Pakistan Economy - News & Updates - Archive

[Neo]

Punjab govt plans one million tonne wheat export ​

Saturday, 09 May, 2009

LAHORE: The Punjab government has decided to export one of its two million tonnes in surplus wheat and has formed a committee to explore markets and price possibility, says Provincial Food Minister Malik Nadeem Kamran.

At a press conference here on Friday, the minister said the committee, headed by Senator Ishaq Dar, would come up with a report ‘within days’ so that the process could be accelerated and stocks cleared.

Flanked by Law Minister Rana Sanaullah and Food Secretary Irfan Elahi, the minister claimed that the province needed 3.5 million tonnes and normally supplied 500,000 tonnes to other federating units. Its stocks had already touched 3.67 million tonnes, more than the provincial requirements, he claimed.

He said the province would have over six million tonnes by the end of this procurement season, which would be two million tonnes more than its requirements. The Punjab government had decided to export one million tonnes wheat and keep another million as buffer stocks till any decision was taken about it, he said.

He reiterated official stance that the government would remain part of the procurement drive till proverbial last grain and would clear food farrago at all costs.

 

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Islamic banking gains ground in Pakistan ​

LAHORE: Islamic banking is fast gaining ground in Pakistan because it is risk free as compared to conventional modes of banking.

This was stated by chief executive officer AlBaraka Islamic Bank Mohamed Isa Al Mutaweh while talking to Lahore Chamber of Commerce and Industry president Mian Muzaffar Ali here on Thursday.

He said that Islamic financing products such as Murabaha, Ijara, Musharaka and Islamic Export Refinance were catering to a diverse cross-section of the economy, including the corporate, SMEs and consumer sectors.

Speaking on the occasion the LCCI president said that more than two hundred and fifty Islamic financial institutions were operating worldwide from China to US. Western banks through their Islamic units in UK Germany, Switzerland, and Luxembourg were also practicing Islamic banking.

He said that Islamic finance was practiced mostly in the Muslim world throughout the middle ages facilitating trade and business activities. In Spain and Baltic States, Islamic merchants became indispensable middlemen for trading activities. Many concepts, techniques and instruments of Islamic finance were later adopted by European financers and businessmen.

He said that the Islamic financial system employed the concept of participation in the enterprise, utilising the funds at risk on a profit-and-loss-sharing basis.

DAWN.COM | Business | Islamic banking gains ground in Pakistan

 

[white_pawn]

Volume of gold trade shoots up by 250 percent​

Saturday, May 09, 2009

KARACHI: The volume of gold trade soared up by 250 percent, following National Commodity Exchange (NCE) stretched up its working hours to 21.

NCE released handout said that NCE management at the beginning of the current year had installed new fast trading software, which triggered the volume of trade shooting up by 250 percent and 7000 deals for the sale/purchase of 2.5 tons of gold were finalized in April.

Besides, after extension in trading hours from 9.00 A.M. in morning to next day 6.00 A.M. morning, gold trading in exchange now continues up to 21 hours.

NCE said it is working on the arrangement for trading of more products in the exchange.

 

[Neo]

IMF may agree to allow more fiscal space to Pakistan ​

Country will have Rs180bn more in hand if IMF allows 1.2pc hike in fiscal deficit target​

Saturday, May 09, 2009

ISLAMABAD: Pakistan and the International Monetary Fund (IMF) have agreed on an additional fiscal space of 0.8 to 1.2 per cent of gross domestic product (GDP) in the next budget 2009-10 in a bid to give a boost to sluggish economic activities in the country.

By relaxing fiscal deficit target in the range of 0.8 to 1.2 per cent of GDP, which is currently under discussion, the exact size of fiscal space will be finalised during policy level talks to commence on Saturday between both sides in Dubai, it is learnt.

Pakistan is asking the IMF to allow an increase in the fiscal deficit target by 1.2 per cent of GDP to 4.5 per cent instead of earlier target of 3.3 per cent for the next fiscal year.

