A special committee of Senate has urged the government to inject up to Rs400bn!

on 17/10/2018

A special committee of Senate has urged the government to inject up to Rs400bn into the system to avoid closure of power plants and ease the problem of circular debt that now stands at about Rs1.55 trillion.

The Special Senate Committee on Circular Debt led by PTI’s Shibli Faraz has mentioned these short-term measures in its report about steps that could be taken to deal with the crisis. The committee stands dissolved after submitting its final report about resolution of the circular debt issue.

The report has proposed drastic measures, including a review of the fuel supply agreements of the power projects based on Regasified Liquefied Natural Gas (RLNG), to bring them on a normal plane instead of their “must pay status” under which they must be compensated even if they do not produce electricity.

According to the report, the role of two key regulators — the Oil and Gas Regulatory Authority and National Electric Power Regulatory Authority (Nepra) — should also be reviewed and they should be merged if needed.

Some of its suggestions are already known, like reducing reliance on imported fuels and increasing local resources like hydro power and other renewable sources because 63 per cent of the electricity is being produced from fossil fuels and 55pc from imported ones.

The committee has recommended privatization of power companies, private sector participation in electricity supply operations and handing over of distribution companies to the provincial governments with recovery shortfalls settled from the NFC award.

It recommended that enforcement of the renewable energy policy 2006 be extended for two years because a sudden break in December 2017 had blocked investments in the sector.

The committee also called for reversing some of the amendments made to the Nepra Act by the PML-N government in its last few months in office because they had “compromised the independence and professional standing of the regulator by reducing the status of its four members and the chairman to a rubber stamp.

The report noted that it was simply impossible for a business to be profitable when about 25pc of its production was going to waste — known in the power sector as aggregate technical and commercial losses.

It explained that the system (transmission and distribution) losses in the power sector officially stood at 18.3pc and another 8-10pc of the billed amount remained unrecovered, resulting in a Rs295bn gap that is to be re-charged to the consumer or picked up by the government and funded through taxpayers’ money. Ironically, a major part of Rs175bn is re-charged or re-circulated to the consumers in monthly bills and around Rs120bn annually remains stuck with the government and transformed into circular debt.

The report said the total circular debt or funding gap amounted to Rs1.557 trillion in the fiscal year ending in June 2018. This included Rs245bn receivables from the government and related entities, Rs500bn running defaults and disconnections, Rs187bn system losses of five years, R338bn tariff delays and another Rs300bn as tax refunds and instalments of bills.

The committee regretted that even though such a major issue was challenging the fundamentals of the country’s economy there was neither an effort at consolidation of power sector entities nor reconciliation of the balances available on their financial statements.

So much so that even the principal loan amounts reported by the Discos, Central Power Purchasing Agency, Power Holding Company and the power division do not match. On top of that there is no consolidated financial model in place that could project the financial position, performance and results of the sector based on key assumptions such as price sensitivities, changes in prices of imported fuels and currency devaluation.

The Senate committee deplored that 8,000MW of capacity addition in recent years was based on RLNG alone, having currency and oil market sensitivities. The report advised the government to settle an outstanding tariff confusion of the Azad Kashmir government which was getting a fixed rate under the Mangla Dam agreement and resulting in a Rs100bn gap.

The report criticised the previous governments for a system under which the Federal Board of Revenue charged taxes on total billing of the distribution companies even through a significant part was never paid by the consumers. About Rs100bn was stuck on this count alone, limiting the cash flows of distribution networks.

It was ironic that cumulative receivables as of June 2018 surged to Rs824.3bn, up from Rs670bn a year before, said the report. There were more than 5.3 million non-paying electricity connections and 1.3 million disconnected ones, having Rs405bn and Rs95bn outstanding against them.

The committee concluded that the government should inject at least Rs300bn into the sector to avoid plant closures. The money could be raised through commercial loans with repayments in five years and involvement of provincial interior ministers in operations of the distribution companies to increase recoveries and reduce losses and theft.

