Agha Steel to Raise Rs.5 billion

on 29/05/2018

Agha Steel Industries Ltd (ASIL) planned to raise around five billion rupees through a local Islamic bond to propel its production to meet growing steel demand in Pakistan, the company said in a statement, after the steelmaker shelved its plan last year to roll out the country’s biggest-ever private sector public offer.“ASIL intends to issue OTC (over the counter) listed, rated and secured sukuk of up to Rs5 billion (inclusive of green shoe option of Rs1 billion) for the tenor of six years inclusive of a grace period of 2 years in order to fulfill its expansion plans and invest in futuristic technologies,” the steelmaker said.

Agha Steel mandated Habib Bank and Bank AL Habib as mandated lead advisers and arrangers for the transaction.The bids from qualified institutional buyers are expected from April 10 to 30. “Specifically identified musharika assets are set to be utilised under a qualified shariah advisory board,” it added.

Last year, the Karachi-based steel manufacturer planned to raise Rs10 billion through an initial public offering to lift its production capacity to satiate a gigantic appetite of infrastructure developments estimated at more than $55 billion under the China-Pakistan Economic Corridor. World Steel Association termed Pakistan as one of the world’s fastest-growing steel producers. The country’s crude steel output climbed nearly 40 percent to five million tons in 2017. Likewise, construction sector that accounts for 2.7 percent to GDP grew nine percent during the last fiscal year of 2017, State Bank of Pakistan said in its annual economic report.

Agha Steel planned to utilize the funds from local Islamic bond to meet costs associated with balancing, modernisation and replacement activities for existing and new facilities. It will also commission a new rolling mill unit to increase the annual re-rolling capacity of the company to 650,000 tons from 150,000 tons.

What makes Power Issues hell in Karachi

on 29/05/2018

KE spokesperson Sadia Dada says the Sui Southern Gas Company (SSGC) has cut 100mmcfd gas supply to the power utility due to which it has suffered a 500MW electricity shortfall as plants on said gas supply are lying idle. As a result, the residents in Karachi are facing two to three hours of additional load shedding.

After Karachi plunged into darkness, Sindh Chief Minister Murad Ali Shah sought the federal government`s intervention to resolve a dispute between two Karachi-based electricity and gas utilities KE and SSGC to provide relief to the residents and businesses in Karachi. Shah reported to the prime minister that people of Karachi were enduring 10-hour load shedding on a daily basis when temperatures were continuously rising and taking a heavy toll on students who were appearing in the secondary school board examinations. Such a situation could create a law and order problem, he warned.

The two utilities have been involved in a dispute for almost three years over outstanding payments and reduced gas supplies. Early this month, the gas utility made a conditional offer to increase gas supply to the KE for a few days but not without settlement of Rs80 billion arrears. Besides its own gas constraints, reports said the SSGC was sensitive to any `irregular gas supply` because of ongoing examination of its record by the country`s accountability apparatus and wanted to secure its side and reduce outstanding liabilities in case of the KE`s transfer to the Shanghai Electric Power Limited (SEPL) of China from the current management of Abraaj Capital.

The federal government decided last month to issue a national security certificate for the sale of shares held by the KES Power Ltd in the K-Electric Ltd (KEL) to the Chinese multinational SEPL.  SSGCL said it was facing continuous shortage of 250mmcfd of gas due to depletion of reservoirs at different gas fields and on the contrary increasing demand, particularly in the domestic sector. In addition, it has started supplying 20mmcfd gas to the Sindh Nooriabad Power Company during this financial year as per the gas sale agreement.

It said the KE was categorically told in April last year that it would be very difficult to sustain even existing supplies. The gas company said it was struggling to meet obligatory requirements of customers having gas sales agreements, making full payments, including advance security deposits.The gas company said KE was not providing security deposit equal to three-month billing or Rs7.2bn. Also, the `FIA is probing the continuous supply of gas to K-Electric by SSGC despite huge over dues on K-Electric against the gas sale`.

KE said the power utility had never defaulted in payment of its current gas bills during the past five years and its old principle outstanding gas bills were only Rs13.7bn while the remaining amount of Rs66bn was interest which had been challenged in court.

