PKR: RATES INERT
Rates were almost unchanged on the money market on Friday as the rupee sustained overnight levels against the dollar in the process of trading, Kamal Hayder, Research Analyst-PAGE said. The rupee also did not budge any side in relation to the dollar for buying and selling at Rs 104.85 and Rs 104.86 respectively. Inter-Bank Market Rates: In the final Asian trade, the dollar perked up, rebounding from a seven-week low on optimism over the US economic outlook and corporate earnings, while the Mexican peso fell after the White House floated the idea of a 20 percent tax on Mexican goods to pay for a border wall. The dollar index, which measures the greenback against six major peers, gained 0.2 percent to 100.57. The index had recovered overnight to hit 100.73, after dipping to a seven-week low of 99.793. Kamal further said that the dollar was helped by rising US Treasury yields and strong equities.
RATES OF SEED COTTON HIT SEASON’S HIGH: KAMAL
Prices of Phutti (seed cotton) touched season’s record level on the cotton market on Friday as buyers were active to replenish their stock, Kamal Hayder, Research Analyst-PAGE said. The official spot rate recovered by Rs 100 to Rs 6600. In Sindh, seed cotton prices were at Rs 3100-3450. In Punjab, phutti rates recovered slightly at Rs 3100 and Rs 3700, as per 40 kg. In the ready session, over 7,000 bales of cotton changed hands between Rs 5550 and Rs 7000. According to the market sources, after announcement of SROs, cotton yarn and phutti prices are gaining ground due to improvement in demand.
WWF, AGRICULTURE DEPARTMENT INK MOU FOR BETTER COTTON PRODUCTION
The Punjab Agriculture Department, Extension wing signed a Memorandum of Understanding (MoU) with the World Wide Fund for Nature-Pakistan’s (WWF-Pakistan) on ‘Better Cotton Initiative’ (BCI) on Friday to undertake agriculture specific activities focused on widespread dissemination and promotion of the Better Cotton Standard System (BCSS) in the province. The formal agreement was signed by Hammad Naqi Khan, Director General WWF-Pakistan; Dr Muhammad Anjum Ali, Director General AED-Punjab; and Lena Staafgard, Programme Director Global Supply BCI in presence of Muhammad Mahmood, Secretary Agriculture Punjab. The MoU forges a partnership of 5 years between the organisations starting from January 2017 and ending in December 2021. To achieve BCI’s main objective of mainstreaming Better Cotton standards, the plan is divided into 3 phases which may work in parallel in different project areas. The first 2 years will make up the first phase of the project whereas WWF-Pakistan will work as the main implementing partner with collaboration in field implementation from AED-Punjab. The third and fourth year, the second phase of the project, will see a reduction in WWF-Pakistan’s role in direct field implementation activities and the organisation will assume the role of a strategic partner.
RAIL-BASED MASS TRANSIT PROJECTS: APPLICABILITY OF WITHHOLDING TAX ON EQUIPMENT IMPORT SPELT OUT
The withholding tax under the provision of section 148 of Income Tax Ordinance, 2001 shall not apply on import of equipment for rail-based mass transit projects in Lahore, Karachi, Peshawar and Quetta under China Pakistan Economic Corridor (CPEC), source said to Research Analyst-PAGE. According to SRO 44 (1)/2017 issued on Friday, pursuant to the approval of the Economic Co-ordination Committee of the Cabinet vide case No ECC-2/1/2017, dated the 6th January, 2017, the federal government has amended Second Schedule of the Income Tax Ordinance. The rate of tax, under section 152 in the case of M/s CR-NORINCO JV (Chinese contractor) as recipient, on payments arising out of commercial contract agreement signed with the government of Punjab for installation of electrical and mechanical (E&M) equipment for construction of the Lahore Orange Line Metro Train Project, shall be 6 percent of the gross amount of payment. The provision of section 148 of the Income Tax Ordinance, 2001 shall not apply on import of equipment to be furnished or installed for rail-based mass transit projects in Lahore, Karachi, Peshawar and Quetta under the CPEC, source added to him.
MODERNIZATION OF PRODUCTION SYSTEMS, SUPPLY CHAIN INTO HIGH VALUE PRODUCTS PREREQUISITE
National Agriculture Education Accreditation Council (NAEAC) Chairman M E Tusneem has said that modernization of agriculture production systems and supply chain into high value agriculture products are prerequisite to boost up agriculture growth, sustainable food security, and to alleviate poverty. He along with 10-member team of NAEAC, HEC visited the University of Agriculture Faisalabad (UAF) and its departments including Plant Beading and Genetics; Agronomy; Institute of Soil Sciences; Institute of Horticultural Sciences and Quality Enhancement Cell of the varsity. He said they were making all-out efforts to evolve mechanism of quality assurance of agriculture education to come up to current and emerging challenges of knowledge economy. He said NAEAC was mandated to implement agriculture education degree programmes accreditation based on HEC policies to assure high quality and standards of education. He appreciated the steps being taken on the part of the varsity for the agricultural education and to cope with the challenges of the food security.
Dean Faculty of Agriculture Professor Dr Muhammad Amjad Aulak said “agriculture is the backbone of our economy.” He said they were taking all possible measures to produce the skilled manpower having the knowledge of modern agriculture. He said UAF was only institution in the country which was ranked among the top 100 universities world-wide in any category.
