Archive for June 14th, 2011
Fallout of volatile oil prices
PAKISTAN’S economy is often affected by developments that take place outside the country’s borders and over which the policymakers in Islamabad have no control. Policies such as those adopted in framing national and provincial budgets and in determining the structure of tariffs matter.
But what also matter is what happens in some of the international markets. One of these is the oil market, given Pakistan’s large and increasing dependence on imported oil.
This is why it is important to take note of the decision taken on Wednesday June 8 by the representatives of the eleven states that make up the OPEC, the cartel of oil producers. The meeting ended in considerable acrimony and dashed expectations that the members of oil cartel will increase production to steady the markets. The development led to an increase in the price of Brent crude by $2 to $118.59 a barrel.
Saudi Arabia, with the OPEC-allocated level of production of 8.9 million barrels a day, is the largest member of the OPEC followed by Iran with 3.7 mbd, UAE 2.5 mbd, Kuwait 2.4 mbd, Venezuela 2.2 mbd and Nigeria 2.1 mbd. The remaining four – Angola, Algeria, Ecuador and Libya together account for 4.4 mbd. Ecuador is the smallest producer in the group with production of only 400,000 mbd. Iraq, the twelfth member, has not been subjected to a production quota since the country was invaded by the United States. The OPEC production of 26.2 mbd is 40 per cent of the world total. In December 2008, the members had agreed to produce 24.85 mbd but the actual production is about 10 per cent higher. Some of the large oil producing and exporting countries such as Russia have not joined the cartel.
The production quotas fixed by the cartel are not always followed by its members. Saudi Arabia, for instance, unilaterally increased its production to compensate for the decline in exports from Libya. It increased it again in May by about 200,000 and is set to add further production of 200,000 and 300,000. In spite of the OPEC determined quotas and the powerful oil ministries that manage production in their countries, no firm estimates are available as to how much the cartel really produces. This lends to a great deal of speculation and volatility in the oil market. There is a consensus among experts that the cartel is currently pumping about 1.3 mbd more than the agreed limit.
The oil ministers met in Vienna on June 8 to decide on the levels of production and it’s sharing among the members. Vienna is the city where the OPEC has its headquarters.The meeting was held as political turmoil in the Middle East was raging. Libya because of the civil war was not producing much oil and exporting even less.The country’s 1.3 mbd of exports seemed lost for as long as the struggle in the country remained unresolved. Its place at the meeting was contested by the government and the rebels. The ranks of the rebels were strengthened by the defection of the former oil minister. Small of the smaller Arab producers were also having political difficulties. Syria’s 150,000 barrels a day of oil exports were in jeopardy because of the mounting violence in the country.Yemen’s 260,000 barrels a day of production had virtually halted. The country’s president had gone to Saudi Arabia on the eve of the Vienna meeting. His future as well as that of his country remained uncertain. A complete breakdown in law and order could conceivably threaten the nearby Bab el Mandeb shipping lane through which an estimated 3.7 mbd passed. According to one oil expert, “Yemen was wild card. It could be the failed state in the middle of the gulf and it threatens the stability of the largest oil producer, Saudi Arabia.” In light of all these uncertainties, there was hope expressed on the eve of the meeting that the oil ministers, meeting in Vienna, will act to stabilize a jittery market. The decision to increase production would have been the first taken in nearly four years. The aim would have been to put a lid on the continuing increase in the price of oil following political problems in many countries of the Middle East. Saudi Arabia wanted the price of crude to settle down well below the current levels. Ali elNaimi, the Kingdom’s oil minister had indicated on several occasions that he wanted oil prices to remain between $70 to $80 a barrel, much below the trading range between $105 and $125 which has been in place for more than four months.
The Saudis were also concerned that the world demand would increase as the refineries, following the pe riod during which they shut down for maintenance, return to full production and that would add to the pressure on prices. Riyadh was nervous that at the current levels, the global economy may not be able to sustain the tepid recovery from the Great Recession of 2008-09. ElNaimi described the Vienna meeting “the worst we have ever had”. His attempt to raise production was blocked by Iran. Terhran was joined by several small producers who did not have the capacity to increase in output. A decline in the price of oil would have reduced their earnings. The Saudi minister wanted to add 2.5 mbd to the club’s production level. OPEC’s spare capacity of some $4 mbd is in the hands of just three countries – Saudi Arabia, Kuwait and the United Arab Emirates. All three were in favor of raising the level of output.
