Business Recorder

  • Private sector reluctant to invest in water, power projects

    ISLAMABAD (February 16 2008): The government is confronting a tough time in attracting private sector's investment in water and power projects as the government has lined more than 40 development projects for Public Private Partnership (PPP). As an informal cut of around 70 billion on 2007-08 PSDP allocation has been placed, the government has speeded up the process of putting the development projects for investment from private sector both in and outside the country, sources told Business Recorder. The investors are not coming forward according to the expectations of the government in hydro-electric and water projects, especially the planned big reservoirs as the government is yet to remove certain reservations about these important projects, the sources said. The planned Basha, Munda and some other projects have been lined for PPP mode of execution. However, there are certain reservations of the private sector's investors on these projects. The government will have to give a resettlement action plan of these projects before taking these projects up with private investors, according to the sources. The sources, however, said that there was overwhelming response from private sector to fully or partially fund projects in other sectors especially the communication, water supply, sanitation, sewerage and solid waste management. Pakistan needs at least 10 percent GDP allocation for development budget, around 20 billion US dollars for one year. This is a huge amount that is actually more than the annual tax collection, which the Federal Board of Revenue (FBR) has made in the past. For the year 2007-08, the tax collection target is little over Rs one trillion and there are indications that FBR would not be able to meet the target, the sources said. In this scenario the PPP mode for taking development agenda forward is must, the sources said. The government has established an independent cell in the planning and development (P&D) division to refer almost every development projects to Infrastructure Project Development Facility (IPDF), an autonomous body to look for investors in launching development projects. The Planning Commission, according to the sources, is required to do a lot to make the projects implementation mechanism neat and clean. This will be a pre-requisite for attracting local and foreign investors in investing in the development schemes. There is a need that the government should do it swiftly in order to maintain the overall growth, Pakistan has achieved in the recent years. A recent World Bank report says that Pakistan is suffering from dearth of infrastructure in water, irrigation, power and transport sector. The report enlists corruption as one of the main reasons that hinders the development drive in Pakistan. Delays in projects' implementation, lack of skilled workforce and implementation of some development schemes on political basis are other factors for unreasonably slowing the development process. Copyright Business Recorder, 2008

  • Musharraf for setting up more desalination, power units

    President Pervez Musharraf has asked the Karachi Port Trust, Port Qasim Authority, Pakistan Steel Mills, as well as the city and Sindh governments to install desalination and power generation plants all over the metropolis. He was speaking as chief guest at the formal inauguration of the DHA water desalination and power generation plant and ground breaking ceremony of Phase-II of the project here on Monday. He had performed the groundbreaking of this very project three-and-a-half years ago. The President termed the inauguration of such a project as a very important occasion.

  • Pakistan lacks energy efficiency development road map: ADB

    Pakistan lacks a comprehensive energy efficiency development road map and investment programme and international experience indicates that the effective implementation and incorporation of energy efficiency into the policy mainstream requires concerted, long-term action and commitment, said Asian Development Bank report. In a project update report on 'Preparing the Sustainable Energy Efficiency Development Programme for Pakistan', the ADB emphasised the need for a comprehensive policy and regulatory framework; energy price and utility rate-setting reforms and incentives; a strong equipment standards, certification, and testing regime; complementary alternative and renewable energy programmes; and easy, widespread access to energy efficiency information, financing, products, and services by all categories and levels of energy market players and end users. According to ADB project study, the energy efficiency assessment conducted under ADB's Energy Efficiency Initiative determined that Pakistan has a large and untapped energy efficiency market. It identifies several energy efficiency improvement opportunities in gas distribution (supply side) and in the government and residential sectors (demand side) that can be tapped into. These opportunities may be explored without extensive precursor preparations, detailed policy design, or framework development, achieving immediate energy savings and deferring additional supply requirements. Further refinement and expansion of such options could result in a portfolio of immediate, bankable energy efficiency investment options for Pakistan, which the government and ADB may consider. According to report, the government and domestic consumers consume more than 60 percent of Pakistan's energy. The public sector is the most inefficient consumer, and the government is looking for more efficient utilisation and conservation measures. The government is eager to procure and adopt energy efficient technology in its operations, including the use of efficient lighting and heating and cooling systems in existing and new buildings, and introduction of energy-efficient building codes. The domestic sector currently uses 45 percent of the power supply. The most effective way to expedite the use of efficient compact fluorescent lamps by domestic consumers is to inject a large volume of such lamps into the market at a low price. This approach has been successful in several countries, where it has immediately reduced customers' monthly power bills. Preliminary analysis suggests that the introduction of 15 million high-quality compact fluorescent lamps into Pakistan's domestic market would save customers $78 million over the lifetime of those bulbs (approximately 2 years). This money could be used more productively in the economy. In addition, 880 MW of power demand would be avoided. The cost of such additional new generation capacity would be $1.15 billion (at $1.3 million per MW), ADB report disclosed. ADB report further pointed out that Pakistan's gas distribution system is ageing and is suffering from high technical losses (25-30 percent in some areas compared to industry standard 5 percent) that could be eliminated by replacing medium and low pressure pipes with more efficient, corrosion-free pipes. Natural gas accounted for half (43 billion cubic meters) of Pakistan's primary energy supply in 2006. A more efficient gas distribution system would result in significant national savings (up to $580 million per year) and increased use of cleaner fuel by more domestic, industrial, and commercial consumers, ADB report mentioned. It said that Electricity consumption, projected to grow an average of 8 percent per annum until 2015 (although recent experience suggests much higher demand growth), will similarly require large power generation capacity additions. Higher energy demand and imports will also require massive investments in associated port terminals, storage facilities, refining capacity, pipeline and transmission networks, and surface fuel transport infrastructure. During 2001-2006, ADB report stated that primary energy supply increased 5.4 percent per year. Meanwhile, consumption of electricity rose at an average annual rate of 6.8 percent, natural gas by 10.4 percent, liquefied petroleum gas by 17.6 percent, and coal by 22.8 percent. Electricity use, in particular, is growing robustly across all sectors-industry, agriculture, domestic, and commercial-recording a 10.2 percent overall jump in 2005-2006, while generation increases lagged at 9.3 percent during the same period. Copyright Business Recorder, 2008

