs to accept an obvious fact: that private sector can engage in the same activity more profitably and therefore for the good of the economy they need to get out of the business of production. In this context, it is necessary to be patient with privatisation, which maybe deferred till such time as there is a vibrant global financial market, or transfer management to the private sector in order to improve productivity.

Tarin needs to consult with all the stakeholders and formulate a policy plan that would remove the impediments to private sector activity thereby not only providing greater employment opportunities but also the capacity to minimise the impact of halving of output that is forecast for Pakistan in the coming year. To raise productivity it is critical to provide energy and to achieve this objective the government has to act on a war footing. As matters stand today, the India-Pakistan-Iran gas pipeline has, once again, been held hostage to a failure to agree on pricing while accessing energy from Central Asia remains dicey given that Afghanistan continues to be in the throes of a civil war.

In this context it is necessary for Tarin to focus on reducing the burgeoning inter-corporate debt. This, in itself, would ease some of the short-term supply issues. Medium and long term plans shall also to be shared with the people of this country so that they are aware that action in this regard is imminent.

Social safety nets as provided by the Benazir Income Support Programme are not likely to be adequate given the high rate of inflation. At the same time, 2008 was marked by burning of schools in Taliban areas coupled with failure to immunise children against polio and other diseases.

It is, therefore, imperative for Tarin to provide large chunks of public money for education and health - with the objective of providing education and health care to all within the next ten to fifteen years. This would not only resolve many health related issues associated with illiteracy but also help ease the significant law and order problems in the area. In addition, micro finance must be supported as much as possible in an effort to ensure that the unemployed, have recourse to assistance that can be translated into higher productivity.

 

[Neo]

Power from Iran​

As Pakistan struggles to grapple with a severe power crisis, the visiting Iranian Deputy Minister for Energy, Abbas Aliababi, and a representative of our Ministry of Water and Power signed an agreement on Wednesday to increase co-operation in the power sector and to expedite implementation work on the existing projects.

As per the agreement, an Iranian company will complete the transmission line for the import of 1000MW electricity into Pakistan by the end of 2009 and also carry out feasibility study for another transmission line for a 1000 MW project. Notably, Iran is to send to this side electricity generated at its gas-based 1000 MW plant close to Pakistani border near Zahidan. Possessing one of the world's largest gas reserves, Iran is expected to sell this electricity at a considerable cheap rate.

A particularly noteworthy aspect of the agreement is a sense of urgency to make progress, and Iran's interest in investing in different areas of the power sector. To ensure that the agreed projects move forward expeditiously, a ministerial level committee is to fix timelines for the projects' completion and remove any impediments. Towards that end, the two sides also named their respective nominees who would act as focal persons to oversee implementation work. In a further show of its commitment to increase co-operation with Pakistan, the Iranian government undertook to support the 130MW Sehra Hydropower project, being developed by a private Iranian company.

As important as these projects are for this country, they are but a small fraction of the possibilities that remain to be explored. It needs to be recalled here that two years ago ie, in January 2007, when an Iranian delegation led by the chief of Iran's Foreign Investments Company visited Pakistan, there was some talk of starting joint ventures. The then minister for privatisation and investment, Zahid Hamid, had vowed to open a new era of strong economic relations between Pakistan and Iran.

That being a time when the government claimed the economy to be growing at an unprecedented fast rate of 7-8 percent, the Iranian visitors evinced interest in the power sector, petrochemicals and some other areas as well. But nothing much followed, probably, because of the government's short-sightedness, inflated confidence, and over reliance on the US, which was working overtime to isolate Iran both politically and economically.

Much has changed since then. There is an elected government in place that faces a serious economic crisis, while foreign investments are at the lowest ebb. It is good to note, therefore, that this time the Iranian officials' hosts tried to attract their interest with liberal incentives for investments in hydropower projects having a total capacity of about 16000 MW requiring financing to the tune of some $26 billion by 2025.

The proposed projects include coal-fired power plants of 6000MW capacity scheduled for completion by 2015 at a cost of $7 billion, and an unspecified amount for another 1000 MW from alternate energy generation sources by the same date. An additional $4.7 billion is needed for rehabilitation and reinforcement of related systems for new germination plants. Iran said it was interested in all these projects, and that it would see what the Iranian companies, both in the private and public sectors, could do to avail the investment opportunities that have become available. Islamabad must do whatever is necessary to keep that interest alive and to translate it into fruitful economic co-operation with Iran. For building and strengthening such co-operation will bring us long term economic as well as political gains, and may lead to better and bigger things in terms of regional co-operation.

 

[Neo]

A way out of IPI 'dilemma'​

January 01 2009: Iran will sign a gas deal with Pakistan even if India - the third party to the IPI pipeline project - walks out, Iranian Oil Minister Gholamhossein Nozari has been quoted by an Iranian news agency as saying. Nozari's remarks come against the backdrop of arrival in Tehran of a Pakistani delegation for two-day talks on the issue.

