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News Alerts

Daily News Friday, July 06, 2012

News Alerts Email # 158

Pak Law Publication Office # 05, Ground Floor, Arshad Mansion, Near Chowk A.G Office, Nabha Road Lahore.

Ph. 042-37350473 Cell # 0300-8848226 [email protected] 2

July 6, 2012

Table of Contents

Taxation Pakistan ............................................................................................................................. 4

Revenue target likely to be missed by Rs 37 billion: FBR chief ............................................................ 4

Service providers: FBR allows SRB full access to customs data ........................................................... 5

Interconnection charges: telecom companies seek exemption from sales tax .................................... 6

Gradual rollout of WEBOC allowed .................................................................................................... 6

SRB to introduce its automation system in Sindh Bank ...................................................................... 7

FBR issues new IT-5 form for immovable property sellers .................................................................. 8

UN calls for ''billionaires tax'' to help world''s poor ............................................................................ 9

Business & Economy ..................................................................................................................... 12

Cement sales up by 9pc in 2012 ....................................................................................................... 12

OGRA notifies new LPG prices ......................................................................................................... 12

Govt set to produce 3.3 million ton meat in 2012-13 ....................................................................... 13

FBR issues exemption certificate to Cyber Internet Services ............................................................ 14

Release of containers: FBR tells field formations to make preparations ........................................... 15

Cement sector remained under financial pressure in FY12 ............................................................... 16

Industries & Sectors ...................................................................................................................... 17

Wasim Ahmad replaces Mustafa Peracha as CEO of wi-tribe Pakistan .............................................. 17

BOD of Fesco approves development projects ................................................................................. 18

Projects' implementation to help Industry grow 4.1 percent............................................................ 18

Fuel and Energy: Pakistan ............................................................................................................ 20

Power ministry told to revise Rs 383 billion subsidy ......................................................................... 20

Power supply and demand: Cabinet fed up with conflicting figures ................................................. 21

Nepra cuts tariffs of Jamshoro, Muzaffargarh units for June ............................................................ 22

Ogra reduces LPG price by Rs 30 per kg ........................................................................................... 23

Power shortfall crosses 5,000 megawatts mark ............................................................................... 24

LPG Air mix tariff: tug-of-war between Ogra, oil and gas ministry .................................................... 24

Gencos, Discos directed to use only PSQCA-certified electricity cables............................................. 26

Miscellaneous News ....................................................................................................................... 28

Despite rapid growth, Pakistan’s media remains financial lightweight ............................................. 28

Corruption and intrigue surface in Pak Datacom saga ...................................................................... 29

On the fast track: Govt to divert funds to projects nearing completion ............................................ 31

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July 6, 2012

Sindh, Punjab get more water for Kharif crop sowing ...................................................................... 33

Worker’s funds: Chairman lauds performance of EOBI..................................................................... 34

OPEN MARKET FOREX RATES ........................................................................................................... 35

INTER BANK RATES .......................................................................................................................... 36






July 6, 2012

Taxation Pakistan

Revenue target likely to be missed by Rs 37 billion: FBR chief July 06, 2012

The Federal Board of Revenue (FBR) is likely to miss its revenue collection target for tax year 2011-12 by Rs 37 billion, Chairman FBR Mumtaz Haider Rizvi said on Thursday. He was talking to media during an international conference on ''Control Drugs - Control Crimes'' organised by Pakistan Customs at a local hotel. He said that the board was expecting to collect Rs 1,915 billion against revenue collection target of Rs 1,952 billion for tax year 2011-12. Despite natural calamities, economic meltdown and other factors, the FBR has so far collected Rs 1,910 billion and expected to collect nearly Rs 5 billion more till the closing of the current fiscal year, he said. Terming the revenue target of Rs 2.381 trillion for current fiscal realistic, Rizvi said that the board could achieve the said mark through broadening of tax base. Moreover, the FBR chief said that the board had identified 600,000 new potential taxpayers and issued 65,000 notices. Of the total, he said, 38,000 persons had responded positively and filed tax returns. He said the board had so far processed 27,000 returns and generated an additional revenue of Rs 5 billion through this exercise. He hoped that the exercise to broaden the tax net would create a positive impact of Rs 10 billion on national exchequer. He said that the FBR would not allow any Nato and Isaf container to leave ports without proper scanning, adding that 100 percent container scanning would avert the possibility of smuggling of prohibited items. He said the war against drugs and organised crime was basically the war for the survival of humanity and global powers should focus on this war as well. Highlighting the crucial role of Pakistan Customs, he said that Pakistan was one of the major transit countries through which drugs were smuggled around the world. "Keeping in view these facts, we have incorporated certain provisions in the Finance Act 2012 to strengthen Pakistan Customs to combat this challenge in a better way," he maintained. The conference was attended, among others, by diplomats from more than 40 countries, a team from Foreign Law Enforcement Community (FLEC), members of Pakistani law-enforcement agencies, officers of Pakistan Customs and representatives of the business community. Collector Customs, Preventive, Khawar Farid Maneka said that drug cartels needed to be eliminated. He said that the solution to the problem did not lie in catching individual carriers, but to eliminate big fish via a more co-ordinated approach. Although the country has moved a long way towards a drug-free society, a lot more needed to be done to increase seizure rates which currently ranged between 6 and 7 percent of total drug production world-wide.






July 6, 2012

Copyright Business Recorder, 2012

Service providers: FBR allows SRB full access to customs data July 06, 2012

YASIR BABBAR

The Federal Board of Revenue has allowed Sindh Revenue Board (SRB) to have full access to its data relating to customs regarding the sales tax matters of service providers, Business

Recorder learnt here on Thursday. Official sources told BR that the FBR has given this authorization to SRB on its request. The concerned officials of the provincial services tax collection body had requested the FBR to allow access a few months back. The FBR has allowed SRB in writing - a copy of which is available with Business Recorder - that "After due deliberations the Board is pleased to authorise SRB to have access to the following custom data: a. list of licensed customs agents (available with MCC (appraisement Karachi). b. number of GDs filed by these agents in a given time period. As regards the other data related to shipping agents, stevedores, ship management services, freight forwarding agents, ship chandlers, port/airport operators, etc, the SRB may like to contact the relevant agencies directly for the requisite information. This letter has been issued with the approval of the Chairman FBR, the letter stated. Sources said that authorization of access has been given by the FBR on a condition that SRB and Pral would not divulge, share, reveal, exchange or give away the information or part of the information to any person, entity or organisation except the competent court of law. Member (legal and co-ordination) SRB Mumtaz Ahmed told Business Recorder that this is very good decision taken by the FBR in response to SRB letter. Now we will monitor service providers'' related customs matters very well with the data of FBR. He said the SRB is striving for the collection of sales tax on services and for the registration of new taxpayers with the help of the FBR. The FBR had already allowed SRB to share all kinds of data regarding the taxpayers which has benefited SRB in tax collection and data-compiling as well, he added. To a question, Mumtaz replied that with the data of FBR regarding customs, SRB would definitely increase its tax collection and would register more people and companies related to services of customs. But we can''t say how much tax collection would be increased with the help of FBR, he added. Copyright Business Recorder, 2012






July 6, 2012

Interconnection charges: telecom companies seek exemption from sales tax July 06, 2012

The Federal Board of Revenue is examining a request of telecom companies seeking exemption of sales tax on interconnection charges under section 65 of the Sales Tax Act, 1990. Sources told Business Recorder here on Thursday that the FBR is analysing the legal aspects of the issue in the light of section 65 of the Sales Tax Act. The companies have pleaded their case that sales tax is not applicable on the interconnection charges. If sales tax is being levied, then it should be adjusted and should be applicable from July 1, 2012. The FBR is examining the issue and no notification has been issued in this regard, official added. The draft of the notification is based under the provisions of section 65 of the Sales Tax Act, 1990 which proposes that the FED in sales tax mode should not be collected prior to July 1, 2012. Under section 65 of the Sales Tax Act, if in respect of any supply the Federal Government is satisfied that inadvertently and as a general practice: Firstly, the tax has not been charged in any area on any supply which was otherwise taxable, or according to the said practice the amount charged was less than the amount that should have actually been charged. Secondly, the registered person did not recover any tax prior to the date it was discovered that the supply was liable to tax and thirdly, the registered person started paying the tax from the date when it was found that the supply was chargeable to tax. It may, by a notification in the official Gazette, direct that the tax not levied or short levied as a result of that inadvertent practice, shall not be required to be paid for the period prior to the discovery of such inadvertent practice.