  • Prime Minister for alternative energy sources to reduce fuel bill

    Prime Minister for alternative energy sources to reduce fuel bill ISLAMABAD (February 22 2008): Prime Minister Mohammedmian Soomro on Thursday emphasised the need on utilising alternative sources of energy including possible blending of ethanol with petroleum products. The Prime Minister said this while chairing a high level meeting held here to examine the possibility of using ethanol in petroleum products. He directed all the concerned organisations to focus on developing alternative sources of energy to help reducing the prices of petroleum products as well as saving foreign exchange. Expressing concern over the escalation of oil prices in the international market, the Prime Minister underlined the need to employ all available alternative sources of energy which could help sustenance of economic growth. He directed the Petroleum Ministry to finalise its recommendations and strategy in consultation with all the stakeholders. Secretary Petroleum informed the meeting that feasibility study for blending of ethanol with petroleum products was earlier carried out and a pilot project was launched in August 2006 which was completed in March 2007. He said the project established that the ethanol (E-10) blended fuel is environment friendly and economically viable. The meeting was apprised that ethanol is a by-product of molasses which is presently being exported. The local consumption of the product could help reduce the fuel bill and impact the economy in a positive manner. The meeting was also informed that Brazil is the leading country where ethanol is being used as a major alternative source of energy. The other countries which are switching towards this trend include USA, China, European Countries, Australia, Canada, Japan, Thailand and India. Minister for Petroleum and Natural Resources, Ehsan-ullah-Khan also attended the meeting. Copyright Associated Press of Pakistan, 2008

  • Pesco urges consumers to conserve power

    Chief Executive of Peshawar Electricity Supply Company (Pesco) Sakhi Marjan has urged the consumers to conserve electricity in view of the increasing gap between supply and demand in the country. Seeking consumers' co-operation to the company, the Pesco chief said that the company could overcome the current energy crisis only with the help of consumers. He advised them to stop unnecessary and illegal use of electricity to ensure continued and uninterrupted power supply. For this, the consumers were required to follow the proposals of the company so that they could not face any inconvenience, he said, and appealed to people to conserve energy by means of less consumption, especially during the peak hours, ie rom 6.00 pm to 11.00 pm. He said that Pesco was taking all possible measures to overcome the prevailing energy crisis. The company also urged the industrial consumers to extend their co-operation to save at least 25 percent energy and asked them to close the shopping centres before 7.00 pm and switch off the street lights. It also called for switching off the lights of all billboards to save electricity for the domestic consumers, who were also requested to use energy savers and tubelights instead of bulbs and iron their clothes in day time. Copyright Business Recorder, 2008

  • Petrol price raised by Rs 5, diesel by Rs 3.50

    The government has increased petroleum products' prices, which will be effective for the fortnight, from March 1 to March 15. The petrol price has been raised from Rs 53.70 per litre to Rs 58.70, diesel from Rs 32.57 per litre to Rs 36.07, kerosene oil from Rs 35.23 per litre to Rs 38.73 and HOBC per litre from Rs 64.88 to Rs 69.88, a notification of Oil and Gas Regulatory Authority (Ogra) said. The oil prices in the international market showed a record surge during the last several months, which compelled the government to pass on partial increase to consumers, said a government spokesman. The petrol and HOBC prices have been raised by Rs 5.00 per litre, while prices of kerosene oil and light diesel oil have been raised by Rs 3.50 per litre. The spokesman further said the government will continue to provide a subsidy of Rs 16.82 per litre on kerosene oil and Rs 15.30 per litre on light diesel oil, after the price increase. The price computation is carried out by OGRA in accordance with the formula prescribed by the Federal Government. It requires that the price be based on average Arab Gulf prices for the last fortnight for Naphtha, Diesel, Kerosene and HSFO, to which Inland Freight Equalisation Margin (IFEM) is added, which reflects estimated transportation cost of the products to the 29 depots in the country for the purpose of price equalisation. Government levies viz. petroleum development levy and sales tax are added to notified prices. Copyright Business Recorder, 2008

  • ADB pledges $0.6 million grant to develop energy efficiency plan

    The Asian Development Bank (ADB) is helping Pakistan craft, a comprehensive energy efficiency policy and investment programme to meet the growing energy demands of an expanding economy and population.

  • Pesco chief urges consumers to conserve electricity

    Chief Executive, Peshawar Electricity Supply Company (Pesco) Muhammad Qasim Khan has urged consumers to conserve electricity and extend their co-operation to stop unnecessary and illegal usage of elec

  • Solar energy termed best solution to power crisis

    The then advisor to Prime Minister on Power Yasin Malik has said that solar energy is the best solution to the ongoing power crisis in the country.

  • Pakistan has largest privatisation programme: Naveed

    Pakistan has the largest privatisation programme and fairly long experience in the South Asia, which can be mutually beneficial for the entrepreneurs of entire region including Azerbaijan. The Federal Minister for Privatisation, Naveed Qamar stated during a meeting with Ambassador of Azerbaijan to Pakistan, Dr Eynulla Madatli who called on the Minister on Thursday.

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