Pakistan Economy: News & Discussion

jackprince

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Why doesn't US understand giving loads of money won't ever solve Pakistani problem ever? Are they stupid or ignorant? Pakistan is only milking US. It has been deteriorating for a long time - only recently the Taliban's advances made it prominent. Giving it money wont stop it's collaps into chaos but make it even more dangerous to India and other nations in the region.
 

Rage

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- Members' suggestions implemented.


- I urge that this letter be dispatched forthwith to the USINPAC since the process of deliberation and lobbying is already well begun. To avoid needless wastage of time in requesting members to "thank" the post in order to indicate their compliance and acceptance of their names in the undersigned, I suggest that a deadline be set: preferably 12:00 midnight tonight Eastern Daylight Time, to send the message with the names of all the users on DFI with the exception of those who have already intimated Invi of their removal.
 

Rage

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Two very conflicting reports:

----

Congress to finish Pakistan bill urgently: Kerry

8 May 2009, 0150 hrs IST, AFP


WASHINGTON: The US Congress will urgently complete an aid bill to stabilize Pakistan, Senator John Kerry promised on Thursday after talks with

the Pakistani and Afghan presidents.

"Obviously, it is urgent," Kerry told reporters after a closed-door luncheon on the situation in Pakistan and Afghanistan.

"Senators on both sides  Republicans and Democrats  are committed to move this as rapidly as possible. So I can't give you a precise date, but we do understand the urgency."


Congress to finish Pakistan bill urgently: Kerry - US - World - The Times of India

x=x=x=x=x=x=x=x=x=x=x=x=x=x=x=x=x=x=x


Emergency US aid for Pakistan unlikely: Top senator

Updated at: 2315 PST, Thursday, April 30, 2009


WASHINGTON: The US Congress is unlikely to pass an emergency aid package for Pakistan separate from a broader measure to fund wars in Iraq and Afghanistan, a leading senator said Thursday.

"I don't think it's likely," Democratic Senator Richard Durbin said when asked whether the senate would take up a Pakistan aid measure before the 83.4-billion-dollar supplemental spending legislation for the two conflicts.

That package includes about 1.4 billion dollars for Pakistan but may not pass the US Congress for weeks, and some lawmakers have warned that it could be too late to help the "war on terror" ally.

US President Barack Obama's administration has said it wants to speed up to 400 million dollars for Pakistan, and told lawmakers that it may seek other avenues for the funding if they fail to act, according to congressional aides


Emergency US aid for Pakistan unlikely: Top senator
 

Yusuf

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Two different spectrum of the Congress subscribing to different lobbyists?

Anyway US has confirmed new military and civilian aid with the condition that it act against the Taliban in SWAT.
 

Rage

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Pakistan’s economy falling prey to militancy

Sunday, 24 May, 2009 | 12:57 PM PST |


Army troops patrol a wheat field in the
village of Pir Baba in the Buner district. —AFP



KARACHI: Growing extremist violence has crippled the economy in northwest Pakistan, made tens of thousands of people unemployed and exacerbated the poverty that breeds fundamentalism, business leaders say.

North West Frontier Province (NWFP), which borders Afghanistan and Pakistan’s capital Islamabad, is rich in agriculture, minerals, stunning mountain scenery once popular with tourists and multiple local industries.

But the 21st century has brought decline owing to extremist violence in the adjacent federally administered tribal areas (Fata) and the NWFP district of Swat, where the Taliban launched an uprising two years ago.

‘Around three-quarters of our industries have closed since the war in Afghanistan started but most have closed in the last two to three years,’ Sharafat Mubarak, president of the local chamber of commerce and industry, told AFP.

Before the September 11, 2001 attacks on the United States which precipitated the invasion of Afghanistan and ensuing Taliban insurgency, 2,254 industries were functional in NWFP, of which just 594 operate today, he said.

‘We had more than 100,000 people employed in those industries but now just 18,000 are there and the rest have lost their jobs,’ Mubarak said.

The decline has accelerated over the past six months, during which Pakistan battled Taliban fighters, agreed a ceasefire in part of NWFP and last month launched a renewed offensive as militants advanced further towards Islamabad.

Once known affectionately as the ‘Switzerland of Pakistan’ and frequented by Western holidaymakers, Swat is today a national symbol of horror where violence last year halved receipts from tourism, official figures show.

The main industries in NWFP and Fata include marble, chemicals, rubber, plastic, food, tobacco, handicrafts, paper, leather and furniture.

The match industry, the only export-oriented sector in NWFP and which once employed around 5,000 people, has hit difficulties as a substantial quantity of the required wood comes from the conflict-torn districts.

Mubarak said banks have reduced their lending to local industry because of the growing instability and element of risk.

‘Only 32 billion rupees out of 852 billion rupees lent by banks in Pakistan were granted to industries in NWFP last year. The lending has further reduced this year,’ Mubarak said.