Gradual rollout of WEBOC allowed July 06, 2012

SOHAIL SARFRAZ

The Federal Board of Revenue (FBR) on Thursday allowed gradual rollout of Web-Based One Customs (WEBOC) clearance system at Model Customs Collectorate (MCC) Exports, Karachi, Air Freight Unit, Karachi and MCC Appraisement, Karachi including import cargo cleared at Al-Hamd International Container Terminal. In this connection, the FBR has issued instructions to the Collectors of Customs here on Thursday. According to the FBR''s instructions, the Board has allowed gradual roll-out of






July 6, 2012

WEBOC system to MCC Exports, Karachi (all export cargo currently cleared through ''One Customs'' from East Wharf, West Wharf, and Off-dock terminals), MCC Appraisement, Karachi (all import cargo currently cleared through One Customs at Al-Hamd International Container Terminal initially as project and subsequently to the other ports and categories of Goods Declaration handled by the Collectorate), and Air Freight Unit, Karachi, FBR''s instructions added. A formal inauguration ceremony of the indigenously developed Web-Based One Customs (WEBOC) clearance system would be held here on Friday (July 6) at Customs House Karachi. It is learnt that the inauguration of the WEBCO at Karachi International Container Terminal (KICT), Pakistan International Container Terminal (PICT) AND Port Qasim would be held at Karachi. FBR Chairman Mumtaz Haider Rizvi and senior customs officials would attend the ceremony. The senior representatives of the Karachi Chamber of Commerce and Industry (KCCI), customs clearing agents, terminals operators, shipping agents and representatives of business and trade would participate in the ceremony. The WEBOC has been successfully running for the last 6-7 months at the KICI and PICT and around one year at Port Qasim. Once the training and connectively issues would be resolved, the FBR intends to rollout the system at the Export Collectorate Karachi, Air Freight Unit (AFU) Karachi and other collectorates. At present, Syed Tanveer Ahmed Project Director WEBOC and Director Risk Management Unit (RMU) have successfully implemented the new customs clearance system. At the same time, the RMS has become fully functional and a new team has finalised the RMS. Under Director RMS Syed Tanveer, the new RMS has started functioning by incorporating necessary modules in the new customs clearance system. Presently, 15-20 percent consignments cleared through the WEBOC have been examined against 100 percent under the manual clearance system of One Customs.


SRB to introduce its automation system in Sindh Bank July 06, 2012

Sindh Revenue Board (SRB) has prepared its own automation system including the bank-portal which is likely to be introduced in Sindh Bank for the collection of sales tax on certain services shortly, Business Recorder learnt on Wednesday. Currently, SRB is getting complete technical assistance from Pakistan Revenue Automation Limited (Pral) for the collection of sales tax on services.






July 6, 2012

All 42 authorized branches of National Bank of Pakistan are using Pral's system. SRB would also extend contract with Pral soon for the new fiscal year 2012-13, sources claimed. Sources familiar with this development told Business Recorder that Information Technology (IT) experts of SRB have made the automation system including bank-portal like Pral in the first week of June 2012. Former Chairman SRB Nazar Hussein Mehar had also announced creation of SRB's own automation system during a conference titled "Sales Tax on Services - Lessons learnt and way forward," held at a local hotel on May 9, 2012, they said. SRB had to introduce its own system from FY-13 but it could not do this due to some technical reasons so now, SRB is likely to introduce its own system in Sindh Bank, they said. SRB and Sindh Bank are likely to reach an agreement soon for authorisation of some bank branches in various areas of the province. This initiative had been taken by the head of Sindh Bank who visited SRB head office to enter an agreement for authorisation of some bank branches, they added. When contacted, Chairman SRB Shakaib A Qureshi told Business

Recorder that he is monitoring each and very section of SRB minutely.


FBR issues new IT-5 form for immovable property sellers July 06, 2012

The Federal Board of Revenue (FBR) has made it mandatory for the sellers of immovable property including plots, flats, buildings and agricultural land etc to submit a new application form ie IT-5 to the registering/transferring authorities for sale/transfer of the property/land. In this connection, the FBR on Thursday issued IT-5 form ie an application to the registering/transferring authorities for sale/transfer of immovable property. According to the new form, the sellers, buyers and Registering/Transferring Authority of Immovable Property (such as plots, buildings, flats, agricultural land, etc) can pay withholding tax u/s 236 of the Income Tax Ordinance 2001 and get a Computerised Payment Receipt (CPR) issued by NBP/SBP. Experts explained that the FBR had introduced a new Form IT-5 for sellers of property. It is an application to the Registering/Transferring Authority for sale/transfer of immovable property, wherein the seller of property shall pay 0.5 percent withholding tax under newly introduced section 236C of the Income Tax Ordinance, 2001, which is sort of advance income tax on sale or transfer of immovable property. The registering or transferring authority would have to make four copies of the IT-5 form. The original copy would be retained by the registering/transferring authority and the






July 6, 2012

remaining three copies be distributed among seller, buyer and concerned Regional Tax Office of the FBR. The last copy to the RTO would enable the BR to know about the property transaction for the imposition of capital gain tax on the immovable property. The registering or transferring authorities would have to ensure that withholding tax u/s 236 of the Income Tax Ordinance 2001 has been paid by the sellers and one copy has been sent to the Regional Tax Office concerned. Through Finance Act, 2012, Capital Gain tax on immovable property has been introduced for the first time, which definitely works as an additional revenue generating measure. The gain on sale of such property within two years of acquisition shall be taxed in the laid down manner: Where the holding period of immovable property is up to one year, the rate of tax would be 10 percent and where the holding period of property is more than one year but less than two years, the rate of tax would be five percent. By virtue of this amendment through Finance Act, 2012, gain on sale of immovable property becomes taxable under the head capital gain however immovable properties sold beyond holding period of two years would bear the character of capital assets but are not taxable. Similarly, another withholding tax provision has also been introduced through Finance Act, 2012 ie, Section 236C of the Income Tax Ordinance, 2001. As per newly introduced provisions of the law, any person responsible for registering or attesting transfer of any immovable property shall at the time of registering or attesting the transfer shall collect from the seller or transferor advance tax at the rate specified in Division X of Part IV of the First Schedule. Sources said the move appears to be a strong documentation measure at the part of FBR to collect data from most undocumented sector for which certain particulars have been sought from the buyer and seller of immovable property. At the time of sale/purchase transaction of immovable property, following particulars shall be filed by both ends (buyer/seller):- name of seller/owner, CNIC/NTN/PP of seller, name of buyer, CNIC/NTN/PP of buyer, location and particulars of property such as whether it is commercial, residential or agricultural and status of property like, building, flat, plot or land, value of property and tax computation, like, date of purchase of property and date of sale/transfer. Sale price and whether sold within a period of two years from the date of purchase and withholding tax calculation etc.


