BUSINESS Sunday, 3 November, 2013
russia willing to invest in coal-based power projects
Definition of Statistics: The science of producing unreliable facts from reliable figures. — Evan Esar
HAMPERING INDO-PAK TRADE INDIA EYES OTHER COUNTRIES THAN PAKISTAN TO MEET ONION CRISIS ISLAMABAD
ISLAMABAD: Major Russian companies have expressed their desire to invest in coal-based power projects of Pakistan. The understanding came at a meeting of representatives of the companies with Minister of State for Water and Power Abid Sher Ali in Moscow. During the meeting‚ 'Technoprom Export' expressed its interest to participate in construction of up to 600 MW new coal-fired unit at Jamshoro and 660 MW coal-fired unit at Gaddani. Another Russian company also expressed willingness in the coal based power projects at Jamshoro and Guddu. ONLINE
Fbr to net big Fish ISLAMABAD: The Federal Board of Revenue (FBR) has decided to bring all the ‘big fish’ into the tax net by targeting members of the costly clubs and those owning luxury vehicles. Sources said that 1,000 notices would be sent every month to the targeted wealthy persons not paying taxes. Following the shortfall in tax collection during three months of the new government, FBR has moved into action and started laying hands on all those wealthy persons owning costly limousines, enjoying memberships of the elite clubs, other luxuries and yet not paying any tax whatsoever. Sources said that FBR has already completed the necessary paperwork in this regard and would start sending one thousand notices every month. FBR has also sought the help from the banks for preparing the list of all such persons evading taxes. Earlier, the World Bank in its report had said that Pakistan tax collection could rise by Rs700 billion, if corruption and irregularities are eliminated. INP
HoUGH India is facing an acute onion crisis, thinking even to airlift the kitchen item from various countries to meet the immediate demand, the traders on both sides of the neighbouring countries are reluctant to move for a deal in the agriculture business. Imports from Pakistan will be more cost effective as compared to other countries like China, Iran, Egypt etc from where Delhi is planning to import onions in a bid to bring down prices of the staple. But the decades-old mistrust and enmity hampering bilateral trade are depriving the traders the business opportunities, especially during the seasonal shortages of
commodities. onion prices in India have risen to over Rs 100 per kilogram ($1.6) with a jump of around 320 percent over the past 12 months, driven by supply shortage after excessive rains hit crop output in the country. Though it was expected that the authorities concerned and traders of India and Pakistan would suggest and force their governments to open Wahga Border and enhance trade via sea routes, no serious effort and move has been witnessed on both sides of the borders. India had imported the commodity in 2010 and 2011 from Pakistan. According to sources in the horticulture industry, over a dozen containers of
onion have been exported to India via sea route as the trade of staple is not allowed through land route (Wahga Border). No significant increase in the volume of exports has been witnessed despite the ever growing demand in the neighbourhood. “Traders who had sent containers of onion to India are now facing payment issues,” said the sources, adding that the development has further risked trade with Delhi as a Pakistani exporter, under the present environment of mistrust and enmity can hardly claim his payment from India if the importer defaults. “I am facing a non-payment of $8,000 from an Indian importer against contain-
ers of onion he imported in 2010,” a leading exporter told Pakistan Today. According to him until there is guarantee of payment, exporters cannot risk trading with their counterparts in India. In the present state of relationship, not only Pakistani businessmen or traders face the payment issue but the Indian exporters are also reportedly facing the same situation in case of trade with Pakistanis, he further said. According to him, since there are seasonal and periodic shortages both in India and Pakistan for the same kind of agricultural items like food grains, sugar, onion, potatoes etc. both countries can meet the shortages through bilateral improved relations. If the issue of payment is revolved and Wagha border is opened for export of onion, the country could export over 200,000 metric tonnes onion this year. While price in the international market is currently $400 per tonne, Pakistan has exported few containers of the commodity at the price of $300 per tonne. Pakistani exports onion to Saudi Arabia, Dubai, Bangladesh, Malaysia and Mauritius among others.
