Pakistan Economy - News & Updates - Archive

[Neo]

'New cane varieties to increase sugar production' ​

FAISALABAD (June 22 2008): The scientists of Ayub Agricultural Research Institute (AARI), Faisalabad, have developed sugarcane varieties which have contributed significantly to increase in sugar production in the country.

This was stated by Dr Arshad Ali Chattha, Director, Sugarcane Research Institute (SRI), Faisalabad, while addressing an awareness seminar on control of viral diseases of sugarcane, arranged in co-operation with Pakistan Agriculture Research Centre (PARC), Islamabad, here on Saturday. He said that the country has not only become self-sufficient in sugar production but is also exporting it to other countries, like Sri Lanka, Yemen and Bangladesh.

He said that scientists have developed technological package for sugarcane production which, if adopted properly, could double sugarcane production in the country. He said that some sugarcane varieties, evolved by AARI scientists, are in the pipeline which are far superior to the existing varieties, and would revolutionise sugarcane production, after proper approval. Dr Chattha said that AARI scientists have also developed a method of sugarcane sowing which increases sugarcane production, besides saving irrigation water.

Scientists delivered lectures on various aspects of sugarcane production technology and explained the methods for controlling sugarcane diseases and attacks of insects and pests. Agriculture scientists, farmers, representatives of sugar industry, Dr Tahira Jasmine from PARC, Dr Muneer Nayyar from Madina Sugar Mills, and Dr Muhammad Javaid from Ramzan Sugar Mills also attended the seminar.

Business Recorder [Pakistan's First Financial Daily]

 

[Bushroda]

Dream of a prosperous Pakistan ​

ARTICLE (June 21 2008): Pessimists are having a field day predicting a bleak future for Pakistan, considering the facts, as they are. Their prognosis may be correct to some extent, but to write off Pakistan totally will be a travesty. We all want to see Pakistan flourishing as a prosperous country, its people at peace, and its coffers full.

The question is whether it is possible, and in the realm of reality? The answer is a resounding 'yes', but how? It all boils down to a resolute, aware and astute leadership, not travelling the oft-beaten track, but hacking out new paths for survival. These new ways exist and have been propounded many a time, in these columns, as well as by others. It requires courage, determination and selfless devotion to the task at hand, and the success can be ours.

These are not mere idle exhortations. History is full of success stories of nations who have pulled themselves up by their own boot-strings, and risen to the top of the economic world. Two nations - defeated and devastated in the Second World War (Germany and Japan) - are prime examples.

True, they were provided material aid, but their success owes to their indigenous labour and creative genius, not the greenbacks showered on them. Other nations too received huge amounts of aid and support, but their names do not stand anywhere in the same league as Germany and Japan. The so-called 'Asian Tigers' are another example of success born of grim toil and fortitude.

So for Pakistan, it is not a lonely journey. Others have set worthy examples before us. The lesson to be learnt is self-reliance and not depending on others to do our work for us. Once this grit and determination is exhibited in sincerity, Pakistanis can begin to see the light at the end of the tunnel.

We have to set our priorities right and move the way Chinese have done, or Malaysia, or others, for that matter. We must give up, once and for all, the idea that only the West can deliver. This is the century of the South and the East. Our destiny calls. Are we ready to answer?

Business Recorder [Pakistan's First Financial Daily]

Good to read an article with a +ve outlook. There is no dearth of pessimist doomsday painter. But being +ve is a way forward.

Neo, Now you might now why I avoid posting negative news.

 

[ejaz007]

Deep Water Container Port : KPT to award two contracts by August
By Moonis Ahmed

KARACHI: The Karachi Port Trust would award contracts for Marine Protections Works and Quay Wall Construction of Pakistan Deep Water Container Port in August, official sources told Daily Times.

Sources said detail design of the project has been completed and contract has been awarded for the dredging and reclamation works. The dredging volume shall be 21 million cubic meters and its channel shall be deepened to 16 meters. Approximate cost of this part of the project is $200-250 million.

The total cost of the deep water container port is $1.6 billion. The port is being built at Keemari Groyne.

Initially 16-meter draft will be built which could later be further deepened to 21-meters. The port will be the first transshipment hub of the region where post panamax containers, having a draft of more than 16-meters will be handled.

A total of ten berths will be completed in the in three phases. Four berths will be built in first phase while two and four berths will be built in second and third phases, respectively.

