Mar 26 - Apr 01, 2001
$373m World Bank loan on
soft-terms under study
The World Bank is considering offering a concessional $373 million loan
to Pakistan for three development projects.
"Pakistan government's economic revival programme seems to be well
on track to produce better results for which the board of directors of the World Bank is
expected to approve before July a $373 million loan for three projects on concessional
terms," said the WB country director for Pakistan and Afghanistan, John Wall.
He told a news conference here on Wednesday that the proposed $350
million Structural Adjustment Credit (SAC) was likely to be offered on highly concessional
terms. The previous IBRD Structural Adjustment Loan (SAL), which was to be agreed on 6/7
per cent interest rate, would be converted into an IDA loan for which Pakistan would have
to pay only 0.75pc service charges, he added.
Mr Wall elaborated that beside $350 million SAC, the WB was considering
a proposal to offer $20 million for the On Farm Water Management project in the NWFP, and
$3 million technical assistance for the Trade and Transport project. An environment
project would be undertaken in Balochistan whose funding was yet to be worked out.
In reply to a question, the WB official said that no decision had so
far been taken about the $300 million Banking Sector Adjustment Loan, and added that the
issue was likely to come up for approval in the next financial year.
He was asked whether the WB would provide $700 million in addition to
$600 million from the ADB to help retire some of the Pakistan's most expensive and
short-term loan as had been proposed by the Debt Reduction and Management Committee.
"It would be difficult for the Bank to offer this much of amount against the present
annual funding level of about $200 to $300," he replied.
Nonetheless, he said, his Bank could consider the proposal provided
Pakistan was ready to double its exports in four years and manage $3 billion through
SBP tightens monetary policy
Pakistan on Wednesday further tightened its monetary policy to
stabilize the rupee that has so far lost more than 16 per cent of its value against the
dollar since its free- float on July 20, 2000.
The State Bank raised the yield treasury bills of three months to one
year by 32 to 65 basis points to discourage holding of greenbacks in inter-bank market
where the rupee touched a new low of 60.80 to a dollar on Wednesday. This brings its total
loss against the greenback to one per cent within a month. On February 20, the rupee had
slipped below 60 to a dollar for the first time in inter-bank market and closed at 60.20.
It was on that occasion that the State Bank had hiked up the yield on
three-month T-bills by 45 basis points to 10.95 per cent-obviously to keep the rupee
Financial adviser appointed
The financial adviser for the privatization of Government of Pakistan's
working interest in nine oil discoveries has been appointed, said Zafar Ali Khan,
Secretary, Privatization Commission, on Monday.
Talking to newsmen, he said that the privatization of this share will
begin by June 30. This share ranges from 20 per cent to 40 per cent, depending on the size
of investment, he added.
Referring to the privatization of PPL, Zafar said that very low gas
prices in the country have affected the value of PPL assets which are otherwise very
He said PPL is an excellent asset and under the new gas prices agreed
with the owners of new gas recoveries at $2 per 1000 cubic feet, its value can be
increased to $3 billion.
Financial adviser for PSO sell-off
Privatization Commission on Wednesday signed the Financial Advisory
Services Agreement with J P Morgan, for the privatization of Pakistan State Oil Company
Ahmad Waqar, Additional Secretary Privatization, signed the FAS
Agreement on behalf of the Government of Pakistan, while Philip Jackson, Managing Director
and Group Head Energy Infrastructure Asia Pacific of Chase Manhattan Asia Ltd represented
J P Morgan.
PC to invite EoI
Privatization Commission plans to invite expression of interest for the
sale of United Bank Ltd (UBL) and Pakistan Telecommunication Company Limited (PTCL) by the
end of March.
The EoI for UBL will be invited on March 28 and an advertisement
inviting EoI for PTCL will appear on March 29, Minister for Privatization Altaf M. Saleem
said at a seminar here on Tuesday.
Long-term sugar policy on cards
The federal government has decided to formulate a long-term sugar
policy specially by eliminating the old and present zoning systems in the country.
"A development package is being worked out and the purpose is to
eliminate both the old and present zoning systems to promote equity and justice in the
system", said the Minister for Commerce, Industries and Production, Razak Dawood.
STML plans to raise Rs208.3m
Sapphire Textile Mills Limited proposes to raise Rs208.3 million
through a right issue at 35 per cent at a premium of Rs 30 per share.
The company said all of the money, together with the long term loan of
Rs100.0 million would be used to finance the expansion plan of the spinning unit.
WAPDA allowed to raise tariff
The National Electric Power Regulatory Authority (Nepra) allowed the
Water and Power Development Authority (WAPDA) on Thursday to increase power tariff for
domestic consumers only by 12 paisa per unit (kilowatt hour).
The increase was allowed under a mechanism, called the automatic
adjustment in consumer end tariff, which was evolved earlier this year. The mechanism
provides for a quarterly review of electricity tariff with the fluctuation in fuel prices.
BoI for zero duty
The Board of Investment (BoI) has proposed the government to bring
import of machinery and raw material under the zero slab regime in next budget, the BoI
Chairman Wasim Haqqi informed the members of the International Chamber of Commerce (ICC)