POLICY

 

Nov 18  - 24 , 2002

 

1.INTERNATIONAL

2. INDUSTRY

3. FINANCE

4. POLICY

5. TRADE

6. GULF

 

PIA, BOEING SIGN $1.6BN DEAL

Pakistan signed its biggest-ever airline contract with the Boeing firm, under which it will buy eight Boeing 777 aircraft for $1.6 billion.
"It is the biggest ever deal in the history of Pakistan International Airlines," said PIA's Chairman Hamid

 

Nawaz Khan who is heading a high-level team, which came Washington to sign the deal.

Under this agreement, Boeing will start delivering the aircraft by the end of 2003.

The US Export-Import Bank agreed to provide 85 per cent of the fund to Pakistan to help it buy passenger aircraft from Boeing.

This is the first time the bank has underwritten a deal between Pakistan and a private US firm. The United States has agreed to help Pakistan revive its ailing economy which Islamabad said was adversely affected after Sept 11.

Last month, the Pakistani government agreed to contribute $150 million over three years to help PIA finance the purchase of new planes.

Pakistan's Finance Minister Shaukat Aziz said the money will help the airlines embark on an ambitious $2bn fleet-overhaul programme that includes the scheduled purchase of eight planes from the Boeing.

In August, Mr Khan disclosed plans to improve the airline's aging fleet with new aircraft. "Our relationship with the Boeing began in 1960 when we bought 707 aircraft on lease from Pan Am," Mr Khan said.

"The new extended range, 777 aircraft shall enable us to regain our lost status and make us comparable to other world-class airlines," said Mr Khan.

PIA is trying to reduce the 18-hour fly time between Pakistan and the United States by inducting faster long haul aircraft into its fleet.

PIA has 40 planes and 22,000 employees. The average age of PIA planes is 23 years.

SPADEWORK DONE FOR MAJOR UNITS SELL-OFF

The Cabinet Committee on Privatization (CCoP) was informed that preparatory work has been completed for the privatization of PSO, NITL, OGDCL, PTCL, HBL, KESC, and Pak Arab Fertilizer.

PSO, NITL and HBL are at most advanced stages and the pre-bid meeting for PSO transaction has been scheduled for November 15, 2002, the meeting was further told.

The meeting, presided over by Minister for Finance Shaukat Aziz, also directed the Privatization Commission (PC) to work with full commitment so that major transactions could successfully be concluded in the period between November 2002- April 2003.

OCAC LIKELY TO CUT PRICES BY 2-5PC

The Oil Companies Advisory Committee (OCAC) is expected to bring down the prices of oil products on November 15 following downward trend in international prices of crude oil and finished products.

"We expect that the prices will come down by 2-5 per cent," an analyst at Invest Capital and Securities says. "The shining of the rupee against the dollar has also been a helpful factor in bringing the import cost down," the analyst said.

He said that crude oil prices were at $28 a barrel in the last fortnight as compared to current level of $26-27 a barrel.

GAS DEMAND/SUPPLY

The Economic Coordination Committee of the Cabinet (ECC) decided to introduce gas management programme during the current financial year.

The ECC, which was presided over by Finance Minister Shaukat Aziz, noted that in winter consumption of gas increased from 2.5 to three times more than the normal summer gas demand.

The Ministry of Petroleum & Natural Resources has, therefore, planned gas demand/supply management programme to meet the increasing demand of gas in the ensuing winter.

SBP ALLOWS REMITTANCE OF RE-INSURANCE PREMIA

The State Bank has allowed remittances of re-insurance premia on policies issued in respect of accidental death.

In a circular issued to all banks the SBP says that the step has been taken "to further liberalize the foreign exchange regime."

For this purpose the circular has amended the relevant part of the Foreign Exchange Manual.

NEPRA OKAYS 6.49 PAISA INCREASE

The present government has put on hold a 6.49 paisa per unit increase in electricity tariff for announcement by the elected government, authentic sources told.

The National Electric Power Regulatory Authority (Nepra) had approved 6.49 paisa per unit increase in power tariff under automatic fuel adjustment formula on Oct 17 and forwarded to the government for notification the same day, the Nepra sources confirmed.

SBP LEAVES BANKS LIQUID AHEAD OF EID

The State Bank left the banking system with enough liquidity to enable them to offer liberal credit to the private sector and to finance the ongoing pre-Eid withdrawals.

The central bank mopped up only Rs20.9 billion from the system by selling six-month treasury bills against the target of Rs30 billion.

Senior bankers said the SBP received Rs38.6 billion worth of bids of which it accepted Rs20.9 billion and rejected the rest.

WB TO HELP IMPROVE INVESTMENT CLIMATE

The World Bank and its investment agencies plan to help Pakistan improve its investment climate through macro-economic and social reforms, direct project investments and political risk guarantees over the next three years.

Officials in the economic affairs division told that the bank assistance would be in a coordinated fashion in which both of its investment agencies International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA) would participate.

RS3.023BN DRAWBACKS PENDING FOR JULY-OCT

The Central Board of Revenue (CBR) has yet to release Rs3.023 billion of duty drawback claims pending for July-October period of current financial year.

The amount was withheld against the 57850 duty drawback claims made during the same period this year, according to official figures.