The project shall be carried out in phases and on public private partnerships. In phase I four berths terminal would be made with 1500 meter quay, 16 meter deep at a cost of $550 million with KPT contributing $345 million, sources said.

The terminal will built in two stages. The first terminal shall comprise of 4 berths 1.5 kilometer long and 18 meters deep. KPT sources said that expected investment is $191 million. The berths are being offered on BOT basis and for a concession period of 25 years. The project’s completion is expected by June 2010.
Daily Times - Leading News Resource of Pakistan

 

[ejaz007]

Australian company to invest $1bn in mining
By Ijaz Kakakhel

ISALAMABAD: The world’s largest copper and gold producing Australian company, with an investment of $1 billion, will launch a mega project— Reko Dik Copper-gold— near Saindak in Balochistan by 2010.

The project would help the government to produce 0.3 million tonnes of copper annually, thus bringing the country for the first time on the list of major copper producing countries of the world. Senior officials told Daily Times here Monday that in the same vein, Duddar lead-zinc deposits in Balochistan are being developed and expected to commence production by end 2008. The expected production from these deposits is 100,000 tonnes of zinc concentrates and 33,000 tonnes of lead concentrates, the export of which will bring precious foreign exchange.

Officials in the Ministry of Petroleum and Natural resources further informed that development of Thar coal field in Sindh, containing 175 billion tonnes of coal, which are of best quality lignite deposits in the world, on completion would be used for power generation and gasification. Similarly all the non-glamorous minerals, having immense socio-economic benefits would be fully utilised. The abundantly available gypsum deposits would be utilised for producing gypsum plaster to partially replace cement in housing sector. Reclamation of saline-sodic soils and treatment of low quality tube wells water through the application of gypsum would bring socio-economic impacts in rural areas, generate gainful employment and improve crop yield.

Phosphate rocks of NWFP would be exploited to set up Phosphatic fertilizer industries, dimension stones, precious and semi precious stones industries along with the establishment of other mineral based industries to meet the increasing demand of various sectors of the economy.

In the annual budget 2008-09, the federal government has earmarked Rs 221.9 million for minerals (non-fuel) sector. Major projects to be carried out during 2008-09 include: feasibility study gasification of Thar coal worth Rs 104 million, national coal policy worth Rs 22.7 million, exploration and evaluation of coal fields of Chamlang-Bala Dhaka, Bahlol and parts of Ghazi Basin in Balochistan worth Rs 10.9 million and establishment of project monitoring and evaluation cell worth Rs 18 million.

Pakistan is blessed with rich and diversified mineral potential due to favourable geological environment. The government has been and is still nurturing environment to build the mineral sector as a potent factor in the national economy. The officials further said that potential of the country in this sector is widely recognised but the sector is not developed. The government made the development of the mining industry as ‘priority sector’ in various five years plans, but none of these efforts were materialised. Adequate institutional, human, research and development and other relevant infrastructure have been established for improvement of this sector but they remain under-utilised.

Daily Times - Leading News Resource of Pakistan

 

[ejaz007]

HUBCO to set up 225MW power plant
Staff Report

KARACHI: Hub Power Company Limited (HUBCO) will set a combined cycle power plant based on reciprocating engines technology with an investment of $300 million having ISO installed capacity of 225MW.

“The company has received the government of Pakistan’s formal approval for setting up of this plant”, HUBCO announced Monday.

Tariff structure for this new plant has recently been agreed with National Electric Power Regulatory Authority (NEPRA) and the letter of support has been received from the Private Power Infrastructure Board with finalization of all equipment supply and construction contracts.

This plant is being set up in district Narowal Punjab and will start supplying electricity to national grid from end March 2010, thereby helping in reducing the acute power shortage in the country.

Javed Mahmood, Chief Executive Officer HUBCO said that the new investment by the company reflected the desire to be a part of the solution to the burgeoning energy crisis in Pakistan. “We are fully committed to Pakistan’s development and progress and will continue to look at power projects even beyond this second plant in years to come”, he added.

At present, Hub Power plant consists of four generating units each giving 323Mega Watt gross output.

Daily Times - Leading News Resource of Pakistan

 

[ejaz007]

Chichoki Mallian project: BNP Paribas, HSBC awarded contract
MUSHTAQ GHUMMAN

ISLAMABAD (June 24 2008): The federal government has awarded financing mandate of 525 MW Chichoki Mallian thermal power project to a consortium of BNP Paribas and HSBC but arrangement for the rupee component was yet to be firmed, sources in PPIB told Business Recorder.