If the IMF allows Islamabad to hike its fiscal deficit by 1.2 per cent of the GDP, it will give fiscal space to the incumbent regime in the range of Rs170 to Rs180 billion for spending more on development projects as well as raising salaries and pensions by around 15 to 20 per cent as adhoc relief for public sector employees.

“In case the fiscal space shrinks the chances for giving solace to inflation stricken masses will be diminished,” added the official sources.

Pakistan and Fund authorities have completed technical level talks in Dubai on Friday and now policy level talks will start from today.

Advisor to PM on Finance Shaukat Tarin will leas the Pakistani side while Chairman FBR, Ahmed Waqar and Governor State Bank of Pakistan Saleem Raza would also participate into the policy level talks. The policy talks will be completed by May 11, 2009.

When contacted the official spokesman of the Finance Ministry, Asif Bajwa, who is also additional secretary finance ministry and part of Pakistani delegation currently holding review talks with the IMF in Dubai, told this scribe on telephone that the size of the fiscal space came under discussion but nothing had so far been finalized in this regard.

“In the policy level talks, both sides will decide the issue of additional funding by jacking up the quota for Pakistan as well as the fiscal space for the next budget 2009-10,” he concluded.

Pakistan’ economic managers are holding review talks with the IMF for the next tranche worth $840 million under $7.6 billion Standby Arrangement (SBA) program.

The IMF considers the fiscal deficit target as sacrosanct and it is the known view of the Fund that the increased fiscal deficit basically fuels inflation.

But Pakistani side is arguing that they have taken measures by tightening fiscal and monetary measures, resulting into slowing down of the national economy.

Now there is time for stimulus package by easing down fiscal and monetary policies in order to revive the sluggish economic activities in the country. The IMF should not adopt the approach of “one shoe fit for all” in order to overcome ills being faced by Pakistan’s economy.

The sources said that the Friends of Democratic Pakistan (FoDP) had pledged $5.28 billion for the next two years but Islamabad’s economic managers were worried about realization of these funds. If these funds are not materialized in hard cash then Pakistan requires lenient view from the IMF in terms of fiscal deficit target envisaged for the next financial year 2009-10.

Keeping in view this scenario, Pakistan would ask the IMF for allowing additional resources equivalent to 1.2 per cent of the GDP for spending on social sector of the country which means that the fiscal deficit target could go up to 4.5 per cent by the next budget in case of agreement with the IMF.

 

[Neo]

10 million tonnes wheat available in Punjab for procurement​

ISLAMABAD: Farmers of Punjab have over 10 million tonne of wheat available for sale from a total of around 20 million tonne production, a survey of Punjab Lok Sujag and South Asia Partnership-Pakistan revealed Friday.

This was a quarter more than the raised procurement target of the two government departments. The Punjab Food Department had raised its target from 4 to 6 million tonne while the federal government’s PASSCO has increased it to 2 million tonne to be met from all over the country.

To date the two departments have hardly achieved half of their targets due to lack of finances, gunny bags, storage capacity and insufficient human resource.

The survey showed this unbelievably high quantity available for procurement from farmers was quite plausible if compared with the neighboring Indian state of Punjab. Indian Punjab had produced 15.6 million tonne of wheat in the current season. The six state departments assigned with procuring wheat have set a target of 11.5 million tonne of which 10.6 million tonne had been purchased till May 6.

The government experts have been calculating the tradable surplus in wheat as 30 percent of the total production. (The surplus is the quantity the farmers offer for sale after saving for home and sharing with others).

The procurement agencies use this figure to set their targets, which helped stabilise the market at the government announced Support Price. The survey further showed the method to assess tradable surplus was flawed and that it was much higher than the official calculations for the current season.

The survey showed farmers keep over 10 percent of their production for home consumption and a similar quantity was paid to the teams of harvesters. The 956 surveyed farmers had sold 64 percent of their produce in 2007-08.

The shares in wheat crop of various partners were not constant in percentage terms. Crop reapers were paid in maunds (40 kg) of wheat per acre while threshers were paid a percentage of wheat produced. Share croppers get a fixed weight from each farming family.

Quantity saved for home consumption depends upon number of persons in the family and remains constant whatever the production. These factors result in a varying portion offered for sale in each year.