Islamabad urged to close Punjab’s ‘water excesses’
Legislators in the Sindh Assembly on Friday demanded of Islamabad to end water excesses by Punjab, saying that the upper riparian province had been holding Sindh’s due share. A heated debate in the Assembly on water crisis in Sindh drew the federal government’s attention towards the ‘non-implementation’ of Water Accord of 1991, saying that Punjab had been usurping the lower riparian province of its valid share. Sea because of a less water flow in the Indus River has eroded some 2.2 million acres of agriculture land in Sindh, the lawmakers from either side of the house clamoured, saying that “the continuing sea erosion will swallow Thatta, Badin, Sajawal and Hyderabad by 20150 while by 2070 Karachi”. Sindh Health Minister, Dr Sikandar Mandhro blamed Punjab for sea erosion, saying that the bigger province that bordered Sindh had been holding up the water share of the province that resulted in ravaging agriculture land. He said that the water disputes had now been for the 200 years and still unresolved.
SENATORS TELL CONSUMERS WON’T REPENT FOR GOVERNMENT’S NANDIPUR
A parliamentary panel headed by Senator Nauman Wazir said on Friday that it would not allow the government to pass on additional cost of Rs 36 billion of 425 MW Nandipur power project on to consumers through tariff, source said to Research Analyst-PAGE. During the meeting, Asif Sheikh, Additional Director Nandipur power project, informed the panel that the cost of the project had increased from Rs 22 billion to Rs 58 billion, ie, a Rs 36 billion increase because of 15-month delay in issuance of legal opinion. Senator Nauman Wazir questioned whether the government intends to pass on burden of Rs 36 billion onto consumers but at the same time he made it clear that the panel would not allow the government to overburden consumers. Nepa has allowed a 15 percent Internal Rate of Return (IRR) to the government on investment. Senator Wazir maintained that the government should pick up Rs 36 billion as equity, adding that by doing so the government’s earning would come down from 15 percent to 8 percent as the government is responsible for the delay not the masses. He further directed officials of Water and Power to submit a detailed viewpoint on this proposal in the next meeting expected to be held on February 11, 2017, source added.
OIL & GAS EXPLORATION NOTICES SERVED TO 17 INACTIVE LICENCE HOLDERS
The Ministry of Petroleum and Natural Resources (MoP&NR) has initiated its drive against non-performing oil and gas exploration and production (E&P) companies and issued notices to 17 inactive licence-holders for their failure to start exploration work as per the agreement, PAGE-source said. Source said the ministry has yet to initiate action against oil exploration and production companies which obtained licenses in 1999 but are yet to start their exploration activities. Some 40 blocks licenses were revoked whereas revocation of four of these was challenged in the court of law. The ministry had initiated process of revoking the licenses but the companies challenged its action in courts and obtained a stay order. PAGE-source maintained that the monitoring authority ie Director General Petroleum Concession had delayed investigation against non-performing E&P companies. The ministry has revoked 17 such licenses so far and permits of all oil and gas companies failing to start exploration activities as per their obligation will be cancelled. The source informed, “More licenses of inactive companies will be revoked shortly after completing all formalities,” adding that the licenses could not be cancelled instantly; rather such companies are issued notices and provided an opportunity to present their cases. Keeping in view the prevailing energy situation, the government has tightened the noose around non-performing E&P companies which obtained licenses and are reluctant to initiate exploration work.
FBR DETECTS 486,238 TAX DEFAULTERS IN 2-YEAR
Federal Board of Revenue (FBR) has detected 486,238 tax defaulters in the country during the last two years and collected around Rs 52.654 billion from them. The FBR detected a total of 242,087 tax defaulters during 2014-15 including 198,976 income tax defaulters, 42,410 sales tax defaulters and 701 Federal Excise Duty defaulters while it detected a total of 244,151 tax defaulters during 2015-16 that include 194,624 income tax defaulters, 48,765 sales tax defaulters and 762 Federal Excise Duty defaulters. According to the information placed before the National Assembly on Thursday during the Question Hour, it was revealed the FBR collected around Rs 24.855 billion during the 2014-15 and Rs 27.799 billion during 2015-16 from the defaulters. The FBR collected Rs 21.744 billion under the head of income tax, Rs 2.286 billion as sales tax and Rs 825 million as FED during 2014-15 and it collected Rs 15.666 billion as income tax, Rs 4.118 billion as sales tax and Rs 8.015 billion as FED during 2015-16. To another question, Parliamentary Secretary for Finance and Revenue Rana Muhammad Afzal informed the National Assembly that the government signed a total of $5.123 billion loans with the Asian Development Bank during January 2013 to November 2016 while an amount of $2.812 has been disbursed to the government during the said period.
WIND ENERGY TARIFF ANNOUNCED
National Electric Power Regulatory Authority (Nepra) has announced benchmark levelised tariff of 6.7467 cents per unit KWh for wind power plant on 100% foreign financing discounted at 10% per annum and 7.7342 cents per unit on 100% local financing, source said to Research Analyst-PAGE. The new tariff has been decided in response to a suo motu notice by the regulator which used three months LIBOR of 0.6% and three months KIBOR of 6% respectively whereas reference TT & OD selling rate has been used at $105. Around 20 companies were waiting for new tariff. This tariff will be applicable on wind power generation only. The relevant agencies will conduct the bidding under Nepra Competitive Bidding (Approval Procedure) Regulations, 2014. The validity period for the tariff is 365 days from the date of issuance of this determination. The power purchaser will not take the wind risk and relevant wind power generation company will be required to account for this risk. According to Nepra, majority of interveners in suo motu hearing were of the view that to ensure a transparent and competitive bidding, one of the most important factors is the creation of a level playing field for all the potential investors which is not presently the case in Pakistan. A number of projects have been issued Letter of Intents (LoIs) and are at different stages of project development.