Ginning factories suspending operations
The cotton crisis is worsening with more ginning factories suspending
their operations and stopping buying phutti at the recently government-fixed price of
Rs825 per maumd.
Ginners say they are not on a strike but have only stopped to buy
phutti because it is not economically viable to purchase it at the new price.
'We cannot afford buying phutti at Rs825 per maund and selling cotton
lint for Rsl,936. The government-fixed lint price does not include ginning expenses of
Rs300 per maund. The cotton lint rate should be set close to Rs2,200 per maund. Otherwise,
it will not be possible for ginners to survive,' Pakistan Cotton Ginners Association
chairman Sheikh Mohammad Saeed told.
Some 202 ginning factories in Punjab and 103 in Sindh are said to be
operating at the moment out of a total of 1,000 units in the country. 'With the passage of
time these units are suspending their operations because this business is no more viable
at the present price,' Saeed said.
Tractor makers halt delivery
Tractor makers have suspended the tractor delivery to the farmers owing
to non-release of funds by the Agriculture Development Bank of Pakistan (ADBP) amounting
to over Rs one billion.
"We have stopped deliveries to the farmers from Oct 1 as the ADBP
has yet to release Rs 680-700 million," an official in the Millat Tractors, makers of
Massey Ferguson tractors, told from Lahore on Thursday.
Punjab may witness a shortfall in sugar production this year due to
decrease in sugarcane acreage and poor condition of the crop.
The failure to achieve the production target will mean that the country
will not be in a position to export sugar.
According to official figures, the area under sugarcane crop has
decreased by 13%. This is mainly due to resentment among the farmers against sugar mills
for non payment of their dues.
According to Punjab agriculture department's survey, 1,680,000 acres of
land has been brought under sugarcane which is 13% less than the last year. Total
production expected this year is about 29,240,000 tonnes which would be 41,43,000 tonnes
less than the last year's yield.
New package of incentives proposed for investment
A five-member high-powered committee headed by the minister for finance
and commerce has proposed a new package of reforms and incentives for industrial
development and attracting foreign investment in the country.
"We are considering new concessions and incentives for the
industrial sector, which will have constitutional protection at least for five years with
a view to have consistency in economic policies", said the state minister for water
and power and one of the members of Dar committee on economic revival, Haleem Siddique.
He said that Dar committee will give a comprehensive report to the
cabinet shortly to revive the economy by adopting both long-term and short-term what he
termed "viable and dynamic policies".
Ministers for water and power, labour and manpower and Deputy Chairman
Planning Commission were the other members of the committee.
He said that confidence of the local and foreign investors could not be
restored without having a piece of legislation. "And this legislation will prevent
the government of Pakistan or the State Bank to use foreign currency accounts of the
overseas investors", Haleem Siddiqui said.
EoI invited for HEC
The Privatization Commission of Pakistan has invited Expression of
Interest (EoI) from local and international investors for prequalification in order to
disinvest the Heavy Electrical Complex (HEC).
HEC is a greenfield project, which achieved full completion in June
1997. Located in Hattar Industrial Estate in the NWFP, HEC has excellent infrastructure
facilities and access to skilled manpower.
The opportunity offers an instant access to Pakistan's Heavy Electrical
Industry through a diversified product line which includes a market leader position in the
manufacture of 132 KV and 66 KV transformers and equipment used in sub-stations and
grid-stations of high voltage power supply systems.
Govt decides to revive 800 units this fiscal
The government has decided to revive 800 sick industrial units out of
total of about 3000 units during the current financial year.
Initially, the government planned to pump in Rs10 billion to revive
maximum number of sick units. While the government planned to make available some funds
from its budget, it would ask the commercial banks to also lend money for this purpose.
Official sources said here on Monday that Dar committee on the revival
of economy has identified 800 sick industrial units which could be revived within
1999-2000 by providing certain administrative and financial support.
These units will be revived in phases. Some of the industries, which
were closed down due to various government's what was termed "ill and wrong
decisions" in terms of reducing or increasing different duties and taxes, will be
He said that many of the industrial units became "nonviable"
because of increase in duties on the import of raw cotton in the past. He said that the
Dar committee believed that genuine industrialist who faced unnecessary problems will be
provided all financial and administrative support. It was also said that many overseas
Pakistanis, who had set up their industries in Pakistan but were forced to closed down
because of the highhandedness of different excise and tax departments, will also be
encouraged to revive their units.
Sources said that those sick units which could not be revived due to
one reason or the other will be liquidated and declared bankrupt. "Then the
government would invite the genuine industrialist to buy them and run them efficiently as
they are doing with their own units", a source said.