and attended by PIA Chairman, Managing-director and
its Board members, approved $1 billion financing plan for which the
federal government will provide $150 million in three instalments.
Initially, $30 million would be extended this year
while two instalments of $60 million each would be provided in 2002 and
2003 by the federal government, informed sources said.
The sources further said while the federal government
would extend sovereign guarantee for buying planes, it had made it clear
that there would be supplier's guarantee that no commission, no fee or
consultancy would be offered to anyone to borrow or take planes on
The finance minister made it clear that his ministry
had nothing to do with the fleet selection but the government would not
tolerate any under-hand deal to benefit any individual or group.
"You may borrow or get planes on lease but
everything should be transparent," the sources quoted the minister
The sources said the meeting was told that US Exim
Bank would offer loaning to PIA on behalf of Boeing Company while Airbus
Company had its own financing consortium to deal with the issue.
The ten-year business plan envisaged gradual
replacement of old aircraft with the induction of new technology
aircraft to fulfil the requirement of the airline to compete with other
GOVT, IMF AGREE NOT TO REVISE TAX TARGET
The government and the IMF have agreed that Rs460
billion revenue collection target set for the current financial year
will 'not' be revised downward.
Head of the five-member IMF review mission Klaus
Enders held first formal meeting with Finance Minister Shaukat Aziz,
Governor State Bank Dr. Ishrat Hussain and the secretary general
Ministry of Finance, and discussed with them revenue generation, export
growth and inflation performance.
SPECIAL CASH RESERVE CUT TO 15PC
The State Bank has lowered the special cash reserves
on new foreign currency accounts from 20 to 15 per cent. But it has kept
intact the mandatory reserves at five per cent.
The central bank conveyed this decision to all banks
and non- bank financial institutions through a circular (BSD No 16)
issued on Saturday. The decision would take immediate effect.
The circular told all the banks and NBFIs that from
now onwards they would maintain cash reserves in the US dollars
equivalent to not less than 20 per cent of their total fresh foreign
currency deposits instead of 25 per cent. Of this five per cent would
continue to be treated as mandatory reserves and the remaining 15 per
cent as special cash reserves.
FOREIGN FIRMS WITH LOCAL STAKES UP
The trend towards withdrawal of foreign companies
with stakes in Pakistan seems to have been reversed with new entrants
outnumbering those folding up.
Despite the renewed interest of more foreign firms,
the volume of fresh investment however remains subdued.
The office of the Foreign Assets Control (OFAC) of US
Department of Treasury has lifted the blockade of the financial assets
of Platinum Commercial Bank, the chief spokesman of the State Bank said
CUT IN FARM INPUT PRICES UNDER STUDY
The government is considering a proposal to reduce
the prices of agriculture inputs aimed at providing some relief to
Official announcement issued on Thursday said that to
consider the proposal a high level meeting was chaired by federal
minister for food, agriculture and livestock, Khair Muhammad Junejo on
The meeting was attended among others by secretary
general finance, Moin Afzal, chairman, Central Board of Revenue(CBR),
Riaz Malik and secretary, MINFAL, Shafqat Ezdi.
The prices of agriculture inputs increased following
the imposition of General Sales Tax (GST) on all agriculture inputs —
fertilizers of all kinds, pesticides — and increase in the rate of GST
on the actual price of urea and levying of duties and the rates of
The Central Board of Revenue has said that the rate
of withholding tax was reduced from 30 per cent to 20 per cent on profit
arising on securities issued by the federal, provincial governments or a
Commerce Minister Abdul Razak Dawood has sought New
Zealand collaboration in textile sector. Textile is a large industry in
Pakistan and we look for ways and means for collaboration with New
Zealand in textile sector, particularly in the textile machinery, the
HBL SELL-OFF ATTRACTS LOCAL, FOREIGN INVESTORS
State-run Habib Bank is a "jewel" that has
been offered for sale as Dr Ishrat Husain, Governor of State Bank, puts
it and sources say it has attracted domestic strategic investors as well
as multilateral agencies , interested in acquiring stakes in the bank.
A consortium of leading local businessmen — the Aga
Khan Foundation, Habib Bank A.G. Zurich and Bestway Holdings Group of
Abu Dhabi — are among those who have submitted EoIs (Expressions of
Interest) to the Privatization Commission. The last date for submitting
EoIs was July 31 and the process of pre-qualification of prospective
bidders is expected to be completed by August 15.