The contract to set up the 525 MW thermal power plant with an investment of $450 million at Chichoki Mallian (Sheikhupura) was awarded to Chinese company, Dongfang Electric Corporation (DEC) by the newly elected government on 30 March this year.

In view of the downgrading of Pakistan's credit risk and the fact that the second lowest bidder namely M/s Fortis Bank was not agreeable to meet the terms, the government has awarded the mandate to M/s BNP Paribas and HSBC on the following terms;

1) Coface component at fixed CIRR for 14.5 years

2) Sinosure component, preferably at Libor plus 87.5bp but with flexibility to accept 90bp above Libor as fall back position.

Sources said that Pakistan Electric Power Company (Pepco), currently headed by Fazal Ahmad Khan after the sacking of Munawar Baseer Ahmad, was in doubt if the Bank of Punjab was in a position to provide the rupee funds for the project. Some independent experts were of the view that the project cost agreed by the GoP could have been negotiated better. The DEC was already in the process of setting up thermal power plant of 450-500 MW at Nandipur (Gujranwala).

Former Prime Minister Shaukat Aziz had signed a memorandum of understanding (MoU) with the Qatar Investment Authority (QIA) and Alsthom-Marubeni to set up 450-500 MW thermal power plant at Chichoki Mallian, but it was terminated when the sponsors did not come up with the tariff petition.

The ECC, in its meeting on October 31, 2007, had directed the Ministry of Water and Power to issue a notice to the proposed sponsors, including Alsthom-Marubeni and the QIA, to come up with a deadline as to when they intend to file an application to the National Electric Power Regulatory Authority (Nepra) for tariff fixation and project completion to avoid any further delay.

The government of Pakistan had sent several letters to QIA for this purpose, but received no response despite the fact that gas allocation deadline of November 30, 2007, had passed.

The sources said that Marubeni had approached the Minister for Water and Power Raja Pervez Ashraf seeking his help to restore the agreement, but to no avail. An official told this scribe that the Chinese company would complete the project within the estimated cost of $330 million.

Business Recorder [Pakistan's First Financial Daily]

 

[ejaz007]

India all set to sign IPI deal within weeks

NEW DELHI (June 24 2008): India is all set to sign an agreement on a 7.5-billion-dollar gas pipeline with Iran and Pakistan in the coming weeks, as there are no signs of progress on its nuclear deal with the United States owing to domestic political opposition, media reports said on Monday.

In an interview with the NDTV network, India's Petroleum Minister Murli Deora said an agreement on the Iran-Pakistan-India (IPI) gas pipeline was likely within the next four to five weeks.

"There were some minor problems, which have been sorted out. Very soon, we should be able to sign the agreement with Iran and Pakistan," he told the news channel on the margins of the meeting of the world energy ministers in Jeddah. Deora, who held talks with his Iranian counterpart Gholam Hosein Nozari at the summit, said "some issues" on the pipeline with Pakistan were resolved.

The IPI project was first conceptualised by officials from India and Iran in 1989. The talks began in 1994, but were delayed by tensions between nuclear-armed neighbours India and Pakistan and later disagreements over the cost of gas.

The development comes against the backdrop of India's ruling United Progressive Alliance (UPA) coming under increasing pressure from its left-wing partners, who have warned of withdrawing support to the government if it went ahead with the civilian nuclear deal with the US.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Services trade deficit balloons by 43.48pc ​

Tuesday, June 24, 2008

ISLAMABAD: Services trade deficit of the Pakistani economy during July-May 2007-08 stood at $6.098 billion depicting an increase of 43.48 per cent over the corresponding period of the last fiscal ($4.25 billion).

During these 11 months, services imports (outflow) stood at $9.025 billion while its exports (inflow) were only $2.927 billion. Last year during the same period, imports were recorded at $7.583 billion and exports at $3.33 billion.

Services exports during the period under review collapsed by 12.18 per cent and imports moved up by 19.02 per cent over the corresponding period of the last fiscal, the State Bank of Pakistan (SBP) reported.

Due to mismatch of supply and demand in the country’s underdeveloped service sector and its opening-up to the outside world, the rising services deficit is set to pose a daunting challenge to the government. Given a comparatively backward service industry, it is impossible for Pakistan to reverse the trend and would not break even in service trade in the short term. The service trade, which covers major tertiary sectors such as transport, tourism, telecommunications, construction, insurance, financial services and royalties and licence fees all, were in deficit during this period under review.

