Foreign exchange: SBP reserves dip 2.28pc, amount to $7.29bn
The foreign exchange reserves held by the central bank shrank 2.28 percent on a weekly basis, according to data released by the State Bank of Pakistan (SBP) on Thursday. The falling reserves raise concern about Pakistan’s ability to meet its financing requirements. Earlier, Saudi Arabia provided financial assistance to Pakistan, which pushed the reserves above the $8-billion mark, however, they later started falling again. Moreover, the third $1-billion loan tranche from the kingdom is expected to arrive this month. Separately, Chinese has agreed to provide much-needed support for the fast depleting reserves. On December 28, the foreign currency reserves held by the SBP were recorded at $7,287.5 million, down $170 million compared with $7,457.3 million in the previous week. The decrease was attributed to external debt servicing and other official payments. Overall, liquid foreign currency reserves held by the country, including net reserves held by banks other than the SBP, stood at $13,837.8 million. Net reserves held by banks amounted to $6,550.3 million. Last month, Chinese Embassy Deputy Head of Mission Zhao Lijian assured Pakistan of a financial package to boost its flagging foreign currency reserves, hinting that it would be bigger than that pledged by Saudi Arabia. More than a month ago, China agreed to immediately give a loan of $2 billion to Pakistan, a move meant to arrest the slide in foreign currency reserves and provide much-needed breathing space to the new government.
Alleging favouritism: PPP invokes NAB in Rs300bn Mohmand dam contract case
The Pakistan People’s Party (PPP) has demanded that the National Accountability Bureau (NAB) probe into award of Rs300 billion Mohmand dam contract to a company owned by close aide of Prime Minister Imran Khan. “Rs300 billion contact of the mega dam project is being given to Descon [owned by Adviser to Prime Minister on Commerce, Textile, Industries & Production and Investment Abdur Razzak Dawood and his son] which is a conflict of interest,” said the PPP’s Sherry Rehman while talking to media on Wednesday. She said nobody knows how the Frontier Works Organisation (FWO) joint venture was technically knocked out during the evaluation process. “The case should be referred to NAB for investigation,” added the senator, whose party’s top leaders are implicated in a mega graft case. Addressing a press conference, the Water and Power Development Authority (Wapda) Chairman Lt Gen Muzammil Hussain, however, said Descon has the required experience. “The local companies have the capability to execute such work. Pakistani engineers would build small dams on Indus River,” he added.
Facilitating businesses: ‘government working on national policy’
The PTI government is working on a national policy for facilitation of businessmen, industrialists and investors as per international standards, said Special Assistant to Chief Minister K-P for Science and Information Technology Kamran Bangash. While addressing industrialists and investors at the Sarhad Chamber of Commerce and Industry (SCCI), he said the federal government and all the federating units are preparing their recommendations for the national policy. The special assistant said the K-P government was in contact with all stakeholders in preparations of the recommendations. He said purpose was to fulfil all requirements of the ‘ease of doing business’, while removing legal formalities and complications for new businessmen and industrialists for sustainable economic development. The government is working to introduce a one-window operation, while using technology in all government departments for facilitation of industrialists and business community, he added.
Technology upgrade must for economic growth
Upgrade of technology and machinery in indigenous industrial sector was the key requirement for rapid economic growth of Pakistan, but imposition of heavy duties and taxes on the import of some industrial machinery was the major constraint in uplifting the local industry, said Islamabad Chamber of Commerce and Industry (ICCI) President Ahmed Hassan Moughal. Lauding the government’s initiative for exempting imports of heavy machinery for oil and gas exploration and development from customs duties and other levies, he said the government should extend similar concession to the import of industrial machinery in the next mini-budget to upgrade the industrial sector and bring it at par with developed countries. He stressed that the government should allow duty free import of technology and machinery of local industry in the next mini-budget that would help in producing value-added products and putting Pakistan on the path of accelerated progress and prosperity.
Mohmand dam’s groundbreaking on Jan, 13
The ground breaking ceremony of the much-awaited 800 MW Mohmand dam hydropower project suffers a delay and will now take place on January 13.
“The ground breaking ceremony of Mohmand dam was earlier scheduled for the first week of January but it will now take place in the second week,” said the Minister for Water Resources Faisal Vawda while addressing a press conference on Wednesday. He said there had not been any wrongdoing in award of the dam’s contract to a joint venture of CGGC-Descon and emphasised that the bidding process was completed and the contract was awarded to the company prior to establishment of the Pakistan Tehreek-e-Insaf (PTI) government. The minister also refused to appear before the Public Accounts Committee (PAC) to answer with regard to the bidding controversy on a one-day notice and said he is answerable only to the prime minister. “I am not anyone’s servant. I will not appear before them [PAC] on one-day notice, particularly when a convicted person or accused comes from jail and summons me,” the minister said in an apparent reference to PAC Chairman Shehbaz Sharif, who is facing NAB investigation and is currently in custody. Vawda said he is not answerable to anyone other than the prime minister. He said no one would be allowed political point-scoring, adding that he had also directed his ministry that no one would appear before the PAC on a one-day notice.
