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 5. TRADE  6. GULF



Feb-25 - Mar- 10, 2002

Canada wants investment in power, telecom

Canada has shown keen interest in making new investment in power, telecommunication and information technology sectors.

A four-member team of Southern Electric Power Lavalin Canada met Finance Minister Shaukat Aziz on Monday and discussed with him the possibilities of increasing Canadian investment in Pakistan.

Officials of the Canadian company, Anthony Rustin and Stephane Mail Hot, told the finance minister that they were interested in taking advantage of Pakistan's investment-friendly and level-playing policies to invest in power, telecommunications and information technology sectors. Currently, the company is already a joint venture partner in Southern Electric Company, an independent power producer (IPP), located outside Lahore with a capacity of 110 mw.

Aziz told the Canadian investors that as a result of structural, financial, economic and social reforms, Pakistan's international credibility had improved. International financial institutions have widely acclaimed the transparent policies of the government.

The gross foreign exchange reserves, the finance minister said, had increased to over $5 billion. These reforms, he said, would continue uninterrupted and had made Pakistan an investment destination, offering a number of opportunities to foreign investors.

He further said that a delegation sponsored by the Board of Investment (BoI) would be visiting Canada later in the year to explore possibilities of joint ventures and increased cooperation between the two countries.

Aziz welcomed the Canadian investment in Pakistan and assured a hassle-free atmosphere. He said after liberalization of foreign exchange regime, foreign investors could repatriate profits and dividends without government's intervention.

The meeting was also attended by secretary economic affairs division and other officials of the Ministry of Finance.

MoU signed for gas pipeline study

Iranian Minister for Petroleum Bijan Namdar Zanganeh on Friday, said a decision on the issue of taking gas pipline from Iran to India either through Pakistan or deep sea would be taken after completion of studies on both the alternatives.

Speaking at a press conference after signing a memorandum of understanding with his host counter part, Usman Aminuddin, he said the studies on both these alternatives of the "super project of gas pipeline" would be completed by the end of 2002.

The pre-feasibility study on taking gas pipeline through land route, an option which would result in substantial earnings for Pakistan, would be carried out by an Australian company Broken Hill, he said.

The other option of laying the pipeline in deep sea, an apparently capital intensive preposition, would be studied by an Italian company, he added.

Govt in a fix over surplus wheat

The federal government is in a fix as to how to dispose of around two million tons of surplus wheat following poor bidding results last week, official sources told on Friday.

"Nobody is ready to burn fingers as it is very difficult decision," said a senior government official. The main question is whether the government should extend subsidy on export of wheat, he said. "The exporters would earn windfall and whosoever takes a decision would be accused of kickbacks," said a senior government official.

Basically, the decision should have been taken by the ministry of food, agriculture and livestock (Minfal) to dispose of the surplus commodity as lifting of fresh crop would be impossible unless existing stocks are cleared, said a source.

Musharraf supports Saudi peace proposal

Pakistan on Thursday expressed its support for Saudi Arabia's peace initiative for the resolution of Palestinian issue.

President Gen Pervez Musharraf and Saudi Crown Prince Abdullah bin Abdul Aziz held detailed telephonic discussion on the issue, according to official sources.

During the telephonic contact, President Musharraf assured the Saudi Crown Prince of Pakistan's fullest support to Saudi Arabia's efforts and peace initiative to resolve the Palestine issue.

PS to face great challenge

Pakistan Steel will have to re-adjust the prices of its products to compete in the market and increase its sales, said Minister for Commerce, Industries and Production, Razak Dawood.

"No consumer is ready to pay higher prices specially when he could have various steel products on lesser prices from the market," he stated. He said that PS was facing a great challenge of increasing its sale and improve its overall performance.

Bank branches

Pakistan and Afghanistan have agreed to open the branches of each other commercial banks in Kabul, Kandahar, Jalalabad, Peshawar and Quetta. Hidayat Amin Arsala, Finance Minister and Vice Chairman of the Afghan Interim government, who arrived on Monday for a two-day visit, met Finance Minister Shaukat Aziz and discussed with him the early possibilities of opening banks on reciprocal basis in the two countries.

Forex rules relaxed

The State Bank has allowed the banks to hold 20 per cent of their time and demand liabilities abroad instead of 15 per cent, according to a circular issued on the last working day before Eid.

In other words the banks are now supposed to keep 80 per cent instead of 85 per cent of the specified assets within the country.

The circular (BSD No. 10) says the decision is effective from March 2, 2002. It says that the relaxation given to the banks will create more space for them to take advantage of the removal of the Nostro limits. The central bank recently removed the Nostro limits-or the limits on balances held abroad-on the demand of the IMF to enable banks to do more business in foreign exchange.