UN calls for ''billionaires tax'' to help world''s poor July 06, 2012

The United Nations on Thursday called for a tax on billionaires to help raise more than $400 billion a year for poor countries. An annual lump sum payment by the super-rich is one of a host of measures including a tax on carbon dioxide emissions, currency exchanges or






July 6, 2012

financial transactions proposed in a new report that accuses wealthy nations of breaking promises to step up aid for the less fortunate. The UN''s annual World Economic and Social Survey also says it is critical to find new ways to help the world''s poor as pledged cash fails to flow. The report estimates that the number of people around the globe worth at least $1 billion rose to 1,226 in 2012. These include an estimated 425 billionaires in the United States, 315 in the Asia-Pacific region, 310 in Europe, 90 in other North and South American countries and 86 in Africa and the Middle East. Together they own an estimated $4.6 trillion dollars - or an average of $3.75 billion per person, according to the report. The UN estimates that a one percent tax on their wealth would raise $46 billion in 2012. "Would this hurt them?" it questioned. "The ''average'' billionaire would own $3.7 billion after paying the tax. If that billionaire spent $1,000 per day, it would take him or her over 10,000 years to spend all his or her wealth," the report says. It says that the wealth of billionaires grew at an average rate of four percent a year in the two decades before the 2008-2009 financial crisis. "If that rate of growth returned with no wealth tax, the average billionaire''s wealth would double in less than 18 years." The UN acknowledged, however, that for now its tax on the unimaginably wealthy remains "an intriguing possibility." "It has not been regarded as a means of raising revenues for international co-operation." The report gives other ideas for international taxes, including: ---- a tax of $25 per tonne on carbon dioxide emissions would raise about $250 billion. It could be collected by national governments, but allocated to international co-operation. ---- a tax of 0.005 percent on all currency transactions in the dollar, yen, euro and pound sterling could raise $40 billion a year. ---- taking a portion of a proposed European Union tax on financial transactions for international co-operation. The tax is expected to raise more than $70 billion (55 billion euros) a year. It also suggests expanding a levy on air tickets that a number of nations already impose to raise money for drugs for poor states through UNITAID, a UN initiative. The report says more than $1 billion has been handed over to UNITAID since the levy started in 2006. France has a one euro tax for a domestic flight in economy and six euros for international flights - with 10 euros for business class on domestic flights and 40 euros on international tickets. The air industry fiercely opposes any extension of the tax, arguing that it already pays heavily in taxes and levies. However, because of budget cuts, aid and development assistance to poor countries fell $167 billion short of promised levels in 2011, according to Rob Vos, the report''s lead author. "We are suggesting various ways to tap resources through international mechanisms such as co-ordinated taxes on carbon emissions, air traffic and financial and currency transactions," Vos said. The UN expert said the taxes make "economic sense" as they stimulate the green






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economy and "mitigate financial market instability." "In short, such new financing mechanisms will help donor countries overcome their record of broken promises," he added. UN Secretary General Ban Ki-moon says that if the new "innovative financing" is to become viable, "strong international agreement is needed, with adequate governance mechanisms."

Copyright Agence France-Presse, 2012






July 6, 2012

Business & Economy

Cement sales up by 9pc in 2012 Thursday, 05 July 2012 22:19

KARACHI: Domestic sale of cement in volume has jumped by 8.8 percent to 23.95 million tons in June 2012 compared to 22 million tons in June 2011 due to rise in construction activities in the country.

According to industry data, the domestic sale of cement (volume) has recorded a rise of 12.5 percent to 2.29 million tons in June 2012 over June 2011 on month to month basis.

Pakistan's cement exports have, however, dropped by 9.1 percent to 8.58 million tons during the period under review compared to 9.43 million tons in corresponding period last year.

Similarly, cement exports in June 2012 registered a decline of 13.9 percent to 0.73 million as compared to 0.85 million tons in the same month last year.

Exports to India touched the lowest monthly level of 15,000 tons in June 2012 despite re-opening to trade route between the two neighbours. But overall export to India record an increase of 2.6 percent to 61,000 tons during the year.

Exports to Afghanistan have recorded a negligible decline of 0.2 percent to 4.72 million tons during the period under review compared to 4.73 million tons in June 2011.

Senior research analyst at KASB Research, Shagufta Irshad Khurram said that cement sector is doing well on the back of post wheat harvest.

The construction activities in rural areas have been geared up, she added.

Copyright APP (Associated Press of Pakistan), 2012

OGRA notifies new LPG prices Thursday, 05 July 2012 22:48

ISLAMABAD: The Oil and Gas Regulatory Authority (OGRA) on Thursday notified the prices of Liquified Petroleum Gas (LPG) for domestic consumer.

According to a notification, the price of locally produced LPG will be Rs.983 per domestic cylinder of 11.8 kg with per kg value of Rs 83.30. Likewise, the price for 100% imported LPG will be Rs 1,136 per domestic cylinder of 11.8 kg with per kg value of Rs 96.27.






July 6, 2012

The price for local and imported mix LPG has been fixed as Rs 1020 per 11.8 kg cylinder i.e. Rs. 86.4 per kg.

Due to higher transportation cost, the OGRA has allowed the distributors to charge Rs 30 more per domestic cylinder in Azad Jammu and Kashmir, FATA and Northern Areas.

The notification has advised all the LPG marketing companies to make available or issue the sales invoice/ gate pass on the their printed format clearly mentioning whether the consignment is imported one or local before dispatching the truck from storage and filling plants.

Chairman of the LPG Distributors Association Irfan Khokhar, addressing a press conference here at National Press Club, praised Minister for Petroleum and Natural Gas Dr Asim Hussain, for implementing the new LPG policy.

Khokhar appealed to the Prime Minister, the Chief Justice of Pakistan and the Ministry of Petroleum to take action against the LPG companies which were busy in black marketing of LPG and charging exorbitant prices the poor people.

Talking about the LPG Policy 2011, he said Rs 5 billion revenue per annum could be added to the national exchequer if the policy was implemented because it would eliminate the monopoly of LPG mafia in the country.

He demanded of the government to take action against anti- market forces in LPG sector.


Govt set to produce 3.3 million ton meat in 2012-13 Thursday, 05 July 2012 15:45

ISLAMABAD: The government has set the target of producing about 3.3 million tons of meat during the current financial year to full fill the domestic demand as well as for export purposes.

An official in the Ministry of National Food Security and Research told APP here on Thursday that meat production in the country was increased by 5.76 percent during last financial year.

As many as 3.2 million ton meat was produced during the year 2011-12 as against the set target of 3.0 million tons posting 5.76 percent increase in its production, he added.

He said that beef production target has been set at 1.8 million ton and mutton production at 0.643 million as against the last year's achievements of 1.76 million tons and 0.629 million tons respectively.






July 6, 2012

He said that beef and mutton production during the year 2011-12 had registered a growth of 4.7 percent and 3.4 percent respectively.

Meanwhile, poultry production is set to reach 0.937 million tons during the current financial year. The poultry production increased by 10 percent during the year 2011-12 as about 834 million ton poultry meat was produced against the set target of 758 million tons, he added.

The official further said that milk production is projected to touch 39.94 million tons target as compared to the last year's production of 38.69 million tons, while the egg production is expected to reach 13.81 million, showing 6.5 percent growth.

The target of other livestock production like fish are set at 0.729 million tons which deposited negative growth in its production during last financial year as it output was drooped by 24 percent.

As many as 0.262 million ton of inland and 0.467 tons of marine fish production is estimated during the year 2012-13 to full fill the domestic consumption as well as to export, he remarked.


FBR issues exemption certificate to Cyber Internet Services Thursday, 05 July 2012 21:02

ISLAMABAD: The Federal Board of Revenue (FBR) has issued an exemption certificate to Cyber Internet Services Karachi for tax deduction.

A statement issued by FBR here on Thursday said, "It is hereby directed that no deduction of tax shall be made under Sub-section (1) of section 153 of the income tax ordinance 2001 in the case of Cyber Internet Services Karachi from payments representing services rendered by it".

It is however, directed that tax already deducted shall not be refunded to the tax-payers but shall be deposited into the government treasury, the statement added.

The exemption certificate for said the company is valid upto December 31.







July 6, 2012

Release of containers: FBR tells field formations to make preparations Thursday, 05 July 2012 11:39

RECORDER REPORT

ISAMABAD: The Federal Board of Revenue has issued instructions to the field formations to make preparations for the release of the Nato/Isaf containers destined for Afghanistan, it is learnt.

Sources said here on Wednesday that the government has not imposed any transit fee on the Nato/Isaf containers. However, the government may impose existing taxes/fee on Isaf/Nato containers which are presently applicable on transit trade consignments to Afghanistan. This may include scanning fee on each container, service charges on processing of GDs, monitoring of containers using tracking devices and any other applicable fee/charges on transit trade consignments.

Sources further stated that the FBR has directed the relevant Collectorates of Customs including Model Customs Collectorates Quetta and Port Qasim to start making arrangements for the clearance of the consignments of Isaf and Nato. In this connection, a letter of the Ministry of Interior addressed to the Director General Rangers has been faxed by the FBR to the relevant Collectorates of Customs. At present nearly 2,000 containers of Isaf/US and Nato are awaiting clearance at Karachi and the field formations would make necessary arrangements for clearance of the Isaf/Nato containers destined for Afghanistan. The customs authorities would start the process of release of Nato/Isaf containers from Karachi through land routes of Chaman and Torkham to Afghanistan.

