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August 22, 1999

  1. International
  2. Finance
  3. Industry
  4. Policy
  5. Trade

Dar rejects

Federal Finance Minister Ishaq Dar has rejected the demand of All Pakistan Powerlooms Association to remove the condition of compulsory sales tax registration of their units.

SBP keeps balance in inter-bank market flows

The State Bank has managed to keep a balance between inflows and outflows of funds in the inter-bank money market so far this month signaling the market not to go berserk in either case in future.

Senior bankers told that during 01-19 August the market received a little over Rs 41 billion worth of inflows through ongoing maturity of treasury bills and federal investment bonds. They said SBP sucked in Rs 38.40 billion from the market during this period thus largely offsetting the impact of the inflows.

The market is to witness a little more than Rs 13 billion inflow in the remaining days of the current month on account of maturity of TBs and FIBs.

Bankers expect that SBP may easily suck in the said amount.

15pc GST to hit utility cos revenue

The imposition of 15 per cent GST on electricity, gas and furnace oil will worsen the financial position of power utility companies.

The official decision to absorb the impact of 15 per cent GST on power consumers in the additional surcharge will directly hit the power utilities as it is the part of their revenues.

"Yes additional surcharge is the part of our revenues and if this the intention of the government then it will hit us," a spokesman at the Karachi Electricity Corporation said.

He said the company had not yet received anything in writing by the ministry of water and power.

"We think the utility revenues will be impacted by this move at a time when they desperately need additional funds," he added.

Another hit, which power utilities are likely to get, is through higher furnace oil prices. The government has decided to pass on the impact of 15 per cent GST to consumers.

World Bank may provide $200m for Railways sell-off

The World Bank has agreed in principle to disburse 200 million dollars for the privatization of Pakistan Railways and the money would be available once the request is formally accepted by the WB Board, sources in the Finance Ministry confirmed.

The PR privatization has long been delayed mainly because of funding problem. However, the ministry sources said hopes for revival of the process have been renewed by the WB officials who recently conveyed that Pakistan's request for a longterm loan was acceptable, which only needed a formal approval by the Board.

Short of recovery target

The Sui Southern Gas Company (SSGC) has cut off about 66,000 gas connections in its ongoing recovery campaign started more than a year ago to retrieve the Rs.588 million.

The update of the campaign gathered by the SSGC on August 10 and released on Wednesday, shows that though the recovered amount reached the figure of Rs 444.21 million, the company still lagged behind its target by Rs 144 million despite judicial and civil administration assistance.

Rs 1.3 billion dues against sugar mills

Sugarcane worth Rs. 22 billion was purchased in the province of Punjab out of which Rs. 20.97 billion have been paid to the growers while Rs. 1.3 billion are still outstanding.

Seven closed textile mills owners not traceable

Owners of seven closed textile mills are simply not traceable and those of four other are missing while machinery in seven textile units have been removed.

These facts emerged from an analysis of only 62 closed textile mills done by private independent textile consultants in March and April this year. It was accomplished as a part of government-sponsored exercise for revival of sick industrial units.

Follow-up enquiries made in the banking circles revealed that among those owners who are missing, include a former Chairman of the All Pakistan Textile Mills Association (APTA). Bankers say that after defaulting on payment of over Rs l billion banks loans he left Pakistan few years back and is now running three hotels in Europe. The analysis of 62 closed textile mills discovered that 16 per cent of these units or ten in number were in the process of liquidation and sponsors of other 10 units were just not interested in responding to any queries. Only 18 of these closed units were found to be in running state and 6 others were found involved in waste spinning.

The private consultants had in fact targeted 154 closed textiles with over two million spindles for survey to find out the cause of closures and to trace out potentials for their revivability. Much to their dismay only 53 closed units, representing one third of these textile mills responded.

In another sample survey of 68 textile units, the private consulted found none was equipped with the state of art machinery for export quality product. Only 16 per cent of these 68 units (11 in number) were found to have sound machinery while in ten units critical components necessary for export quality production were missing.

Banks asked to recover cab loans

The State Bank of Pakistan has asked commercial banks to expedite campaigns to salvage their stuckup loans in the yellow cab scheme of 1992 and be careful about the identity of applicants seeking loans under the new National Transport Scheme.

Banking circles here said commercial banks were yet to recover around Rs6 billion which were disbursed from 1992 to 1994 under the failed yellow cab scheme.

Since banks are very prudent m advancing loans under the NTS, bankers say, hardly 900 applications have so far been received here during the last about two months.

Govt to consider rebate on carpet exports: official

The federal government would try to give positive consideration to the local arms manufacturers' demand of awarding them arms and ammunition import authorisation licence, federal secretary commerce, Mansoor Elahi told members of the Sarhad Chamber of Commerce and Industry.

In his address to the SCCI members, Elahi said the government would look into the issue of awarding arms and ammunition import authorisation licence to the local arms manufacturers.

He was responding to the SCCI president's demand in the welcome address who also urged the government to legalise the arms manufacturing business being carried out in the tribal areas.