01

BUsIness

Bsaturday, 20 April, 2013

Pakistan’s economy ispassing through a phase

of low growth withprotracted energy

crisis and weak fiscalfundamentals the main

reasons behind the slow growth

ISLAMABAD

AGENCIES

THE World Bank (WB) hasagreed to provide $840million for the TarbelaDam extension projectafter the Ministry of Water

and Power accepted the WB condition toopen a separate escrow account to avoidthe curse of the circular debt.

According to reports, the WB decisionwill be a big blow to the oil mafia whichis minting billions of rupees on account ofthermal generation based on costly fur-nace oil and diesel. The secretary waterand power took the much-awaited deci-sion to open the escrow (revolving) ac-count to obtain the credit line of $840million for the Tarbela Extension IV Proj-ect, which the World Bank had withheldand linked to the opening of the account.

“Yes, we have decided to open the ac-count and the World Bank will soon issuethe NOC (No Objection Letter) to this ef-fect. The NTDC will open the account ei-ther in the National Bank of Pakistan(NBP) or in Habib Bank Limited (HBL),”a senior official of the Ministry of Waterand Power, said.

WAPDA Chairman Syed RaghibAbbas Shah also confirmed that the Min-istry of Water and Power secretary hadasked the NTDC to open the escrow ac-count so that Pakistan could benefit fromthe cheaper electricity of 1,350 MWs,which the Tarbela IV extension projectwould produce.

“This will pave the way for ensuringthe World Bank’s credit line of $840 mil-lion, which is imperative to complete themost viable project, that is the TarbelaExtension IV project.”

The Tarbela IV project, with a capac-

ity to generate hydropower of1,350MWs, had earlier hitsnags as the NTDC in-fluenced by the mightyoil mafia had refusedto open the account.

The WorldBank insisted onthe account to pre-vent the viability ofthe Tarbela-IV proj-ect from the adverseimpact of the mon-strous circular debt,which is feared to touch astaggering Rs 792 billion bythe end of the current financial year.

The NTDC would have to deposit allproceeds in the new account for electric-ity to be supplied to it under the Tarbela-IV project to avert the cash flow crisis.The oil lobby does not want Pakistan to

increase its reliance on hydrogeneration as 68 percent

electricity generation istaking place through

costly diesel and fur-nace oil and the oillobby considers theTarbela-IV projectas detrimental to itsinterests in thecountry.

According to theofficial, under the Tar-

bela-IV extension proj-ect, three turbine units,

each having a capacity to gen-erate 450MWs will be installed. The

country has right now the capacity togenerate hydropower of almost7,000MWs and in case the project mate-rialises, the hydro generation would in-crease up to 8,300MWs.

WB allows $840 million for Tarbela extension project

the world Bank decision will be a

big blow to the oil mafia which is minting

billions of rupees on account of thermal generation based on costly furnace

oil and diesel

ISLAMABAD

APP

Despite numerous challenges, Pakistan’seconomy performed well in 2012 com-pared to 2011, United Nations said in itslatest survey report.

“There was improved performance in2012 despite numerous challenges, in-cluding heavy rain and flooding in south-ern parts of the country, increases in fueland commodity prices, the global slow-down and weak capital inflows,” says theUN Economic and Social Survey of Asiaand the Pacific 2013.

According to the report, the country’sGDP grew by 3.7% in 2012 as comparedwith 3% in 2011 and the agricultural sec-

tor also performed better than in 2011. As for manufacturing, its perform-

ance improved and the construction sec-tor staged a strong recovery while highergrowth in the industrial sector as a wholewas achieved despite shortages of elec-tricity and natural gas.

On the other hand, the services sectorwitnessed somewhat slower growth, thesurvey observed. On the demand side,consumption, both private and public,grew at a higher rate in 2012 but invest-ment declined, it said adding as a result,investment fell to 12.5% of GDP in 2012from 13.1% of GDP in 2011.