‘Thousands of people from the tribal areas who have been rendered jobless are at the mercy of the militants,’ he said.

‘It makes it so easy to hire unemployed youth for their cause. The government should stop this by helping us revive the industries,’ he added.

Jahan Manan, head of the independent Centre for Public Policy Research, said the root cause of decline was Afghanistan, wracked over many years by civil war and insurgency.

‘NWFP’s geographical position as a frontline province in international conflicts for the last 30 years has had a damaging effect on its economy. The unrest and insecurity discourage private investment,’ he told AFP.

The State Bank of Pakistan reported a decline of 13 per cent in foreign direct investment in the country during the first 10 months of this financial year, which runs from July 1 to June 30, compared with the same period last year.

‘The security concerns in Pakistan’s northwest and the global recession are both responsible,’ said Mohammad Sohail, chief executive of Topline Securities brokerage house.

According to the finance ministry, Pakistan’s decision to join the US-led ‘war on terror’ meant massive unemployment in affected regions and increased rural poverty, as state spending focused on law enforcement, not development.

Business leaders want the government to offer a package of incentives such as tax and duty exemptions to revive the economy, but for now the state is focused on dispensing millions of dollars in emergency aid to the displaced.


DAWN.COM | Business | Pakistan?s economy falling prey to militancy
 

Rage

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Sleepless in Karachi: the effects of the recent power cuts on Pakisthan's "city of lights"



A vendor waits for customers along a street – AFP/Asif Hassan



A vendor makes use of light from a cellphone so that he can
deal with his customer during the power failure – AFP/Asif Hassan




Commuters run on the streets during electricity outages – AFP/Asif Hassan



A view of vehicles moving about the streets
of Karachi during the night - Sabir Mazhar




Residents sleep outside their houses during electricity outages– AFP/Asif Hassan



Pakistani residents sleep outside their houses during
electricity outages– AFP/Asif Hassan




A view of traffic on I.I. Chundirgar Road during
the power breakdown - APP/Jajangir Khan




Pakistani residents sleep outside their houses during electricity outages
– AFP/Asif Hassan




Cars are seen on a road during a city wide power outage in Karachi – AFP/Asif Hassan


Residents sleep on carts outside their houses to escape
the heat during a power outage in Karachi early morning – AFP/Asif Hassan
 

prahladh

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They say "there is always light at the end of the tunnel" But in this case it doesn't seem to be because of power-cuts.
 

Rage

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Rampant corruption causing collapse of govt organisations

Rampant corruption causing collapse of govt organisations

Saturday, August 01, 2009

*Reign of kickbacks, commissions, back room deals cost nation billions of dollars


By Kamran Khan


KARACHI: Government decisions, in total disregard to merit, fair play and transparency, based on personal monetary gains for a few individuals in the government have grossly compounded the economic miseries of Pakistan and turned several government organisations into insolvent corporate entities, according to an investigation during which dozens of well-placed and informed sources in the government and corporate sectors were interviewed.

Positioning of several handpicked corrupt and incompetent officials in key appointments at the government-run companies, in many cases without an active approval of Prime Minister Yousuf Raza Gilani, has left a trail of incredible cases of corruption never witnessed before.

Many policy decisions with financial implications in the government-run corporations routinely carry an imprint of a few individuals, who maintained close personal and business ties with some of the most important people in the government between 1997 and 2008.

One of them, who was probed for his most shady commodity deals struck during the last tenure of the PPP government, now appears to be the main motivating factor behind the loss making ventures of Pakistan Steel and the Trading Corporation of Pakistan. His reach now extends to the National Bank of Pakistan, where his former employee now holds a key position.

The consequences of former President Pervez Musharraf’s National Reconciliation Ordinance (NRO) and an absence of a potent anti-corruption organisation in the country seem to have contributed to this fearless unbridled corruption that now plague Pakistan’s economic and business edifice. Following examples illustrate reasons that require an anti-corruption crackdown before it is too late:

Crash of Pakistan Steel Pakistan Steel, a sheet anchor in Pakistan’s infrastructure development, had a reserve of Rs 11 billion and an inventory of products worth at least Rs 6 billion in June 2008.

By the second week of the current month, in space of only 54 weeks, Pakistan Steel has almost turned into a bankrupt state institution with current liabilities of Rs 21 billion.

Most shockingly, the Pakistan Steel management, which opened new annuls of corruption during this period, has already consumed the entire amount of employees’ gratuity and provident funds besides swallowing the earnest money deposited with the organisation by its contractors and suppliers.

Blast furnace, the backbone of Pakistan Steel, is running at 15 percent capacity in the absence of quality iron ore while its main production units of billet mill and billet caster are standing almost idle delivering a negligible output.

