China to keep offering assistance to Pakistan’s power sector
The Power Division has decided to meet individually all investors pouring money into energy projects of the China-Pakistan Economic Corridor (CPEC) in order to help fast-track work on these projects and remove any difficulties being faced by them.
Federal Minister for Power Division Awais Ahmed Khan Leghari announced this during a meeting with China Ambassador Yao Jing.
All power-sector stakeholders, including the Private Power Infrastructure Board, Alternative Energy Development Board and National Transmission and Despatch Company will be part of the dialogue with the investors.
While appreciating the contribution of Chinese investors to the power projects, Leghari said CPEC was the epic of relations between the two countries and in times to come the cooperation would go up to new heights.
The minister invited suggestions from the Chinese ambassador for the planned meetings with the investors.
USF Predicted To Spread Broadband Services
The Universal Service Fund (USF) has played a great role in spreading telecom services in far-flung areas of Pakistan and experts believe it can play its part again in the promotion of broadband services across the country.
Pakistan’s largest province by area, Balochistan, witnessed the development of telecom infrastructure and services by various telecommunication operators through USF projects worth billions of rupees in 2017.
USF, an autonomous organisation under the Ministry of Information Technology, since 2007 has disbursed grants worth Rs50 billion to different operators for projects in different telecom regions.
Ufone received the highest subsidy of Rs14 billion followed by PTCL with Rs12.2 billion and Telenor with Rs5.2 billion.
“USF has set out an aggressive strategy to roll out basic infrastructure for telecommunication, basic telephone and internet services for the people and businesses in Khyber-Pakhtunkhwa and Fata,” said a USF spokesperson. According to USF data, five out of six optical fibre projects were based in Balochistan, yet there is big room for improvement since the province has the lowest number of mobile phone users.
About 46% of the province’s population has no access to either mobile, wireless or a fixed line network.
Auto rickshaw maker to set up car assembly plant by June next year
Sazgar Engineering Works, maker of CNG auto rickshaws, has decided to set up a car and light commercial vehicles’ (LCVs) plant on a fast-track basis as it looks to roll out models in an 18-month time frame to tap potential growth in Pakistan’s auto sector.
To achieve the target, the company has put on hold its earlier announced expansion plan for three-wheelers, stated a notification sent to the stock exchange on Wednesday.
“Considering the potential growth and future prospects of the automobile sector in the country and in order to facilitate timely completion of the project; the board has decided to hold the expansion of auto rickshaws production facilities as communicated earlier,” Company Secretary Arshad Mahmood said in the notification to the Pakistan Stock Exchange (PSX).
Sazgar’s share price increased 0.83%, or Rs1.58, to reach Rs191.19 on Wednesday with a volume of 320,700 shares changing hands. “The (cars and LCVs) project will be completed by June 30, 2019,” he said. The plant would have a “production capacity of 24,000 units per annum”, he said.
The board of directors has approved the estimated cost of the project of Rs1.76 billion. This is excluding the value of land already owned by the company. It is setting up the car plant in collaboration with a Chinese firm. The name of the foreign partner has been kept undisclosed since the beginning. They developed a formal understanding and signed a memorandum of understanding in this regard in May 2017. The two partners would manufacture, assemble, sell, and offer after-sale services of passenger and off-road (like jeeps) vehicles, it said.
Foreign cng cylinder manufacturers to visit Pakistan in jan 2018
Domestic and foreign industrialists and traders associated with compressed natural gas (CNG) and allied industries have started reorganising their businesses in Pakistan after a surge in the price of petrol – a rival of CNG – to a three-year high.
The petrol price has been increasing over the past six months in line with the rise in international crude markets.
The gas businesses sprang into action after facing a tough time for years. They had experienced acute gas shortages, prolonged shutdown of filling stations, particularly in winter and a ban on the import of CNG cylinders and kits.
A collapse of oil prices in domestic and international markets compounded miseries of the CNG industry.
“Representatives of some foreign CNG cylinder manufacturing companies are scheduled to visit Pakistan in the second week of the current month. They will meet executives of car manufacturing companies and commercial importers of CNG cylinders,” said an industry official.
Officials of Italian CNG cylinder manufacturer Faber and associated gas kit importer BRC will visit Pak Suzuki Motor Company to persuade it to resume production of factory-fitted CNG cars.
Another group of cylinder and kit manufacturers will make a trip to Indus Motor Company.
Representatives of Argentinian cylinder manufacturer Inflex, US firm Composite Technology and a Chinese company will arrive in Pakistan on January 9 for a five-day trip and meet industry people.
Meanwhile, Landi Renzo, the Italian gas kit manufacturing company, is considering reviving its factory in Karachi keeping in view the current petrol and CNG pricing trends.
“Landi Renzo, which has been virtually closed for years, still keeps a small staff at the factory,” a source revealed.
The crude oil price shot up over 50% to almost a three-year high at $66.87 per barrel in the world market on Tuesday compared to the low of $45 touched in June 2017. The current price is the highest since April 2015.