There was also some concern in several quarters about what is called “demand destruction” – when consumers begin to reduce consumption on a permanent basis by making changes in their life style while investments are made in developing non-oil sources of energy. Experts believe that this is likely to happen if the price of oil remains above $125 a barrel for a long period of time. After the difficult meeting in Vienna it has begun to approach that level.
What should be the reaction in Islamabad to the Vienna decision? Pakistan, like several other developing countries, tightly controls the oil market. Sale price at the service stations are set by the government and are well above the price at which the companies buy the product. The difference is collected by the government as a form of oil tax. There is uniform price in the country which means that the areas near the ports through which much of the oil comes subsidize those that are upcountry. This kind of regime produces enormous distortions which are not helpful for an economy that is so troubled most of the time.
Among the several structural changes the government needs to introduce is in the area of oil marketing. Ideally the government should let the price at the pump and at the points of distribution to be set by the market. It should reflect competition among the distributors. The state can charge a tax on sales so as not to affect the revenues generated by oil. The market should be allowed to develop instruments that will take out the wide fluctuations that have become the norm in oil trade.
Dawn.com
Read Full Post | Make a Comment ( None so far )‘Lobbying’ against coal-based power projects
TWO ministers of Sindh have accused the ‘petroleum lobby’ and ‘supporters of large dams’ of manoeuvring to prevent productive use of enormous coal reserves of Thar region and creating hurdles in building of coal-based power stations. This is the first such explanation by any government functionary why the Thar coal deposits discovered in 1992 remain unutilised till today.
The two ministers are Syed Murad Ali Shah and Ayaz Soomro. They were on a visit to Karachi Chamber of Commerce and Industry on May 17 to discuss matters relating to the provincial budget. Shah, the provincial finance minister, said that a powerful lobby in oil import business, which has a strong influence on government’s decision-making, ensured that only the expensive oil was used for electricity generation, and discouraged efforts for use of coal. And the supporters of big dams, who always argued that dams were imperative for Sindh’s water and power requirements, he said, saw to it that the province and the nation remained deprived of electricity generation from coal.
Ayaz Soomro, the law minister, said that Sindh had been forced not to pursue coal development. “Bureaucracy in the federal government has a major role in nondevelopment of coal resources,” he added.
The ministers’ narrative absolves the political elite of Sindh of any role in delaying the utilisation of precious coal deposits. Although the clout of the so-called oil lobby can hardly be denied, the fact that it can succeed in freezing a project of great national importance for almost two decades, is not convincing enough.
In fact, the successive governments in Sindh are more to blame for the unforgivable delay for they have never been keen, nor shown any resolve, to implement this project on a fast pace. The 185 billion tonnes coal deposits, which are lying like a huge waste, could not be exploited primarily because of bureaucratic intrigues, cabinet ministers’ inefficiency and indifference and then the prolonged power tussle between the Sindh government and the federation over control of these deposits.
As a result, the body tasked with handling the project kept reshaping itself and changing its name with the changes in the government with no progress on the ground .
It seems incredible that no concern for nation’s urgent power needs was shown by either the central government functionaries or the Sindh ministers. The senior government officials were more interested in settling tariff rates and kickbacks with both foreign and domestic investors over purchase of electricity.
Dr A.Q. Khan, the reputed nuclear scientist, recently wrote in a column that with the help of Riaz Mohammad Khan, the former ambassador to China and later foreign secretary, he had arranged a deal in 2002 with one of the largest coalmining and processing companies of the world, Shenhua Group of China. The company was willing to provide electricity at 5.39 cents per unit and had committed to set up four power plants of 325 MW each, by 2010. But since no commission was involved, the deal was cancelled. Shenhua employs about 170,000 people and produces thousands of megawatts of power. It has put up plants in Mongolia, Indonesia and Australia.
Such has been the prevalent at titude for more than a decade although Sindh government has been spending a huge amount on building infrastructural facilities as well. The political figures handling the project acted more like rent-seekers and less like responsible administrators, treating coal deposits as a source of personal profits rather than of national pride.
In 2009, confrontation between Islamabad and Karachi over Thar became so intense that it resulted in non-allocation of funds for the development of mines in the Thar project in the PSDP 2009-10. The Annual Plan Coordination Committee decided to put on hold the allocation until the 16-year old dispute was resolved.
