Provinces don’t spend oil companies’ CSR amounts

on 11/07/2018

No one bothers to respond to my letters, complains sec petroleum, CSR.

Islamabad has blamed the provinces for inadequate development of areas around oil and gas fields despite the provision of sufficient funds by the petroleum exploration and development firms under corporate social responsibility (CSR).
Secretary Petroleum Sikandar Sultan Raja has told the Senate Standing Committee on Petroleum led by Senator Mohsin Aziz that the provinces are neither spending funds for development under CSR program of the E&P companies nor responding to communications as to why these funds remain unutilized.
The E&P companies are required under the laws and policies of the government to transfer certain amounts under CSR to the respective deputy commissioners where exploration and development activities are ongoing but these funds remain unspent because these have to be processed by a committee for the purpose of transparency.
These committees comprise local political representatives, top officials of the provincial government and district administration.
The Secretary Petroleum claims he has personally written letters to the chief secretaries and none have even bothered to respond. Billions of rupees worth of funds, meant for the development of schools, health, and water supply schemes remain stuck up with the deputy commissioners and assistant commissioners, he says.
Taking serious note, the committee has ordered that details of funds from all the fields and companies be submitted before the next session to ascertain how the funds were spent, what outcomes they have delivered, where did they remain unutilized and in what quantities, depriving the poor people of the intended development objectives.

All free trade agreements to be reviewed, claims PPP manifesto

on 11/07/2018

The Pakistan Peoples Party (PPP) vowed to review all free trade agreements (FTAs) Pakistan has entered into thus far if it comes into power after the election `to create a level playing field` for industry and agriculture.

In its manifesto for the elections 2018, the PPP also severely criticised the PML-N government `fictitious growth story`, saying `the outgoing government is leaving our country saddled in copious debt, alarming external trade and balance positions, unsustainable public finances and more exclusions.

It promises a series of reforms for water, energy, trade, industry, agriculture and energy revitalisation, some of which sound pointed whereas others speak in generalities. For example, in trade the manifesto says `efforts will be made to promote trade within the region by separating trade from other geopolitical considerations`, a clear reference to India, with which the party came close to normalising trade relations in its previous stint before backing away for undisclosed reasons at the last minute.

Other than this, it promises to restore zero rating for export oriented sectors of the economy, payment of all rebates, `provision of electricity at subsidised rates`, and `maintain a market based exchange rate` as measures designed to breathe life into Pakistan`s exports.

For industry, the manifesto promises a rehabilitation scheme through the State Bank for `revival of economically viable but closed sick units` and `viable tariffs on electricity`. It also promises to diversify the industrial base of the economy through directed credit programs through the State Bank, adding these will be time bound and performance based.

In the energy sector, the manifesto points to renewable sources of energy as a priority, saying the party will aim to raise the contribution of renewable energy in the total energy mix to 5 per cent through `adequate incentives`. It also promises to complete Diamer Bhasha dam, and eliminate the circular debt `by focusing on the drivers of the circular debt, as define d in the National Power Tariff and Subsidy Guidelines 2014`. It also calls for provinces to have their own transmission and distribution grids.

The manifesto promises gas pricing reforms to move toward `economic valuation of indigenous production` and `reform of price concessions and subsidies to serve only the poorest among domestic consumers`. The language appears to suggest a broad based rolling back of gas price subsidies. It also emphasises provincial ownership of gas resources `and the accrual of their true value to provinces`. The majority of Pakistan`s natural gas is produced in Sind and Balochistan.

It aims to advance digital payments through a new regulatory framework, elimination of duties on machinery and equipment required for the industry`s core operations, tax incentives as well as pushing the flow of credit to the sector with the help of the State Bank.