Industry hopes textile exports will jump to $13bn this year
Textile exports have been going up steadily since the start of the current fiscal year in a positive sign that raises expectations that full-year proceeds will touch $13 billion after a hiatus of two years. Textile shipments jumped 7.66% year-on-year to $5.51 billion in the first five months (July-November) of the current fiscal year, driven primarily by a surge in value-added textile exports. In a review of the industry’s performance in the outgoing year 2017, Pakistan Textile Exporters Association (PTEA) Chairman Shaiq Jawed said in a statement that textile shipments had been on an upsurge since the start of 2017-18 in July following a continued fall in the previous fiscal year. After hitting the peak at $13.73 billion in 2013-14, textile exports dropped to $13.47 billion in 2014-15 and $12.44 billion in 2015-16. Afterwards, they inched up 0.04% at $12.45 billion in 2016-17, but were still lower by more than a billion dollars than the peak. Propped up by cash incentives under the prime minister’s trade package, textile exports took off, but challenges were still there that should be addressed to further ramp up growth, Jawed said.
Pointing to the industry’s lack of competitiveness both in domestic and international arenas, he called the high cost of energy a serious concern as the textile sector heavily banked on energy supplies to run its operations smoothly. In Pakistan, he said, the industrial gas tariff was almost 100% higher and electricity price was about 50% higher compared to regional competitors. Punjab-based industries are compelled to consume high-priced regasified liquefied natural gas (RLNG) in winter, which puts them at a disadvantage compared to industrial units in other provinces. “The liquidity stuck in the tax refund system is another stumbling block; exporters are waiting for the release of billions of rupees blocked in sales tax, income tax and customs duty rebate claims, which has sparked severe liquidity crunch,” Jawed said. “If these payments are released, the exporters can spend the money on trade expansion.” On the other hand, Sohaib-uz-Zaman, Lecturer-KUBS-University of Karachi revealed that technological advancement is another area where Pakistan has trailed its competitors. Not enough investment has been made in technology because of which productive capacity of the sector has remained stagnant,” Sohaib added.
Oil sales drop 11.4pc due to planned closure of power plants
Oil sales dropped 11.4% to 1.87 million tons in December 2017 after the government closed a number of furnace oil-fired power plants as cheaper LNG and coal-based plants replaced the conventional method of electricity production.
“In December 2017, furnace oil sales declined by a hefty 44% year-on-year to 0.43 million tons after the shutdown of power plants,” Taurus Securities said on Wednesday.
However, “demand for MS (petrol)/HSD (diesel) remained strong and rose by 12% and 9% year-on-year, respectively,” it said. The increase in demand for petrol and diesel was driven by surging population of cars and two-wheelers in the country. During the first half of the current fiscal year, demand for retail fuels went up by 12% on a yearly basis to 8.40 million tons due to growing automobile sales, and high infrastructure development activities.
“As anticipated, furnace oil sales remained on a downward trajectory (down 13% year-on-year) as circular debt piled up to Rs441 billion, along with growing current account deficit, propelling the government to reduce reliance on expensive furnace oil-based power plants,” the brokerage house said.
On a company-wise basis, during the first half of the fiscal year, Hascol Petroleum continued to gain market share to 10.8%, up by 314 basis points. Similarly, Attock Petroleum Limited’s total market share inched up to 8% (up 33 basis points). Despite its strong retail network, Pakistan State Oil (PSO) was not able to sustain its market share (down 129bps to 55.5%), due to decline in furnace oil sales. “In the upcoming months, we expect furnace oil (and high speed diesel sales volumes to slightly improve as hydel generation dips in winter and due to the on-going sugar crushing season.
Electricity wastage in Punjab-province
Punjab Agriculture Secretary Muhammad Mahmud said on Wednesday that 120,000 agriculture tube wells operational in Punjab are consuming 30% more electricity than the prescribed amount. In a statement issued by the media liaison unit of Punjab agriculture department, Mahmud said that an energy audit of agriculture tube wells in Punjab was in progress, which had revealed massive wastage. He also said that , adding that there are over 1 million tube wells in Punjab with 120,000 of them being run by electricity. Mahmud said the agriculture department had assigned the task of energy audit of agriculture tube wells to agriculture engineering department in July 2016 to plug chances of unnecessary wastage of energy.
Zubair invites norwegian financiers
Sindh Governor Muhammad Zubair urged Norwegian investors on Wednesday to invest in the province, while talking to Ambassador of Norway to Pakistan Tore Nedrebo who called on him at Sindh House in Islamabad. A host of issues came up for discussion during the meeting, said a statement issued by the Governor House on Wednesday. He spoke of the role played by Pakistan in the war against terror and said that Pakistan rendered immense sacrifices and sustained losses. “However the international community, instead of taking steps for its economic development and prosperity, confined itself to mere promises,” Zubair said, adding that now is the time for the international community to honour its promises. Besides investment in Pakistan, the negative travel advisory should also be reviewed, he added.
ICCI links sector’s growth to overall economic growth
Islamabad Chamber of Commerce and Industry Senior Vice President Muhammad Naveed said on Wednesday that facilitating the growth of the real estate sector is crucial for promoting industry and employment in the country.
He also called upon the government to reduce heavy taxes imposed on the sector in the coming budget in order to trigger economic growth of the country, while addressing a meeting of Gulberg Association, Islamabad.
Naveed said that the growth of about 250 ancillary industries in Pakistan including cement, steel, brick, timber and building material was dependent on the real estate sector, but the increase in taxes has eroded the business of all these allied industries.
He said that due to the situation, many investors are leaving the real estate sector.