It said there should be task forces of law enforcement personnel at the provincial level for making recoveries. Any shortfall in recoveries or theft should be linked to a financial adjustment formula between the federal and provincial governments through the national pool to ensure delivery on targets.

China overseas port holding offers 2,000 jobs to locals!

on 17/10/2018

Chief of the China overseas port holding company that is now running the port has informed that it has taken the locals onboard and offered more than 2,000 jobs including a majority of the senior positions to local people since its operation in Gwadar.

“I’m very happy to inform you that since the operation of the company in Gwadar, we have offered more than 2,000 jobs to the local people, and majority of the senior positions like marketing manager, finance manager, human resource manager are taken by the local people,” Chairman and chief executive officer of the company, Zhang Bao Zhong said in an interview appeared in the Chinese media on Oct 7.”As what Xi Jinping, the president of China said that all the people shall benefit from China-Pakistan Economic Corridor (CPEC), we are following exactly what our leaders request us,” he added.

The Chairman said that a state of the art school, vocational training institute, 50-bed hospital and recruitment of a considerable number of locals in ongoing development projects are the benefits being offered to around twenty-six hundred thousand people of Gwadar.

CPEC is already creating opportunities for young Pakistanis, especially the locals of Gwadar, who have remained mired in a trap of poverty and deprivation for decades, he added.

The CPEC has brought new hopes for the local people in Gwadar, the deep sea port in Balochistan, the largest province of Pakistan.

Mubarak, who lives in Gwadar and works for the China overseas port holding company, said that the locals are expecting too much from CPEC, too soon.

He said this education institute started with 150 students now it is educating over 500 students, it was built by the Chinese government, with support from the Pakistan education department and they have also built one hospital.

Mubarak said: “CPEC is a big project, it will take time, we can’t say that tomorrow we will develop everything, and so we cannot say they are not doing anything.”

Gwadar port, the nucleus of the multi billion-dollar project, and dubbed to becoming the hub of regional trade, is mainly a fisher folk community and the life of the people depends on their day to day catch.

For the locals, this sudden development has mounted fears, coupled with rumours that they might be relocated once trade activity begins.

A leader of the Gwadar Fisherman Forum, Rasool Baksh expressed happiness that the CPEC would benefit Pakistan and hoped that the new government and people related to CPEC will fulfill their demands and ensure basic necessities of life including water and electricity for common people.

He also criticized the last government for not taking care of the local people. The analysts, however, opined that with rapid developments on the ground in Gwadar, the life of locals are turning around towards progress and prosperity with new infrastructure developments, employment opportunities and health and education facilities.

Many believe that the China Pakistan economic corridor is indeed becoming a game changer in the region

‘CPEC will be reviewed for Balochistan’ Promises Imran Khan

on 17/10/2018

After not more than a month of Islamabad’s backtracking from its promise of reviewing China Pakistan Economic Corridor (CPEC), Prime Minister Imran Khan promised with Balochistan cabinet on October 6 that his government would review CPEC pact to address the reservations of Balochistan.

Khan said that the centre would work with Balochistan as a partner and they would not make any such promise for which we might have to excuse later on.”

He said Gwadar and its role in the China-Pakistan Economic Corridor (CPEC) is an “opportunity” that can bring immense benefits for the province if it is utilized. He noted that 800,000 acres of land can be used for agricultural purposes if Balochistan is given its water share through the Kachhi Canal.

Khan said incidents of terrorism had led to a major brain drain from Balochistan and vowed that the government will make efforts to send qualified professionals to the province. He also announced that the government will conduct a feasibility study on providing cancer treatment in Balochistan, so its residents do not have to travel to other cities.

Khan was in Quetta in his maiden visit of Balochistan after assuming the office and told the province that the country was currently facing financial issues hoping the government would get rid of such difficulty soon.