The market share in wheat production (tradable surplus) had accrued to 72 percent of the total production of surveyed farmers.

The survey showed farmers with less than one acre of land sell no wheat while those with 1 to 2.5 acre of land sell just 14 percent of their production. In contrast farmers owning more than 50 acres of land sell 74 percent of their production.

Government was the only buyer in the market as low international prices and other local factors were keeping the private buyers away from the market. Though the government had set all-time-high procurement targets, they still fall short of the actual quantities available in the market.

The survey showed the expected amount that would not be procured by the government departments almost equals the quantity being offered by the small farmers. This effectively means that around 2 million small farmers would be the likely victims of this poorly planned wheat season.

 

[Neo]

E&P sector achieves 23.8 percent growth during July-March ​

KARACHI (May 09 2009): The exploration and production (E&P) sector continued its robust performance during the nine months' period in the current fiscal year FY09 and showed growth of 23.8 percent. The cumulative profit after tax (PAT) of the sector stood at Rs 72 billion as against Rs 58.2 billion in the same period in FY 08.

"Despite falling crude prices during the period, the sector witnessed growth due to deferred impact of high international oil price on gas prices and depreciation of Pak rupee against dollar", Husna Azhar, an analyst at Ismail Iqbal Securities, said. The major beneficiary was Pakistan Petroleum Limited (PPL) due to its gas dominant revenues, she added. The E&P sector yields forward PER of 4.7x wherein among the listed E&P sector companies, the cheapest is PPL with PE multiple of 4.7x.

OGDC witnessed growth of 22.3 percent in the bottom line to Rs 44.4 billion (EPS: Rs 10.33) as compared to Rs 36.3 billion (EPS: Rs 8.44) in the same period of last year. Despite fall in gas and crude volumes during the period, higher realised prices in rupee term led to increase in sales revenue by 12.8 percent to Rs 100.2 billion during the said period as against Rs 88.9 billion in nine months of FY08.

The company made two new discoveries during the period and continues its aggressive stance towards exploration. The resolution of discount factors on Qadirpur gas pricing by the end of current month and likely cap of HSFO price of $400/ton as against current cap of HSFO price of $200/ton was an important revenue trigger for the company as it accounted for 40 percent of its total gas sales volume.

In addition to this, the development activities at Tal block and capacity enhancement at Qadirpur by 100mmcfd are important revenue catalysts, going forward. PPL remained the star performer in the entire sector mainly in the wake of upward revision in pricing of Sui and Kandkot and weakening rupee against dollar.

The profit after tax of the company grew by 40.1 percent to Rs 20.9 billion (EPS: Rs 25.27) in the nine months of FY09 as compared to Rs 14.9 billion (EPS: Rs 18.04) in the same period of last year. Net revenue witnessed a jump of 36.9 percent to Rs 45.3 billion during the period under review. The increase in profitability of PPL witnessed in FY09 is not likely to continue in FY10 as crude prices witnessed a continuous fall since July 2008. However, development activities taking place at Tal block and increased exploration activities by the company can be potential revenue drivers in the upcoming fiscal year.

The Pakistan Oilfields (POL) volumes continued downward journey. The PAT of the company dropped by 13.6 percent to Rs 4.68 billion (EPS: Rs 19.82) during the nine months period in FY09 as compared to Rs 5.42 billion (EPS: Rs 22.92) in the same period in FY08, on the back of fall in top line. Net revenue fell by 6.6 percent to Rs 11.32 billion during the said period as compared to Rs 12.13 billion in this period in FY08 mainly on the back of continued decline in sales volume. Crude volumes fell by 26.8 percent whereas gas volumes reflected decline of 13.2 percent during the nine months period in FY09 as compared to the corresponding period of last year.

The only silver lining for the company was the development of Tal block to be brought online by the end of the current month or early next month. "In case there is any delay than we might expect the first quarter of FY10 to be very tough for the company as no recovery has been witnessed from its key fields Pindori and Pariwali", Husna said.

