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June 11 - 17, 2001

Curbs on new projects lifted

The National Economic Council on Thursday lifted moratorium imposed on new schemes by the government, besides approving 4.5 per cent GDP growth rate and Rs130 billion Public Sector Development Programme for 2001-2002.

The NEC meeting, which was presided over by Chief Executive Gen Pervez Musharraf, also approved three-year and 10-year perspective development plans. The NEC, the highest decision-making body on economic issues, was reportedly criticized by the provinces for not having adequate resources to mitigate the effects of the continued drought situation.

Finance Minister Shaukat Aziz and Deputy Chairman Planning Commission Dr Shahid Amjad Chaudhry later told a news conference that there had been 18 per cent increase in the PSDP over the current year development programme.

The finance minister said that Rs130 billion Public Sector Development Programme also included Rs30 billion funds to be generated by the provinces and as such the size of the PSDP was Rs120 billion. He said provinces were not forced to generate Rs30 billion. "In fact the provinces themselves said they would generate Rs30 billion by collecting various taxes and duties," he said.

Answering a question, the finance minister said the GDP target had been fixed at 4.5 per cent for 2001-2002, the details of which would be revealed at the time of the announcement of budget on June 16. However, the finance minister and the deputy chairman Planning Commission did not explain how could 4.5 per cent growth target be achieved when the current year growth was being projected below 3 per cent. The third quarterly report of the State Bank foresaw 2.8 per cent growth for 2000-2001.

Dr Chaudhry said that performance of agriculture sector was likely to improve during the next financial year and as such it might not be that difficult to achieve 4.5 per cent growth target in 2001-2002. He said the government had decided to shelve $750 million National Drainage Programme because of lack of sufficient funds. "In fact we plan to re-study this mighty project to have some other relatively small and suitable projects," he added.

NEC okays major uplift projects

The National Economic Council (NEC) has approved a number of development projects in the new PSDP including Rs6 billion water supply project for Karachi.

Deputy Chairman Planning Commission Dr Shahid Amjad Chaudhry told reporters on Thursday in a separate briefing that the chief executive had changed the entire investment strategy with a view to having major development projects.

"The Karachi water supply project will get Rs6 billion in the next PSDP to have another 100 million gallon water for the city", he further stated. The project will be completed in two and half years time. "The NEC has also approved two major projects for Karachi which include Northern Bypass and Lyari Expressway at a cost of Rs4.5 billion and Rs3 billion separately", he said. Similarly, he said that Rs6 billion would be provided for water supply project in Quetta.

'Mega projects can improve cement industry'

The announcement of a couple of 'mega' public sector projects and the new allocations of gas to units, could improve the demand and supply side of the country's cement industry, giving the 'underdog', a fresh chance to take a positive turn.

In their Research Report on Wednesday, The First Capital Equities Limited observed that all the industry variables in the cement sector were based on "pure open market practices", but a few budgetary changes could give fillip to the ailing sector. On the demand side, the announcement of any mega public sector project would be a major bull factor for the cement sector. Given the ongoing water shortage, the government might announce construction of a few water reservoirs in the North. "Since all the provinces have shown their consent to this, we feel that construction work will start immediately", the analysts said, adding that the cement industry could receive a big boost by such an action.

Development package approved

Chief Executive Gen Pervez Musharraf on Monday approved a Rs1 billion development package for the mineral sector with a projected annual foreign exchange earning of $1 billion. Official sources told that the package was approved after a detailed over three-hour presentation by the petroleum ministry that was also attended by the ministers for finance and commerce besides provincial chief secretaries.

The CE approved Rs50 million for the provincial government to establish mines and mineral departments at the provincial level. Another Rs100 million special grant was approved out of the poverty alleviation fund to reduce gestation period of high altitude gemstone and precious stone development.

OGDCL produces 26,028 mmcfd gas

The Oil and Gas Development Company Limited (OGDCL) has enhanced daily average production of natural gas up to 868 mmcfd. This is one of the highest ever production of the natural gas recorded since the inception of the Company, sources told on Monday.

According to OGDCL's production figures, the Company produced a total of 26,028 mmcfd natural gas in the month of April 2001, with daily average production of 868 mmcfd. These production figures indicate a substantial increase of 3,505 mmcfd over the gas produced in March 2001 which was 22,523 mmcfd and is an increase of 4,072 mmcfd over the corresponding month during the previous year i.e. 2000.