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1- THE INCREASING DEMAND OF CEMENT
2- PERFORMANCE OF PUBLIC SECTOR CROP.
3- AGRICULTURE IN SAARC COUNTRIES

 

PERFORMANCE OF PUBLIC SECTOR CORPORATIONS

 

Performance of these corporations has been much better this year than in the past

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From SHAMIM AHMED RIZVI, Islamabad
Aug 11 - 17
, 2003 

 

 

 

Federal Minister for Industries and Production Mr. Liaquat Ali Khan Jatoi while briefing the Press in Islamabad on improved performance of the Public Sector Corporations during the outgoing financial year disclosed that his ministry has planned various projects for expansion and modernization for these corporations and subordinate departments to make them more viable and profitable.

The Minister gave facts and figures which proved beyond doubt that the performance of these corporations has been much better this year than in the past. But at the same, one cannot ignore the fact that this improvement has only helped to reduce the operational losses and not made them profitable. The improvement in the public sector's performance last year is undoubtedly an encouraging feature which in the long run may contribute to meaningful progress in the process of privatization with the possibility of better prices for the shares of these corporations in open bidding. The rationale for making heavy investments on the proposed expansion and modernization plan is, however, questionable. The Minister told newsmen that all corporations include National Fertilizer Corporation, Pakistan Steel Mills Corporation, Pakistan Automobile Corporation, State Engineering Corporation, Utility Store Corporation have planned expansion of their units, replacement of old machinery with new and training of technical knowhow keeping in view to secure maximum share in the market in their respective sectors.

He said that Development of Chemical Vision and Industrial Policy for Pesticide, Industrial Investment in Pakistan and Booklet on 'Physical Infrastructure in Pakistan' is under preparation by Expert Advisory Cell of the Ministry.

Giving the performance of the corporations of 2002-03 under the Ministry, he said during the year, production index of all corporations, including their units, showed an increase of 8 per cent last year. Net sales of industrial units under corporations registered an increase of Rs.8.10 billion (32 per cent) (from Rs.25.6 billion last year to Rs.33.7 billion in 2002-03). Pre-tax profit for the year 2002-03 increased to Rs.1,265 million against Rs.292 million in previous year (an increase of Rs.973 million, which is 333 per cent).Taxes and duties paid to the government during 2002-03 showed an increase of Rs.2.35 billion (37 per cent).

The sale of PS increased 8.7 billion 2002-03 largely due to rise in volume. The sale of PS during 2002-03 was Rs.23 billion as compared to Rs.14.2 billion in 2001-02. It also showed an increase in the pre-tax profit of PS by Rs.871 million in 2002-03 as compared to last year, he added.

During 2002-03, investment attracted by Karachi EPZ increased to $16 million (107 per cent) over previous year). Exports increased to $129 million during the year against $ 100 million through EPZA showing an increase of $29 million. EPZA developed two new zones at Sialkot and Risalpur. In Risalpur EPZ, 34 projects proposals worth $16 million were approved and two units started production. In Sialkot EPZ so far, 171 projects stood sanctioned with envisaged investment of $132 million.

The government has planned 19 more zones in different cities of the country, which are under different stages of completion of Phase-II and Phase-III, he added. Jatoi said that SMEDA facilitated 3,100 SMEs in different sectors during the year. Moreover, 8,300 people were trained under different training Programmes/Seminars and Workshops.

According to the Minister following are the future projects which his ministry intends to initiate. Ministry of Industries has proposed for setting up of Marine Fish Processing Research and Training Institute at Gwadar with collaboration of government of Japan at a cost of Rs.377.4315 million.

A project for upgradation of Automotive Testing and Training Centre, Karachi is under process at cost of Rs.298 million. The centre will provide testing and calibration services to the auto industry, to disseminate the latest technological knowhow and providing training facilities.

National Fertilizer Corporation of Pakistan (Pvt) Ltd (NFC) Pak-American Fertilizer has been awarded ISO-9001 quality standard certificate and Pak Arab is likely to get this within current month.Upgradation of Plastic Technology Centre (PTC) Karachi in collaboration with JICA is underway at a cost of Rs.396 million and will be completed by 2005.