The two Sindh ministers while blaming the oil lobby have not talked of resisting the anti-coal ‘conspiracy’ by expediting the work on power projects in Thar. While the coal-fired power stations are no more welcome in the world for reasons of global warming (Pakistan is turning to gasification), they are still providing nearly half of total electricity compared to other sources.
No developed country has yet abandoned the use of coal for power although new plants are either in decline or not coming up. The United States has at present more than 600 coal-based power plants but no new plant has been added since 2008. Republicans’ loyalty to coal is evident from the fact that on February 18 this year, the House of Representatives, controlled by them, voted to block the Environmental Protection Agency from regulating greenhouse gases. On May 25, deputy assistant secretary of department of energy said that new EPA regulations mean a lot of coal-fired power plants will shut down soon.
The largest producers of coal, based on 2008 estimates are: China 2761 million tonnes; USA 1007 million tonnes; India 490 million tonnes; Australia 325 million tonnes; Russia 247 million tonnes; Indonesia 246 million tonnes; South Africa 236 million tonnes; Kazakhstan 104 million tonnes; Poland 84 million tones; Colombia 79 million tones and Pakistan mere 150MW.
To attract investment in Pakistan, the Federal Board of Revenue has allowed a 30-year tax holiday for companies intending to produce power from Thar coal fields. In a notification on April 24, it exempted 10 per cent income tax on the dividend of any project at Thar coal fields for 30 years from the launch. Similarly, the payments for goods, services, construction and other operations of the project would be exempted from up to 3.5 per cent withholding tax.
The concession has been given on the recommendations of the Privatisation Commission and Thar Coal Development Board, which want a tax-free environment for investors. Currently, the electricity produced from coal is less than one per cent of the overall national energy mix in the country. It is mainly used for firing brick kilns.
It is interesting to note that everywhere as here in Pakistan natural gas is preferred to coal for electricity generation although Pakistan’s gas reserves would last for only 20 years and coal reserves would take about 200 years to consume.
Dawn.com
Read Full Post | Make a Comment ( None so far )Joint management of water proposed with Afghanistan
ISLAMABAD, June 13: The World Bank has offered finances and services as an ‘honest broker’ to help Pakistan and Afghanistan in joint water management under a bilateral treaty on the pattern of Pak-India Indus Waters Treaty of 1960.
Sources told Dawn on Monday that the lending agency that had brokered Pak-India treaty and later helped Pakistan in development of Mangla and Tarbela dams has already done necessary work, including arrangement of about $12 million from five other lenders to finance at least four technical studies and the negotiation process.
“It is in the bank’s financial clout and its worldwide experience that provides the necessary incentives for reaching a trans-boundary agreement and paving the way for its successful implementation,” said a World Bank communication seeking support from the two neighbours. “As the most suitable institution for such an undertaking, the bank would sponsor and promote this crucial dialogue and cooperation between Afghanistan and Pakistan for economic development and security in the region,” it added.
The World Bank has proposed putting in place a mechanism for dispute resolution and joint management of water resources by the two countries with the name of Kabul River Basin (KRB) Management Commission on the pattern of Pakistan-India Permanent Indus Commission.
The World Bank’s eager ness to assist the two countries in shared and integrated management of water resources is seen here as a key development because it enjoyed three essential elements for its successful execution. These are political neutrality, international experience and technical expertise for development and implementation of such arrangements and financial resources to finally bring such efforts to reality on ground.The sources said the bank wanted to develop institutional capacity in both countries, particularly Afghanistan, for promotion of greater cooperation and understanding through exchange and sharing of hydro-meteorological data of the KRB between the two countries and development of a management plan using hydrological, hydraulic and economic models.
A $3.5 million component of the project would assist dialogue for greater cooperation on utilisation of water and development of a joint system for data collection, verification, analysis, storage and dissemination through geographic information system (GIS) and digital elevation model (DEM).
Another $2.5 million component aims at development of projects and programmes for multi-sector options on a long-term scenario, combined with economic modelling, climate impact, drought mitigation and other aspects of energy, agriculture and tourism.
Another Rs3 million study would design a permanent KRB management commission jointly managed at the highest level by Afghan and Pakistani specialists support ed by sub-basin councils. The entire programme has to be implemented in four years.