For state owned enterprises, the manifesto only promises independent boards and `engage public private partnerships` for investment. It promises to set up a task force for SOEs, as well as a Joint Parliamentary Committee, composed of members from all political parties, to develop a National Economic Agenda

How climate change affects economies of Sindh and Punjab

on 11/07/2018

Sindh has emerged as the most vulnerable hotspot in Pakistan followed by Punjab as changes in the average weather will add another dimension to the future economic growth of the province given its high vulnerability, the World Bank said in a new report.
The report, `South Asia`s Hotspots: The Impact of Temperature and Precipitation Changes`, says Sindh has the second-largest economy, with a GDP per capita of $1,400, which is 35 percent more than the national average. The province has a highly diversified economy ranging from heavy industry and finance centered in and around Karachi to a substantial agricultural base along the Indus River, it says.
According to the report, Hyderabad district emerged as the top hotspot followed by Mirpurkhas and Sukkur. Some of the densely populated cities in Punjab were named among the top ten hotspot districts. This highlighted the importance of addressing changes in average weather in the economically important Punjab and Sindh.
Punjab, which is the most densely populated province, is also second-most vulnerable. The province has the largest economy in the country, contributing 53.3pc to the national GDP and overall has the lowest rate of poverty among all the provinces.
However, the prosperity is unevenly distributed throughout the province, with the northern portion being relatively well-off economically and the southern portion among the most impoverished in the country. The long-term climate vulnerability has implications for both growth and poverty reduction for Punjab, the report says. Hotspots tend to have lower living standards compared to the national average. In this respect, it seems right to conclude that changes in average weather will hurt poor households disproportionately and therefore increase poverty and inequality.
Of the six countries investigated, living standards are predicted to be adversely affected by changes in the average weather in four of them: Bangladesh, India, Pakistan, and Sri Lanka. Afghanistan and Nepal are estimated to benefit from such changes in the average weather.
The report has alarmed that changes in average weather in South Asia are projected to have overall negative impacts on living standards in Pakistan, India, Bangladesh and Sri Lanka. The region is recognized as being very vulnerable to climate change. Its varied geography combines with regional circulation patterns to create a diverse climate.
In Pakistan, analysis of the report reveals that expanding electrification by 30pc could reduce the impact of average weather on living standards from a negative 2.9pc to negative 2.5pc.
Thus, electrification alone may not completely overcome the adverse effects of changes in average weather on living standards. This indicates that additional inspection could be warranted to better understand how to prevent the emergence of hotspots within the country.
The glaciated northern parts -the Himalayas, Karakoram, and the Hindu Kush mountains have annual average temperatures at or below freezing, whereas much of the Indian subcontinent averages 25°C to 30°C. Both the hot and cold extremes are challenging for human well-being, and climate change heightens these challenges.
Average annual temperatures in many parts of South Asia have increased significantly in recent decades, but unevenly. Western Afghanistan and southwestern Pakistan have experienced the largest increases, with annual average temperatures rising by 1°C to 3°C from 1950 to 2010.
The scientific literature suggests that such events will grow in intensity over the coming decades. Dhaka, Karachi, Kolkata, and Mumbai metropolitan areas that are home to more than 50 million people face a substantial risk of flood-related damage over the next century.
In India and Pakistan, water-stressed areas will be more adversely affected compared to the national average.
While negative impacts are sizable under the climate scenarios of `climate-sensitive` and `carbon-sensitive`, they are more severe under the carbon-intensive scenario. Both show rising temperatures throughout the region in the coming decades, with the carbon-intensive scenario leading to greater increases. Expected changes in rainfall patterns are more complex in both, the report says.
By 2050, under the carbon-intensive scenario, the declines are projected to be 6.7pc for Bangladesh, 2.8pc for India, 2.9pc for Pakistan, and 7pc for Sri Lanka.
Main findings of the publication cautioned that unlike sea-level rise and extreme weather events, changes in average weather will affect inland areas the most. For most countries, changes in average weather will also reduce the growth of their GDP per capita, compared to what it would be under present climate conditions. The GDP losses are greater for severe hotspot regions

Engr. Qadir Shah accuses PEC Chairman Javed Saleem of economic slaughter of local Engineers

on 11/07/2018

Engr. Abdul Qadir Shah, a candidate for the top slot of the Pakistan Engineering Council (PEC) has alleged the incumbent chairman Engr. Javed Saleem of damaging the interests of local engineers through exempting Chinese companies from forming joint ventures (JVs) under the China Pakistan Economic Corridor (CPEC) in Pakistan.

