PAKISTAN GETS $230 MN LOANS TO CUSHION FOREX RESERVES
Pakistan has received two short-term loans worth $230 million from international creditors, meant to keep the official foreign exchange reserves at a level sufficient to provide cover to three-month import bill.
According to officials, the country received an amount of $153 million from Citibank in August. Besides, Islamic Development Bank (IDB) gave a $77 million short-term loan in July for crude oil import.
The IDB’s short-term facility is meant for import of crude oil from Saudi Arabia and the lender directly makes payments to the oil supplier on behalf of an oil importer. It partially helped lower pressure on the country’s forex reserves.
From April to May this year, Pakistan had signed three separate short-term loan agreements with the IDB valuing $700 million. Of this amount, Pakistan has already imported crude oil equivalent to $340 million.
For the current fiscal year, the government has estimated receiving $1.55 billion short-term loan from the IDB against the oil import facility.
Sources in the State Bank of Pakistan (SBP) said higher than anticipated foreign remittances in August also helped keep the official foreign currency reserves above the three-month import cover level.
They said that in August, Pakistan received around $2 billion in foreign remittances, partly because of the seasonal effect of Eidul Azha.
The SBP is expected to officially announce the foreign remittances statistics next week.
During the week ending August 31, 2017, the SBP’s reserves increased by $338 million to $14.681 billion due to official inflows, the central bank had reported on Thursday.
For almost one month, Pakistan was touching the three-month import cover border line as its reserves remained at around $14.3 billion.
In order to avoid downgrading in its credit ratings and keep the tap of budget financing open from the World Bank, Pakistan has to maintain its official foreign currency reserves above the three-month import cover level.
The finance ministry is currently making arrangements for floating about $1 billion worth of Sukuk Bonds by middle of November and a better credit rating will help lower the cost of borrowing. It had also raised $1 billion last year at 5.5% interest rate – the lowest rate on the Islamic bond that it ever paid.
The government was reviewing different options to keep the reserves above the level of three-month import bill. The options included incentives for expatriates to invest in Pakistani dollar-denominated bonds, more restrictions on imports and steps that will encourage exporters to bring back export proceeds.
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FINANCE MINISTRY LAUDS STRONG PAK-CHINA RELATIONS
Finance Minister Ishaq Dar said on Friday that the bilateral relationship between Pakistan and China has solidified due to the launch of the China-Pakistan Economic Corridor (CPEC).
He expressed the sentiment during a meeting with China’s Finance Minister Xiao Jie in Urumqi, China, according to a statement.
The two leaders discussed various issues of mutual interest including ways to further enhance bilateral economic relations. Welcoming Ishaq Dar on his visit to China, Jie said that high level exchanges between the two neighbours have been helpful in furthering the objectives of strong relations.
He also appreciated Pakistan’s efforts towards ensuring timely implementation of CPEC projects. He also thanked Dar for Pakistan’s support to the Central Asia Regional Economic Cooperation (CAREC) Institute in Urumqi and expressed the hope that Pakistani professionals will play an active role in making the institute a success.
Dar said that Pak-China strategic relationship is an anchor for regional peace and stability, adding that Pakistan-China friendship enjoys across-the-board political, institutional and popular support in Pakistan.
Congratulating his counterpart on the inauguration of CAREC Institute, he assured of Pakistan’s complete and active participation in the institute’s activities.
On the sidelines of his visit, Dar also held a meeting with Asian Development Bank (ADB) President Takehiko Nakao, in Urumqi,China to discuss matters related to ADB-financed development projects in different sectors.
Dar appreciated ADB’s support to the CAREC initiative which is helping to bring the member countries closer through cooperation in areas like trade and transportation, according to a statement received on Friday.
He said that regional connectivity is extremely important for the member countries of CAREC to enhance presently precarious regional trade and economic cooperation between them. He also commended ADB’s support to the CAREC Institute, which has established for brainstorming and devising innovative solutions for regional development issues.
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SSGC STARTS CRACKDOWN AGAINST GAS THEFT TO OVERCOME LOSSES
The Sui Southern Gas Company (SSGC) has kicked-started a crackdown against gas theft under the provided law ‘The Gas Theft Control and Recovery Act, 2016’ and had owners of two factories arrested for allegedly using illegal connections as part of the campaign.
“The arrested factory owners were illegally utilising gas of around Rs1.5 million per month,” an official at the utility firm estimated.
He said that the firm has decided to intensify crackdown, including in the industrial zones, which comes under its jurisdiction.
“Whenever required, the SSGC raiding parties will also seek the assistance of Pakistan Rangers,” a statement issued by the company added.
The utility firm accounts-in 7.5% line losses each year under the nameplate of Unaccounted for Gas, this limit is set by the government. Otherwise, actual losses due to the gas leakages is said to be much more than this (7.5%), which are worth hundreds of millions of rupees per year.
The statement revealed that SSGC’s Counter Gas Theft Team conducted a raid at a factory in Azizabad. “The owner of the factory, Sagheer, has been arrested by the SSGC dedicated Police Force and an FIR has been lodged against the offender,” it added.
The gas theft team conducted another raid on an ice factory in Sukkur. The owner of the factory, Zuhaib Ahmed Khairo, was using gas without passing it through the meter. An FIR has also been launched against the culprit and the gas supply line has been disconnected and gas claim has been raised against him.
SSGC has expressed its determination to uproot the menace of gas theft.
The Gas Theft Control and Recovery Act, 2016 passed by the National Assembly in 2016 and the recent establishment of gas theft utility courts have given the gas utilities the mandate to take an unprecedented legal action against them, it said.
