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May 14 - 20, 2001

Chinese firm to get Saindak contract

Pakistan has decided to award a lease contract for Rs16 billion Saindak Copper-Gold Project to a Chinese firm during a four-day visit of Chinese Prime Minister Zhu Rongji.

Cabinet sources told that a decision to this effect had been taken by the federal cabinet on Wednesday on a summary circulated by the petroleum ministry while the cabinet meeting was in progress.

Hectic consultations took place among the minister and officials of the petroleum ministry, Saindak Metals Limited (SML), Geological Survey of Pakistan (GSP), finance ministry and Foreign Office before and after the cabinet meeting to finalize a memorandum of understanding (MoU) and its technical details so that it could be signed in the presence of the visiting leader. Official sources said the Metallurgical Corporation of China (MCC) will pay $500,000 per month to Pakistan as lease rental for 10 years in addition to 50 per cent of the total production from the project.

The sources said in the final round, three companies, MCC of China, and two companies from Australia M/s Holly Mining and Tethyane Mining took part in the bidding. The bid of Tethyane was rejected on technical grounds.

The technical evaluation committee awarded 72.5 points to Holly Mining of Australia compared with 17 points to MCC of China. The two bids were almost identical to financial terms, the sources said. They, however, claimed that negotiations with the two contenders resulted in improvement in the Chinese offer and finally its offer proved better than the Australian. The sources said that China was so keen in the project in view of future copper prices in the international market that it also agreed to withdraw sovereign guarantee for $500 million white oil pipeline project. A Chinese company has already undertaken exploration activities in Daddar area with an investment of around $80 million, the sources said.

IBRD, IMF for speedy disposal of state units

The World Bank and the IMF have asked Pakistan to undertake, by next year, programme to streamline; restructure; corporatize and privatize most of the public sector enterprises.

Official sources, on Thursday, said as both these donors are not satisfied with the slow pace of restructuring and corporatization, they have asked the government to carry out a detailed reform programme from the year 2002, in this context. The main concentration will be on improvement in financial situation of major enterprises through market-based pricing policies, greater efficiency, lay-offs, reduction in subsidies and cross-subsidies and settlement of arrears.

EoIs for sale of NPCC invited

Privatization Commission of Pakistan has invited Expression of Interests (EoIs), from prospective investors to participate in the disinvestment process of National Power Construction Corporation (Pvt) Limited (NPCC), through sale of shares on, as is where is basis.

The offer provides a lucrative opportunity to local and foreign investors to own a profitable corporation operating in the public sector with significant opportunities for expansion within and outside Pakistan.

NPCC is eligible to bid for turnkey Construction of power transmission line up to 500KV with power utilities in Saudi Arabia, Kuwait, UAE, Syria, Malaysia and Indonesia, where it has been participating in the transmission line/substitution tenders in the recent past.

Japan may resume aid

Japan has indicated to resume Pakistan's increased annual assistance from the next financial year. Diplomatic sources said that Pakistan's 400 million dollars annual Official Development Assistance (ODA) by Japan could be increased to 500 million dollars from 2001-2002.

Moreover Japan could also consider extending additional financial support for mitigating the effects of a severe drought the country has been experiencing. Sources said that Japan saw assurances given to finance minister Shaukat Aziz by US Secretary Treasury Paul O'neil last week in Washington as positive developments for the removal of remaining international sanctions against Pakistan.

Personnel policy of banks

The State Bank has asked all banks to formulate a clearly defined personnel policy and send a copy of the same to the central bank for approval by June 30, 2001.

SBP said in a circular on Tuesday that the personnel policy duly cleared by the board of directors of the bank concerned should cover recruitment procedure, compensation, performance evaluation, separation, training and service rules etc.

Credit allocation raised

All commercial banks and Agriculture Development Bank (ADBP) have been asked to increase their credit allocation for development and production loans, to growers from Rs45 billion to Rs100 billion.

"We have asked the commercial banks and ADBP to increase the credit limit to Rs100 billion," Federal Minister for Food and Agriculture Khair Muhammad Junejo told. Junejo who chaired a meeting with the provincial agriculture ministers, representatives of commercialized banks and ADBP and other concerned officials said that the credit allocation was being raised from the Kharif crop.

UBL to shut 350 branches

State-run United Bank Ltd has introduced the scheme as part of a plan to close down unprofitable branches and reduce its workforce: the bank is preparing to close down 350 of its total 1372 domestic branches this year and 350 more in 2002. And it expects to say goodbye to more than 5000 of its total 11366 employees in two years.