The sources said international non-governmental organisations like South Asia Water Initiative (SAWI), Afghanistan Reconstruction Trust Fund (ARTF), MultiDonor Trust Fund (MDTF) and Climate Change Adaptation Fund have already agreed to support the World Bank move.
The bank has estimated that the average annual flow of Kabul River is about 21 billion cubic meters (BCM). Kunar River, with major contribution of 75 per cent in the Kabul flows, draws more than 60 per cent of water from the Chitral area of Khyber Pakhtunkhwa.
Islamabad has been worried over New Delhi’s increased help to Kabul for development of a number of storages on the Kabul River without addressing Pakistan’s concerns. Pakistan had hinted at diverting Chitral River before its entry into Afghanistan in the event of attempts made to deprive it of its due share.
Pakistan gets about 17 per cent water supply from the Kabul River when Indus flows decline in winter. Pakistan and Afghanistan currently share nine rivers with annual flows of about 18.3 million acres feet (MAF). Out of this, the Kabul River has water flows of 16.5 MAF, to which Chitral River, originating in Pakistan, contributes about 8.5 MAF. After entering Afghanistan, the Chitral River becomes the Kunar River, joins the Kabul River near Jalalabad and then reenters Pakistan.
Dawn.com
Read Full Post | Make a Comment ( None so far )Refinery sales record flat growth in May
KARACHI, June 13: Sales of the country’s refinery sector saw almost a flat growth in the month of May, or a minor decline of 0.4pc to 666.3 thousand tons, the recently released numbers by Oil Companies Advisory Committee showed.
Petrol sales took a bigger plunge of 9.8 per cent on account of reduced sales by the National Refinery Limited (NRL). Fault in NRL platform forced the company to limit its sale to just 2.3 thousand tons of petrol (down 75pc over the earlier month). “Though the company is working on fast-track basis to overcome the problem, but reduced petrol production cannot be ruled out for June as well,” said Nauman Khan, analyst at Topline Securities.
This in addition to month long plant maintenance shutdown of Attock Refinery (ATRL) and three-day plant shutdown of PARCO on account of ‘pricing dispute’ resulted in petrol supply shortage in early part of June.
During 11MFY11, throughput (production) of all refineries combined declined by 4.7 per cent to 7.1m tons as against 7.5m tons in same period last year, with average capacity utilisation at 69 per cent.
ATRL and NRL witnessed an increase in their throughput by 2.8 per cent and 23.3 per cent, respectively, while other refineries ended in throughput shortfall.
PARCO, country’s largest refinery, faced a month-long closure on account of devastating floods while BYCO and PRL conducted their plant maintenance shutdown during the year, which restricted their throughput.
During the period underreview, PARCO, BYCO and PRL sales declined by 9.9pc, 34.4pc and 5.1pc, respectively.
On MoM basis, refinery throughput showed a minor decline of 0.4pc in May to 666 thousand tons as against 669 tons in April. The noticeable feature was a sizeable 9.8pc decline in petrol production with major culprit being NRL.
On account of fault in its petrol platform, company petrol sales plummeted by a significant 75.4pc. However, company’s overall sales increased by 7.8pc with lost ground being covered by up tick in FO (Furnace oil) sales which is a loss making product.
The change in the sales mix towards FO would have a negative bearing on company’s FY11F earnings, says the analyst.
Another notable change was decline in Pakistan Refinery Limited (PRL) sales by 42.5pc to 63.6 thousand in May as against 110.6 thousand in April.
The industry sources suggest that the decline is primarily attributed to maintenance activities.
PARCO, and ATRL throughput increased by 1.4pc, 2.0pc, while BYCO sales surged by a massive 141.2pc.
“Given that the fault in petrol platform is still to be overcome in NRL, we expect reduced petrol sales in the month of June as well,” says Nauman, adding that according to industry sources, NRL is working on fast-track basis to overcome the fault and restore its petrol production.
However, June sales were expected to remain subdued.
Another industry report released by Farhan Bashir Khan at InvestCap stated that as per latest figures available, local refinery production went down by 4.5 per cent monthon-month (MoM) in May while sales were also nominally down by 0.4pc MoM as previous inventories were retired.
The decline was visible in the mainstream petroleum products, including motor gasoline (down 10pc MoM), high speed diesel (down 6pc MoM) and aviation fuels (down 12pc MoM).