Trade experts have predicted that the service sector long-standing trade deficit may continue for the coming many years because the fledgling sector will lag behind overseas counterparts for that long.

Pakistan’s soaring need for foreign transport, insurance and consultancy services as well as increased expenditure on financial services would also contribute to the expected hike in the deficit. Besides, other factors responsible huge services deficit included higher outflows on account of travel, insurance, construction services, computer and information services, royalties and licence fees. Besides, the country’s fast-expanding general trade deficit resulting from a robust growth in merchandises imports over the past decade, also disturbing for the government’s trade experts.

During the period under review, the country had to spend $3.324 billion on transportation account (i.e. charter of ships and aircrafts with crew, freight on commodity imports through sea and air, 8 per cent freight on cash import) whereas its earning under this head was only $961 million. Thus, the net deficit in the service account due to chartering of vessels for imports, exports shipment was $2.36 billion.

Another factor responsible for big services’ account deficit was a net outflow of $1.205 billion on account of overseas traveling.

The country had to spend $1.451 billion to finance personal and business-related traveling abroad of individuals and groups whereas it earned only $246 million under this account. The same applies on spending on insurance and royalties and licence fees paid to international organizations and their employees operating in Pakistan.

During July-May 2007-08, inflows under construction services were $34 million, insurance $42 million, financial services $40 million, royalties and licences fees $46 million while outflows under these heads were $47 million, $135 million, $172 million and $111 million respectively.

However, under the communication, computer and information services the scenario was a little encouraging.

Under communication sector, outflows were $99 million and inflows $106 million; computer and information services inflows were recorded at $138 million and outflows at $119 million during the period under review.

Services trade deficit balloons by 43.48pc

 

[Neo]

Pak cement in high demand in South India ​

Tuesday, June 24, 2008

NEW DELHI: Low-priced and quality Pakistani cement is making way into South Indian markets where its demand is rising.

Media reports quoting an official of the Kerala Cement Dealers’ Association said a 50-kg Pakistani cement bag is available in Kochi at Rs250 as compared with local cement at Rs260 a bag. The quality of Pakistani cement is very good but the supplies are limited.

A few months back, about 1,000 tonnes of imported cement landed at Ernakulam at a price of Rs220 per bag when the domestic cement was costing around Rs250.

Ramaprasad, an importer in Chennai, said around 1,000 containers of cement were shipped to Chennai two months back and around 1,500 containers landed in Tuticorin. Each container had a capacity for 500 bags of cement weighing 50kg each. Ramaprasad further said the quality of Pakistani cement is very good but supply is limited.

Pak cement in high demand in South India

 

[Neo]

WTO success to boost Pakistan’s agribusiness ​

Tuesday, June 24, 2008

KARACHI: A breakthrough in World Trade Organisation (WTO) talks will help Pakistan increase agricultural output as investment diverts from subsidised to competitive farm economies, Mujeeb Ahmed Khan, the Country’s Head of WTO Cell told The News on Monday.

WTO negotiations on free trade have not moved forward as the United States is reluctant to reduce huge subsidies it gives to farmers and the European Union delays measures to open up their markets.

“When these subsidies go down, farmers and investors will rush to competitive countries like Pakistan,” he said, explaining that food shortages in rich countries have already made them conscious.

He said member nations of the Gulf Cooperation Council (GCC) have realised that they cannot rely on food imports from the US and Australia. “Now they know they have to rely on developing countries.”

Saudi Arabia, the UAE, Qatar and Bahrain have already started securing large tracts of arable land in other countries including Pakistan. A few weeks back during a visit to Saudi Arabia, Prime Minister Yousuf Raza Gilani has reported to have pledged land to investors.

Despite historically being an agricultural economy, Pakistan’s production of food staples has not increased and the country often imports grain.However, while the oil-rich governments only intend to feed their own people, there is a market of millions of hungry people here, which provides opportunity to big food companies to make quick money as world food prices soar.

Some progressive farmers also view entry of large corporations into agriculture as good for the country’s food output. “Yields are stagnant because there is no capital in the rural economy,” Hamid Malhi, a director at Farmers Associates of Pakistan (FAP) had told The News in an interview in May. “Right now a farmer is growing to meet his own needs. If he has money, he will create surplus.”