Korea an ideal model for Pakistan’s uplift KARACHI STAFF REPORT
Pakistan and Korea’s ties in the economic field and political front have strengthened over the past 30 years across a wide range of areas including socio-economic projects and people to people contact. This was said by Korean Consul General Chang hee Lee at a reception hosted on Friday night to celebrate the 30th anniversary of the establishment of diplomatic ties between the Republic of Korea and Pakistan. The Korean consul general said Korea and Pakistan have developed a close relationship in working with the international community like the United Nations as well as regional organizations. The Korean envoy said trade volume between the two countries had reached $1.6 billion per year and total Korean investment in Pakistan is about $400 million. He said there is scope to further enlarge this relationship when we consider the potential the two countries possess. Lee said Pakistan is rich in natural resources with a population of 200 million. In this context, the relationship between the two countries should rapidly broaden
in various areas. He added Korean companies have participated in infrastructure construction works like the motorway from Lahore to Islamabad, Lowari Tunnel, dams and power plants etc. He said about 12,000 Pakistanis were working in Korea while 800 Koreans mostly engaged in business, were living in Pakistan.
The Korean Consul General concluded by inviting Pakistani entrepreneurs to explore and expand trade with Korean companies to enhance bilateral trade. Senior Sindh Minister Nisar Ahmed Khuhro, who was chief guest at the reception, said Pakistan can learn a lot from Korea which is now the eighth largest
country in the world in trade volume with a total of $1.1 trillion per year. He said Pakistan should benefit from Korea’s experience and expertise to develop its economy. He added closer interaction between Pakistan and Korea would translate into greater economic benefits for both countries.
INDIA SEEKS PAYMENT GUARANTEE FROM PAKISTAN ON GAS AGREEMENT STATE-OWNED GAILBSE PLANS TO SUPPLY 5M CUBIC FEET OF GAS PER DAY TO PAKISTAN THROUGH A 110 KILOMETRE PIPELINE FROM JALANDHAR NEW DELHI ONLINE
India has sought from Pakistan sovereign payment guarantees before it can sign a contract to export natural gas through a pipeline from Punjab. State-owned gas utility GAILBSE 0.71 % India Ltd plans to initially supply 5 million standard cubic meters per day of gas to Pakistan through a 110-km pipeline from Jalandhar to international border near Atari. But before GAIL enters into a gas supply contract with a Pakistani firm, New Delhi wants Pakistan to provide payment guarantees, PTI quoted sources privy to the negotiations as saying Five rounds of negotiations have been held between the two sides and it has been found technically feasible to export gas
from Punjab into Lahore. Besides sovereign guarantees, India wants sureties for three months payment and advance termination commitments, they said. GAIL plans to import gas in its liquid form, called liquefied natural gas (LNG), on a port in Gujarat or Maharashtra. After converting this again into gaseous state, it is proposed to transport the gas through cross-country pipeline network to Jalandhar. From Jalandhar, a 110-km line is proposed to be laid to international border near Atari for delivery to Pakistan. Pakistan wants to import gas from India to meet its rising energy deficit. Initially, it wants to take 1-1.5 million tonnes of LNG (5 mmscmd). This can run a power plant of up to 1,200 MW. Pakistan faces huge power deficits and its electricity generation capacity at about 20,000 MW is less
Pakistan wants to import gas from India to meet its rising energy deficit. Initially, it wants to take 11.5 million tonnes of LNG (5 mmscmd) than India's generation capacity from renewable energy sources like wind. Sources said pipeline exports to Pakistan are being looked upon as mode for testing viability of an energy pact with the neighbouring nation as a precursor to India importing gas through TurkmenistanAfghanistan-Pakistan-India pipeline. If this system of payments and guarantees works, then imports through the TAPI pipeline
could be feasible. Sources said the delivered price of gas will be up to $22.3 per million British thermal unit after including transportation charges and all taxes and duties. Considering imported LNG price of $14.50, the delivered rate would be $15.46 after considering shipping and import duty charges. After re-gasification and service tax, it would cost $17.01 per mmBtu. Further, transportation of gas through
trunk pipelines would cost a further $1.75 exclusive of service tax. Then again, $0.5 would be charged for transportation of gas through a dedicated pipeline up to Indo-Pak border bringing the total cost to about $19.54 per mmBtu. A slew of other costs along with Value Added Tax (VAT) is expected to raise the price of gas to a final $22.3 per mmBtu at which it can be delivered to Pakistan, they added.
