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A

POLICY

May 13 -19, 2002

SSGC, SNGPL TO BE UNBUNDLED

The federal government has decided in principle to un-bundle the two gas utilities, Sui Northern Gas Pipelines Limited and Sui Southern Gas Company, into marketing and transmission companies for their ultimate privatization.

Official sources told that Asian Development Bank has appointed Pricewaterhouse Coopers as financial adviser recently in Manila for the restructuring of gas sector in Pakistan particularly SSGC and SNGPL.

The restructuring of the two gas utilities is most probably to be on the corporatization pattern of Wapda in which water and power sectors were separated and power wing was unbundled into 12 corporate companies. No privatization in the power sector could take place under this plan that started in 1995-96.

First phase of gas sector restructuring was approved on April 12, 2002 by the Central Development Working Party (CDWP) at a cost of $1.5 million.

Phase two, i.e. implementing the restructuring proposal approved by the CDWP and implementing the marketing and sale of the integrated or unbundled entities, was, however, left to the ADB and the financial advisers, these sources said.

Under the restructuring plan, the two utilities would be divided into a number of companies. This would be finally decided after the financial advisor's report whether distribution companies should be established on regional basis, or marketing and sales and revenue collection companies.

Nevertheless, it has been agreed that there would be a "common carrier" that would purchase gas from producers and sell it to the distribution companies.

A third party access (TPA) to the gas network has been introduced and an arrangement in this respect is currently being finalized between SSGC and SNGPL that provides for the former to carry gas belonging to the other.

MUSHARRAF, HARIRI DISCUSS MIDEAST, S.ASIA CRISES

President Pervez Musharraf and Lebanese Prime Minister Rafik Hariri, who met on Thursday, expressed their total understanding and unanimity of views on matters concerning the Middle East and South Asian region.

Musharraf, flanked by the Lebanese premier, told reporters after the formal talks the two sides discussed situation in the Middle East and Palestine and evinced a common desire for a peaceful settlement of the dispute.

The president said he also briefed the Lebanese dignitary on the tension between Pakistan and India, and the Kashmir issue. The situation in Afghanistan also came up for discussion.

Musharraf said the visit of Prime Minister Hariri had provided the two sides with the opportunity to have an overall review of what was happening in the South Asia and around the world.

OIL, GAS SECTOR SELL-OFF HITS SNAGS

The process of disinvesting the potential oil and gas sector is getting delayed due to the reservations of the ministry of petroleum and natural resources specially over the sale of mighty Oil and Gas Development Corporation Limited (OGDCL).

Informed sources said on Thursday that the ministry of petroleum was not even approving the privatization deal of Badin- 1 oil well, although the successful bidder had increased its offer from 131 million dollars to 143 million dollars as was desired by the Privatization Commission (PC).

COMPETITION ORD 2002 IN FINAL STAGES

The government has decided to repeal the Monopolies and Restrictive Trade Practices (Control and Prevention) Ordinance 1970 to establish Competition Commission of Pakistan (CCP) in view of emerging post-privatization market competition.

Finance Ministry sources said that ministries of law and justice and finance are in the final stages of vetting the "Competition Ordinance 2002" to repeal the 1970 monopoly ordinance. The law is expected to be presented to the cabinet for consideration by end of this month, these sources said.

4 FIRMS IN RUN FOR CBR REVAMPING BID

The government will select one of the four international consulting firms who have sent their bids for the implementation of tax administration restructuring plan.

The multinational firms, who sent their bids to the Central Board of Revenue included KPMG, Price Water House Coopers, Maxwell Stamps and IBMFD. Of these firms, a senior official in the CBR told, one would be selected for the task later this month.

SHAUKAT LEAVES FOR CHINA

Minister for Finance Shaukat Aziz left on Wednesday for Shanghai to attend the annual meeting of the Board of Governors of the Asian Development Bank (ADB).

During his four-day visit to China, he would also be holding bilateral talks with his Chinese counterpart and other important officials to increase trade and economic cooperation between the two countries.

DR MURTAZA MALIK SHOT DEAD

Noted religious scholar Prof Dr Ghulam Murtaza Malik, his driver and a policeman were shot dead by two gunmen in Allama Iqbal Town, on Tuesday night.

EPB ASSURES BENEFIT TO SMALL EXPORTERS

Export Promotion Bureau chairman Tariq Ikram on Tuesday said the bureau had improved the provision of infrastructure, laws and other requirements to benefit the exporting community.

He said this while addressing a meeting of local industrialists and exporters at the Sialkot Chamber of Commerce and Industry (SCCI) after visiting the site of Sialkot airport, export processing zone, dry port and various industrial units.

The EPB chairman said that newly-introduced "export finance guarantee" and "export soft-term loans" schemes of the bureau were being successfully implemented to benefit the small exporters.

EC RETAINS 21-YEAR AGE FOR VOTERS

The Election Commission announced on Monday it had finalised the fresh electoral rolls on the basis of age limit of 21 years, contrary to the announcement by the president that the age limit for the voters in the next general elections would be 18 years.