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July 02 - 08, 2001

Oil subsidies to go in three years: Usman

The commendable economic reforms introduced by the President, Gen Pervez Musharraf have created ideal conditions for foreign investments in Pakistan, said Usman Aminuddin, the Federal Minister for Petroleum & Natural Resources.

Speaking at the International Petroleum Investment Conference in Calgary, Canada, the minister said as a result of Islamabad's wide-ranging economic reform programmes, several positive indicators are already evident. These include: strong rebound in agriculture, broad-based growth in large scale manufacturing, lowest inflation in two decades, tax collection growth by 15 per cent as against an average growth of 4.8 per cent during 1996-1999, containment of money supply growth at targeted level, significant increase in exports and workers' remittances, and improvement in trade and current account balances.

He told the conference that Pakistan government is committed to pursuing its agenda of developing a free market economy. "We have already removed many bottlenecks restricting inflow of foreign investment in Pakistan and others are being addressed through comprehensive business-related reform resources," he said.

Usman Aminuddin also explained government's future policies and said the new plans for the upstream petroleum sector are aimed at accelerating exploration and production of oil and gas activities through consolidation, continuation and improvement of policy terms, and operational flexibility.

The minister added: "In line with these objectives, the government has prescribed production sharing contracts in offshore with incentives based on water depths." For onshore exploration, he said, income tax rate has been reduced to 40 per cent from earlier 50 to 60 per cent. Furthermore, the onshore zones have been redefined particularly in difficult areas where exploration companies were not showing interest.

Onshore policy aimed at opening up gas market: Usman

Federal Minister for Petroleum and Natural Resources, Usman Aminuddin has stated that thrust of the recently announced onshore policy has been opening up of gas markets in Pakistan.

According to a message received on Monday the minister was talking to a delegation of British Gas Crescent Petroleum and ABN Amro, which called on him in London to brief him about their planned activities in Pakistan.

He said that the augmentation and upgradation of gas transmission infrastructure, which was the main constraint in marketing the gas, had received special attention of the government.

He said that the producers were given the option to develop infrastructure for which transportation tariff would be payable over and above policy gas price. British Gas delegation applauded the efforts which the government was making to deregulate the markets and revitalize investment in Oil and Gas Sector.

Banks can finance wheat purchase

The State Bank has withdrawn restriction on banks to finance procurement of wheat by the private sector. It has also substantially reduced the minimum margin requirement in respect of advances extended by commercial banks for wheat.

"Accordingly the banks can now freely finance the procurement of wheat by flour mills from any source in Pakistan and without any time restriction on the basis of the annual manufacturing capacity of each flour mill at a nominal rate of 10 per cent," says a SBP press release.

"Similarly, private traders and growers have also been allowed to obtain bank finances for the purchase of wheat at a simple margin of 15 per cent. All finances provided by banks for procurement of wheat shall be, inter alia, covered against the pledge of wheat stocks."

"In view of bumper wheat crops for the last two years, these timely measures will significantly facilitate the optimum disposal of crops by the growers and stabilization of wheat prices."

Shaukat briefs donors on budget

Finance Minister Shaukat Aziz on Thursday said the new budget would further the process of reforms in the country and provide adequate incentives for business to undertake new investment projects. This, he stated in a detailed briefing session held for the representatives of the donor countries to Pakistan.

Local govt law next week

Local Government Ordinance 2001 is likely to be promulgated by the respective governors of the provincial governments during the first week of July, well-placed sources in National Reconstruction Bureau informed.

Earlier in the day, General Tanvir Naqvi, Chairman NRB informed the participants of a training workshop in NRB that the Local Government Ordinance, which will provide the legal framework for implementation of Local Government Plan 2000, is about to be finalised within days. Shortly thereafter, it will be promulgated by the provinces, he was quoted as saying by the official spokesperson of NRB.

$15m accord signed

Pakistan on Tuesday signed a US$15 million exploration investment contract with a leading Canadian company, disclosed visiting federal minister for petroleum and natural resources Usman Aminuddin.

14 major deals by December: Privatization

The Privatization Commission has finalized 14 mega transactions to be completed by December this year. "These 14 major privatization deals will be completed within six months as we are receiving encouraging response both from local and foreign buyers," said Secretary Privatization Commission, Zafar Ali Khan.

He said the government has decided "not" to change the last date for receiving Expressions of Interest (EoIs) for Pakistan Telecommunication Company Limited (PTCL), which is June 30, with a view to completing its privatization by December this year. "Some foreign buyers are ready to buy 16 to 26 per cent strategic shares of the PTCL to take over the management control of the company," he said.