On the other hand, overall decline in industry sales was restricted by virtue of 15pc MoM increase in sale of furnace oil.
The shift towards higher furnace oil sales also distorted the white oil yield of the sector which went down by 19pc MoM.
“Likewise, the white oil yield has been lowest since September 2010 when petroleum output was disturbed due to floods in the country,” stated analyst Farhan.
Refinery sales slipped by 4.3pc during in the 11 months of the current financial year over the earlier similar period, while Mogas and FO sales were down by 6.3pc YoY and 3.7pc YoY, respectively.
In terms of individual refinery-wise performances, highest decline was visible in PRL’s sales, which dipped by a massive 41pc MoM, where Mogas sales dropped by 45pc MoM.
Other fuels, such as HSD and FO, also witnessed a significant drop of 59pc MoM and 17pc MoM.
The decline was somewhat compensated by higher sales posted by NRL, the refinery benefiting from 50 per cent MoM higher sales of FO while its own sales of Mogas recorded fall of massive 75pc to mere 2.5k tons (2pc of industry gasoline sales during May, compared to average 10pc).
The analyst was also of the view that higher mix of furnace oil would affect refinery margins adversely. Farhan at InvestCap stated that discussions with industry sources had revealed that the decline was primarily attributed to fault in plat-former unit of the refineries, including ATRL, NRL, PRL and BYCO.
While the problem is addressed at NRL, maintenance work continues at ARL. The unit is primarily used to process low octane naphtha into high octane gasoline fuel and is apparently the prime reason for gasoline supply deficit in May, worsening off in June.
The maintenance work was expected to be undertaken throughout the month of June, which had already resulted in excessive shortage and called for additional import of gasoline.
The said pattern in refinery sales was anticipated to have negative implications on sector profitability.
Dawn.com
Read Full Post | Make a Comment ( None so far )Electricity tariff Households pay almost same rate as industry
KARACHI, June 13: This could be surprising for many yet it is a fact that ordinary citizens, in stress owing to severe load-shedding, are paying a high cost of electricity as industry that is also higher than the rate agriculture sector pays.
The calculation carried out on the basis of overall prices paid by the different segments of economy, including residential consumers across the country, shows that industry enjoys subsidies like the general public but enjoys priority in supply over households and, therefore, is not as severely hit by load- shedding.
The common residential consumers are paying Rs7 per Kwh, while the industry on average pays Rs7.2 per Kwh. The agriculture sector, however, pays Rs6 per Kwh for using power for tube wells.
While the people have been crying over high electricity tariff and ever-increasing load- shedding, particularly in summer, the government is expected to further increase the tariff by 25 to 30 per cent during the next fiscal.
The government had allocated Rs74 billion for subsidy on electricity, while it provided Rs285 billon during FY 11.
This massive decline in subsidy is expected to hike prices mostly for household consumers as they are the biggest user of electricity.
For next year electricity subsidy is budgeted at Rs74 billion, including Rs50 billion for Wapda generation, while Rs24 billion for KESC.
“We believe actual subsidy in FY12 would remain higher at Rs150 billion unless international oil prices sharply reduce. Moreover, given rising electricity shortage we believe that tariff hike this time would be rationalised,” said Farhan Mahmood, researcher at Topline Securities.
Analysts believe that two per cent per month tariff increase could be introduced from next fiscal but they said the political cost of this increase could be much more than expected.
Since the largest consumers of electricity are the general people, they would pay most of the cost of price hike.
Farhan said that against the average selling rate of approximately Rs7.5 per Kwh, residential customers, who consume 45 per cent of the country’s electricity, are on average paying Rs7 per kwh.
Though no major steps were announced to arrest electricity shortage in the new budget the government looked serious to curtail its burgeoning subsidies on electricity next year in line with IMF directives, he said.
Dawn.com
Read Full Post | Make a Comment ( None so far )Payment of Rs10bn dues IPPs plan to invoke sovereign guarantees
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LAHORE, June 13: Four Independent Power Producers (IPPs) will on Tuesday (today) serve the final notice on the government for invoking sovereign guarantee for the recovery of outstanding power dues of over Rs10 billion.“We have decided to give the final notice for invoking sovereign guarantees in next 10 days,” a director of one of the IPPs told Dawn on Monday.
