SINDH GOVERNMENT TO LAUNCH ‘CITY BUS SERVICE’ IN KARACHI
The Sindh government announced on Tuesday it was launching a City Bus Service in Karachi given the delays being faced in completion of other transport projects in the metropolis, source said to Kamal Hayder-Research Analyst-PAGE. We are launching the City Bus Service because Abdul Sattar Edhi Line [Orange Line BRT], Green Line BRT, Blue Line BRT and Red Line BRT are facing delays,” Sindh Transport Minister Nasir Hussain Shah told at the Sindh Secretariat. The transport minister said initially 600 buses will be imported with special concessions in fare for senior citizens and students. The government will act against those buses that are unfit for travelling, Shah said. The total length of the KCR is 43.24 km of which 14.95 km will be on ground and 28.18 km will be elevated. The expected KCR ridership is 550,000 while there will be 24 stations of which 10 are to be on ground and 14 elevated.
LOCAL AUTOMOBILE SALES DOWN 7.5PC
Local automobile sales (including LCVs and jeeps) in the first eight months (Jul-Feb) of fiscal year 2017 remained 138,103 units, down 7.5 percent compared with 149,311 units in the same period of the previous year, Kamal Hayder-Research Analyst-PAGE said on Friday. However, auto sales continued to witness strong growth, given additional sales under Punjab Taxi Scheme that discontinued last year, in the first eight months of fiscal year 2017. Car sales, including import of 60,000 units, may touch 270,000 units in fiscal year 2017. He further said that February 2017 car sales (including light commercial vehicles (LCV’s) and jeeps) came at par with expectations, the report said. On a month-on-month basis, car sales declined 6 percent (5-year average contraction of 8% month-on-month) in February 2017 due to lesser number of working days in the month compared to January, he added.
POWER COST RISES 25PC WITH HEAVY RELIANCE ON OIL-BASED PLANTS
The cost of electricity production rose 25 percent in January following higher generation by expensive oil-fired plants and lower output from hydroelectric power plants, Kamal Hayder-Research Analyst-PAGE said. Average cost of power production came in at Rs6.39 per kilowatt-hour in January 2017 compared to Rs5.13 in December 2016. The cost was also lower at Rs5.53 in January 2016, according to data released by the power sector regulator. The National Electric Power Regulatory Authority (Nepra) has reported that the share of furnace oil-based power production increased to 43 percent (3,005 gigawatt-hours) in the total output in January 2017 from 37.13 percent (2,673 GWh) in December 2016. In January last year, the production stood higher at 50 percent (3,387 GWh). In comparison, zero-cost hydroelectric power generation dropped to mere 7.40 percent in January 2017 compared to 22.82 percent in December 2016 and 12 percent in January 2016. In November 2016, the output was even higher at 41 percent.
GOVERNMENT UNVEILS FIRST-EVER RS40,000 PRIZE BOND
The government on Friday launched Pakistan’s first-ever registered prize bond of Rs40,000 denomination aimed at tapping a cheap source of budget financing, which will also address concerns about whitening money through old traditional prize bonds, source said to Research Analyst-PAGE. Finance Minister Ishaq Dar launched the new prize bond at a ceremony held at the State Bank of Pakistan’s Islamabad Office. Earlier, unregistered bonds of Rs25,000 and Rs40,000 denomination were available in the market. Speaking at the bond launching ceremony, Finance Minister Ishaq Dar said that the first prize of the bond is Rs80 million, whereas after six months profit on the bond will also be paid to the holders. He said that a printed receipt will be given to the buyer of the bond and there was no limit and period of the investment, adding every person except banks, could buy the bonds. The Tax Reforms Commission that the government had set up to reform the tax system proposed that a new strategy be adopted on borrowings through prize bonds. The TRC findings showed that the high denomination unregistered bonds were the main source of “corruption and tax evasion”, source added to him.