He said after terrorist attack on United States, there was a lot of optimism that Gulf money will find its way into Pakistani agriculture. “But nothing happened because there was no one to push forward that idea.”Now, he said, the global food crisis has made investment in agriculture so attractive that it will do even without any policy. —SH

WTO success to boost Pakistan’s agribusiness

 

[Neo]

Rice exports rise by 32.96pc in May ​

Tuesday, June 24, 2008

ISLAMABAD: Rice exports from Pakistan in May witnessed an upward trend as the quantity increased by 32.96 per cent when compared with the exports in April.

Pakistan exported 627.107 metric tonnes of rice costing $299.9 million in May as compared with exports of 471.631 metric tonnes costing $ 228.8 millions during April of the current financial year, according to the Federal Bureau of Statistics.

The rice exports during the month under review witnessed an increase of 131.33 per cent when compared with the same month of the previous financial year, which were recorded at 271,084 metric tonnes costing $103.8 million.

Rice exports include 209,064 metric tonnes of basmati costing $145.3 million. The basmati exports witnessed a 45.88 per cent increase when compared with the export quantity of 143,311 metric tonnes during the month of April.

As compared with the same month of the financial year 2006-07, the basmati exports witnessed an increase of 163.36 per cent increase by growing up from 79,382 metric tonnes in May 2007 to 209,064 during the month under review.

The export of other varieties of rice increased from 328,302 metric tonnes in April to 418,040 metric tones in the month under review. When compared with the same month of the last financial year, the exports of other rice varieties increased by 194 per cent.

Rice exports rise by 32.96pc in May

 

[Neo]

PM hints at documenting black economy​

ISLAMABAD, June 23: Prime Minister Yousuf Raza Gilani will launch a massive scheme to document black economy by appealing to the nation for voluntarily declaring untaxed assets.

The move, likely to come at the concluding budget session of the National Assembly, is aimed at documenting the black economy and will be part of an investment tax scheme that allows taxpayers to disclose their undeclared businesses, capital and assets by paying just two per cent of their market value.

A well-placed source told Dawn on Monday that the prime minister would urge parliamentarians to persuade voters to make the scheme a success for widening the narrow tax base.

Under the scheme, people who declare their assets would not have any fear of investigation into their tax affairs for the past provided they declare their assets at a nominal tax rate of two per cent and file their income tax returns for that year and three consecutive years.

Only 2.2 million taxpayers in a population of 160 million represents the lowest ratio in the region and tax-to-GDP ratio has remained static at about 11 per cent for the past many years, added the source.

A tax arrears settlement incentive scheme (TASIS) has also been introduced for tax defaulters to broaden the tax net. Tax defaulters will be allowed to pay the principal amount of due tax.

The additional tax, which can be 100pc of the principal amount, would not be charged and penalties levied for non-payment would be withdrawn. An amnesty scheme has been introduced where unregistered manufacturers and retailers have been offered amnesty from paying past liabilities if they voluntarily register between June 11 to July 31.

According to amendments made in the finance bill by National Assembly, sales tax exemption has been granted to hospitals owned by federal or provincial governments, hospitals of statutory teaching universities having 200 or more beds and charitable hospitals having 50 or more beds.

The services of property developers and promoters have been subjected to federal excise duty. The development of plots shall be subject to excise duty at Rs100 per square yard and construction of residential and commercial units shall be subject to excise duty at the rate of Rs50 per square foot of the covered area.

Amendments pertaining to customs include the reduction of import duty on sulphonic acid from 15pc to 10pc. Earlier, fixed tax was imposed on builders and developers. Now this tax has been withdrawn as income tax and the federal excise duty on services of property developers and builders has been levied.

Under income tax, through an amendment the urban area for the purpose of capital value tax has been restricted to rating areas only and the prescribed limits for its calculation have been withdrawn.

PM hints at documenting black economy -DAWN - Top Stories; June 24, 2008

 

[Neo]

Pakistan’s exports face greater barriers: WB​

ISLAMABAD, June 23: Pakistan’s exports face much greater barriers than other South Asian economies because of a less favourable governance environment and a weak control on corruption, says the World Bank.

In its latest report “World Trade Indicators 2008,” the bank also said that although Pakistan began liberalising its trade regime as part of the Comprehensive Economic Revival Programme launched in 1999 and its tariff rates have fallen dramatically since then, the latest Trade and Tariff Restrictiveness Index (TTRI) suggests that the trade regime remains relatively protectionist as is common for most South Asian countries.