Sources said the FBR has also received a letter of the Ministry of Interior addressed to the Director General Rangers. In its letter, the Interior Ministry has asked the DG Rangers to provide proper security to the containers of Isaf and Nato. The letter of the Interior Ministry to the DG Rangers has specifically talked about providing foolproof security to the Isaf/Nato containers, sources added.

The government has brought back all the Isaf/Nato containers from Chaman and Torkham to Karachi and placed them in a secured environment to prevent any incident of stealing or burning. In the past, all Nato containers were called back to Karachi stuck up on way to Chaman and Torkham borders. These containers are loaded with goods to be supplied to the international forces in Afghanistan, but were stuck up as Pakistan disconnected the supply line in the wake of Salala border post attack by Nato forces.

Sources said the FBR had introduced an enabling provision in the Customs Act 1969 to collect transit fee on Isaf/Nato containers. However, an enabling provision ie Section 129A in the Customs Act, 1969 has not been invoked by the FBR. According to the provisions of the Section 129A of the Customs Act, a transit fee may be levied on any goods or class of goods






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in transit across Pakistan to a foreign territory at such rates as the Board may, by notification in the official Gazette, prescribe, it added.

However, the powers under Section 129A of the Customs Act, 1969 have not been exercised by the FBR. This means that there would be no transit fee on the resumption of Nato supplies to Afghanistan.

Presently, there is no official restriction on clearance of Afghan commercial cargo under the Afghanistan Pakistan Transit Trade Agreement (APTTA).

Cement sector remained under financial pressure in FY12 Thursday, 05 July 2012 11:16

RECORDER REPORT

LAHORE: Cement sector remained under financial pressure during the fiscal year 2011-12 due to increase in its input cost mainly, electricity, diesel, paper sack, gypsum and devaluation in Pak rupee. However, for the year 2011-2012, the industry's local cement dispatches were the highest ever in the history of the country.

Revealing the performance of the cement sector in the year 2011-12, Spokesman of All Pakistan Cement Manufacturers Association in a statement said that the local cement dispatches increased to record level of 23.947 million tons registering an increase of 8.84 percent. However the exports remained under pressure throughout the year and declined by 9.12 percent to 8.568 million tons. He said 2011-12 was the third straight year when the cement exports showed decline.

He further said that the cement sector added 3 million tons additional production capacity in the year 2011-12 as its total production capacity is increased by 7.23 percent to 44.217 million tons from 42.235 million tons in 2010-11. However, for the year 2011-12 its capacity utilization remained under pressure due to sluggish export demand, non revival of construction sector in the country, lack of investment in housing sector and government inability to initiate mega projects.

He said that from the peak level of 10.752 million tons achieved in 2008-09 the export have now decreased to 8.568 million tons in the year 2011-2012 showing a decline of 20.4 percent. He said that hype created on trade with India has so far not been materialized and export in that market was only 0.605 million tons in 2011-12 which is well below the expectation of the cement sector.






July 6, 2012

Industries & Sectors

Wasim Ahmad replaces Mustafa Peracha as CEO of wi-tribe Pakistan Thursday, 05 July 2012 21:43

ISLAMABAD: Qtel Group on Thursdasy announced the appointment of Wasim Ahmad as the new CEO for wi-tribe Pakistan.

Mr Ahmad takes over from the outgoing CEO, Mustafa Peracha, who has led wi-tribe from a startup operation to a solid number two broadband provider in Pakistan and the largest WiMax operator, said a press release issued here.

Prior to joining wi-tribe, Mr. Ahmad was at Telecel Globe (an Orascom Telecom company) as Group Chief Commercial Officer.

He brings with him a diversified leadership experience of over 20 years in telecom and consumer goods industries with leading organizations like Millicom, Nestle and Proctor and Gamble.

Mustafa Peracha, CEO wi-tribe Pakistan, is assuming new responsibilities within the group in the broadband area. He will be based in Doha at the Qtel Group headquarters.

Through his efforts, wi-tribe Pakistan has been consistently rated as the number one service provider in customer satisfaction and recognized for its leadership in launching numerous industry-first products and services.

Wi-tribe launched its largest operations in Pakistan in July 2009, and is currently operating in five regions; Islamabad, Rawalpindi, Lahore, Karachi and Faisalabad.

Wi-tribe is passionate about providing a unique and personalized customer care experience, teamed with instant connectivity and simplified service bundles and applications.

Backed by unrivalled experience, knowledge and ability, wi-tribe group, a Qtel Group company, was establish in April 2007.

The vast experience these world leaders bring to the table has fuelled the growth of this new venture, launching wi-tribe globally as part of Qtel's 2020 vision.







July 6, 2012

BOD of Fesco approves development projects Thursday, 05 July 2012 16:32

FAISALABAD: The 96th meeting of Board of Directors (BOD) of Faisalabad Electric Supply Company (Fesco) was held here with Nadeem Aftab Sindhu in the chair.

The board meeting unanimously approved that electricity development works should be executed with a loan of the Asian Development Bank (ADB).

The board was told that banks had given 23.29 million dollars for first and 19.23 million dollar loan for second phase for electricity development works.

In this connection, various grid stations and transmission lines are being upgraded to ensure uninterrupted electricity supply to agricultural, industrial, commercial and domestic consumers.

The board also approved purchase of 11-KV switch gear panels, circuit breakers and bus insulators and reviewed electricity purchase issue from Kamalia Sugar Mills, Shakarganj Sugar Mills and Ramzan Sugar Mills.

The board approved electrification of Danish School for boys and girls campus in Mianwali with Rs 35 million.The board also approved external electrification of the Punjab government Servants Housing Scheme being constructed on Sitiana Road.

The meeting was attended by Chief Executive Officer Fesco Engineer Iftikhar Ahmed, Malik Asghar Ali Qasir, Rana Muhammad Mushtaq, Muzamil Sultan, Wasif Majeed Sh. Ms. Balqees Akhter, Shahid Raza, Dr. Iqrar Ahmed and Saifaullah.


Projects' implementation to help Industry grow 4.1 percent Thursday, 05 July 2012 15:38

ISLAMABAD: With the implementation of various projects, the overall Industrial sector is projected to grow at 4.1 percent during the ongoing fiscal year (2012-13) with major contribution of manufacturing sector, which will expand by 4.4 percent.






July 6, 2012

The manufacturing sector would grow by 4.4 percent, while 3 percent and 7.5 percent growth rates have been fixed for Largescal Manufacturing and Small Scale manufacturing respectively, official sources said.

The main growing industries in 2012-13 would be chemicals, automobile, pharmaceuticals, electronics, leather products, paper & boards, cement and non-metallic minerals.

Similarly textile sector is expected to grow at a higher pace in 2012-13 as it is expected that its products would be exported in huge quantity to European Union after approval of concessions by WTO to Pakistani textile products in February 2012.

The exporters are expected to comply with different international obligations, like ISO Certifications, produce and export quality product and ensure timely exports.

The sources said that for promoting the industrial sector during the ongoing year, Rs 2,049 million have been allocated to manufacturing sectorn including Rs 775 million for Ministry of Industries, Rs 612 million for Ministry of Production and Rs 227 million for Ministry of Textile.

Major manufacturing projects to be carried out are include, Establishment of Chromite Beneficiation Plant at Muslim Bagh, District Killa Saifullah, Balochistan (Rs 104 million); Woman Business Development Centre, Karachi (Rs 59 million); Red Chilies Processing Centre, Sindh (Rs 256 million) and Water Supply Scheme for Hub Industrial Estate phase-II (Rs 247 million).

In addition the funds would also be utilized for the projects like Meat Processing and Butchers Training Centre, Multan (Rs 265 million) and establishment of Castor Oil Extraction Plant at Uthal District Lasbela (Rs 300 million).

Similarly, the major projects of textile to be executed during the year include Pak-Korean Garments Technology Training Institute, Karachi (Rs. 300 million); Lahore Garment City Company, Lahore (Rs 587 million); Faisalabad Garment City Company, Faisalabad (R. 499 million) and Providing & Laying Dedicated 48 inch Diameter Mild Steel Water Pipeline for the Pakistan Textile City Karachi (Rs 637 million).