The Mari Gas Company (MARI) showed increase of 34.6 percent in the bottom line mainly on the back of higher average selling prices during the period under review. The average selling price increased from Rs 124.5/mmcf to Rs 156.4/mmcf. This increase was partially offset by increase in operating expenses and finance cost.

 

[Neo]

IMF assures support for economic growth ​

WASHINGTON (May 09 2009): The International Monetary Fund has assured Pakistan of its support for economic development of the country as Managing Director Dominique Strauss-Kahn had a meeting with President Asif Ali Zardari. "You can count on our support for growth and sustainable economic development," Kahn said, according to officials.

He applauded Pakistan's economic performance in recent months despite difficult conditions and said the Fund supports the country's programs for poverty alleviation. President Zardari apprised the IMF leader of his government's economic policies, saying these prioritise fiscal and economic stabilisation as well as development of the poor through programs aimed at their well-being.

Meanwhile, US Congresswoman and co-chair of Pakistan Congressional Caucus, Sheila Jackson Lee called on President and reaffirmed her support for Pakistan's efforts to rid the region of violent extremism and achieve economic development of the Pakistani people.

 

[Neo]

US House body approves $1.9 billion security, economic aid ​

WASHINGTON (May 09 2009): The US House Appropriations Committee has approved $400 million counterinsurgency assistance for Pakistan in the current financial year as well as another one billion dollars economic and security aid for the key anti-terrorism partner for the next fiscal year beginning October 1, 2009.

The total assistance for Pakistan would be about $1.9 billion, Pakistan's ambassador to the United States Husain Haqqani said welcoming the development.

"The US Congress is more receptive to Pakistan's views as a result of President Asif Ali Zardari's visit and diplomatic efforts by the embassy in Washington," he said. According to the break-up, the assistance is part of a $96.7 billion 2009 war funding bill for Iraq and Afghanistan and includes about $600 million economic and $400 million for enhancement of counterinsurgency capability in the new fiscal year beginning October 1, 2009.

The $600 million will help address the economic crisis including agriculture and food security, assist the displaced population, strengthen national and provincial governance, expand the rule of law, and improve access to and quality of education. According to the committee, the $400 million security assistance is for the Pakistan Counterinsurgency Capability Fund to build the counterinsurgency capabilities of the Pakistani security forces.

Earlier, Information Minister Qamar Zaman Kaira and presidential spokesman Farrattullah Khan Babar said at a joint press briefing that the United States has pledged to provide about dollar one billion to Pakistan on urgent basis to meet its immediate defence and economic requirements.

"The Obama administration will provide about dollar one billion economic and security assistance to Pakistan on immediate basis - dollar 500 million economic and dollar 497 military assistance." "We hope to receive it by the end of this month", they said.

The high-level consultation between President Asif Ali Zardari and the US President Barack Obama this week has been very productive and the US administration agreed to help Pakistan on urgent basis, they said. President Obama declared that his government was looking forward to a stable, strong and democratic Pakistan.

"We will be going back home with greater confidence" Faratuallah Khan Babar said, referring to Obama's statement, which emphasised that the security of Pakistan and Afghanistan is inter-linked with the security of US. "This is a far-reaching statement, which demonstrates the concern of the Obama's administration on bringing peace and stability in the region." The Obama administration is now fully convinced that insecurity in Pakistan can harm the security of the United States as well.

This was for the first time that US. Pakistan and Afghanistan at trilateral summit agreed to formulate a unified strategy on the security related issues to defeat militancy. The Obama administration appreciated Pakistan's recently taken economic and diplomatic initiatives and showed willingness to provide it short and long-term assistance.

 

[ajpirzada]

65 ships reach Gadani for scrapping By Saleem Shahid
Saturday, 09 May, 2009 | 10:14 AM PST |

These ships would produce around half a million tons of scrap for steel industry in the country and add billions to customs duty and income tax. – Reuters/File photo of workers dismantling a decommissioned ship

QUETTA: Ship-breaking industry is flourishing once again in the country as 65 more abandoned ships arrived at the Gadani’s ship-breaking yard from various countries for scrapping.

‘More ships are expected to reach Gadani,’ official sources told Dawn, adding such an activity was seen at the Gadani beach after two decades, and it would provide thousands of jobs to area people.