Inflation in Pakistan was broughtdown from 13.7% in 2011 to 11% in 2012despite increases in international oil

prices, the effect of an upward adjustmentin the administered prices of electricityand natural gas, supply disruptions due toheavy rains and flooding in the southernpart of the country and heavy bank bor-rowings. The country achieved strong ex-port growth at 28% in 2011 and value oftotal merchandise exports reached $25billion. In spite of the crises in the Eurozone, a major destination for Pakistan’sexports, the country could maintain ex-ports at nearly the same level as in theprevious year.

Overseas workers’ remittances con-tinued to grow and crossed the $13 billionmark in 2012. The growth rate in remit-tances over the past two years exceeded45% partly due to government efforts to

divert remittances from informal to for-mal channels. These remittances havehelped in containing the current accountdeficit.

However, the report pointed out thatPakistan’s economy is passing through aphase of low growth, saying that the pro-tracted energy crisis and weak fiscal fun-damentals are the main reasons behindslow growth.

Similarly, the declining trend in pri-vate investment expenditures is continu-ing and without stemming the free fall ininvestment and addressing the challengeof chronic energy shortages, growth can-not be improved on a sustainable basis.

The report predicted GDP growth ofthe country at 3.5% in 2013.

PAkIstAn’s eConomy PerFormed well In 2012: Un rePort

Provinces unlikely to achievebudget surplus

ISLAMABAD

NNI

The Finance Ministry has expressed fearsthat the provinces might not be able toachieve the projected budget surplus of Rs80 billion for the fiscal year 2011-12 dueto election year and downward revision inrevenue collection of the Federal Board ofRevenue. Sources at the Ministry of Fi-nance said the FBR revenue collection,which was originally estimated at Rs2,381 billion for the current fiscal year,has been revised downward to Rs 2,193billion. The decrease in FBR revenue col-lection would result in decline in provin-cial share from the divisible pool andconsequently the provinces’ ability to gen-erate surplus. Moreover, the Ministry ofFinance has already revised estimatedprovincial surplus for the current fiscalyear to Rs 50 billion from original projec-tion of Rs 80 billion. The provincial trans-fer from the federal governments, whichwas estimated at Rs 1,562 billion for thecurrent fiscal year, has now been reviseddownward to Rs 1444 billion, reflecting ashortfall of Rs 118 billion in provincialtransfers, according to the budget strategypaper for 2013-16. The provinces closedtheir fiscal year in deficit by Rs 40 billionduring the last fiscal year.

SECP introducesonline financialreporting system

KARACHI

STAFF REPORT

In continuation of its efforts to strengthenthe surveillance of equity markets, the Se-curities and Exchange Commission ofPakistan (SECP) has introduced online Fi-nancial Reporting System for the TRECholders/Brokers of the three stock ex-changes. From July 2013 onwards, allTREC holders/brokers will be required tofile their financial information onlinewithin 15 days of the end of each quarter.This effort is a part of Commission’s over-all policy to make use of informationtechnology and automation and to stream-line the flow of information. Introductionof this online system will provide timelyfinancial information with respect toTREC holders/Brokers and enable theCommission to proactively monitor theirfinancial soundness and take preemptivemeasures for the protection of investors.For effective implementation of this sys-tem, the SECP will organize training ses-sions for the brokers at all the three StockExchanges.

ISLAMABAD

APP

Azerbaijan is keen to further enhance its bilateral,economic and commercial relations with Pak-istan with special focus on improving thedeteriorating energy situation of the coun-try. “Azerbaijan has expertise in energysector, having huge hydel power plantsas well as expertise in exploration ofoil and gas sector, therefore both thecountries could cooperate in theseareas to further enhance their bilateralrelations,” Ambassador of Azerbaijanin Pakistan Dashgin Shikarov said in ameeting with office-bearers of Islam-abad Chamber of Commerce & Industry(ICCI) on Friday.