Believe it or not, govt seeks approval for nearly $1 bn polio eradication plan
The Central Development Working Party (CDWP) on Thursday recommended to the Executive Committee of National Economic Council (Ecnec) for approval the Emergency Plan for Polio Eradication worth $ 986.3 million. Minister for Planning Khusro Bakhtiar, who is also the Planning Commission deputy chairman, presided over the CDWP meeting on Thursday. The meeting was attended by Planning Secretary Zafar Hasan, the Planning Commission members and officials of federal and provincial governments. The CDWP considered two revised projects including Nai Gaj Dam Project and Emergency Plan for Polio Eradication. The forum also considered two position papers relating to transport and communication and housing and work division. The CDWP recommended second revision of the Emergency Plan for Polio Eradication. The forum was informed that polio will be eradicated from Pakistan by the end of 2019. However, two years would be required for follow up and complete eradication of its core reservoirs.
OMCs may be required to invest Rs 6bn in infrastructure
Several small oil marketing companies (OMCs) are likely to pull out of the market if the government approves a new policy which will require the OMCs to step up investment to Rs6 billion in infrastructure development. At present, 59 OMCs are running in the country and they will face a higher investment condition when the new policy is given the go-ahead, say officials. The Oil and Gas Regulatory Authority (Ogra) has given licences to several OMCs but many have failed to meet the condition of building oil storages. At present, state-run Pakistan State Oil (PSO) and Shell Pakistan have storages but oil tanks are not enough to stave off an oil crisis, like the one that struck the country during tenure of the previous Pakistan Muslim League-Nawaz (PML-N) government. The infrastructure development plan will be based on demand from provinces and regions with details of installations, storages and terminals at different locations and points. The Petroleum Division, in a summary, suggested that a new company must build storage tanks with capacity of 20,000 tons each for high-speed diesel and petrol or capacity equal to 20 days of average sales, whichever is higher, prior to beginning petroleum product sales in the country.
Seed firms demand cut in turnover tax
The Federal Board of Revenue (FBR) is expected to reduce the turnover tax imposed on seed-supplying companies. Sources pointed out that over 650 local seed-supplying companies were paying 1.25percent turnover tax where flour mills and other industries related to agricultural crops were paying just 0.25percent turnover tax, which was substantially lower. For other industries, the tax rate is even lower at 0.2percent. If the government decides to reduce the turnover tax for seed suppliers, the cost of producing agricultural crops by the farmers will come down and they will get an incentive to produce more. According to sources, the Seed Association of Pakistan has asked the government to reduce the turnover tax rate to 0.2percent. Sources in the FBR revealed that the authority was reviewing the turnover tax on seed companies but no decision had been taken yet.
“If a decision is taken on reducing the tax rate, it will still not be cut to the level demanded by the seed association,” a source said. “Rationalisation of the tax is being considered because the federal government has decided to support the domestic industry supplying quality seeds.” As Pakistan has an agricultural economy, the government has planned to go for seed import substitution by enhancing the production of seeds in the country.
Freight trains: train track at port briefed
Minister for Maritime Affairs Ali Haider Zaidi has assured all stakeholders of the shipping sector that their issues will be resolved following a meeting with Prime Minister Imran Khan. He said this in a meeting with office-bearers of the All Pakistan Shipping Association (APSA) at a gathering organised by the APSA. APSA Chairman Aasim Siddiqui, along with all stakeholders of the shipping fraternity, discussed the issues, challenges and the way forward. The chairman apprised the minister of the freight trains from the port, for which a train track should be made operational in order to load containers from the container terminal. The minister was also briefed about the long pending legislation on the Carriage of Goods by Sea Act 2017 and Sea Carriage Shipping Documents Act 2017.
NTDC directed to rectify faults swiftly in fog-prone regions
Federal Minister for Power Omar Ayub Khan has directed the National Transmission and Despatch Company (NTDC) to depute additional ground teams and enhance monitoring in fog-prone areas in order to timely rectify any fault occurring in high transmission lines besides taking precautionary measures to avoid tripping. The minister instructed the NTDC to take all necessary steps for the restoration of tripped transmission lines to ensure uninterrupted power supply to consumers. Khan gave the directives at the National Power Control Centre (NPCC) on Thursday while monitoring and supervising the restoration of transmission lines in central and southern Punjab, which were hit by a dense fog in early hours of the morning. A day ago, the dense fog in Punjab resulted in tripping of four power plants, triggering an almost four-hour-long blackout in the provincial capital of Lahore. According to sources, Balloki, Nishat Power, Nishat Chunian and Kohinoor Electric plants tripped early on Wednesday morning at around 8:30 am. Around 1,750 megawatts of generation capacity remained out of the national grid. Apart from the tripping of power plants, the fog also caused tripping in Kot Lakhpat’s 220-kilovolt main transmission line and 220kv Sarfaraz Nagar transmission line. The power minister during his visit to the NPCC praised the NTDC ground teams for extensive efforts for restoring the high transmission lines considering the extreme weather conditions. He told the NTDC managing director to ensure that all safety measures were taken for the teams while the restoration work was under way. The NTDC MD and NPCC general manager briefed the minister and power secretary that due to the dense fog, 500kv and 220kv transmission lines in the NTDC network tripped, bringing down power generation at Guddu and Balloki power plants besides failure of power supply to 220kv grid stations at Ghazi Road and Sarfaraz Nagar, Bahawalpur, Vehari and Lal Sohanra.