The sources said that the provinces are also actively involved in establishing industrial zones through their Small Industries Development Boards (SIDBs) and Corporation to promote Small and Medium Enterprises (SMEs) in order to generate employment and revenue through their own efforts.

All provincial governments have established various industrial estates in different parts of their respective provinces to cater to the needs of investors.

The provincial governments are also striving to help their artisans by providing training, equipment, and financing so that they may sale their products in better way and thus improve their socio-economic conditions.







July 6, 2012

Fuel and Energy: Pakistan

Power ministry told to revise Rs 383 billion subsidy July 06, 2012

ZAHEER ABBASI

The Finance Ministry on Thursday urged the Ministry of Water and Power to revise the Rs 383 billion subsidy during a Cabinet Committee on Energy. The Ministry of Water and Power has sought a subsidy of Rs 383 billion to alleviate the power sector''s financial woes and enhance power generation to reduce the duration of power cuts in the country, sources told Business Recorder on Thursday. They said that the Finance Ministry had not agreed to the amount demanded by the Ministry of Water and Power as subsidy and requested Water and Power Ministry for revisiting the figure on Thursday during a Cabinet Committee on Energy. The meeting, presided over by the Finance Minister, was reportedly informed by officials of the Secretary Water and Power that they had to pay to Pakistan State Oil (PSO) for fuel and logistics. The meeting was informed that Rs 20 billion was needed for logistics along with Rs 35 billion for fuel. Power sector''s financial position was been badly affected due to Rs 172 billion outstanding against various public sector departments at federal and provincial level. Total receivables, the meeting was told, amounted to Rs 477 billion. Officials of the Ministry of Water and Power argued that a gap of Rs 90 billion had not been bridged in the tariff differential subsidy of Rs 185 billion budgeted for the current fiscal year. The gap between receivables and payables widened to Rs 90 billion, they said. The Ministry of Water and Power wanted to know how much subsidy would be provided to them for the power sector. The Ministry of Finance insisted the Water and Power Ministry to re-examine the amount of subsidy. The meeting remained indecisive about taking concrete decisions to minimise the growing demand-supply gap and expected early rains that might add 1,000-megawatt to the system, easing the problem of power outages. The meeting opined that enhancing fuel supply to 28,000 tons to IPPs could add 250MW to the system. The addition of power generation would help maintain the demand-supply gap at 4,000MW level. Officials said that electricity demand stood at 18,055MW during the season. The meeting expressed the hope that addition of 1,000MW hydel power following rains as well as 650MW of the KESC and 185MW of RPPs to the system would help them keep electricity outages to three hours across the country in Ramazan between Iftar till Taraveeh.






July 6, 2012


Power supply and demand: Cabinet fed up with conflicting figures July 06, 2012

MUSHTAQ GHUMMAN

Federal cabinet is reportedly fed up with exaggerated and often conflicting electricity generation and fuel supply figures presented by the Ministry of Water and Power and Ministry of Petroleum. The newly appointed Secretary Water and Power, Zafar Mahmood informed the cabinet on July 4, 2012 that electricity generation stood at 12,500 MW, Pepco''s website along with the photograph of sacked MD, NTDC, Rasool Khan Mehsood claimed 13,650 MW whereas, according to top officials, generation was 1400 MW. Secretary Water and Power also did not inform the cabinet that 710 MW electricity is being given to KESC out of total generation of 12,500 MW which implies that total supply to NTDC system was 11,790 MW against the demand of 19,000 MW, showing a shortfall of over 7000 MW. Power sector analysts maintain that Managing Director, NTDC, Naveed Ismail, has failed to deliver and the Minister for Water and Power should rethink his decision to appoint a man, who does not have an electrical engineering degree, as power sector chief. Official documents exclusively available with Business Recorder reveal that the cabinet was apprised of the latest progress on the energy situation in the country by the Secretary, Ministry of Water and Power. The Secretary revealed that the decisions regarding fuel oil/gas supply taken by the Prime Minister on 23rd June 2012, facilitated matters considerably. Since then 1800 MW generation (peak) has been achieved which was previously 1200 MW only. Due to Prime Minister''s directions, the supply of fuel has been increased in the last 10 days, average fuel supply being 22,000 tons. The Prime Minister directed that this may be increased to 28,000 tons. The Secretary, Water and Power informed the Cabinet that the total generation is 12,500 MW up to date. He explained that due to the current heat wave, and less rains, the current shortfall is acute but manageable. Regarding gas supply, he stated that the position was acute and against the requirement of 207 mmcfd only an average of 97 mmcfd is being supplied. He further revealed that increased supply of gas will help ease the shortfall.Documents further disclose that after the Prime Minister took over the office, there was improvement in the first 2-3 days in the power situation, however, since then it has not improved further. In response the Secretary Water and Power stated that due to the imminent increased inflow in the dams, situation is likely to improve soon. The Prime Minister desired that actions should be geared up in a manner that 15,000 MW target is achieved. Secretary assured that by the end of July there would be an excess of






July 6, 2012

14,000 MW in the national grid. The Prime Minister also desired that there must be significant improvement in stocks before the advent of Ramazan. The Secretary further informed that if crude oil is given as per demand, 450 MW will be added to the capacity. Similarly increase in gas would add 800 MW in future. Secretary, Petroleum and Natural Resources stated that with effect from June 23 2012, 24000 tons of fuel oil had been supplied. Secretary conveyed that logistically, the capacity of power plants in terms of storage has varied. Storage declined to 2000 to 3000 tons in some cases, although more than 26,000 tons of fuel was supplied. Prime Minister Advisor on Petroleum and Natural Resources stated that transportation of 28,000 tons of fuel target, which is unprecedented, is a difficult proposition, as railway network is not functioning and tankers lack the capacity. The following points were raised during the meeting: (i) gas supply situation needs to be improved considerably as against demand of 207 mmcfd, only an average of 97 mmcfd is being supplied; (ii) scheduled load shedding should be resorted to only; (iii) in major cities there is 10 hour load shedding and in rural areas there is more; (iv) it was noted by many members that there was considerable variation in the figures of Ministry of both Water and Power and Ministry of Petroleum which will affect developing a system for supply load management; and (v) actions need to be taken against those Gencos which have been receiving excess fuel supply and have failed to utilise their capacity. The cabinet observed that Ministry of Water and Power has not been able to come up with a concrete plan for recoveries on account of stuck up outstanding bills and theft/pilferage which should be formulated at the earliest. It was also decided that since 30th June 2012 was the fiscal year closing time, the line losses details from companies should be made available. The cabinet decided that Secretary Water and Power will be responsible for procuring daily receipts of fuel supply which will be duly signed by both Secretaries and a daily report shall be sent to the Committee by 1600 hours, which shall also include distribution position. Reasons for shortfall, if any, should also be indicated. According to the cabinet it is imperative that the figures be authenticated by both the Ministries to build a consensus on all figures related to demand supply of power and fuel. Copyright Business Recorder, 2012

Nepra cuts tariffs of Jamshoro, Muzaffargarh units for June July 06, 2012

MUSHTAQ GHUMMAN

National Electric Power Regulatory Authority (Nepra) has revised down the tariffs of Jamshoro Power Company Limited and Northern Power Generation Company for June 2012 due to reduction in price of furnace oil. According to the notifications issued by Nepra, tariff






July 6, 2012

of Jamshoro unit 1 has been revised down from Rs 18.4006 per unit from June 15, to Rs 17.5356 with effect from June 30, whereas the tariff of Jamshoro units 2, 3, and 4 has been slashed to Rs 20.1914 per unit from Rs 21.1902 per unit. Nepra has also reduced tariff of Muzaffargarh units 1, 2 and 3 to Rs 18.3814 from Rs 19.2396 per unit. The revised tariff for unit 4 will be Rs 18.2174 per unit against Rs 19.0679 per unit. Likewise, power rates for Muzaffargarh units 5 and 6, will be Rs 20.7155 per unit from June 30, as compared to Rs 21.6826 per unit. Official sources told Business Recorder, National Transmission and Dispatch Company (NTDC), in its Fuel Price Adjustment (FPA) petition for June, will recommend reduction in tariff for Discos, impact of which will be passed on from the next calendar year.