‘These ships would produce around half a million tons of scrap for steel industry in the country,’ sources said.

‘Around rupees one billion has, so far, been generated from customs duty and income tax,’ said Additional Collector Customs Gadani Ali Sher Bhihan.

Pakistan’s ship-breaking industry was at its zenith in the 70s when up to 150 ships had been brought to Gadani’s ship-breaking yard.

However, the industry lost its charm in the 90s when rates of ships increased and the PML-N government imposed duty on ship-breaking.

However, as scrap smuggling from Iran and Afghanistan to Pakistan stopped, it proved a boon for local ship-breaking industry.

‘The local steel industry is now depending on Gadani’s ship- breaking industry for scrap as its smuggling stopped from Iran and Afghanistan,’ said a source.

Sources said rates of abandoned ships have been reduced in the international market due to economic recession.

Balochistan would also get more financial resources with a boost in the ship-breaking industry in Gadani.

The provincial government is providing maximum facilities to ship-breakers at Gadani’s ship-breaking yard.

DAWN.COM | Business | 65 ships reach Gadani for scrapping

this is really gud for ppl of balochistan

 

[ajpirzada]

65 ships reach Gadani for scrapping By Saleem Shahid
Saturday, 09 May, 2009 | 10:14 AM PST |

These ships would produce around half a million tons of scrap for steel industry in the country and add billions to customs duty and income tax. – Reuters/File photo of workers dismantling a decommissioned ship

QUETTA: Ship-breaking industry is flourishing once again in the country as 65 more abandoned ships arrived at the Gadani’s ship-breaking yard from various countries for scrapping.

‘More ships are expected to reach Gadani,’ official sources told Dawn, adding such an activity was seen at the Gadani beach after two decades, and it would provide thousands of jobs to area people.

‘These ships would produce around half a million tons of scrap for steel industry in the country,’ sources said.

‘Around rupees one billion has, so far, been generated from customs duty and income tax,’ said Additional Collector Customs Gadani Ali Sher Bhihan.

Pakistan’s ship-breaking industry was at its zenith in the 70s when up to 150 ships had been brought to Gadani’s ship-breaking yard.

However, the industry lost its charm in the 90s when rates of ships increased and the PML-N government imposed duty on ship-breaking.

However, as scrap smuggling from Iran and Afghanistan to Pakistan stopped, it proved a boon for local ship-breaking industry.

‘The local steel industry is now depending on Gadani’s ship- breaking industry for scrap as its smuggling stopped from Iran and Afghanistan,’ said a source.

Sources said rates of abandoned ships have been reduced in the international market due to economic recession.

Balochistan would also get more financial resources with a boost in the ship-breaking industry in Gadani.

The provincial government is providing maximum facilities to ship-breakers at Gadani’s ship-breaking yard.

DAWN.COM | Business | 65 ships reach Gadani for scrapping

this is really gud for ppl of balochistan

 

[white_pawn]

Pre-budget advice from Lahore​

INDEPENDENT think-tanking, especially on matters economic, has not been an established practice in Pakistan. In the run up to the budget, a plethora of unhelpful ideas do flood the system from various interest groups. There is also a tradition of pre-budget seminars organised by the print media. The origins of the pre-budget seminar can be traced to the days of Dr Mubashir Hasan in the finance ministry when the government itself took the initiative to hold some very vibrant discourses. The process was led by the veteran journalist Syed Najiullah and this writer.



Some of the best-known names today emerged on the national scene during these debates. Lately, the electronic media has been experimenting with counter-budgets. Professional conferences, such as the annual meetings of the Pakistan Society of Development Economists and the Lahore School of Economics held in the first and the third weeks of April, also spelled out critical themes for the policymakers.



All these are, however, not efforts leading to structured and usable reports in the next budget. One is aware of only two such initiatives launched in the 1990s — the attempt to produce a Citizens Report by the Sustainable Development Policy Institute in Islamabad and the regularly appearing annual reviews by the Social Policy and Development Centre in Karachi. Since last year, Lahore has offered some serious competition. By launching its Second Annual Report on May 2, the Institute of Public Policy in the Beaconhouse National University, Lahore has announced its intent to stay in the competition.