The ambassador informed the ICCI mem-bers that Azerbaijan would increase its airline fleetby 2014 to establish direct air-link between Islamabadand Baku which would bring people of the two countriescloser to each other.

He also underlined the need for establishing Pak-Azer-

baijan Business Forum and invited ICCI’s delegation to visitAzerbaijan that would open new avenues of cooperation.

Dashgin said that the construction sector is one ofthe fastest growing areas of Azerbaijan’s econ-

omy as it is in process of constructing hugebuildings and a new island that provide in-

vestment opportunity of about $130 bil-lion. He said that the two countriesalso have a potential of joint venturesin pharmaceutical, agriculture andmanufacturing sector.

Speaking on the occasion, ICCIPresident Zafar Bakhtawari said thatboth the countries must ensure a lib-eral visa policy to enable the busi-

nessmen get visa easily and meet eachother, which is imperative to boost trade

between the two countries as there isenough potential in various fields between

the two countries to increase trade.The ICCI president informed the ambassador that

ICCI plans to host a meeting of ECO Capital Chambers Con-ference in Islamabad with the aim to promote mutually ben-eficial relation between Pakistan and ECO countries.

Azerbaijan to help resolvePakistan’s energy crisis

SBP pumps over Rs 379 billion intobanking systemKARACHI: The central bank on Friday in-jected over Rs 379 billion into the bankingsystem which is facing an acute liquiditycrunch, thanks to the rampant budgetary bor-rowings of the cash-strapped the govern-ment. The State Bank, through conducting7-days reverse repo open market operation,pumped Rs 379.950 billion into the moneymarket. Of the total 27 bids of Rs 430.900billion received the bank accepted 20 bids topump the said amount at 9.17 percent annualrate of return. “Total amount offered at 9.17percent was Rs 114.100 billion out of whichSBP accepted Rs 86.250 billion on pro ratebasis,” the central bank said. According toSBP spokesperson, the regulator conducts re-verse repo OMOs when there is a liquiditycrunch in the money market. -STAFF REPORT

ICI Pakistan posts Rs173m profit in 1Q2013KARACHI: The Board of Directors of ICIPakistan Limited Friday declared a profitafter tax of Rs 173 million while approvingthe company’s financial results for the quar-ter that ended last month on March 31. Ac-cording to a statement issued by Seemi Saad,manager corporate communications at theICI Pakistan, the company’s profit witnessedan increase of 10 percent over the correspon-ding period of last year. “Higher volumes inthe polyester and soda ash businesses tookthe company’s net sales income to Rs 9.3 bil-lion,” the statement added. The sales income,it said, marked a 13 percent growth over lastyear. The company’s profit before tax, duringthe quarter under review, also ballooned by10 percent to Rs 265 million, the statementsaid. The Board of Directors also announcedan earning per share of Rs 1.88 for the quar-ter, registering 10 percent increase comparedto the previous year. STAFF REPORT

LAHORE

APP

The Federation of Pakistan Cham-ber of Commerce and Industry(FPCCI) on Friday demanded totalexemption from power and gasload shedding to strengthen the na-tional economy besides saving theindustrial and agricultural sectorsfrom massive losses. The newly-elected FPCCI President ZubairAhmad Malik and VP SAARC

Chamber of Commerce and Indus-try Iftikhar Ali Malik, in a jointstatement expressing serious con-cern on massive load shedding, de-manded that the government shouldaccord top priority to industrial andagricultural sectors over domesticand commercial sector. They saidround-the-clock power and gas sup-ply throughout the year would accel-erate economic growth and meetexport targets timely besides help-ing in production of bumper crops.

Iftikhar Ali Malik said unprece-dented load shedding would hamperthe industrial production in thecountry and lead to reduction in ex-port orders. He said that the industry was al-ready facing acute energy crisis andthe frequent increase in petroleumprices would further reduce liquid-ity. The high power, gas and petro-leum tariffs had created liquiditycrunch for importers of industrialraw materials, he added.