Ogra reduces LPG price by Rs 30 per kg July 06, 2012

ABDUL RASHEED AZAD

The Oil and Gas Regulatory Authority (Ogra) on Thursday reduced the price of Liquefied Petroleum Gas (LPG) by Rs 30 per kg. According to a notification, the Authority fixed maximum consumer price for 100 percent locally-produced LPG at Rs 983 per 11.8 kg cylinder or Rs 83.30 per kg. The reasonable maximum consumer price for 100 percent imported LPG has been fixed at Rs 1136 per 11.8 kg cylinder or Rs 96.27 per kg. Reasonable maximum consumer price for local and imported mix LGP is fixed at Rs 1020 per 11.8 kg cylinder or Rs 86.4 per kg. The Authority directed all LPG marketing companies as well as all distributors to ensure notified prices. Otherwise, it said, relevant department of the regulatory body would take serious action against violators. At present, LPG price vary from city to city and shop to shop: in Karachi, LPG is available at Rs 110 per kg and in Gilgit as well as in Muzaffarabad it is being sold at Rs 140 per kg. Moreover, the Authority also advised marketing companies to make available/issue the sales invoice/gate pass on the company printed format clearly mentioning whether the consignment is imported or local before dispatching the truck from storage and filling plants. Later, Ifran Khokhar, the Chairman of All Pakistan LGP Distributors Association addressed a press conference and said that LPG marketing companies were blackmailing consumers and were also overcharging them. He alleged that LPG marketing companies were bound to import 20 percent of their total quota and they, since February this year, had not imported any consignment and were selling local LPG at imported prices. Khokhar said that LPG






July 6, 2012

marketing companies had overcharged consumers by Rs 2.46 billion over the past four months. He said that within next four to five months, Pakistan would start producing about 800 ton of LPG per day, taking the local LPG production to 2,000 ton per day. Khokhar deplored that the Ogra was not making any serious effort to force marketing companies to follow rules or ensure the availability of LPG at government fixed prices and as a result, marketing companies, along with some distributors, were taking advantage of the situation.


Power shortfall crosses 5,000 megawatts mark July 06, 2012

Power shortfall crossed again the threshold of 5,000MW against all tall claims of the federal government. The domestic as well industrial consumers were highly perturbed over long durations of load shedding, cursing the government throughout last 24 hours. According to Energy Management Cell spokesman, power generation remained 13,000MW against a demand of 18,713MW. Power generation through hydel, thermal and IPPs stood at 4,060MW, 1,959MW and 6,930MW respectively. Meanwhile, the power supply to KESC remained 710MW during last 24 hours. An increase in power shortfall resulted into 15 hours load shedding in urban and 22 hours load shedding in rural areas.


LPG Air mix tariff: tug-of-war between Ogra, oil and gas ministry July 06, 2012

A tug-of-war has begun between the Oil and Gas Regulatory Authority (Ogra) and the Ministry of Petroleum after the regulatory body expressed its inability to fix Liquefied Petroleum Gas (LPG) Air Mix tariff for consumers. The outcome was a letter written by gas utility Sui-Southern Gas Company (SSGC) to the Ministry requesting the latter to stop Ogra from interfering in SSGC''s matters, it is learnt.






July 6, 2012

Sources in the Petroleum Ministry told Business Recorder that the Authority argues that as per Ogra Ordinance 2002, it determines the Weighted Average Cost of Gas (Wacog) twice a year whereas LPG prices fluctuate all year round. In a letter to the Petroleum Ministry, the Authority maintained that the determination of cost of LPG as well as WACOG on a monthly basis is not in line with Ogra''s charter. "Tariff for LPG air-mix cannot be determined as well as notified by Ogra under the relevant provisions of the Ordinance" the letter states. The Authority further argued in the letter: "the cost of LPG is five times that of natural gas and it was already been allowing LPG Air-Mix projects undertaken by SSGCL, pursuant to government advice, which is severely hurting the natural gas consumers. LPG Air-Mix projects are capital intensive projects. Ogra, in view of huge disparity between natural gas and LPG Air-Mix price, again reiterates that all LPG Air-Mix projects shall not be included as permissible expenditure in the revenue requirements of the respective gas companies, since the same will translate into humungous burden on existing natural gas consumers and sharp increase in gas price. The same should be treated as standalone projects, only focused on remote areas where the natural gas system does not exist." The Petroleum Ministry, as the upstream regulator, is responsible for LPG Air-Mix pricing, the letter adds. "The proposal of mixing LPG Air-Mix in natural gas and including the cost of the same in the weighted average cost of gas is not supported. The World Bank and multilateral donors agencies have already vehemently propagated elimination of cross-subsides while giving appropriate economic signals. It is again reiterated that inclusion of cost of LPG Air-Mix will not only result in sharp increases in cost of gas but will also create further anomalies in the system through introduction of yet another substantial cross subsidy," the letter argued. Gas utilities, under the existing tariff regime, are entitled to a guaranteed rate of return on assets. The inclusion of capital and revenue expenditure of such mega projects in the revenue requirement will result in sky rocketing prices, thereby severely burdening the natural gas consumers. The SSGC letter to Secretary Petroleum noted that after detailed deliberation and based on the initial opinion of the legal Advisor in the matter, the Board unanimously agreed and passed the following resolutions: (i) Resolved that the determination given by Ogra with respect to Company''s ERR for FY 2012-13 is highly unjustified and in contravention of Section 9 of Ogra Ordinance hence, not maintainable. (ii) In light of the initial opinion given by Director Mirza Mahmood Ahmad, the Management is directed to review thoroughly and if found appropriate pursue a legal resource for seeking a declaration from a Court of competent jurisdiction for not paying any amount under the head of penalty / disallowances so imposed by Ogra". (iii) The Management should also examine the possibility of recovering the already paid amount under the head of penalty/disallowances during the previous years and approach the Board for its further directions in this regard. (iv) Directions given by Ogra with respect to handling of HR affairs of the Company are concerned the same have been thoroughly examined and the Board is of the firm opinion that Ogra has transgressed its jurisdiction in the mater hence the Company is legally not bound to comply with such directions".






July 6, 2012

As regards Ogra''s observations with respect to the salary of the Executives of the Company are concerned the same has been examined and found to be in line with the market conditions as prevailing in the Oil & Gas Sectors companies, the letter continues. The letter also noted "with regret that the language used by Ogra in its determination with respect to HR issues is such which could result in a conflicting situation between the Management and the workers leading to unrest in the Company. This attitude and approach of Ogra is totally beyond any legal and moral jurisdiction and the Management is directed to evaluate the situation and advise the Board on legal remedies available to the Company in the matter."


Gencos, Discos directed to use only PSQCA-certified electricity cables July 06, 2012

GHULAM ABBAS

The Pakistan Electric Power Company (PEPCO) has finally issued notices to all power generating and distribution companies directing them to use/purchase only Pakistan Standard and Quality Control Authority's (PSQCA) certified cables, as the substandard electric wire is highly contributing to electricity losses. Interestingly, Pepco has instructed power companies to use good quality cable approved by PSQCA for the first time since its inception in 1996. Though it is one of the compulsory non-food items being certified by PSQCA under its Act of 1996, Pepco, the government body which provided electricity to millions of consumers through Discos, was yet to make the certification compulsory for purchase and use of the electric appliance. Although experts believe that around 75 percent of energy losses in transmission and distribution networks of the country are due to poor quality and de-rated electric cables and other installations, even the government-controlled organisations are not ensuring installation of standardized wires. Following a letter recently sent by PSQCA, Pepco on June 21, 2012 has issues notices to Gencos and Discos including Lesco, Gepco, Fesco, Iesco, Mepco, Pesco, Tesco, Hesco, Qesco, Sepco, Genco-1(Jamshoro Power Company) Mohra Jabal New Dadu road, Genco-2(Central Power Generation Company) Thermal Power Station Guddu, Genco-3(Northern Power Generation Company) Thermal Power Station Muzaffar Garh, Genco-4, Thermal Power Station Lakhra Sindh and NTDC Wapda House Lahore instructing heads of these companies to ensure the use of PSQCA-certified PVC insulated electric cables for electric wiring under the authority's Act No VI, 1996.