The 2007 MFN-applied simple average tariff (14.1 per cent) is comparable to the regional average (14.4 per cent), but the import weighted (15.3 per cent) tariff average is higher than the regional mean (12.9 per cent), with both indicators above the low income country group averages.

Moreover, only 2.5 per cent of Pakistani imports in 2000-05 were MFN duty free, much less than regional and income group comparators.

Unlike most other South Asian countries, almost all (98.7 per cent) of Pakistan’s tariffs were bound. A number of Pakistan’s service industries, including the financial and telecommunications services, have been successfully liberalised. However, its low overall GATS commitment index suggests an ample room for greater multilateral commitment to services liberalisation.

Market Access TTRI (including preferences) ranked near the worst at 117th (out of 125). Its MFN duty-free exports accounted for about 14 per cent of all exports in 2006, lower than the South Asian average of 26.4 per cent, but almost twice its own 2000-04 average.

Pakistan is a Generalised System of Preferences (GSP) beneficiary with a number of industrialised countries and a signatory to the Trade and Investment Framework Agreement (TIFA) with the United States. Its utilisation rate of EU and US preferences is a moderately high 74 per cent, but the value of such preferences is a very low: one per cent of bilateral exports.

Regionally, Pakistan is member of the Economic Cooperation Organisation (ECO), the South Asian Association for Regional Cooperation, and the South Asian Preferential Trade Arrangement (SAPTA), although the country’s difficult political relationship with India undermines their bilateral trade.

After an appreciation of 3.2 per cent in 2005-06, Pakistan’s currency with the rupee depreciated only slightly by 1.1 per cent in 2007 on a real trade weighted basis.

The bank also said that Pakistan’s Doing Business rank is a relatively high 76th (out of 178), despite a low rank on the subcategory Enforcing Contracts (154th).

Surpassing the regional and low-income group averages on nearly all aspects of trade facilitation, it ranked 68th (out of 150) on the 2006 Logistics Performance Index. Here its weakest indicators were quality of transport and information technology (IT) infrastructures and efficiency of customs and other border procedures.

With relatively short processing times and low per container export costs, the country is ranked also 94th (out of 178) on the Doing Business Trading Across Borders subcategory, a worse standing from the previous years rank of 81, partially attributable to an increase in average import costs by $165 per container.

Pakistan’s estimated real growth in trade was a low 0.9 per cent in 2007. This follows high growth rates of 18.5 per cent in 2005-06, and moderately high rate of 6.9 per cent in the early 2000s.

The impressive growth rates in 2005-06 were mostly driven by expanding imports, which grew by 29.6 per cent. Even with this substantial increase in total trade in recent years, Pakistan’s trade share in the GDP which was about 42 per cent in 2007 is lower than the regional and about half the low-income group mean integration ratio. The services’ share in total exports is a low 17.2 per cent, with transport being the most important service export.

Pakistan’s main merchandise exports were textiles products, such as linen, cotton and various fabrics. Its export concentration is lower than the average South Asian or low- income country. Its main destination markets are the US, the United Arab Emirates, Afghanistan, the United Kingdom, and China.

Its imports, which include petroleum, machinery, plastics and transportation equipment, are obtained from a wide range of countries, including China, Saudi Arabia, United Arab Emirates, Japan and the United States. Foreign direct investment (FDI) inflows as a share of the GDP were relatively high (3.4 per cent) in 2007, attracted in part by privatisation of some key state-owned industries.

Pakistan’s exports face greater barriers: WB -DAWN - Business; June 24, 2008

 

[Neo]

Chichoki Mallian project: BNP Paribas, HSBC awarded contract ​

ISLAMABAD (June 24 2008): The federal government has awarded financing mandate of 525 MW Chichoki Mallian thermal power project to a consortium of BNP Paribas and HSBC but arrangement for the rupee component was yet to be firmed, sources in PPIB told Business Recorder.

The contract to set up the 525 MW thermal power plant with an investment of $450 million at Chichoki Mallian (Sheikhupura) was awarded to Chinese company, Dongfang Electric Corporation (DEC) by the newly elected government on 30 March this year.