Requesting anonymity, he said nothing short of full payment of the dues could change their mind. The IPPs, which gave the preliminary notice for invoking sovereign guarantees for the recovery of Rs16.50 billion on May 14, include Nishat Chunian, Nishat Power, Liberty and Atlas Power having a combined capacity of producing 800MW of electricity. The director said the government had released Rs6 billion to the four IPPs ever since they had served the preliminary notice, but was delaying the payment of the remaining dues. Industry sources told this reporter that the Pepco authorities had held a meeting with the management of these IPPs and explained to them the reasons for the delay in the payment of their power dues. But the meeting failed to produce any result as the IPPs remained unconvinced. The Pepco officials were told that the delays in the payment of the power dues had created financial crunch for the IPPs that were facing difficulty in procuring fuel for running their plants, they said. “We have exhausted our credit lines (to purchase fuel) and run the risk of closure,” the CEO) of another IPP, who also requested anonymity, said, “The government has long been ignoring our financial problems and its contractual obligations and has forced us to demand the sovereign guarantee to stay afloat.” According to the power industry sources, some IPPs are in a position to wait for actual payment because they are assured of fuel supply by the PSO or gas utilities on the instructions of the government. But others, established under the power policy of 2002, do not enjoy this facility. The sources claim that the IPPs established in the 1990s receive monthly capacity charges in addition to uninterrupted fuel supplies. The IPPs established under the power policy of 2002 are neither given any capacity charges nor get uninterrupted fuel supplies. They are required to purchase fuel from their own resources and pay one month in advance. “In case the government does not honour its contractual obligations, it will be deemed to have defaulted on its sovereign guarantees leading to downward revision of its sovereign ratings,” the director said. He said the cases of resolution of disputes and encashment of guarantees would be heard in foreign countries like United Kingdom or United States because almost all IPPs had component of foreign investments.
Dawn.com |
KP wants net hydel profit uncapped
PESHAWAR, June 13: The Khyber Pakhtunkhwa government has decided to take up with the centre the issue of uncapping net hydel profit, which has been lingering on for over a year.
“The attitude of Wapda is somewhat discouraging. It appears it doesn’t want resolution of the issue,” Sahibzada Mohammad Saeed, provincial secretary finance, told a post-budget press conference here on Monday.
Finance Minister Humayun Khan, Information Minister Mian Iftikhar Hussain and secretaries of provincial departments were also present on the occasion and responded to the questions of journalists.
Prime Minister Syed Yousuf Raza Gilani had constituted a technical committee, comprising officials from the provincial and federal governments and Wapda, to come up with recommendations for devising a permanent formula for working out the net hydel profit, capped in 1991-92 at Rs6 billion annually.
Technical committee constituted for the resolution of the matter has held several meetings, but it could not reach any conclusion mainly because of indifferent attitude of Wapda, explained Mr Saeed.
According to him, the chief minister had written a letter to the prime minister, seeking his intervention to resolve the issue that was supposed to be settled within one month.
He said the prime minister would address the issue after passage of the federal budget, adding, “we are pretty confident that something good for the province will come out.” Earlier, the finance minister while commenting on the next budgetary proposals tabled in the provincial assembly, said efforts were being made to increase revenue receipts that were hardly 3 per cent of the entire budget at the moment.
Revenue from royalty on oil and gas was growing annually and it had reached Rs16 billion this year, he said and added that the earning from hydropower generation will also be increased from the current Rs2.11 billion in addition to the net hydel profit.
The minister said that the provincial government was undertaking a number of hydel power generation projects, which after completion would enhance the province earning.
To a question, he clarified that arrears from the federal government on net hydel profit were being spent on income generating projects other than hydropower projects.
To a question, an official of the Provincial Disaster Management Authority (PDMA) explained that last year floods had inflicted a loss of Rs105 billion on the provincial infrastructure. He explained the provincial government suspended the Annual Development Programme (ADP) for 45 days for relief and rehabilitation of the victims.
The PDMA, he said, had so far disbursed Rs5.81 billion among the households affected in floods, adding the first phase would be over by June 25, while the second installment of Rs40,000 would be disbursed after that.
Secretary Planning and Development Salim Khan explained that the provincial government had initiated 154 schemes of rehabilitation at a cost of Rs14 billion, adding that most of the schemes related to early rehabilitation of flood-hit areas had been completed, while the remaining would be completed by the end of next financial year.