A day before premier’s arrival, Balochistan’s Finance Minister Mir Arif Jan Muhammad Hasni said that Balochistan was facing a severe financial crisis warning that it would deteriorate if immediate measures were not taken by Islamabad to bail out the province.

Hasni said the province was facing a deficit of Rs75 billion in the current budget. They would take up the matter with the prime minister.

Previous government passed a Rs352bn budget for the financial year 2018-19 allocating Rs88bn for the annual Public Sector Development Program (PSPD).

How would such a hefty deficit be bridged is the biggest challenge which Hansi would be met with the help of Islamabad but it too is running short of money.

Balochistan claims to have set aside Rs75 bn for PSDP and is forced to introduce a cut in the number of schemes designed by its predecessors.

Chief Minister Jam Kamal Khan has decided to surrender his discretionary grant which his predecessor spent to the Rs830 million last year.

Hasni said Balochistan received Rs350bn under 7th NFC award in last eight years but the sum was wasted over exploration of minerals and tourism, which did not yield any benefits.

Of the biggest expenditures, law and order swallows huge money which has deflated to Rs40 billion from merely Rs5 billion.

The situation has affected social sectors including health Prime Minister on the other side says Balochistan is the future of Pakistan and our team will do its best to overcome all of the problems prevalent in the province.

PM Khan said the completion of Kachhi canal would bring an agricultural revolution in Balochistan. Of the 363-km long canal starting from Taunsa Barrage at Indus River, 281 km lies in Punjab and 80 km in Balochistan.

Business spreads like wildfire provided powered by positive word!

on 11/10/2018

Business spreads like wildfire -Please tell us about yourself, your education and experience?

My name is Mirza Fawad Ahmad. I have done Masters in banking and finance from the University of Management and Technology. I have been in the industry from past 10 years. After 10 years line I started in this very organization as an accountant but soon I realized that I am in an alien pitch. I am more of a salesperson. My leadership was kind enough to allow me to switch my career altogether, “From Accountant to Sales Person”. Ever since this change, I am successfully working my way up the ladder.

l For how many years you are working with Multiline Engineering and what is excellence in this organization?

u It has been 7 good years in Multiline, first one year in the finance department and then as I mentioned earlier I moved to my dream job as a salesperson. I have never looked back ever since.

l What are your core responsibilities?

u Now, I am responsible for my entire sales team, its sales targets and departmental coordination.

l What is the importance of after-sales service in the power generation industry?
u After sales service is not only essential in the power generation industry but in every company, this is the most vital factor that plays an important role in the company’s success. It plays an important role in customer satisfaction and retention. It generates loyal customers and increases a brand value. They speak well about the organization and its product & services. I would like to add that in my experience of 10 years I have fondly observed that business grows like wildfire if it is accelerated by a positive word of mouth. In Multiline we provide the best after-sales services, more than 80% of our new customers are referred to us by existing customers. This means a lot for us.

l Are you satisfied with the quality of fresh engineers?

u Well, we have a rigorous screening mechanism in place. We hired the best of the best. I am more than satisfied without engineering team. They are the ones helping us realize our sales targets

Ezzi Engineering: Chinese, part and parcel of industry!

on 11/10/2018

Mazhar Faizullah, the CEO of Ezzi Engineering says Chinese companies have become part and parcel of industry everywhere in the world and they have made their place through hard work and dedication.

“Not only in Pakistan but also anywhere in the world you would not see any business and trade without Chinese”, he said while talking to ER. Chinese companies and professionals roam around the world and we think we should go along with them if we want to live with the industry. For us, he believes China is a great source of producing economically viable machines.

Mazhar who seemed satisfied with the expo and found it a healthy activity for the industry in Pakistan, as well as progress in comparison to previous such event, said Pakistanis should not be concerned as China was the major player in the global market. “They produce the product which fits into the budget of the client. Many European companies get their products manufactured from Chinese which benefits the end customer.

He is hopeful that the new government in Pakstan would formulate business-friendly policies so that the import and exports of the country are carried out smoothly.