Reams of documents are available with this correspondent that prove how this national treasure was plundered through irrational spot purchases of raw material and equipment, grant of freight contracts at the price 20 times more than the running rate, the sale of Pakistan Steel products at an amazingly lower rate than the cost of production in the past one year.

Such was the invisible control of a crony of a government high and mighty in the affairs of Pakistan Steel that his personal office in Clifton became the place where the suppliers and buyers of Pakistan Steel would queue everyday to negotiate any sale or purchase agreement related to Pakistan Steel.

No wonder that three directors left their jobs as Director Finance of Pakistan Steel during these 54 weeks and the organisation is now being run without a functioning director finance and director commercial.

The quantum of corruption at Pakistan Steel was accidentally revealed last week when a major real estate dealer of Dubai met a senior Pakistani security official during a reception in Islamabad and informed him that a senior Pakistan Steel executive had asked him to invest Rs 60 crore in an apartment complex before Dubai property meltdown began in September last year.


PIA faces bankruptcy

Pakistan International Airlines (PIA) is another example where a prime national institution is facing financial and administrative collapse. PIA suffered a loss of Rs 13 billion in the year 2007 that rose dramatically to Rs 40 billion in the year that ended in December 2008.

A member of the board of directors of PIA, while talking confidentially with this correspondent last week, admitted: “PIA’s balance sheet is a fit case to declare bankruptcy and shut the company down.”

He went on to predict: “With these losses and present number of employees, PIA will not be able to make any profit in the next 50 years at least.”

While the company is struggling to run its day-to-day financial affairs with half-a-dozen of its aircraft grounded just last week, PIA’s Managing Director Captain Ejaz Haroon, another personal friend of government high and mighty, came up with an idea of Rs 160 billion purchase of new aircraft for the airline.

Haroon met the PIA board members in June last to break the news of this mammoth purchase and desired that his early negotiations with the Airbus industry and Boeing to buy 27 narrow body aircraft be kept “secret” from PIA shareholders and, of course, the media.

Ignoring the fact that the airline was not able to foot its most essential bills, Captain Ejaz Haroon revealed that he had an understanding from “someone” in the government that the Government of Pakistan could provide a sovereign guarantee (another US$2 billion in national debt) if the Ex-Imp Bank and a major European bank were ready to lend PIA US$2 billion for this ambitious purchase.

Both Boeing in America and Airbus in France are facing an immense financial crunch and are seeking clients like PIA to keep their operations going.

Although, international prices had some contribution in tripling PIA’s losses for the year 2008, but the situation worsened, as documents available with this correspondent revealed, following a long trail of gross irregularities in purchases such as Rs30 crore worth of Zamzam water for Hajis at the cost of Rs 450 per can, a price around five times more than the previous purchases of Zam Zam water by the PIA.

Manipulations of ticket sales and cargo handling through travel agents in Pakistan and abroad left PIA with more losses that run into tens of crores of rupees.

PIA’s woes are aggravating as the management appointed on political reasons continues to oblige their masters by letting the PIA’s payroll to swell. While facing a record financial crunch and ever rising losses last year, PIA managing director obliged the PPP government by inducting 6,000 workers in the airline, which already had the highest employees per aircraft ratio in the world.

By adding 6,000 persons to its list of permanent employees, the PIA set a unique example in the airline industry worldwide because that was the period when even the most profit making airlines of the world were either laying off their staff or negotiating salary cut agreements with its employees.

“This was the last nail in PIA’s coffin,” said a member of the PIA Board of Directors, who had vigorously opposed the idea of fresh induction into the airline.

Merit has no play in either postings or transfers or even roster setting for flight crews in the airline but the worst display of flouting of transparency, rules and regulations was displayed when the PIA decided to induct fresh air hostesses a few weeks ago and inducted 12 air hostesses at the recommendation of PPP office-bearers of interior Sindh.

In total disregard to discipline and fair play, some of the employees who were thrown out of PIA on criminal charges were graciously reemployed and offered foreign postings.


TCP jolt exchequer

Unprecedented and fearless corruption plagued the Trading Corporation of Pakistan (TCP) and with it the national exchequer as the country lost billions of rupees when an influential federal minister, along with the same friend of the government high and mighty, manoeuvred the appointment of an income tax officer as the TCP chairman in the second half of last year.

This appointment preceded a well-hatched strategy to plunder the government’s trading activity such as procurement of fertilisers, sugar and wheat from international market and a blatant attempt to re-nationalise export of rice from Pakistan by procuring rice locally at an inflated price.

Simultaneously, the new handpicked chairman introduced non-transparent procedures, mostly through backroom deals, to import commodities and their shipping at grossly inflated rates and these imports were timed as such that the local markets could also be played for maximum profits.

To further maximise the profits to the loss of Pakistani national exchequer, new contracts to handle cargo (stevedoring) at ports were awarded at a price that was often thrice the price paid by the TCP for the similar job in the previous year.