According to the consolidated profit and loss accounts of SSGC, the utility firm’s losses soared three-fold to Rs2.33 billion in the single quarter ended September 30, 2015 from Rs768.38 million in the same quarter in 2014.
It is yet to report financial results for various quarters from October 2016 to June 2017.
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NEW PIA CEO TO DRAW UP REVIVAL PLAN BY NEXT MONTH
The cabinet has tasked the new chief executive officer of Pakistan International Airlines (PIA) with coming up with a business plan by mid-October for turning the national flag carrier into a profit-making company, sources say.
CEO Dr Musharraf Rasool Cyan, who took charge this week, has a tough task ahead as he will strive to revive fortunes of the airline that has been facing losses persistently with liabilities swelling to around Rs350 billion.
PIA also has to repay billions of rupees to banks to clear its debt. The cabinet set the task for the CEO in its meeting held on August 22.
In January this year, the Aviation Division approached the Economic Coordination Committee (ECC) of the cabinet, seeking an increase in government’s financial guarantees for PIA from Rs151 billion to Rs161.5 billion.
To support its case, the Aviation Division pointed out that PIA needed state support to pay loan installments and mark-up amounting to Rs24.94 billion from January to June 2017.
The ECC gave its approval to enhancing the government guarantees to enable PIA acquire more bank loans to repay its liabilities. After comprehensive discussions, it was also decided to develop an operational and business plan.
In an effort to keep the national carrier afloat, the government has been providing guarantees to clear the way for raising funds from local and foreign commercial banks.
While giving the go-ahead to the last bailout package for PIA in January, the ECC also constituted a committee to finalise a strategic business plan for improving financial and operational performance of the airline.
The committee held a few meetings, chaired by Ahsan Iqbal, then the federal planning minister, but its findings were not shared with the public.
Now, according to sources, the cabinet has directed the new PIA CEO to prepare a business revival plan by mid-October.
The cabinet, in its late August meeting, also approved the CEO’s appointment for a period of two years. Cyan will work on probation for 90 days and he will be confirmed for two years after probation based on his performance.
Earlier, PIA advertised the vacant top post and in response 11 applications were submitted. Of these, eight candidates were shortlisted after scrutiny.
Initial interviews were conducted on June 16, 2017 which led to the shortlisting of three aspirants. They were called for the second round of interviews on July 3.
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PR INSTALLS 1,000-UNIT SOLAR POWER SYSTEM
Pakistan Railways (PR) has successfully installed a 1,000-unit solar power system at its headquarters to make all its working areas free of load-shedding.
Pakistan Railways Minister Khawaja Saad Rafique inaugurated the system on Friday, and felicitated Railways CEO Javed Anwar, AGM Mechanical M Ansarullah Khan, Chief Electrical Engineer Ambreen Zaman and the administration on the successful generation of 1,000 units from the system.
Speaking on the occasion, he said that all four workshops of the railways, washing line, railway station, headquarters building, divisional office, loco-shed, and Karen Hospital had been made free of load-shedding.
The minister said that the solar system installed at the Karen Hospital and headquarters would not only produce 400,000 to 500,000 units per annum for the railways but these systems would also generate extra power for the Lahore Electric Supply Company (Lesco) on Sundays and other holidays.
Rafique said that installation of two diesel generators of one-megawatt each were also important in freeing the working areas of the railways from load-shedding.
He said that earlier work had to suffer due to power outages, which cost Rs2 million per hour. He revealed that the Pakistan Railways Electrical Department had prepared a proposal for 100 railway stations and all divisional headquarters to be shifted to solar power.
“There was a time when the electricity connections of workshops were being cut, but now all workshops are working day and night.”
Hopper wagons imported from China were now being assembled in the Railways’ workshops and work on overhauling of locomotives besides upgrade of passenger trains was also in progress, the minister added.
Now that power outages were no longer an issue, Railways will be able to increase its performance and play a better role in national prosperity and progress, the minister hoped.
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WEEK-ON-WEEK: SPI RISES 0.58PC
The Sensitive Price Indicator (SPI) for the week ended September 7, 2017 registered an increase of 0.58% for the combined income group, going up from 221.42 points in the previous week to 222.71 in the week under review. Compared to the corresponding week of previous year, the SPI for the combined income group rose 1.89%. The SPI for the lowest income group increased 0.74% compared to the previous week. The index for the group stood at 213.48 points against 211.91 in the previous week, according to provisional figures released by the Pakistan Bureau of Statistics. During the week, average prices of 14 items rose in a selected basket of goods, prices of 11 items fell and rates of remaining 28 goods recorded no change.
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MARRIOTT INKS DEAL TO OPEN SHERATON GRAND HOTEL IN LAHORE
Marriott International has announced an agreement with Imperium Hospitality for opening Sheraton Grand Hotel in Lahore, marking the company’s first hotel in Pakistan’s key gateway city. Scheduled to open in 2021, the hotel will carry the Sheraton Grand designation, which represents the premier tier of Sheraton hotels recognised for their enticing destinations, distinguished designs and excellence in service and guest experiences.
“Sheraton continues to maintain its first mover advantage through strategic pipeline development and growth plans and we are now excited to introduce the brand in Lahore,” said Samir Baidas, Chief Development Officer, Middle East & Africa, Marriott International.
“There is a demand for international hospitality brands in the city and Sheraton will meet the needs of business and leisure travellers, as well as local residents in Lahore.”