The Ministry for Industries and Production also paid visit to SEL and directed to replace the old machinery with new. The machinery has been replaced. Sindh Engineering (Pvt) Ltd. (SEL) entered into Joint Venture Project with Dong Feng Motor Company, which started on July 20, 2003 whereas commercial production will start in second week of August 2003. By January 2004, the activities will expand when 15 ton and above capacity trucks and buses would be produced by SEL. An important and attractive feature of DFM operations is that when SEL will achieve sales figure of 1000 vehicles in a year, it will form into a joint venture with Dong Feng Motor Corporation. In the first year, it is expected to fetch sale of 2,000 vehicles.Pakistan Industrial Development Corporation (PIDC) signed MoU with a Saudi Group (Kane Kanooz Al Watan) for development of Modern International Cluster Park in Karachi.

Following projects are directed to be setup in near future: Revival plan of Huraai Woolen Mills and Bolan Textile Mills and Lasbella Textile Mills, Utthal is underway.Plan for setting up of Fruits Research Centre on the land of Talpur Textile Mill.Plan for setting up of an IT Park in Karachi. PIDC to join hands with EPB for setting up of value added industries for SMEs sector.

 

 

New Joint Venture project identified are:

FISH AND SHRIMP PROCESSING PROJECT AT KORANGI FISH HARBOUR.

PURE VACUUM DRIED (PVD) SALT PROJECT, HUB INDUSTRIAL ESTATE.

PU COATED LEATHER PROJECT, KARACHI.

MANGO PULPING PLANT, HYDERABAD, SINDH.

MARBLE AND GRINITE PROJECT, NWFP.

APPLE AND DATES PROCESSING PROJECTS.

HEAVY MECHANICAL COMPLEX.

Efforts to secure business for the manufacturing of thermal power plants are being made under the new Power Policy.MHC has pre-qualified for two packages of Malakand-III Hydroelectric Power Plant while offers have been submitted to Sarhad Hyderabad Development Organization.

Contract awarded to HMC by HIT for manufacturing of Turret and Hull of Al-Zarrat Tanks.For setting up of Sugar Mill in Afghanistan of 3,000 tons capacity valuing $19.41 million. Agreement has been signed between HMC and M/s Fazal Rahim Group of Afghanistan.

PAKISTAN STEEL

Expansion of Pakistan Steel's capacity from 1.1 million tons per year to 1.5 millions tone in the First Phase with Russian collaboration is underway.

UTILITY STORES CORPORATION OF PAKISTAN (USC)

Rehabilitation plan of the Utility Store on modern lines is under way. Expansion of USC is also underway in the areas where common man benefited at maximum under the policy of the government. The scope of granding/packing of utility brand has been expanded to include Utility Ghee.

PAKISTAN INDUSTRIAL TECHNICAL ASSISTANCE CENTRE (PITAC)

Balancing and Modernization of Workshop facilities at PITAC, Lahore in collaboration with JICA at a cost of Rs.736.35 million and will be completed in 2006.Modernization and upgradation of PITAC (metal processing and development centre) Lahore at a cost of Rs.284 million and would be completed by 2005.Establishment of PITAC Regional and Zonal Industrial Technology Support Centres Phase-II (26 projects) in major industrial cities of Pakistan and AJK at a cost Rs.4514 million and completion period is 36 months.

Notwithstanding the better performance of the public sector corporations, their privatization and transfer of ownership/management control to the private buyers is the ultimate objective under the declared official policy. The minister's reference to fresh investment by some of these units for the purpose of modernization and expansion in manufacturing facilities, may be interpreted as a laudable effort to use the surplus resources of these units for the improvement of their working efficiency and financial viability. It may be assumed that this exercise will not create additional demand on the federal government's budgetary resources. Otherwise the so-called programme for modernization and expansion of these units must be avoided. The objective of privatization is to recover the resources of the federal government, which are tied to the capital base of the public sector corporations because the government cannot afford to continue manufacturing and trading activity for several reasons. Secondly, the management efficiency of the public sector enterprises is always low due to lack of responsible behaviour on the part of the bureaucracy.

The government is already subsidizing the losses of public sector to the extent of Rs.100 billion annually which is one of the major causes of inadequacy of budgetary resources to pay attention to financing of social sector development to a significant extent. For these and other valid reasons, the public sector participation in trading and industrial activity has now been decisively brought to an end in almost all the countries of the world. In this context, it may be expected that the proposed plans of modernization and expansions in public sector industries would not be designed to extend and prolong the state ownership/management. The earlier the divestment of government's shareholdings is completed through the process of privatization, the better it will be for the soundness of the budgetary position of the government.