Inland transportation agreements with private transporters were so lucrative that they some time hired the government’s own National Logistics Cell (NLC), which incidentally failed to win the TCP work, for transportation of commodities from ports to destinations all over the country.

“These contracts were so lucrative that the favoured contractors some times outsourced their work and still made hefty profits notwithstanding the profit they shared with the TCP top management and their masters,” a well-informed TCP source said.

The situation took such a serious turn last year that Prime Minister Gilani had to intervene to stop the TCP, aided by a friend of high and mighty also the central figure in Pakistan Steel corruption, from an attempted informal re-nationalisation of the rice export from Pakistan by procuring rice from the local market at an inflated price.

“The rice operation alone cost the country about Rs 3 billion,” according to a TCP insider. But several TCP sources confirmed that an estimated loss of about Rs 20 billion was caused to the national exchequer by engineering ill-conceived, non-transparent import of Urea in the country last year.

The TCP sources pointed that the race to make quick money was so fast early this year that the TCP chairman routinely ignored objections of Transparency International Pakistan and parliamentary committees in awarding contracts to handpicked that had formed a cartel to monopolise the TCP work in blatant contravention to the government rules governed under the PPRA.

The corrupt TCP management apparently hit a jackpot when the government instructed the TCP to energise the Gwadar Port by ordering some commodity imports at the new port.

“A cursory examination of cargo handling contracts awarded for wheat imports at the Gwader Port will show that sums allowed for the work was five times more than the market price,” a knowledgeable TCP source said, while giving documentary evidence of incredibly low offers that were available to the TCP for the same job.

The stocks available with the TCP and import orders were manoeuvred with the sole idea of benefiting the vested interest with no remorse for the suffering of population. That’s why people of Pakistan are these days forced to buy sugar at an all-time record high price of about Rs 50 per kg. This price situation on sugar would run well into the month of Ramazan.

As the pie of corruption keeps expanding, so was the greed of the top TCP official and his masters until April this year when Minister for Commerce Makhdoom Amin Fahim in consultation with the prime minister decidedly removed the TCP chairman but without ordering probe into his actions.


National Bank jolted

The National Bank of Pakistan (NBP) is another national institution facing doubts about its health and deals concerning government linked individuals, companies and projects.

“On the face of it, the National Bank of Pakistan is seen as financing government backed projects or troubled public sector entities but at the back influential, politically-linked individuals and contracts benefit from this financing,” said an informed NBP official.

For example, a recent decision by the NBP-led consortium to provide an emergency financing of Rs 10 billion to corruption ridden Pakistan Steel may eventually benefit private individuals who are calling shots in Pak Steel affairs from their private office.

The National Bank’s role and interest in enhancing its exposure and affairs of some sugar mills of Sindh and their links with powerful political individuals has left many questions unanswered.

The NBP, which also serves as the treasury for Government of Pakistan, is being curiously watched for its role and growing interest in controversial rental power plants scheme of the government.

The bank, it seems, is ready to take a big exposure in the scheme and had already agreed to finance at least two of the projects.

A whopping Rs 21 billion worth rental power projects have already run into controversy because of the government’s mysterious inability to fully utilise the already-installed electricity generation capacity in Pakistan and armtwisting of other Pakistani banks to finance the shady scheme.

It remained no secret that all top bankers of the country were summoned to the State Bank of Pakistan head office in Karachi early this month. There they had taken the impression that they had no choice but to finance the rental power scheme.


Port Qasim sinks

The Port Qasim Authority (PQA) is a prime example of influence peddling by politically-linked people in getting posted to lucrative positions. A few weeks ago, an intense controversy swirled around Afsar Talpur who was made PQA’s acting chairman. The port authority was already in the middle of charges regarding illegal allotment of land and huge corruption in contracts on port related work.

As it surfaced that the acting chairman, already an official at the PQA, was himself at the centre of many of the charges, the top offices of the government were told that though posted on the orders of the elderly father of an influential personality, the case may create a major embarrassment for the government.

For several days, in the month of May this year, several directors jockeyed for lucrative assignments as the alleged corrupt acting chairman was asked to resume his previous assignment. An intense battle to win the most lucrative positions at the port authority continues to date.

But there was no substantial inquiry to probe the charges involving the allotment of Port Qasim lands through non-transparent procedures and into questionable contracts that have the Port Qasim as one of the most “lucrative” government departments.