The latest report offers concrete advice on how to emerge from the prevailing crisis. In the past decades, the economy of Pakistan has emerged from crisis after crisis. But the crisis that it faces today has, according to Shahid Javed Burki, all the elements of a perfect storm. The simultaneous occurrence of negatives like security breakdown, economic downturn, governance failure and political instability has thrown up a ‘vicious cycle that is virtually carrying us to a point of no return.’



Sartaj Aziz wonders why it is always the democratically elected governments that have to face up to such serious crises. His major policy concern is that poverty reduction cannot and must not continue to be a mere add-on in a situation where the number of poor is becoming a defining characteristic of the population.



Akmal Hussain’s prescription was not just to move away from growth without equity, but also to shun half-hearted efforts at growth with equity and consciously strive for growth through equity.



Some wild estimates have been floating around about the costs of the present crisis. One occurs in the latest Poverty Reduction Strategy Paper and another is a $35bn idea mentioned in public pronouncements by the economic team. Aisha Ghaus-Pasha has made an interesting attempt to put some rational sense into the whole issue of costing the crisis. She picked up two key contributors to the perfect storm, the impact of power crisis on industry and the security crisis.



In 2008 alone, industrial losses amounted to Rs210bn or about two per cent of GDP. Exports suffered a billion-dollar hit. Socially most disquieting, as many as 400,000 jobs disappeared. Security crisis has led to thousands dead and injured. While the overall direct and indirect costs of the war on terror in 2007-08 are estimated at Rs380bn, the disconcerting fact to note is that defence expenditure is 62 per cent higher than it would have been and law and order expenditure is 48 per cent higher than it would have been.



Concrete budgetary proposals came from the person who knows them best, Hafiz Pasha. His advice to avoid new taxation, particularly in the industrial sector, and enlisting the hitherto untaxed sectors at a time of negligible GDP growth per capita is sound. The burden of adjustment should be on expenditure, with a switch from current to development budget. It has to be a mix of improved tax administration, withdrawal of exemptions, ‘strong’ reduction of current expenditure and higher but properly prioritised development expenditure.


The deputy chairman of the Planning Commission gave a concluding speech at the launch of the report. While he made the right noises about the war on terror, he was completely out of touch with the economic reality on the ground and the reality of the organisation he heads; its professional incapacity to deliver on anything is no more an official secret. One is horrified to hear the talk about managing a gasification project for Thar coal and implementing the Ayub days’ idea of a polytechnic in each district by an organisation which is unable to manage properly its own abode: Block ‘P’ in the Secretariat.

DAWN.COM | Business | Pre-budget advice from Lahore

 

[Neo]

Pakistan among gold producing countries ​

ISLAMABAD: By producing 7.746 tonnes of gold during the last five years – 2004 to 2008 – Pakistan has joined the ranks of gold producing countries.

A senior official of the Ministry of Petroleum and Natural Resources told APP, “Presently copper, gold, silver and magnetite are being produced from the Saindak Copper-Gold Project in Balochistan’s Chaghi district.”

According to the data available with the Saindak Metal Limited – during the last five years – Pakistan has produced 86,013 tonnes of copper, 7.746 tonne gold and 11.046 tonne silver, besides the production of 14,482 tonnes of magnetite concentrate (iron), bringing in a total of $633.573 million.

The minerals produced from the Saindak Copper-Gold Project were being internationally marketed by the lessee M/s MRDL, as the project was producing blister copper with contained minerals.

The MRDL lacked refinery facilities to separate the gold from the silver, which resulted in their being exported to other countries. The iron concentrate was being sold to Pakistan Steel Mills, the official said.

 

[Neo]

Electricity shortfall aggravates to 2,000 megawatts​

LAHORE (May 11 2009): There was an unprecedent aggravation of electric power shortfall, touching 2,000MW mark on Sunday resulting in frequent loadshedding. The shortfall in the demand and supply was 900-MW on Saturday.