July 6, 2012

The notice was issued by Chief Engineer (Purchase and Disposal) of Pepco in response to a letter dated 04-06-2012 sent by PSQCA, Ministry of Science and Technology. According to sources, the substandard and cheaper verities of cables available in markets were being highly used by contractors and companies instead of energy efficient wires. The cheaper cables (made of aluminium) were only 60 to 70 percent efficient and bad conductor of electricity while the better copper cable as per recognised standard is 99.9 percent efficient. At least 80 percent of electric shortcuts resulting in burning of whole offices, house, building and others, happened frequently in the country are as a result of the poor quality (poor conductor for electricity) electric wires. As there is no quality control and check on the substandard material/items being produced locally, not only number of causalities of electric burn is increasing but also causing increase in transmission and distribution (T&D) losses. Though Pepco had earlier asked PSQCA to maintain energy-labelling standards and check the manufacturing of substandard electric equipment and wires in the country, but it failed to ensure the use of certified cables. The current energy consumption trends, in the country, despite the severe shortages, are extremely inefficient, whether it is in the domestic, industrial, trade or commercial sectors. According to experts over 1000 megawatts of electricity could be saved through installing the best conductor (copper) and energy efficient wires/cables and electric appliances.







July 6, 2012

Miscellaneous News

Despite rapid growth, Pakistan’s media remains financial lightweight By Kazim Alam

Published: July 6, 2012

Revenues of the entire television media industry was outshone by returns of some of the top companies in Pakistan.

KARACHI:

It may have massive public influence, but the media in Pakistan is not big business, a fact that can best be illustrated with a single statistic: all of Pakistan’s television stations combined – news, entertainment, sports et al – have less revenue than Nestle earns off just selling Milkpak.

Advertising, which forms nearly all of the revenues for television stations, and the bulk of revenues for print publications, has been growing very rapidly in Pakistan over the last decade. According to Aurora (an industry publication), total advertising spending in Pakistan was Rs32 billion in fiscal year 2011, a figure that has grown at an annualised average rate of 23% during the past ten years (inflation was just over 9% during that period).

A number of industry officials who The Express Tribune talked to attributed the phenomenal expansion in the ad spending largely to the mobile telecommunications and banking sectors, which served as its main engines of growth in the past decade.

According to Qamar Abbas Rawalpindiwala, executive director of the Pakistan Advertisers Society, a body of advertisers, which claims to represent 80% of the ad spend in Pakistan, the boom in advertising in the past decade was initially led by the banking sector. “More recently, however, telecoms have been on an advertising spree,” he said.

The telecom sector led the top 10 product categories on news and business channels in fiscal 2011, with a 29% share. Shampoos came second with a market share of 7%, which signifies how heavily the telecom sector spends on advertising compared to other product categories. However, after a huge rise in ad spending from early to mid-2000s, the overall share of banking has decreased, as it stood at just about 5% of the total ad spend in 2011.

According to Aurora, the share of television in the total ad spend was 58%, or Rs18.6 billion, in 2011. Quite expectedly, TV received the highest increase in ad spend over the preceding fiscal year among all mediums of advertising with a rise of up to 28%. The total ad spend in Pakistan increased by 18% in the same period.



http://tribune.com.pk/author/2367/kazim-alam/




July 6, 2012

Express News General Manager Sales Nusrat Ali says TV enjoys the largest share in ad spend mainly because of high cable penetration in the country. Although there are few official figures, industry sources say 70% of total households with a television set in Pakistan have access to satellite channels through the cable network.

While the share of television in the ad spend is increasing every year, figures show that the share of the print media is in decline. In 2011, it was worth Rs8.5 billion, with a 27% share in the total ad spend, a decrease of 5% over the preceding year.

“Reading a newspaper is a habit, and you can’t change it easily. So while the share of newspapers in the total ad spend is shrinking gradually, it’s not going to disappear anytime soon,” says Saad Hashmi, who works as group account head, client services, at Orient Advertising, an advertising agency. “If a quarter-page ad on the front page of a leading newspaper costs Rs1.2 million, a wise account manager can use the same amount to run a month-long ad campaign on radio. That makes print advertising a little less attractive.”

The share of radio in the total ad spend in 2011 was Rs1.3 billion, or 4%, up 22% from the preceding year.

Another noteworthy phenomenon in the ad industry of Pakistan is the surge in the outdoor and brand activation expense, which saw a 50% increase to Rs3 billion, or 9% of the total ad spend, in 2011. Ali says the major reason for the increase in “out of home” advertising is that people are tired of ‘clutter’ on television and want more engagement and personal interaction through brand activation events. Secondly, he adds, power breakdowns have made out-of-home advertising more reliable for advertisers.

Rawalpindiwala says the ad industry will keep growing at a significant pace in coming years. “Although final figures are yet to come out, the size of Pakistan’s ad industry for fiscal 2012 is expected to be between Rs37 billion and Rs40 billion.”

Published in The Express Tribune, July 6th

, 2012.

Corruption and intrigue surface in Pak Datacom saga By Farooq Baloch


Apparently, the federal secretary wanted to benefit Shaukat Ahmed Reshi - owner of Tech Glocal and SAR Technologies. PHOTO: PAKDATACOM.com.pk

KARACHI: Pak Datacom Limited (PDL) – a leading Information Communication Technology solution provider – recently became a hot topic in the industry after its board of directors terminated their Managing Director and CEO Salman Elahi Malik on at least three occasions in less than a month.



http://tribune.com.pk/author/2507/farooq-baloch/

http://tribune.com.pk/story/401788/pak-datacom-ceo-reinstated-acquitted-of-all-charge/




July 6, 2012

The PDL board removed Malik on charges of forgery and acting beyond his authority. However, an independent investigation by The Express Tribune reveals a serious controversy behind Malik’s termination.

The Express Tribune has found strong evidence that the Ministry of IT and Telecom (MoIT) Federal Secretary Farooq Ahmed Awan went out of his way to remove Malik for not obeying his diktats.

The Express Tribune has learnt that, for the past few months, Awan – with support from MoIT Joint Secretary (Administration) Raashid Bashir Mazari – had been pressuring Malik to favour telecom companies SAR Telecom and Tech Global for a satellite bandwidth project and a satellite communication project respectively.

Apparently, the federal secretary wanted to benefit Shaukat Ahmed Reshi – the owner of the aforementioned companies – with an amount exceeding Rs130 million ($1.5 million).

The dispute

In September 2009, PDL had signed an agreement with Intelsat – a London-based satellite service provider – through its local agent SAR Telecom. Under the agreement, PDL had paid $6,34,608 as one-month service charges and security deposit to SAR Telecom.

The project, however, didn’t materialise. PDL claimed a refund, saying it did not receive any services despite making technical arrangements: SAR telecom, in turn, blamed PDL for using faulty equipment to receive the said service. With time, the matter was put on the backburner.

Salman Elahi Malik joined PDL in December 2011 and was directed by the board to resolve the issue. Malik decided to take the matter to the court, but Awan – who is also the board’s chairman – wanted him to resolve the problem amicably.

The secretary recommended that the matter be solved through arbitration and also proposed Raashid Bashir Mazari as arbitrator. In his arbitration award on May 3, 2012, Mazari directed PDL to pay an additional $6,34,608 to SAR Telecom within 30 days of the award, or pay the full cost of the project.

Malik faced resistance from Awan when he tried to seek the board’s approval in challenging the arbitration award. The former CEO sent a written notice, a reminder notice, and made several phone calls requesting Awan to call a board meeting. The latter ignored them.

With only a couple of days left in the deadline of the award, Malik issued a circular resolution on May 29, 2012. Six out of eight board members approved the resolution. Awan, however, did not sign it. He did not give a reason as to why he would not sign the document.

The deal breaker

What really annoyed Awan, our source said, was that Malik filed a petition in the Islamabad High Court against the arbitration. In its petition, PDL claimed that Mazari misconducted the arbitration on the grounds that the arbitration was initiated by PDL, but Mazari mentioned






July 6, 2012

SAR Telecom as claimant instead. Secondly, the topic of arbitration was the refund of $6,34,608, but the arbitrator instead treated it as breach of contract, which had never been agreed upon in the first place.

Malik then went a step further on June 1 when he shelved a satellite communication project in which Tech Global was entitled to receive 8% of the project’s revenue as its marketing agent, saying the company played no role in the project – a claim seconded by at least four PDL officials.