A senior government official, however, termed the reports about the malpractices in Pakistan Steel, PIA, TCP, NBP and Port Qasim a mere propaganda. He said such kind of information was totally wrong and politically motivated. He said opponents of the present government were out to level allegations against the present set-up without any foundation. He said in all the above mentioned organisations, merit was followed as part of the government policy. However, detractors of the government continue to raise baseless objections.


http://www.newstin.com/tag/us/136517310
http://www.reddit.com/r/collapse/comments/96q1v/rampant_corruption_causing_collapse_of_government/
http://www.thenews.com.pk/top_story_detail.asp?Id=23611
 
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IBRIS

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KARACHI, Aug 6 (Reuters) - Pakistan's foreign exchange reserves fell by $50 million in the week that ended Aug. 1 to $11.72 billion, the fourth straight weekly fall, the central bank said on Thursday.
The State Bank of Pakistan's reserves eased to $8.31 billion from $8.35 billion a week earlier, while reserves held by commercial banks fell to $3.41 billion from the previous week's $3.42 billion, the central bank said in a statement.
Foreign reserves hit a record high of $16.5 billion in October 2007 but fell steadily to $6.6 billion by November of last year, largely because of a soaring import bill.
Pakistan agreed in November to an International Monetary Fund emergency loan package of $7.6 billion to avert a balance of payments crisis and shore up reserves.
The fund recently reviewed the country's performance under the deal, and its board is set to meet on Friday to decide on a third loan tranche of roughly $850 million.
The country has also requested about $4 billion in additional financing from the IMF as "insurance" against the economic crisis.
Aug. 1 marked the end of the central bank's providing forex reserves to pay for diesel and other refined petroleum products, which will force importers to obtain the dollars they need in the market. The central bank will continue to provide forex for crude oil imports through Feb. 1 of next year.


Business finance news - currency market news - online UK currency markets - financial news - Interactive Investor

They'r defenatly in deep trouble.
 

IBRIS

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Pakistan Rupee to Weaken on Oil Costs, Standard Chartered Says
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By Shanthy Nambiar

July 30 (Bloomberg) -- The Pakistan rupee, which today dropped to a nine-month low, is forecast to slide more than 3 percent by mid-2010 as higher crude oil prices boost the nation’s import bill, according to Standard Chartered Plc.

The currency declined 5 percent this year, the second- biggest loss among the currencies of Asia’s 10 biggest developing economies, as oil costs rose 42 percent and a Taliban insurgency curbed demand for the nation’s assets. Importers will have to buy more dollars directly from the foreign-exchange market and commercial banks starting next month as the central bank limits the use of its reserves for fuel payments, according to Sayem Ali, an economist at Standard Chartered.

“We have to import oil no matter what the price,” Ali, who is based in Karachi, said in an interview. “We don’t have a choice; it is the key dependency for the economy and the rupee.”

The currency fell 0.1 percent to 83.22 per dollar as of 2:30 p.m. in Karachi, having earlier been as weak as 83.30, according to data compiled by Bloomberg. It reached a record low of 83.55 in October and Standard Chartered, a U.K.-based lender that gets most of its profit from Asia, predicts the currency will drop to 86 by the end of June 2010.

Ali estimated fuel importers will need to source about $4.5 billion from the currency market and banks over the next 12 months, putting pressure on the rupee, which has dropped against the dollar in all but two of the last 20 years. Pakistan buys about 80 percent of the oil it needs from abroad.

Pakistan Rupee to Weaken on Oil Costs, Standard Chartered Says - Bloomberg.com


Just like Pakistani fanboy said in other sites....she's going dowwwwwnn, down in flaaaamesssssss. eehhhh
 

IBRIS

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Biggest Financial Scam In The History Of Pakistan

The ongoing electricity crisis and the ensuing government reaction is not a random incident but a carefully orchestrated plan for a huge financial scam. A satanic idea for getting personal gains in the name of the electricity crisis
The electricity shortfall began appearing in Benazir’s government first tenure, and the kalabagh dam had been politicized. The federal minister of water and power those days, farooq laghari, had plans for commissioning numerous small dams and barrages on big canals. This hydel power project was supposed to fulfill Pakistan’s electricity needs for the next 50 years, and the per unit cost of electricity generated by this project was around 10 paisa’s. Because fuel costs on hydel power are nearly zero, the electricity obtained from these sources was/would have been much cheaper, even cheaper than the gas supplied to homes.


Instead of going for this cheap and practical solution, the Benazir government in their second tenure invited private companies / parties to set up their power plants aka IPP’s (Independent Power Plants), that ran on imported fuel and gas which in the long run was devastating for our economy. Electricity tariff got so high, that our industries could no longer compete internationally


In these projects, four types of malpractice was ensured
1. Expensive imported fuel
2. Electricity was sold at an expensive rate of 7 cents per unit
3. The government agreed to buy 60% of electricity from these parties so that if the production decreased the government would still pay 60%. In short they (the IPP’s) would never be short of profits
4. The investment cost of the project(s) was inflated and shown to be much higher than it really was