The pipeline project has suffered lengthy delays, largely due either to differences over tariff or because of endless foot-dragging by India, apparently under pressure from the US not to sign any such pact with Iran. (India has since been rewarded by the US with a civilian nuclear pact.) A second factor in India's dilly-dallying has been its ingrained wish to block any benefit, financial or otherwise, from accruing to the energy-starved Pakistan. It will be recalled that India had stayed away from the pipeline talks held in Tehran in September this year on the plea that it wished to settle the transit fee issue with Pakistan on a bilateral basis first, which was clearly an attempt to further delay the project.

According to available details, the IPI pipeline would initially carry 60 million cubic meters of gas daily to Pakistan and India, to be equally divided among them. The pipeline's capacity would be later increased to 150 million cubic meters. Iran says it has completed 18 percent of the work for the pipeline to bring gas from its South Pars gas-field to Pak-Iran border, while Pakistan has yet to initiate work on the 1,000-km stretch to link Iran with India.

The project has been kept in the limbo of procrastination by India for so long that Iran has finally signalled its readiness to go ahead without India's participation, which we believe is a propitious development because it will obviate any chance of India playing its old obstructionist tricks. The estimated cost of the mega project has meanwhile escalated to $7.5 billion, which will be an additional burden to be shared by the contracting parties. Originally conceived as the Iran-Pakistan project way back in 1993, the pipeline was later proposed to be extended to India, which has since become the main stumbling block in progress of the pipeline.

The initial capacity of the pipeline will be 22 billion cubic meters of natural gas per annum, which is expected to be increased later to 55 billion cubic meters. As per the original timeframe, starting in 2009 the project was scheduled to be completed by 2012. But now with India practically out of the loop if Iran goes ahead with its resolve, the completion date of the project too will have to be considerably extended. The euphoria the project had initially generated in the region can be gauged from the fact that it was dubbed by many as a "peace pipeline" because it would have created shared stakes in maintaining peace in the region, which would have helped ease tensions.

Natural gas has meanwhile come to play a critical role in the region's industrial sector, as most of the industries which were previously using fuel oil have gradually converted to natural gas. In Pakistan the major consumers of gas now include cement, power and fertiliser industries, which are the key sectors of the economy. The widening industrial application of gas and its growing availability crunch in Pakistan has made it absolutely essential for the government not only to undertake new gas exploration projects, but also to popularise gas conservation methodologies in the country.

If Iran finally goes ahead with the pipeline project without India's participation, and if India decides at some future date to join the project, Pakistan will obviously be the common denominator, which will put it in a dominant position. From Pakistan's perspective, the pipeline project has vital significance because apart from helping it meet its own energy requirements it will bring in handsome financial dividends in the shape of annual royalty.

However, India is said to have reservations over the project because of the security situation in Balochistan through which it will pass. (Incidentally, the plan to lay Turkmenistan-Afghanistan-Pakistan (TAP) pipeline too could not materialise because of the tenuous security situation in Afghanistan.) As one analyst has put it, Iran, being South Asia's immediate neighbour, has an edge in terms of natural gas reserves, while Pakistan is ideally located to benefit from these reserves. As India has become a major obstacle in implementation of the IPI project, Pakistan should team up with Iran to complete the Iran-Pakistan segment on a priority basis. This will help Pakistan meet its immediate energy requirements.

 

[Neo]

No gas load shedding for domestic users: Zardari​

* President sanctions Rs 7.5bn for fuel to produce more thermal power
* Asks IRSA to release more water from dams
* Seeks end to energy sector circular debts by June​

ISLAMABAD: President Asif Ali Zardari ordered an end to gas load shedding for domestic consumers on Friday, during a meeting to review the prevailing energy shortage.

Zardari, who chaired the meeting along with Prime Minister Yousuf Raza Gilani, said gas load shedding would compound the public’s problems. He called for innovative measures to meet the energy shortage.

Water and Power Minister Raja Pervez Ashraf, Economic Adviser Shaukat Tareen, Petroleum Adviser Dr Asim Hussain, Information Minister Sherry Rehman and representatives from WAPDA, IRSA, KESC and public sector energy corporations attended the meeting.

Raja Pervez Ashraf told the participants Pakistan was facing a net shortage of 4,500 megawatts of power after a decrease in the outflow of water from dams and a slump in the oil and gas supplies.

As part of immediate measures to lessen the impact of the shortage, the government decided to increase the outflow of water from dams subject to approval from Punjab, to provide 50 million metric cubic feet of additional gas and 8,000 tonnes of oil to the KESC, and immediately release Rs 7.5 billion to pay for the additional fuel, Information Minister Sherry Rehman said after the meeting.

Increased power production by the KESC will lessen the burden on WAPDA, which has been supplying Karachi with several hundred megawatts of power from the national grid.