FPCCI demands exemption from gas, power cuts

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BUsInesssaturday, 20 April, 2013

Hira Lari launches Lawn Spring 2013

KARACHI: The vibrant summer season arrives with

the spirit of love everywhere. Gear up to update

your wardrobe with a breath-taking mesmerizing

Hira Lari Summer Collection 2013. The Collection is

truly nature inspired, perfectly combined with rich

folk inspired patterns, and silhouetted look. The

Hira Lari Summer collection is a beautiful

amalgamation of illustrated prints; creative

backgrounds; transparent overlay and ethnic floral

mix beautifully combined with the most unusual

attractive color combos. The coordinating applique

embroidery neck pieces and borders are the value

addition, which makes it more fascinating. The

designs are available in different colors to provide

variety. The vibrant colors and trendy designs make

the prints quite irresistible. PR

Habib Group launchesHabib University KARACHI: Habib University, a pioneering initiative

in higher education, was introduced at a fundraising

dinner hosted by Mr and Mrs HM Habib. The event

held at HM Habib’s residence was attended by

noted philanthropists and businessmen. The dinner

brought the university management and patrons

together, interacting and exchanging ideas on how

a dedicated front can help improve the state of

higher education in Pakistan. Welcoming guests at

the event, Rafiq Habib introduced the upcoming

Habib University as a continuation of Habib Group’s

numerous philanthropic projects. He acknowledged

the Board of Directors present and also thanked the

Donors who contributed generously to the

University project. Wasif A. Rizvi, President Habib

University, shared the idea of creating a world-

class, research-based undergraduate institution in

Pakistan, committed to academic excellence and

amalgamating local heritage and international

exposure for the new generation. PR

P&G wins at NFEH CSR AwardsKARACHI: P&G Pakistan has been recognized for its

CSR efforts by the National Forum for Environment

and Health at the CSR Business Excellence Awards

2013. P&G received awards in the categories of

Social Impact and Social Commitment Report. The

award recognizes the positive difference P&G’s

community programs are making in the areas of

health and hygiene awareness, education and

orphan care across the country. Over the years P&G

programs have touched and improved lives of 28

million Pakistanis, providing everyday basics that

help create the experience of home and improving

everyday health and confidence. The Children’s Safe

Drinking Water Program (CSDW) provides clean

drinking water to communities in need. Under the

Keeping the Hope Alive and Safe Schooling for

Building Futures program P&G has partnered with

Health Oriented Preventive Education (HOPE) and

READ Foundation to provide quality education to

children from impoverished neighborhoods. A P&G

Home has been established at the SOS Children’s

Village in Islamabad which is enabling ten orphan

children to live a normal life. The Safeguard and

Always School Education programs aim to instill

outstanding hygiene habits amongst children and

Pampers Mobile Clinics provide mothers who are

unaware about healthy babycare practices with

important information at their doorsteps. PR

Across the aisle: Towardsa national agendaKARACHI: The APNA Pakistan movement has

further capitalized on its achievements, under the

banner of Contech International, and has gained

another mile stone to address critical situation of

maternal and child health, and its linked high

mortality rates in Pakistan. APNA Pakistan has

achieved a consensus on “National Agenda”

amongst key political parties, religious scholars,

health and population experts for improvement in

the existing alarming situation of maternal and

child health and provision of comprehensive

reproductive health. Political will, together with

commitment from societal influential people like

policy entrepreneurs, population and health

experts, religious and minority leaders was

achieved through a non partisan forum ‘Across the

Aisle’ on 31st December, 2012. This first

collaboration emerged into a pledge that led to a

policy road map. Consolidation continued in the

subsequent multiple events. Sessions of the Core

Working Group, face to face meetings with political

leaders, round table conferences with policy

entrepreneurs and televised debates were

conducted successfully to deliberate on the

situation of health, population and development of

a policy framework for further action. PR

NIDA Peshawar holds seminar onindustrial automation LAHORE: National Institute of Design and Analysis