Because of the government‘s guarantees, the banks gave loans albeit the high project costs. The excess money was used to pay bribes/commissions/cuts to the government officials who made this deal possible. The money was utilized to buy expensive property in US, UK, Dubai, Spain which was later on legalized by the magic wand of NRO
Because of these agreements, we buy oil in dollars and sell electricity in rupees. When the electricity production increases , WAPDA has to shut down its own cheap plants and is forced to buy expensive electricity from these companies( THIS IS THE GIFT WHICH SHAHEED MOHTARMA BENAZIR BHUTTO GAVE THE NATION AND WHOSE CREDIT THE SURVIVORS STILL TAKE WITH PRIDE TODAY)


Now the IPP’s sell electricity to WAPDA at a rate of 7.5 cents, almost rupees 5 per unit, 50 times more expensive as compared to the electricity that could have been obtained from the cancelled hydel power projects.
Now, as expected, the government cannot pay these companies, so they are forced to run at a mere 60% of their capacity. The same goes for WAPDA whom the government also can’t pay

The reason why these companies are not paid is not that the users are not paying their bills, it’s the billions in payments the government has to do, and the reason they’re not paying is not because they are bankrupt, but behind all this crisis and chaos is the government’s secret wish of wanting the people on the streets. The same game is being played again. This time it’s the RPP’s (Rental Power Plants), whose projected tariff would be 12 to 15 cents or almost 12 rupees per unit, nearly double the average global rate and more than a HUNDRED times than the potential hydel power tariff. The same snake is ready to bite the same nation through the same hole


According to government and WAPDA figures the electricity demand is 18000MW and our total generation capacity is 15000MW. If these figures are accepted as correct, then the electricity short fall is 16 %, and the ensuing load shedding shouldn’t be more than 4 hours daily. However there is a load shedding of 8 to 10 daily. Not only the government figures and load shedding hours are incoherent, the ground realities prove them false. Last ramzan, load shedding ended when the IPP’s were paid. Nearly 4 months ago the IPP’s were paid around 30 billion Rs and there was no shortage for a month
Simply put, the electricity shortfall as shown by the government is based on lies, deceit and malpractice.


After shutting down of various industries, the electricity generation and demand has no big difference, only by not paying WAPDA and IPP’s this crisis is being prolonged. As previously mentioned, the government WANTS violent, nationwide protests as an excuse for setting up RPP's. No electricity in Karachi for several days and the involvement of near relatives of the president in this issue, khurshid shah( a federal minister) saying that the protestors are themselves “bijli chor”.(This same minister who was caught stealing electricity by a “kunda” for his son’s wedding party)


The reason is simply to create an “emergency situation” out of this chaos, under cover of which, the biggest financial scam/fraud in the history of the nation would take place. An estimated 50 billion rupees is on the table

This plan is one of a kind, in which the company which will produce electricity won’t have to spend a dime; in fact the bribes/commissions/cuts have been added to the proposals. For every project, WAPDA would pay 14 % of the cost in return for a bank guarantee. The remaining 86% is the responsibility of state bank which would pursue the private banks to do the financing. Just assume, a company proposes a project at 100 billion rupees, the real cost no more than 60 billion, but in the feasibility report the real cost in inflated. Now for this inflated cost WAPDA would have to pay 14 billion and the banks would pay 86 billion. The 40 billion excess would simply be taken out before the project even starts, 30 billion for the bribes/cuts of the government people, 10 billion for Project Company. As for the nation, they would buy electricity at 15 rupees / unit!!

The situation of the RPP’s is even worse, which according to a renowned MPA, is the plan for NATIONAL MURDER.
To put it clearly, think like this

You want a car on rent. Besides fuel cost, a Toyota asks for rupees 1000 a day but I give you a V8 Chevrolet at a lower rent of 700 rupees a day.
By the next day you find that the Chevy is so thirsty, that it consumed fuel worth 4000 rupees! Now you’ll have to pay the owner 4700, fuel plus rent. A Toyota would have been cheaper to run!

Plants obtained on rent are those which have been declared unfeasible because of their high fuel consumption. They have been replaced by newer, efficient designs in their own countries. WAPDA would be given this scrap and the people would buy electricity at a rate of 15 / unit.
 

NSG_Blackcats

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IMF to lend $3.2 bn to Pakistan​

Washington: The International Monetary Fund (IMF) has approved an additional USD 3.2 billion loan to Pakistan to fund priority spending and help Islamabad provide assistance to nearly three million people displaced by military operations and a difficult security situation. About USD 1.4 billion of the new IMF resources will be made available, on a temporary basis, for budget financing during 2009-10, IMF officials said. The main purpose of the new loan is to provide bridge financing until donor support pledged at an April donors conference in Tokyo starts to come in, the IMF said. Donors had pledged USD 5.7 billion to Pakistan over three years.