 

BRT’s Environmental, Healthcare compliance ‘Unsatisfactory’

on 29/05/2018

Peshawar Bus Rapid Transit (BRT) Environmental Monitoring Report has declared unsatisfactory the project`s environmental, healthcare and safety compliance during the first two months ending on Dec 31, 2017.

These endings are contained in a 41-page Environmental Monitoring Report and a 70-page annexure looking into potential and actual environmental, health and safety hazards and their risks and mitigation measures has been prepared by the MM Pakistan for the executing agency, Peshawar Development Authority (PDA), and donor ADB.

The report noted that the contractor had been strongly advised to remove all deficiencies and gaps in the implementation arrangements for the environmental, health and safety requirements.

It said the Project Management Construction Supervision Consultants` (PMCSC) environment, health and safety management teams were constantly pushing contractors for the resolution of prevailing environmental issues such as high levels of dust along the project corridor, presence of debris/excavated material along the project corridor, traffic congestion due to construction activities and other relevant issues related to the campsites.The report said keeping in view the fact that the project was being executed in a highly-urbanized environment, it was expected that the environmental issues related with dust emissions and excavated material would continue to arise.`However, all efforts shall be made for the minimization of these impacts in light of the project`s Environmental Management Plan (EMP),’ it said.

The report identified high level of dust, traffic congestion and need of taking health, safety and environment (HSE) related measures along the BRT corridor and noted the corrective measures had been taken to address them.`The construction of the project is in progress on a fast track basis and the general HSE conditions at the project have so far been unsatisfactory,` it said.The report said both the contractor and the PSCMC had deployed 111 HSE staff members for the project.

It included a detailed independent environmental monitoring through a third-party laboratory to check air quality, noise, drinking water and in house environmental monitoring through handheld devices at specific locations along the corridor.The report said since most of the material generated from the Reach-H corridor was earthen material, which was being generated due to the excessive piling activities.It said the material had a high demand and that it was sold to third party contractors.The report said the disposal of excavated material at unauthorized and random locations had been observed along the project corridor and the Reach-H corridor remained most affected due to the practice.

The report said the records provided by the PDA showed that it was only the civic agency, which had felled trees for the project, and that the contractor didn`t chop down any tree. Around 26,500 small and large trees have been cut down or uprooted and that majority of them have been replanted at different locations of the city, it said.The report said major sources of dust production along the BRT Corridor included the movement of traffic at unpaved sections of the corridor, haulage of earth material, presence of dry excavated material at the roadsides, and construction machinery`s movement at the drainage work construction areas along the corridor.

The environmental inspection checklists contained in the annexure for Reach-I said the stored material or spoil heaps could contribute to dust production.The checklists also pointed out that there were no proper drainage and sewerage system for storm water; waste bins were not available at sites in adequate number. They also pointed out spillage of oil and other hazardous chemicals on the soft ground.The checklists also mentioned similar omission for construction sites in all three reaches, batching plants, residential camps and workshops.

When contacted, PDA director general Israrul Haq said considerable HSE improvements had been made. He said the standards mentioned in the report were of international level and in many instances, workers in Peshawar didn`t follow such standards but even then, they were trying to implement them.

Neelum Jhelum Hydropower Project turns Online

on 24/05/2018

Neelum Jhelum Hydropower Project has started providing electricity to the national grid on trial basis. The first unit was supposed to contribute 60MW electricity to the system and to generate electricity to its full capacity to the tune of 242MW in initial two days.

The project has four units with cumulative generation capacity of 969-MW. The first unit has started electricity generation followed by the second, third and fourth units at one month interval respectively.

Neelum Jhelum Hydropower Project is an engineering marvel with 90% of the project being underground in the high mountain areas. The project consists of three main components i.e. a dam, water-way system comprising 52-km long tunnels and an underground power house. The project will provide about five billion low-cost hydel electricity to the national grid every year. Annual benefits of the project have been estimated at Rs.55 billion.

For optimal utilisation of water and hydropower resources in the country, WAPDA has been implementing a two-pronged strategy for the purpose. Under the strategy, not only the under-construction projects are being completed in the shortest possible time but new projects are also being initiated in both water and hydropower sectors. WAPDA is trying its best to award contracts for Mohmand Dam and Diamer Basha Dam within a year to supplement significantly towards existing water storage and hydropower generation capacities in the country.