Mr Khan explained that the provincial government was giving priority to productive sectors, adding that Japan International Cooperation Agency and Asian Development Bank were providing financial assistance for reconstruction of roads and hydel power stations in the province.The finance minister further explained that the provincial government had tried to extend maximum relief to the masses in the budget and proposed a number of public welfare schemes.
To a question, the minister clarified that the professional tax levied on the professional colleges in the private sector would not hurt the students because the government would make sure that these colleges did not pass on its impact.
Dawn.com
Read Full Post | Make a Comment ( None so far )Mirani Dam termed a big disaster
Senator Dr Abdul Malik on Monday termed Mirani Dam in Balochistan a “mega disaster”, saying all the government assessments and forecasts about its utility have proved drastically wrong.
He was speaking at a seminar on “Mirani Dam: Development or Disaster”, organised by the Sustainable Development Policy Institute (SDPI).
The dam’s construction started in 2002 was completed in 2006.
Other speakers demanded an early compensation for the 2007 Mirani Dam flood-affected population. They also called for an evaluation report on the dam, adding it should consist of technical, financial, social and environmental thirdparty audit.
Dr Malik said he supported building of dams in Balochistan because rainwater goes waste every year which can be stored and used for vast cultivable areas in the province. But he added that local people had strong reservations about the dam’s design and claims of the Musharraf government that it would help irrigate 32,000 acres. “The dam is just irrigating 3,000 to 4,000 acres. Vast lands between Turbat and Pasni have become uncultivable due to this dam.” The senator also talked about evidences of corruption and misdeeds of those who were overseeing the dam’s construction. He urged early recovery and compensation for the Mirani Dam flood-affected people of three union councils. ‘They are living under open skies without basic facilities for the last four years.” Arshad Abbasi of SDPI said the dam was a classic example of design failure. “The upstream population was affected due to floods and backwater flow from the dam in 2007.” He lamented that no commission or settlement plan has been announced by the government despite heavy damages to local population.
He demanded that a post-project evaluation report consisting of technical, financial, social and environmental thirdparty audit be initiated immediately. “Although dams in Balochistan were necessary due to rapidly depleting groundwater level, consideration of catchment and watershed management will be vital for developing dams. So far, this has been not taken into account.” Sharif Shamazai of the Institute for Development Studies and Practices (IDSP), Quetta, said Mirani Dam was constructed to provide water to Gawadar and adjacent naval base and not to benefit local people or to irrigate 33,000 acres. He added that survey and feasibility was completed unprofessionally, ignoring the feedback and reservations of local communities on the dam’s’ design. “The locals had proposed 80 feet height and 1200 feet wide spillway, which was ignored and resulted in a mega disaster.”
Dawn.com
Read Full Post | Make a Comment ( None so far )MoU signed to promote energy efficiency, conservation plans
SME Leasing Limited, a subsidiary of SME Bank Limited, and SME Business Support Fund recently signed aMemorandum of Understanding, to facilitate co-operation between the parties for encouraging and promoting energy efficiency and conservation programmes in Pakistan.
Both the parties have agreed to cooperate and facilitate each other for the development of SMEs in Pakistan by creating awareness and encouraging use of fuel efficient devices and equipment through agreed means. The agreement was signed by Syed Saquib Mohyuddin, Chief Executive Officer, and SME Business Support Fund and by Mrs Arjumand A. Qazi, Chief Executive Officer, SME Leasing Limited, in a meeting held at the Main Office of SME Leasing Limited in Karachi.
SME Leasing Limited specialises in providing financial solutions to small and medium enterprises in Pakistan. The company has been a pioneer in the field and has assisted in establishing several SME5 from the start to bringing them to a sizeable and bankable entity. The company has been engaged in leasing of equipment with a view to promote the Governments’ efforts to reduce energy wastage and increase productivity.
SME Energy Efficiency (EE) and Energy Conservation (EC) Financial Solutions: Under the EE and EC financial solutions scheme SME Leasing is providing leasing facilities to SME5 to improve their productivity and reduce cost of doing business, while saving on fuel for the exchequer. The BSF programme will assist SME Leasing in identifying and researching on the industrial energy leakages and the equipment required to reduce the same, with the help of expert service providers.