(NIDA) Peshawar centre held a free seminar on

industrial automation at CECOS University Hayatabad

Peshawar on April 12. Fahim Khan was affianced as

the workshop trainer to impart the incorporative utility

of automation technologies to increase productivity

and robustness of the industrial procedures. Dr. Riaz

Ahmed Khattak Khan, Vice Chancellor CECOS

University was the chief guest at the event, whereas

other guest speakers were invited to share their

expert outlook about the increasing partake and

potential gains of industrial automation in Pakistan.

They also expounded about various contours of

automation programming; PLC (Programmable Logical

Controls), SCADA, HMI, their demand and

dependability in the industry. NIDA (National Institute

of Design and Analysis) is a subsidiary institute of

TUSDEC (Technology Upgradation and Skill

Development Company). The centre is offering many

short courses and diplomas in extensive CAD/CAM

disciplines and also fostering vocational and technical

trainings in a multiplicity of employable trades like

mobile repairing, computer maintenance, UPS

Assembling and solar technologies. PR

CORPORATE CORNER

02

B

major Gainers

COMPANY OPEN HIGH LOW CLOSE CHANGE TURNOVERUnilever Food XD 4332.00 4400.00 4115.40 4400.00 68.00 1,740Wyeth Pak Ltd XD 1266.50 1329.82 1315.00 1329.82 63.32 1,600Sanofi-Aventis XD 428.25 447.99 447.95 447.99 19.74 300Bhanero Tex. 286.33 300.64 300.49 300.64 14.31 300Clariant PaK. 263.91 277.10 264.99 277.10 13.19 22,900

major losersRafhan Maize 3902.00 3850.00 3850.00 3850.00 -52.00 20Indus Dyeing 390.00 380.00 380.00 380.00 -10.00 100Shezan Inter. 429.00 429.00 420.00 420.00 -9.00 200Sunrays Textile 169.90 162.00 161.41 161.41 -8.49 1,000Exide (PAK) 368.00 370.00 361.00 362.00 -6.00 1,900

Volume leaders

National Bank.XDXB 41.06 42.60 40.76 41.77 0.71 18,869,500Engro Polymer 11.46 12.38 11.33 11.77 0.31 14,207,500Engro Corporation 138.33 141.20 136.50 137.45 -0.88 12,474,800Maple Leaf Cement 19.15 19.50 18.51 18.64 -0.51 8,523,000Lotte PakPTA 7.08 7.35 6.97 7.31 0.23 7,465,500

Interbank ratesUSD PKR 98.3575GBP PKR 150.9492JPY PKR 0.9908EURO PKR 128.7598

ForexBUY SELL

US Dollar 99.20 99.45 Euro 128.46 128.71 Great Britain Pound 149.73 149.98 Japanese Yen 0.9835 0.9938 Canadian Dollar 95.09 96.79 Hong Kong Dollar 12.49 12.72 UAE Dirham 26.75 27.00 Saudi Riyal 26.25 26.50

MARKHAM: Frank Scarpitti, mayor of the Canadian city Markham, hosted a reception for Khalil

Ahmed Nanitalwala, chairman Medicam Group. PR

KARACHI: Dr Hilal Hussain Al Tuwairqi, Chairman Al Tuwairqi Holding, Zaigham Adil Rizvi,

Country Head/Director Projects Tuwairqi Steel Mill Limited, Shaoib Akhter, General Manager

Finance and Accounts Al Tuwairqi Holding-Kingdom of Saudi Arabia, Anthony Phillips, Chief

Operating Officer Al-Ittefaq Steel Product Company, Ishtiaq Ashraf, Financial Controller

Tuwairqi Steel Mills Limited, Kim Tae-Kyun, Growth and Investment Division Steel Business

Department II, Department Manager POSCO-South Korea, Young ho Yoo, Resident Director-

Pakistan POSCO, and Seung-Gi Kang, Manager Overseas Steel Business Department. PR

ISLAMABAD

AGENCIES

THE Oil and Gas Regulatory Au-thority (OGRA) plans to conductan audit of oil refineries in an at-tempt to find out where the bil-lions of rupees collected fromconsumers on account of duty

have disappeared, since refineries have so far notupgraded their plants to produce cleaner fuel.