The IMF Executive Board in its meeting approved Pakistan's request for a waiver for the non-observance of two end-June 2009 structural performance criteria. It also approved Pakistan's request for a waiver for non-observance for the end-June quantitative performance criterion on the fiscal deficit, which according to preliminary information was missed by an amount equivalent to 0.9 percent of GDP. Noting that Pakistan's economy has continued to stabilise, deputy managing director and acting chair Murilo Portugal said, "Reforms in the financial sector and the foreign exchange market have been progressing, and steps have been taken to strengthen the social safety net.”

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Pakistan seeks greater access to U.S. markets_English_Xinhua

ISLAMABAD, Aug. 19 (Xinhua) -- Pakistan needs greater market access for its goods in the U.S. and European markets for its economic growth, President Asif Ali Zardari told visiting U.S. special envoy to Pakistan and Afghanistan Richard Holbrooke, the official APP news agency reported Wednesday.

During a meeting on Tuesday evening, the two discussed several issues, including the forthcoming meeting of the Friends of Democratic Pakistan (FODP) and the rehabilitation of the internally displaced persons (IDPs) of Swat and Malakand in northwest Pakistan.

Zardari sought greater market access for Pakistan's goods in the U.S. markets to revive its ailing economy hampered earlier due to U.S.-led war against Russia and now because of current wave of terrorism.

In response to the president's statement, Holbrooke said that the purpose of his visit was to refocus U.S. policy about the region publicly and support Pakistan.

"Now that great success had been achieved in Swat and Malakand and the U.S. could pay more attention to other areas of need, particularly meeting Pakistan's energy needs," he pledged.

Holbrooke said U.S. President Barack Obama's decision to preside over the forthcoming FODP meeting with Zardari reflected the U.S. government's desire to support initiatives aimed at helping Pakistan
 

sky

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The war on terror is going to cost them a huge amount in lost growth,can you imagine any sane company wanting to invest there.paks fdi share will fall , terror attacks continue on a daily basis.there is load shedding,rampant inflation.Even there free trade pact with china is flawed,pak will run a defict with them as they do with india.china is a huge market,the dont need to buy goods from pak as they make so much themselfs.when you sign a trade pact it must be balanced and against china who has a huge manufacturing capacity one must be very careful.
 

amitkriit

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Just let someone from Pakistani Defence Forum talk here and he will come up with a strong logic to convince us on "How Pakistan is an Economic Powerhouse". Problem with Pakistan is not militancy/war on terrorism, real problem stems from the fact that they have trained themselves to continuously live in denial.

Pakistan did have it's good old days when it's economy was booming.
WIKI:
Despite being a very poor country in 1947, Pakistan's economic growth rate was better than the global average during the subsequent four decades, but imprudent policies led to a slowdown in the late 1990s.

GDP growth was steady during the mid 2000s at a rate of 7%; however, slowed down during the Economic crisis of 2008 to 4.7%. A large inflation rate of 24.4% and a low savings rate, and other economic factors, continue to make it difficult to sustain a high growth rate.


If you study the Pakistani growth pattern one can make an interesting observation: "Pakistani Economy performed well under Military rule".
 

1.44

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Oil, gas reserves discovered in Sanghar

Updated at: 1255 PST, Saturday, August 22, 2009


SANGHAR: The Oil & Gas Development Company Limited (OGDCL) and its partners announced the discovery of oil and gas from an exploratory well in Sinjhoro.

The area was located 22.5km northwest of Sanghar in Sindh. The Baloch well No 1 was drilled to a depth of 3,463 meters and tested by the OGDCL. Significant reserves of hydrocarbons were also found in the well.

Oil, gas reserves discovered in Sanghar - GEO.tv
 

NSG_Blackcats

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Banks buy Rs85bn TFCs to clear circular debt​

KARACHI: Commercial banks have bought almost entire Term Finance Certificates (TFCs) issued by the government to clear the circular debt, which has been a major concern for the power generation companies, oil suppliers and refineries. The government has launched the TFCs to clear the circular debt. This was done with the consultation of commercial banks and finally State Life Insurance also entered into the deal. ‘Commercial banks will buy TFCs of Rs82 billion and the State Life Insurance Rs3 billion TFCs,’ Senior Executive Vice-President of National Bank Masood Karim told Dawn on Friday.

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NSG_Blackcats

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Forex reserves rise to $14.36 billion​

Friday, 18 Sep, 2009
KARACHI: Pakistan’s foreign exchange reserves rose to $14.36 billion in the week ending Sept 12 compared with $14.24 billion the previous week, the central bank said on Thursday. The State Bank of Pakistan’s reserves rose to $10.84 billion from $10.74 billion a week earlier, while reserves held by commercial banks also rose to $3.52 billion from $3.50 billion a week earlier.