CHINESE FIRM SECURES FUNDS FOR KAROT, WIND POWER PROJECTS
China Three Gorges South Asia Investment Limited on Friday achieved financial close of 720-megawatt Karot hydroelectric power project and second phase of a 100MW wind power project. To mark the occasion, representatives of China Three Gorges South Asia Investment, Private Power and Infrastructure Board (PPIB) and Alternative Energy Development Board (AEDB) inked agreements at a ceremony. Minister of Water and Power Khawaja Muhammad Asif was also present. Its installed capacity will be 720MW – four units of 180MW each – with average annual output of 3,206 gigawatt-hours. As a single power generation complex, the project’s structure layout includes a rock-filled dam, spillway, powerhouse, diversion tunnels, head-race power tunnels and tail-race tunnel end. It is being developed under the Power Policy of 2002 on build, own, operate and transfer (BOOT) basis with five-year construction period and 30-year concession period.
OGRA SUPPORTS OIL QUALITY TESTING THROUGH INDEPENDENT LAB
The Oil and Gas Regulatory Authority (Ogra) has backed a proposal of hiring an independent laboratory to bring transparency in the testing of petroleum products, which comes in the backdrop of allegations of dubious examination by the state-run Hydrocarbon Development Institute of Pakistan (HDIP), official say to Kamal Hayder-Research Analyst-PAGE. Ogra endorsed the proposal after the Oil Companies Advisory Council (OCAC) – a body that mainly comprises refining and marketing companies – approached the Ministry of Petroleum and Natural Resources, seeking permission to hire a third party to counter-check the HDIP test results. In various instances, OCAC complained to the petroleum ministry, a sample was declared off-specification in the first test, but the second sample was found to be on-specification, though both the samples were taken at the same time. OCAC argued that the contradiction led to delay in the discharge of cargo from anchored vessels and importers were forced to pay unnecessary demurrage charges. Consequently, consumers were burdened with such hefty costs. If first test results were unsatisfactory, the second sample should have been examined by some other independent laboratory, the council suggested.
TREATMENT PLANTS: KARACHI CHAMBER OFFERS TO PLAY ROLE OF MEDIATOR
Karachi Chamber of Commerce and Industry (KCCI) President Shamim Ahmed Firpo said on Friday that the organisation is willing to delve into the matter of establishing effluent treatment plants in the city’s factories. The decision came in the wake of tension between the Sindh Environmental Protection Agency (SEPA) and the city’s industrialists on the issue of treatment facilities. SEPA had sent notices to dozens of industrial units in Karachi’s seven industrial estates, warning them that their operations would be shut down in case separate waste treatment plants are not found, among other violations of provincial environmental laws. Due to this, the situation between both parties exacerbated and subsequently led to National Forum of Environment and Health (NFEH) President Naeem Qureshi meeting with Firpo at his office to defuse the deadlock.
SECP TELLS ROLE OF AUDIT FIRM ALSO UNDER SCRUTINY
More drama continued to unfold in the case of the country’s stock market and the recent crackdown by the apex regulator as the Securities and Exchange Commission of Pakistan (SECP) sought information from six auditing firms to assess the quality of their audit, source said to Research Analyst-PAGE. The move comes as the regulator looks to tighten the screws on brokerage houses and also “critically reviews the role of statutory auditors of brokerage houses”. In a handout released on Friday, the SECP said that it has observed that some auditing firms are acting as statutory auditors for a large number of brokers. “One of these firms had audited the accounts of three brokers who recently defaulted,” stated the handout. “As part of the ongoing inquiry against recently defaulted brokers, the conduct of the said auditing firm is also under scrutiny, source added.