In view of the downgrading of Pakistan's credit risk and the fact that the second lowest bidder namely M/s Fortis Bank was not agreeable to meet the terms, the government has awarded the mandate to M/s BNP Paribas and HSBC on the following terms;

1) Coface component at fixed CIRR for 14.5 years

2) Sinosure component, preferably at Libor plus 87.5bp but with flexibility to accept 90bp above Libor as fall back position.

Sources said that Pakistan Electric Power Company (Pepco), currently headed by Fazal Ahmad Khan after the sacking of Munawar Baseer Ahmad, was in doubt if the Bank of Punjab was in a position to provide the rupee funds for the project. Some independent experts were of the view that the project cost agreed by the GoP could have been negotiated better. The DEC was already in the process of setting up thermal power plant of 450-500 MW at Nandipur (Gujranwala).

Former Prime Minister Shaukat Aziz had signed a memorandum of understanding (MoU) with the Qatar Investment Authority (QIA) and Alsthom-Marubeni to set up 450-500 MW thermal power plant at Chichoki Mallian, but it was terminated when the sponsors did not come up with the tariff petition.

The ECC, in its meeting on October 31, 2007, had directed the Ministry of Water and Power to issue a notice to the proposed sponsors, including Alsthom-Marubeni and the QIA, to come up with a deadline as to when they intend to file an application to the National Electric Power Regulatory Authority (Nepra) for tariff fixation and project completion to avoid any further delay.

The government of Pakistan had sent several letters to QIA for this purpose, but received no response despite the fact that gas allocation deadline of November 30, 2007, had passed.

The sources said that Marubeni had approached the Minister for Water and Power Raja Pervez Ashraf seeking his help to restore the agreement, but to no avail. An official told this scribe that the Chinese company would complete the project within the estimated cost of $330 million.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Seedless kinnows export : Pakistan trying to meet European countries’ demand ​

KARACHI: Pakistani exporters are working on a plan to export seedless kinnow to European countries to meet their demand by 2011, said chairman Fruit and Vegetable Processors and Exporters Association (FVPEA) Monday.

Pakistan is looking forward to produce citrus having 4-6 seeds each as compared to 20 to 25 seeds, which is the main Europeans demand.

Europeans say seeds cause stomach disorder, Pakistani exporters said. "Every seed of kinnow has a specific chemical material that some times disturb stomach," said Mateen Siddiqui, chairman FVPEA.

The production of seedless kinnows was the result of the public-private partnership by Nuclear Institute for Agriculture and Biology (NIAB), Citrus Research Institute of Government of Punjab and Sunder Agricultural and Fruit Farm.

He said Pakistani kinnow was not given much importance in European countries due to containing around 20 to 25 seeds each piece.

Mr Siddiqui said this seedless kinnow would be able to compete in the international market.

He said these kinnows would not be hazardous for the human health in any way as the methods used for its production include natural selection as well as the genetic manipulation.

The European countries mostly import citrus from USA, New Zealand and some of Arab states besides Spain and Morocco.

He said, "If we move professionally and meet quarantine requirements, we can grab the market volumes as we are already meeting the Iranian Plant Protection Organisation requirements of conforming the installation of data loggers in the cold storages.

He said there was need for conducting joint experiments to test fruit flies sterilization at 50C for 14 consecutive days in order to get certified by Department of Plant Protection, Ministry of Food, Agriculture and Livestock.

An official of Ministry of Food, Agriculture and Livestock (MINFAL) said Pakistan produces 95 percent of total world kinnow production. It is the sixth largest producer of Kinnow (mandarin) and oranges in the world, with 2.3 million tonnes. It is being estimated that the country may have a record export of 250,000 tonnes of kinnows this year.

The plants of seedless kinnows are produced through tissue culture and the government has sold 110,000 million saplings to the growers so far. Almost 400-450 saplings of seedless kinnows were being sold every day to the growers.

He said a plant of seedless kinnow costs Rs 100 against Rs 20 for the one with seed, he added.

World citrus exports are valued $2.125 billion in which Pakistan's share was $31 million that was around 2.5 percent. This is due to export of citrus to low priced countries.

Secretary Agriculture Marketing, Punjab, stakeholders of Sargodha region Malik Imtiaz Ahmed, Shamoon Sadiq, chief executive officer and Muhammad Iqbal, chief operating officer, PHDEB and Haji Muhammad Azam, president, Kinnow Processors and Exporters Association Bhalwal expressed hope that country would succeed in increasing kinnow export by virtue of seedless fruit.

Daily Times - Leading News Resource of Pakistan