SME Business Support Fund (BSF) is an autonomous body of the Ministry of Finance and a non-profit organisation formed with the objectives of assisting SMEs as well as Business Development Services Providers for improving their competitiveness and to enhance the revenue generating capacity and profitability of emerging businesses.
BSF Smart Energy Services in order to address the issue pertaining to Energy Efficiency, BSF has initiated the project BSF Smart Energy Services’ with the agenda of energy usage efficiency, creating additional energy supply at source, and to reduce the total cost of production to make SME5 globally competitive through innovation and efficiency.
BSF Smart Energy Services team is conducting preliminary survey of selected SMEs of Kot Lakhpat Industrial Estate in the pilot phase, which will be followed by the detailed energy audits. The results will then be utilised in developing detailed engineering services forsustainable energy solutions so that the set objectives of reducing the total cost of production and to make SMEs globally competitive can be successfully achieved.-PR
Copyright Business Recorder, 2011
Read Full Post | Make a Comment ( None so far )Nine hydel projects: ‘work to be undertaken within next five years’
Water and Power Development Authority (Wapda) will undertake work on nine hydel power projects with a capacity of generating more than 24,000 mega watts electricity during the next five years, while Diamer-Bhasha and Kurram Tangi Dam Projects are ready for construction.
This was stated by Governor, Khyber Pakhtunkhwa, Barrister Masood Kausar during a briefing here on Saturday. The governor, on a point, assured full security for Wapda consultants and contractors working on different projects Fata and directed to resolve all issues hindering progress of work on these projects. He particularly referred to Bara Dam project and said that it would have far reaching impact on the socio-economic condition of the entire area, both in the tribal and settled ones.
He asked Nespak to complete detailed engineering design of Bara Dam project, so that it could be implemented at the earliest. Regarding provision of funds for Bara Dam project, he assured that the matter would be taken up with the federal government at appropriate level.
Earlier, Chairman Wapda, Shakeel Durrani briefed the governor about the ongoing as well as planned projects including Bara Dam inKhyber Agency, Kurram Tangi Dam in North Waziristan Agency, Munda Dam in Mohmand Agency, Golen Gol Hydle Power Project in Chitral, Tank Zam and Daraban Zam Dams in D.I.Khan. He also presented an overview of the total current hydel stations operations, adding that the total installed capacity of 14 hydel stations in operation is 6,464MW while 1,405 MW was in process.
The meeting was told that feasibility study of Bara Dam was completed in 2008 and the project, approved by ECNEC would cost above Rs 14 billion. Detailed engineering design and preparation of Tender documents were in progress. The project would be completed in five year’s period and on completion, would make the existing irrigation system functional, create job opportunities, reduce flood damages and provide treated drinking water besides generating 4.8 MW power.
With regard to Kurram Tangi Project, it was stated that the project, having 84 MW power generation capacities is ready for construction and would be completed in four years period with an estimated cost of Rs 59 billion. Regarding Munda Dam, the meeting was informed that work on its documentation is in progress, including short listing of consultants for detailed engineering design and preparation of tender documents.
The design will be completed within two years with total construction period of seven years. Munda Dam, as stated, is a multi-purpose dam to boost agriculture, produce power up to 740 MW and mitigate flood damage in Peshawar and Nowshera valley.
During the briefing, it was stated that nine projects with total capacity of 1628.76 MW are under execution including Gomal Zam Dam in Fata, Khan Khwar, Duber Khwar and Allai Khwar in Khyber Pakhtunkhwa, Satpara Dam in Skardu and Jinnah Hydropower and Neelam Jhelum project besides repair and maintenance of Unit1, 3 and 4 of Tarbela Dam.
Chairman Wapda, while briefing the governor, said that all out efforts would be made to fulfil the commitment of completion of dam projects. He informed that Wapda has planned to establish a good quality school in the vicinity of their projects and requested proper support in this regard. He also informed that Wapda would also upgrade the nearby hospitals for better health cover to the local people. These measures, he added, would help building confidence among the locals and also improve the socio-economic conditions of the respective areas.
The meeting besides others was attended by the Chief Secretary Khyber Pakhtunkhwa Ghulam Dastagir Akhtar, Attaullah Khan Chief Executive FDA, Fazal Karim Khattak Additional Chief Secretary Fata and Sikandar Qayyum Secretary to Governor.
Copyright Business Recorder, 2011
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