The work of the individual still remains the spark that moves mankind ahead even more than teamwork. — Igor Sikorsky
BUSINESS B Sunday, 3 November, 2013
Pak holds successful investment conference in Germany MUNICH APP
FAISALABAD: A man chooses a coat from a street vendor at Chowk Ghanta Ghar. INP
Govt to launch saving schemes for development projects ISLAMABAD ONLINE
The government plans to launch four new saving schemes in order to reduce dependency on bank borrowing and to generate sufficient funds for development schemes. Spokesperson of National Savings Hamid Raza Khalid said that the new schemes include registered prize bonds‚ Sharia papers‚ child protection certificates and foreign exchange scheme for nonresident Pakistanis. Sharing distinct features of new schemes‚ the spokesperson said that at present the national savings is offering bearer prize bonds. The owner has no claim if they are lost. However registered prize bonds will be in the name of the purchaser and no other than the owner can claim the holdings. He said the registered prize bonds will not only offer cash prizes but the holder of these prize bonds will also be given profit on quarterly basis. Hamid Raza Khalid said national savings is working to launch "Sakook" bonds and Hajj bonds under the umbrella of Sharia papers on the demand of the customers who want profit as per the Islamic law and principles. He said consultations are continuing with the Islamic Ideology Council and prominent religious scholars to formulate the Sharia papers scheme totally in accordance with Islamic teachings. The spokesperson said children protection certificates will be another fixed term scheme of national savings. This scheme will encourage the parents save money to meet future education and marriage expenses of their children. The spokesperson said national savings is also working to encourage overseas Pakistanis to invest in national savings. For this purpose initial work has been started for launch of foreign exchange scheme for non-resident Pakistanis.
ceMent sector declines in Four Months oF FY14 KARACHI
EMENT sector depicted a negative growth in the first four months of this fiscal year, said the manufacturers Saturday. They said the total sales in Julyoctober period in FY2013-14 stood at 10.437 million tons compared to 10.477 million tons during July-october of last fiscal year, a meager decline of 0.39%, while capacity utilisation remained at 70% due to heavy monsoon and Eid holidays. A spokesman of All Pakistan Cement Manufacturers Association (APCMA) said that in the first four months of FY14 the local cement despatches stood at 7.518 million tons against 7.524 million tons cement despatched during corresponding period last fiscal. He said cement exports during the same period were 2.919 million tons this fiscal and 2.953 million tons in the corresponding four months of last fiscal. He further said october turned out to be the second month of this fiscal when both the local sales and exports declined. “The total cement dispatches from cement units in october 2013 were 2.652 million tons which was 4.16 percent lower than the dispatches during the corresponding period last year,” he added. Local cement despatches during the month of october stood at 1.975 million tons while it was 2.086 million tons in the corresponding month last year, depict a decline of 5.32%. Export of cement has also declined by 0.63% from 0.680 million tons to 0.676 million tons during this october. He said that the lower consumption could also be the outcome of higher taxes imposed in the budget and increase in transportation
charges due to strict compliance of axle load restrictions on the cement carriers. He revealed that the cement production capacities have increased 5 times in last two decades from 8.89 million tons in 1992-93 to 44.64 tons in 2012-13 but the total disposal of cement in the market has increased only three times from 8.32 million tons in 1992-93 to 25.06 million tons in 2012-13. The capacity utilization was 93.62 percent in 1992-93 which declined to 74.89 percent in 2012-13. He said that the continued depression in the cement sales is putting pressure on the cement manufacturers. “When the prices of all inputs including power, gas and diesel are increasing at phenomenal pace it is essential for the industry to operate at higher capacities to reduce costs but due to lower GDP growth coupled with currency depreciation and lack of spending on PSDP programs the industry is not able to grow as anticipated.” “Export options are diminishing with Afghanistan facing uncertainties after the withdrawal of NATo forces in 2014 while the Indians are in no mood to remove barriers to cement exports despite huge demand in Indian Punjab,” he said.