Under the PEC laws, foreign companies are bound to make joint ventures (with 30 percent share to Pakistani companies) in case of projects in Pakistan.

Engr. Shah vowed to reverse such a decision which he called the economic slaughter of local engineers in Pakistan. “We shall not exempt any foreign company in future and ensure that they form JVs with Pakistan and also give 50 percent jobs to Pakistani engineers,” he said in an interview with Engineering Review.

He said it was unfortunate that the PEC chairman took such a damaging decision in connivance with at least 4 senior engineers including engineer Prime Minister Shahid Khaqan Abbasiin the previous cabinet.

When asked how such a decision would be reversed, Engineer Shah explained they would frame new laws so that the JVs were ensured while issuing licenses to the foreign companies. “It was a must for absorbing local engineers in Pakistan.”

Engr. Qadir Shah claims to have designed a comprehensive plan to ensure employment of local engineers as according to him as many as 50 thousand engineers are unemployed in Pakistan. “Each and every contractor would be bound to hire engineers and without which they would not be issued licenses.”

Over 50 thousand active contractors are registered with the PEC and it is compulsory for them to hire engineers for each and every project. Many of them violate the rule and buy relevant engineering certificates from engineers to show hiring just in documents. “We shall stop such practice and the PEC would physically monitor the sites to determine whether the engineers are genuinely hired,” Engr. Qadir Shah said.

Abdul Qadir Shah said the new leadership of the PEC would merge contractors into the construction industry and create a proper mechanism for the employment of engineers. Thus, the engineers would have proper jobs, not the sale of engineering degrees, he said.
Engr. Shah who has served as chairman PEC before Engr. Javed Saleem has in his panel Engr. Imtiaz Shah as the candidate for the office of Senior Vice Chairman, Mohammad Shafiq for Vice Chairman Sindh, RanaJabbar for Vice Chairman Punjab, Shahab Khattak for Vice Chairman KPK and Qazi Rasheed Baloch for Vice Chairman Balochistan.

Financial Closing of Lucky Electric Power Project Declared!

on 11/07/2018

The federal government has declared the financial closing of the 660MW Lucky Electric Power Project which would use on Thar coal. The powerhouse would go in commercial operations by end of March 2021.
The documents of the financial closing were formally signed by Private Power & Infrastructure Board (PPIB) Managing Director Shah Jahan Mirza and Lucky Electric Coal Power Chief Executive Officer I. H. Haqqi. The signing ceremony was also witnessed by caretaker Minister for Energy, Barrister Syed Ali Zafar.
The project will be located at Port Qasim near Karachi and based on local coal from Thar. The project is estimated to cost $1.081billion and will be equipped with supercritical technology. Seawater will be utilized for cooling the plant.
Lucky Power Project is being financed through the debt-to-equity ratio of 75:25. The consortium of lenders includes Habib Bank, United Bank, National Bank, Bank Alfalah, Askari Bank, Soneri Bank, The Bank of Punjab, Meezan Bank, Faysal Bank and Dubai Islamic Bank.
Upon financial closing, PPIB will also issue sovereign guarantee on behalf of the government in favor of the project company to secure the payment obligations of the power purchaser.
The Sindh Engro Coal Mining Company which is the leaseholder for execution of mining operations for coal extraction in the Thar coalfield, Block II will supply coal to the project while the electric power generated from it will be sold to Central Power Purchasing Agency-Guarantee under a 30-year power purchase agreement.