US DISBURSES $550 MN UNDER CSF TO PAKISTAN
The United States has disbursed $550 million under the Coalition Support Fund (CSF) grant to Pakistan, rekindling Islamabad’s hopes for a better external account position that had come under stress due to delay in release of the money. The Trump administration transferred the funds this month with a fresh tranche of $200 million coming early this week, said an official of the finance ministry. However, despite the beginning of the process of release of CSF funds, it is unlikely that Islamabad will get $1.65 billion in CSF disbursements before the end of June. The finance ministry had projected $1.65 billion receipts from Washington on account of CSF when making the budget for the current fiscal year. The government expects to receive at least another $400 million but there is no surety that Washington will disburse this amount on time. Pakistan’s ambassador-designate to the US Aizaz Ahmad Chaudhry met Finance Minister Ishaq Dar on Thursday before his departure for Washington. Dar asked Chaudhry to put efforts for further augmenting Pak-US economic cooperation and trade. Although the $550 million appears a small sum for a $300 billion economy, it still matters a lot due to Islamabad’s dependence on external dole-outs.
PAK-CHINA PARTNERSHIP: DASU POWER PROJECT TO CREATE 8,000 CAREERS FOR LOCALS
The Dasu hydroelectric power project would provide more than 8,000 jobs to local residents while helping Pakistan government modernise and expand the energy sector, shifting from thermal electricity to clean, low-cost high-reward hydroelectricity, , source said to Research Analyst-PAGE on Friday. The project, consisting of the main dam, affiliated facilities, a powerhouse, a residential complex and transmission lines, would also help boost development of the local industry, agriculture and tourism.
OGRA TO SET UP OFFICES IN K-P & BALOCHISTAN
Ogra will open its offices in Khyber-Pakhtunkhwa (K-P) and Balochistan to provide better services to people, announced Oil and Gas Regulatory Authority (Ogra) Chairperson Uzma Adil Khan Thursday. She expressed these views during a consultative workshop organised by Ogra, on the issue of unaccounted for gas (UFG), and a draft report to this effect was also made public for workable suggestions and recommendations. A comprehensive UFG’s benchmark study conducted by Ogra through an independent international reputed consultant has been presented before stakeholders and experts of K-P and Fata, seeking their workable recommendations and suggestions to make it more meaningful and goal-oriented.
SWITZERLAND SET TO SHARE DETAILS ON PAK CASH STASHED IN BANKS
Pakistan will soon formally sign a new treaty with Switzerland to pave way for the exchange of information on the undeclared wealth stashed in Swiss banks. Finance Minister Ishaq Dar informed the National Assembly on Wednesday that the Avoidance of Double Taxation treaty will be signed on March 21 as a formal invitation from Switzerland has been received in Islamabad. It took Pakistan almost three years to negotiate and upgrade the existing treaty. The new treaty will enable the country to get information about undeclared money stashed in Swiss banks by Pakistanis, Dar said in a policy statement. He said Switzerland had earlier attached four demands as prerequisites for signing this treaty. Pakistan had first informally accepted these demands, but later termed them unacceptable. The demands were related to granting the Most Favoured Nation (MFN) status to Switzerland in respect of lowering tax rates on interest, royalty, shipping, and reduction in the tax exemption limit — from 18,000 Swiss francs to 14,500 francs — on Pakistani nationals, including students living in Switzerland.
NEW DEADLINE PROCLAIMED FOR MATIARI-LAHORE TRANSMISSION LINE PROJECT
The government gave a fresh deadline to start construction work on the multibillion-dollar Matiari-Lahore transmission line project and said that work on most of the other China-Pakistan Economic Corridor (CPEC) projects was on track, source said to Kamal Hayder-Research Analyst-PAGE. Construction work on the high voltage direct current transmission line would begin in two months and be completed by 2019, said Water and Power Secretary Younus Dagha, while briefing the Public Accounts Committee (PAC) on the CPEC project portfolio. Earlier, the government had hoped of commencing the construction work mid of last year but the project was stuck due to dispute over tariffs to be paid to the Chinese company and its insistence on seeking withholding tax exemption. The secretary said that the work on the second transmission line, Matiari-Faisalabad, would be completed while keeping in mind the commissioning dates of two nuclear-fired power plants being constructed in Karachi to generate 2,200MW electricity. He said that one of the main challenges in the energy sector was the transmission capacity, which remains insufficient to fully take the load. But the Matiari-Lahore transmission line would largely address this issue, source added to him.