223 MW hydro projects become victims of Rs 20b corruption, incompetence ISLAMABAD ONLINE
The incompetence and corrupt practices of officials in every public sector organisation are not a new thing for most of the people, but still some type of corrupt practices amaze everyone leaving them to think how much they want to damage the national exchequer. The recent mismanagement and incompetence emerge in Water and Power Development Authority (WAPDA) causing a staggering damage of Rs 20 billion to the country, media reports said on Saturday. The official sources reveal that various hydropower projects of up to 223
Megawatt capacity, which were earlier estimated to be built at a cost of Rs 26 billion, will now be built with over Rs 46 billion due to continuous delaying tactics and incompetence. According to sources, Alai Khwar project at Indus River with a power generation capacity of 121 MW will be built with an additional eight billion rupees. The earlier cost was Rs 8 billion but its cost has surged to Rs 16 billion. "PC-1 of such projects have been changed for numerous times causing the cost of the projects to rise,” the sources further said. Another project Dabeer Khwar project with an estimated power generation capacity of 130 MW has been completed but transmission line yet to be erected for it.
The volume of bilateral trade between Pakistan and Germany is expected to increase to three billion euros in a year or two from the existing two billion euros. This was stated by the Chairman of Pakistan German Business Forum (PGBF), Qazi Sajid Ali, after the conclusion of celebration of Pakistan Days' in Berlin and Munich. He was confident that the successful holding of the event, attended by a 90 member delegation with representation of 70 companies from Pakistan, would also give a boost to the trade ties between Pakistan and Germany. Eight Memorandum of Understanding (MoUs) have been signed between the Pakistani and German firms as a result of the Pakistan Day conferences in Berlin and Munich. As many as 25 German companies have shown interest to visit Pakistan and have some sort of affiliations with the Pakistani firms, the PGBF chief informed. "Now a tempo has been created on both the sides- Pakistan and Germany, in the wake of investment conferences in Berlin and Munich, on october 30 and 31 respectively, organised for the first time,” the chief of PGBF remarked. He was of the view that the Germans have for the first time listened to what we are doing. our success stories of the German companies in Pakistan were also a part of the conference sessions, he added. This, Qazi Sajid remarked, has created a good impression and a good image of Pakistan. "We are going to establish a committee at the PGBF with representation from Pakistan as well as Germany for a regular follow up of the decision taken and the interest exhibited by the companies from the two countries,” he added. The PGBF chief also spoke of the support being extended by the German government, the German Chambers of Commerce and Industry (DIHK) and the Munich Chamber of Commerce and Industry (IHK). He also lauded the role of the Ambassador of Germany to Pakistan Dr Cyrill Nunn, and the Consul General in Karachi, Tilo Klinner as well as that of the Pakistan Ambassador to Germany, Abdul Basit. Qazi Sajid disclosed that there is a move to establish the German Pakistan Bilateral Chamber of Commerce which is very important especially for the country as well as economic development of Pakistan. He was of the view that efforts are being undertaken to make it a reality by next year with its headquarter in Karachi. An investment conference would be organised by the PGBF in Karachi towards the beginning of the next year and a good number of German companies are expected to attend. An exhibition would also be arranged on the occasion to depict the industrial development attained by Pakistan as well as the investment opportunities. The PGBF would also prepare feasibility reports for various sectors for the potential investors from Germany.
CORPORATE CORNER turkish airlines gM visits Fpcci
KARACHI: General Manager of Turkish Airlines Karachi Huseyin Cepni visited the Federation of Pakistan Chambers of Commerce and Industry and met with acting Vice Chairman Gulzar Firoz and other businessmen from Pakistan. They discussed business relationship between the two countries and observed that the business volume is also increasing between Pakistan and Turkey. Huseyin Cepni updated them regarding Turkish Airlines flights operation in Karachi that Turkish Airlines is operating from Karachi for more than 32 years and now Turkish Airlines is going to operate daily flight from Karachi to Istanbul effective from 23th Dec 2013 and will connect Karachi via Istanbul to 250 destinations of the world on daily basis. Turkish Airlines is also going to start direct flight operation from Lahore to Istanbul effective from 28th November, three flight in a week. PRESS RELEASE