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 5. TRADE  6. GULF



Feb-11 - 17, 2002

ADB to provide $250m for energy sector

The Asian Development Bank (ADB) has allocated $200-250 million for the restructuring of Pakistan's energy sector in 2003.

This was stated by Country Director, ADB, Marshuk Ali Shah in a chat on Thursday after addressing on the topic Private Sector Investment in Energy Sector: Case of Pakistan, in a seminar on Public Private Partnership in Infrastructure. The seminar was organized by the National Institute of Public Administration (NIPA). However, there has been no major lending by the Bank in the current year as compared to $300 million in the year 2000 for energy sector's restructuring.

ADB's total lending to Pakistan in the last 30 years stands at $2.9 billion of which $2.3 billion have been to the power subsector and $0.6 billion to the natural gas and petroleum subsectors, he said adding that the Bank has been a major source of external assistance in the energy sector in Pakistan having provided about one third of the total external resources to the sector.

Three fourths of the assistance to the power subsector worth $1.575 billion has been provided to Wapda and the rest to the KESC, he said.

On entire Pakistan basis, he said, the ADB has targeted a total lending of one billion dollars this year for key seven to eight sectors, which include capital market restructuring, quality primary education, rural development and rural finance projects.

The ADB has, however, initiated a major intervention in 2002 to assist the government in restructuring the power sector under the Energy Sector Restructuring Programme ($300 million). The programme aims at improving sector economic efficiency and consumer satisfaction. He said the reform programme is to restructure the power sector by breaking up the sector's monolithic vertically integrated power projects, transmission and distribution facilities and introducing market reforms into this sector.

Petroleum prices to go up by 14pc

Prices of all the petroleum products and furnace oil are set to go up by 14 per cent across the board in two phases.

The first phase of around 6.5pc increase will come into effect immediately followed by the 7.5pc rise on July 1. This would ensure a 40pc return on equity to the Oil Marketing Companies (OMCs), petroleum ministry sources confirmed on Thursday.

The official said that the director-general, oil, had prepared a summary for formal approval of the ECC under directives of the Petroleum Advisory Council.

The logic behind the decision is stated to be the OMCs' "unmanageable" margin and dealers' commission. OMCs' margin currently stands at 64 paisa, 78 paisa, 19 paisa and 28 paisa per litre of petrol, HOBC, Kerosene oil and high speed diesel, respectively. Similarly, the dealers' commission is Re1.01, 89 paisa and 43 paisa per litre of HOBC, petrol, and high speed diesel, respectively.

NIT to introduce two new products

The National Investment Trust (NIT) would launch two new products to suit separately those classes of investors who prefer, to earn dividends irrespective of fluctuations in Net Asset Values (NAVs) and the other for those who are averse to risks and would rather put money in capital-protected funds. Chairman NIT, Tariq Iqbal Khan told a press briefing on Thursday that the decision about the new products would be taken at the Board meeting to be held on Friday.

Khan, who also heads the Investment Corporation of Pakistan (ICP) managers of the 26 closed-end mutual funds said that there never was a proposal to merge ICP with NIT, but the process of privatization of the latter was going apace. The four prospective bidders: ABAMCO, Arif Habib Securities, PICIC and First Habib Modaraba were in the process of conducting the 'due diligence' exercise.

IMF tranche soon: Shaukat

Head of the visiting four-member IMF review mission Klaus Enders has said the Pakistan government is pursuing broad economic reforms agenda to stabilise the economy.

He met Finance Minister Shaukat Aziz on Wednesday and discussed with him the whole range of economic issues, including revenues, exports, fiscal deficit, balance of payment position and the privatisation process.

SME Bank may write-off Rs5bn loans

With total outstanding portfolio of Rs11 billion, the SME Bank is expected to write off Rs5 billion loans shortly. The bank has been established through the merger of SBFC and RDFC.

"The recovery of this amount is doubtful and may be written off", Kaisar Naseem, president and CEO of SME bank told a news conference on Wednesday.

He said that the bank has been able to recover over Rs4 billion in last 20 months against total outstanding amount of Rs13 billion but the figure has again piled up to Rs11 billion. Elaborating, he said that Rs5 billion was the amount the borrowers have not paid even a single instalment and many of them have died. Of the remaining amount, the borrowers have now turned up to avail of various concession packages with payment of principal amount and restructuring of interest.

Pilcorp, TIB merger plan okayed

The shareholders of Pakistan Industrial Leasing Corporation (Pilcorp) and Trust Investment Bank (TIB) have stamped their approval on their plans to merge into one company.

Fauji Fertilizer

Fauji Fetilizer posted 17.5 per cent growth in sales of its "Sona" brand of fertilizer, to Rs11,982 million for the year ended December 31, 2001, from Rs10,201 million the year ago. Pre-tax profit increased 19.2 per cent to Rs4,994 million, from Rs4,190 million and after charging  tax at effective rate of 36 per cent, compared with 37 per cent last year.