According to sources, the regulator is con-cerned over failure of oil refineries toproduce fuel compliant with Euro-pean standards despite collecting theduty, which they had been allowedto receive in order to modernisethemselves and set up de-sul-phurisation plants.

The refineries are said to havereceived over Rs 200 billion indeemed duty from consumers since2002. Currently the duty is imposedon diesel sales only. Earlier, petroland kerosene consumers were alsopaying the duty. “Oil refinerieshave spent 50% of the deemed dutyon servicing or clearing their bank loans anddeclared that they were covering their losses fromspecial reserves under a formula,” a source said,adding that they had only Rs 7 billion in special re-serves. A judicial commission, formed by theSupreme Court, had recommended scrapping theduty for it was not achieving the desired objective.

The refineries were scheduled to set up de-sul-phurisation plants in 2012, but they got an exten-

sion from the government until July 1, 2014. Later,the Economic Coordination Committee (ECC) ofthe cabinet pushed the deadline to December 2015.

At present, Pak Arab Refinery Company(PARCO) is the country’s only refinery that is pro-ducing Euro-II-compliant diesel. Pakistan RefineryLimited (PRL) Managing Director Aftab Hussainsaid the refineries used to deposit 50% of thedeemed duty in special reserves to cover theirlosses, stressing that since 2002 they had been op-erating under a formula set by the government.

Now, a new formula, approved by theECC, would bar them from doing so

starting from the next financialyear, he said, adding that an Es-

crow account would be opened todeposit the duty collected fromconsumers.

According to sources,OGRA is going to start the auditto find out where the duty was

spent and why only one refineryhas been able to set up the clean

fuel-producing plant. Earlier,OGRA had opposed any in-crease in the rate of deemed duty

and insisted that the refineriesshould establish upgraded plants by the

deadline of July 2014. The regulator argued that incase of increase in duty, consumers would beforced to pay an additional $2.5 billion.

Instead, OGRA suggested that the oil refineriesshould modernise their plants and recover its cost.

Despite the resistance, the ECC has increasedthe duty from 7.5% to 9%, which will come intoforce from January 2016.

Audit to investigate vanished oGrA duty funds

Gold slide flasheswarning signs forworld economy

NEW YORK

AGENCIES

The plunge in the gold price in the pastweek may have raised a big red flag over theglobal economy. Some top investors say thegold sell-off, and the broader declines in oiland metals prices, reflect the failure of theFederal Reserve and other central banks tocreate robust demand even as they injectmassive amounts of money into the worldfinancial system.The slide, which took gold to its biggestone-day loss ever in dollar terms on Mon-day, unnerved investors who saw billions ofdollars in gains wiped out in a few days, andit may portend declines in other asset pricesahead. That may have begun this week withseveral days of big stock price drops.Some see the move in gold as a possibleflashpoint for a broader economic and mar-kets shock comparable to the collapse ofhedge fund Long-Term Capital Managementin 1998 and even the financial crisis adecade later. Both events were preceded bysharp drops in gold.The gold and commodities weakness is “sig-naling concerns about global growth,” saidMohamed El-Erian, the co-chief investmentofficer of PIMCO, which oversees $2 tril-lion in assets. “Commodities have beensending the signal on growth for a while,and now even louder.” And after the stam-pede out of gold earlier this week, investorson Thursday dumped their holdings of U.S.inflation bonds after a lousy auction.

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