The secretary found no other option but to remove Malik. The PDL management has also taken to threatening PDL employees who supported Malik, say sources. The employees are being told to resign or be forcibly terminated.

When contacted, Awan denied allegations that he forced Malik to favour Reshi. Reshi, too, has denied receiving any favours from Awan or Mazari. “I have never met him [Awan]; I don’t even know what he looks like!” he claimed. However, he said he has met Mazari during the arbitration proceedings.

Mazari refuses to answer any questions, saying the matter is subjudice.


, 2012.

On the fast track: Govt to divert funds to projects nearing completion By Shahbaz Rana


Around 70% work has been completed on 278 projects, up to 80% work done on 106 schemes and up to 90% work completed on 110 schemes. PHOTO: ONLINE

ISLAMABAD:

As general elections are approaching, Prime Minister Raja Pervez Ashraf has tasked economic managers with diverting funds to the projects that are nearing completion, a move apparently aimed at highlighting the work of Pakistan Peoples Party government.

The premier gave the directive to the Ministry of Finance and Planning Commission, while chairing a meeting held here on Thursday to review progress on the federal Public Sector Development Programme.

The move indicates ill-planning on the part of economic managers in yet another case, as it was the fifth day of the new financial year and the Planning Commission was asked to review the allocations.



http://tribune.com.pk/author/104/shahbaz-rana/




July 6, 2012

Earlier, the Federal Board of Revenue (FBR) sought downward revision in the tax target on the first day of the fiscal year.

The economic team was asked to determine the exact amount required to complete the schemes where 70% or more work had already been done, according to an official privy to the development. The Planning Commission was directed to review the possibility of releasing money in one go instead of quarterly installments, said the official.

For the current fiscal year, the government has allocated Rs360 billion for 1,074 schemes. Of these, 70% or more work has been completed on 642 projects, said the official.

Around 70% work has been completed on 278 projects, up to 80% work done on 106 schemes and up to 90% work completed on 110 schemes. Besides these, there are 148 projects where more than 90% work has been done, said the official.

According to another official, there will be little adverse impact on other projects, if the government diverted some funds. He argued that the government has already allocated Rs40 billion for the projects where 80% work has been done. It may require up to Rs10 billion additional financing for their rapid completion.

For the last around one year, the government has been in an election mood as far as allocation of funds for development projects is concerned. In the just concluded fiscal year, it had allocated Rs33 billion for projects which came under the premier’s discretionary powers. However, actual spending stood at Rs40 billion, taking some share out of other projects.

According to sources, Finance Minister Dr Abdul Hafeez Shaikh briefed the premier that against allocation of Rs300 billion, the government actually spent Rs310 billion last year. Interestingly, in the previous years the government used to cut the development budget for creating room for non-development expenses.

According to the Prime Minister’s House, Ashraf asked the Planning Commission to complete ongoing projects which are close to completion and carry maximum social impact. The premier emphasised that projects like Chashma Right Bank Canal (lift irrigation), Kachhi Canal, Greater Thal Canal, Quetta Water Supply, Lyari Expressway, Ratodero-Gwadar Road, Lowari Tunnel and Munda Dam should be given priority because of their enormous impact on agriculture, energy and connectivity.

The finance minister said the major projects which were near completion were Mangla Dam Raising, Gomal Zam Dam, Chashma Nuclear Power Plant, Jinnah Hydropower, Gwadar-Hoshab-Ratodero Road, Lowari Tunnel and creating Balochistan Constabulary.

In order to monitor the ongoing projects, it was decided that the executing agencies would submit a report to the Planning Commission every month regarding progress on the projects.


, 2012.






July 6, 2012

Sindh, Punjab get more water for Kharif crop sowing By Our Correspondent


Significant rainfall is expected in central and upper parts of the country which will increase water inflows in rivers further. PHOTO: APP/FILE

ISLAMABAD: Already behind schedule due to the water shortage, the Indus River System Authority (Irsa) has decided to increase the water flow to Punjab and Sindh in order to jack up Kharif crop sowing.

Changing weather patterns with a prolonged cold wave lasting halfway through March resulted in farmers sitting idle in Sindh rather than doing what they do best when the crop season starts. Water levels in Mangla and Tarbela reservoirs have reached an alarming level.

“Farmers depend on tube wells run by electricity to overcome the water shortage for crop sowing,” a farmer from Punjab said adding that they have also been facing series of power outages since the start of the Kharif.

The water shortage will lead to the country missing all crop production targets for the Kharif season.

Irsa released 182,000 cusecs of water from 172,000 for Sindh while Punjab received 134,000 against the previous 128,000. Irsa is providing 4,000 cusecs for Khyber-Pakhtunkhwa and 14,000 cusecs to Balochistan to meet the demands of the agriculture sector. An official of the Water and Power Ministry said that the country was facing a power crisis and increase in water share for provinces would also boost hydel power generation and ease load-shedding.

Irsa Spokesman Khalid Idrees Rana said that significant rainfall is expected in central and upper parts of the country which will further increase water inflows in rivers.

Inflows in Indus River at Tarbela stand at 222,300 cusecs against outflows of 160,000, 81,700 cusecs inflows in Kabul River at Nowshera, 232,200 cusecs in Indus at Chashma, 49,900 in Jhelum at Mangla and 64,800 cusecs water inflows in Chenab River at Marala.

Official said that glaciers were melting due to rise in temperature and it was expected that water inflows would further improve in rivers.

At present, the water level in Tarbela stands at 1,407.85 feet against the previous level of 1,378 cusecs and Mangla at 1,119.70 feet against previous level of 1,040 feet while Chashma’s level has increased to level of 637 feet. The live storage in Tarbela is 0.470 Million Acre Feet (MAF), Mangla 1.003 MAF and 0.174 MAF in Chashma.



http://tribune.com.pk/author/303/our-correspondent/




July 6, 2012


, 2012.

Worker’s funds: Chairman lauds performance of EOBI By PPI


EOBI pays Rs900 million to 400,000 pensioners every month across the country. PHOTO: EOBI

KARACHI:

Employees’ Old-age Benefits Institution (EOBI) pays Rs900 million to 400,000 pensioners every month across the country, Chairman EOBI Zafar Iqbal Gondal has said.

“EOBI pension funds belong to aged, invalid workers and their survivors. The institution is a custodian of this trust money, so the officials, being trustees, should collect and distribute it with a sense of dedication, honesty and care,” he stated. He further said that the EOBI is doing its best to bring about positive changes in the life of the working community of industrial, commercial and other organisations.


, 2012.



http://tribune.com.pk/author/80/ppi/




July 6, 2012

OPEN MARKET FOREX RATES Updated at: 6/7/2012 6:38 AM (PST)

Currency Buying Selling Australian Dollar 96.3 97.5 Bahrain Dinar 236.1 238.1 Canadian Dollar 92.3 93.8 China Yuan 13 13.5 Danish Krone 17 17.7 Euro 117.8 119 Hong Kong Dollar 11.1 11.8 Indian Rupee 1.75 1.85 Japanese Yen 1.174 1.185 Kuwaiti Dinar 319.1 321.1 Malaysian Ringgit 28.1 28.6 NewZealand $ 73.6 74.6 Norwegians Krone 16.4 17.4 Omani Riyal 231 233 Qatari Riyal 25.5 25.6 Saudi Riyal 25.05 25.35 Singapore Dollar 74 75 Swedish Korona 13.1 13.6 Swiss Franc 97.1 98.6 Thai Bhat 2.6 2.7 U.A.E Dirham 25.6 25.95 UK Pound Sterling 146.8 148.5 US Dollar 94.1 95.1






July 6, 2012

INTER BANK RATES Updated at: 6/7/2012 6:38 AM (PST)

Currency Bank Buying TT Clean

Bank Selling TT & OD

Australian Dollar 96.49 96.7

Canadian Dollar 92.9 93.09

Danish Krone 15.85 15.88

Euro 117.87 118.12

Hong Kong Dollar 12.13 12.16

Japanese Yen 1.1787 1.1812

Saudi Riyal 25.09 25.15

Singapore Dollar 74.3 74.46

Swedish Korona 13.62 13.65

Swiss Franc 98.11 98.32

U.A.E Dirham 25.62 25.67

UK Pound Sterling 146.7 147.01

US Dollar 94.1 94.3