Ashraf said the immediate crisis would subside after January 22, when the irrigation canals re-open.

Sources privy to the meeting said the power companies had placed a Rs 15 billion requirement for the next two months, but were told excessive borrowing could have a negative impact on the ongoing $7.6 billion Stand-By Arrangement agreed with the International Monetary Fund (IMF).

A proposal for subsidising the January 1 gas tariff increase was rejected because the policy framework agreed with the IMF requires the government end to all energy-related subsidies by June 2009.

Zardari asked the economic adviser to put together a plan to repay the Rs 160 billion debts that the government owed to independent power producers and oil companies and end the circular debts in the sector by June.

He convened another meeting on January 5 to discuss long-term solutions to the crisis, arranging finances for debt repayments and fuel, and examining a proposed policy to provide incentives to entrepreneurs to explore oil and gas in the country.

A number of Chinese companies had shown interest in exploring oil and gas in Pakistan, he said.

 

[Neo]

Rs 20bn bailout fund sparks hope in stock market​

KARACHI: A ray of hope for good times was sparked after a long and chaotic period in the Karachi Stock Exchange (KSE) on Friday when it was finally able to settle in the positive territory.

Stock analysts attributed the bullish sentiment in the market to the launching of NIT-SEF worth Rs 20 billion aimed at investing in the blue chips.

After losing 35 percent since the removal of floor on December 15 2008, the benchmark KSE-100 index was up by 40.39 percent over the last trading session.

Also the trading volumes, which dropped to a few thousands during the floor period, were substantially higher as 210 millions shares were traded. This is three times more than last trading session, when 75 million shares were traded.

"It was quite encouraging and heartening to see the surfacing of bullish activity in the market, which went through its worst times in the history," a stock investor commented.

Investors and brokers were jubilant on the recovery of the market, which lost more than 10,000 points since its peak level of 15,676 some eight months back.

"We are hopeful that the positive trend in the market will prevail in the coming sessions as all the disputes and issues concerning the stock business have been settled," according a number of brokers and directors of KSE.

"We hope that the harsh and jittery times of 2008, which was the worst year for the stock market, are over and the market would gain its lost momentum again."

Only the news of the said fund has pumped in some energy in the market and analysts believe as soon as the fund starts investing in the market the gains would be much higher.

Although, NIT has not given a specific date for investing in the stock market, the general consensus was that it would most probably coming into action by the next trading session on Monday.

"Since the issues have been settled and the levels are quite attractive, buying spree could be seen in the market during the next week," Dawood Jan Mohammad, former director KSE noted.

Analysts, however didn't rule out some correction in the coming sessions, but that would not be a source of concern and it is expected that the market would absorb this loss in the future.

Among the top volume leaders, significant buying activity was seen in the scrips, which are included in the list of companies, for which Rs 20 billion NIT-SEF would be utilised.

OGDCL, being the heavyweight of the stock market was the most-sought after scrip in today's session as it's 28 million shares changed hands during the day.

 

[Neo]

Govt to get additional 1,000MW power from Iran: Ashraf​

ISLAMABAD: The government is trying to obtain another 1,000MW power from Iran as soon as possible, as the existing power generation capacity of the country is not sufficient enough to meet the domestic requirements.

Federal Minister for Water and Power Raja Pervez Ashraf expressed these views on Friday during a chat with journalists after holding a meeting with Balochistan Chief Minister Nawab Muhammad Aslam Khan Raisani here in the Ministry of Water and Power. The minister said that electricity was not a commodity to import, but needs to be produced domestically. About the current ongoing frequent power break down, he said it was due to shortfall in hydel power generation. The flow of water from Tarbela and Mongla dams had been stopped due to desilting process initiated by the government so as to improve water availability for irrigation purposes. The current power break down in the country would be totally removed by the end of January after completing the desilting process. However, during peak times in summer season, the minister said the country would again witness power shortfall problems.

The power shortfall would be overcome after December 2009.

The government also finalised the import of 1,000MW from Iran and for another 1,000MW negotiations were in progress with Iran. About the cost of imported power from Iran the minister said that it would be equivalent to the existing electricity prices. He said the government also succeeded in importing 40MW from Iran for Gwadar Port.

Earlier, the minister said that the federal government was taking all possible steps to provide basic amenities to the people and for development of Balochistan.

He said this while talking to the chief minister of Balochistan who called on him in his office. Provincial Minister for Finance and Revenue Asim Kurd Gillo and the Adviser to the Ministry of Water and Power, Riaz Ahmed Khan were also present. The minister said that different water and power sector projects with special allocations had been planned in various parts of Balochistan province to meet the electricity and water requirements.

He said that a rental power project of 200MW was being set up in Quetta while the feasibility study of four dams Hingol, Winder, Sukleji and Naolong had been completed by Wapda. Construction work on Hingol dam would be started soon.