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Rage

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Circular railway: looking ahead

By Kunwar Idris
Sunday, 13 Sep, 2009





For Karachiites, the project is a surprise gift — but from the people of Japan, not from the MQM or the ANP


The Karachi Circular Railway (KCR) closed down over 10 years ago. The last train that ran covered the 32-km distance from the city’s eastern suburbs to the central station in two hours earning a total fare of just Rs8,000. Little else needs to be said to explain the cause of its closure.


In a quarter century of its stumbling operations the KCR burdened the country’s railways with huge losses while providing little relief to commuters. Nevertheless, its refurbishment and revival remained on the books of planners, though the focus shifted chiefly to tram-cum-bus transit corridors — seven of them — running through the conurbation of colonies and shanties that Karachi had become since independence.

In 20 years the corridor scheme attracted no investor. The government didn’t pursue it either. The chief deterrence was its huge cost and environmental hazards. The forsaken circular railway plan was dusted off the shelf when the Japanese government showed interest. It has since agreed to finance it fully after years of painstaking study by Japanese experts.

The Executive Committee of the National Economic Council (Ecnec) approved the project recently, subject to a second and more careful look at its staggering cost of Rs128.5bn.

For the people of Karachi, the project is a surprise gift — but from the people of Japan, not from the MQM or the ANP as their leaders have claimed. It is not usual for a project of this size, which also has a commercial dimension to it, to be financed entirely by a foreign government or agency, and that too at a token rate of interest. The three tiers of government — federal, provincial and district — will now have only administrative costs to fight over, if they must, which is barely five per cent of the capital investment.

The real test lies in the speedy and honest implementation of the project. And that is where doubts take hold.

Hardly ever has a project of this size and complexity been completed on schedule and within the estimated cost. Close at hand is the example of the much smaller and simpler Lyari Expressway. It was to be completed in two years. It is now in its sixth year and perhaps will take two more.

The rate of commission — another name for embezzlement — is now said to be 30 per cent of the cost. Gone are the benign days of the legendary and ‘legitimate’ 10 per cent. It is no longer confined to bribery or waste. Political establishments and homesteads, here and abroad, jaunts and feasts of leaders and hangers-on all have to be taken care of.

Pakistan’s political parties have no endowments, nor do their members pay a large fee. Slush funds are also needed, on occasion, to bring down a government. Money cannot be stolen from the treasury all the time.

Since the KCR is the best and, perhaps, the last chance for Karachi to have a mass transit system, maybe the officials and contractors employed on the project can be persuaded to take a vow not to siphon off funds and to strive to complete the work within the stipulated period of four years.

Whether just one or all three levels of government are partners in the venture is immaterial. What matters is that the professionals executing the project should not be in any way beholden to any government, nor should they be politicians’ nominees. One has to be wary on this count when embezzlement is alleged even in the building of houses for the homeless of Balakot affected by the 2005 earthquake. No wonder foreign agencies now have second thoughts about the pledges they made to help the families displaced by extremist violence in Swat.

Fast electric trains unhampered by level crossings going full circle every six minutes on a 43-km dual track would surely make transit corridors unnecessary, especially after branch lines are added in the second phase. Enlarging and modernising the city’s bus fleet for feeder routes, however, would remain a necessity.

Karachi’s bus fleet is obsolete, mechanically unfit, polluting and wholly inadequate. It has been almost three years since Ecnec approved a scheme for 8,000 CNG buses for major cities (Karachi’s indicated share was 5,000), with a 25 per cent subsidy. Not one bus has come on the road so far. It was left to Karachi’s confident nazim to stake municipal money, but on no more than 50 buses. That is a drop in the ocean but has indeed made travel fast and economical on the routes on which these buses ply.

The KCR could fail if buses are not available at all stations where the trains halt to carry passengers to their onward destinations. Finally and crucially, the circular railway, however speedy, punctual or economical, would not be financially viable if it were to rely entirely on the fares commuters can afford to pay or are willing to pay.

City mass transport — rail or bus — all over the world is subsidised. It is viewed as a social function of the government and not a business venture. The economic gains are invisible but many. Getting to work on time is just one of them.

The KCR will be in trouble and bus transport will continue to deteriorate if the government does not find a way to subsidise both. Secondly, Pakistan, like the rest of the world, must convince the private sector to manage transport services while the government invests in infrastructure.

To encourage bus service, the price of vehicles can be subsidised and fares adjusted from time to time to keep pace with operating costs. Shahbaz Sharif’s first government did this in Lahore with some measure of success.

Wage earners queuing for wheat flour and sugar and then jostling to get into a rickety bus may not bring a government down, but they will remain a threat to public order. This threat looms larger in Karachi than elsewhere for it is the only megalopolis in the world where public transport is run by a mafia. Where the state shirks responsibility mafias take over. In Karachi they provide a service which the state or civic authority should but does not.

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DAWN.COM | Metropolitan | Circular railway: looking ahead
 
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