The Pakistan Electric Power Company (Pepco) sources confirmed that the total electricity shortfall on Sunday was recorded as 2000-MW due to steep rise in temperatures and owing to technical problems, there was 750-MW shortfall in generation at Uch and Roosh power plants.

The sources said that immediate repairs are underway and both plants are expected back on line within a day. "The 2000-MW shortfall was managed by proportionate distribution (loadshedding) through the Distribution companies", the sources added. In a self praise, the sources clarified that due to satisfactory generation and better management no loadshedding was carried out from 3rd May to 6th May 2009.

The distribution companies were executing their loadshedding programmes in a co-ordinated manner and nowhere in the country normal life was paralysed due to prolonged load management. Meanwhile the Pepco has commissioned its newly built Ghakhar grid station and started supply of electricity to more than two hundred thousand consumers in Sialkot, Narowal, Mandi Bahauddin and Hafizabad districts with the extension of 132-KV lines.

 

[Neo]

China's Exim Bank to finance purchase of 75 locomotives ​

BEIJING (May 11 2009): China's Exim Bank has agreed to provide loan for the purchase of 75 locomotives for Pakistan Railways and has submitted its terms and conditions to lend money, said Assad Saeed, General Manager, Services and Manufacturing of Pakistan Railways. 'Basically our visit was to negotiate loan with Exim Bank for the purchase of 75 locomotives for Pakistan Railways,' he told APP on Sunday.

Saeed, who is heading a six-member delegation, said they held meetings with Exim Bank of China and its sister insurance company, which agreed to provide loan and submitted their terms for the credit facility.

The GM Railways said the delegation is leaving for home on Monday and would submit the terms and conditions for examination to the Ministry of Finance and Economic Affairs Division and for the final decision to be taken by the competent authority. The total cost of the agreement is $105 million dollars out of which, the Government of Pakistan would pay 15 percent and the Exim Bank would pay remaining $89 million.

Referring to their visit to locomotive manufacturing factory in Dalian, Assad Saeed said that China has made great advancement in this technology and they are now manufacturing locomotives of various categories including 7200 KW (Electric) and over 6000 Horse Power (diesel). To a question, he said these locomotives are suitable for our climate and meet our requirements, adding that Pakistan railways has good experience of their performance in the past.

He also said, although railways faced some problems in 69 locomotives purchased earlier from China, however, for the last three years, their performance is very satisfactory after removal of the snags by Chinese. Keeping past performance in view, Railways floated tenders for the purchase of 75 locomotives, he said adding, the important fact was that the Chinese manufacturers have not increased cost of the unit and price mentioned was almost the same, as it was in 2001.

Saeed said if this cost is taken into consideration, it is almost half of the price quoted by other countries. The agreement, when signed, included transfer of technology, training of staff and routine inspections of the locomotives, he said. 'They agreed to provide transfer of technology, so that in future Pakistan could be able to manufacture these locomotives that would also help save precious foreign exchange,' he noted.

 

[Neo]

World Bank chief delighted with Pakistan's performance ​

WASHINGTON (May 10 2009): The World Bank President Robert Zoellick, who had a meeting with President Asif Ali Zardari on Friday, has deeply appreciated Pakistan's economic performance in a sign of growing international confidence in the country's policies.

The World Bank president said, "we are delighted with Pakistan's performance," in the face of difficult challenges, Foreign Minister Shah Mehmood Qureshi told a gathering of Pakistani Americans Friday, while informing them about the diplomatic, political and economic support Islamabad has earned due to its policies.

In the meeting with World Bank leader, President Zardari apprised him of the policies the PPP-led government is pursing to stabilise the economy as well as shield the poor from affects of rising cost of living. He thanked World Bank's support for economic development of Pakistan.

The World Bank co-hosted with Japan a Friends of Democratic Pakistan moot in Tokyo last month, which secured more than $5.1 billion pledges from major economic powers, the Gulf nations and industrialised countries in support of Pakistan's efforts to come out of its economic straits, caused partly by the ongoing fight against terrorists along the Afghan border.

US Treasury Secretary Timothy Geithner also called on President Zardari during his four-day official visit to Washington and discussed ways to bolster development co-operation between the two countries.