2
KARACHI STAFF REPORT The traders and industrialists in this commercial hub have rejected what they called it the fresh unjustified raise in power tariff allowed by Nepra to KESC. Patron In-Chief Korangi Association of Trade and Industry (KATI) S.M Muneer, Chairman Ehtesham Uddin, President All Karachi Industrial Al- liance (AKIA) Mian Zahid Hussain, Vice Chairmen Hasham A Razzak Tariq Malik and Chairman Press and Media Committee, Syed Johar Ali Qandhari in a joint statement condemned the gov- ernment’s anti-industry act of allowing the KESC yet another increase that they said would have a killing affect on the already ailing economy. They said in- dustry was already struggling hard to survive due to the frequent increases in utilities and POL prices and imposition of other levies and surcharges, the gov- ernment has allowed another bombshell to kill the industry. “Frequent Increases in utilities tariffs have already created chaos for general public, trade and in- dustry and now it seems that govern- ment is willfully creating hurdles in country’s economic survival”, Ehtesham said adding that the country is facing severest power crisis of its history and in such unpleasant circumstances, the approval of summary to further increase power tariff by Rs1.60 per unit will prove the death knell to the industry. The industry’s representatives said that business community fear that export targets fixed by the government can in no way be achieved if present trend of rapidly increasing utility tariffs and power crisis continues. Exporters mate- rialize their orders in advance and un- precedented increase in utility tariffs incur them losses in the form of in- creased cost of manufacturing, they said dding that prolonged unscheduled elec- tricity outages have compelled the ex- port-oriented Industry to the verge of collapse, they added. They demanded of the government to immediately reverse the decision in greater interest of the country and nation. CoTTage indusTry; herein lies The soluTion: The Lahore Chamber of Commerce and Industry Friday urged the government to facili- tate the ailing cottage industry to off- set the financial losses it has been suffering because of unprecedented and unscheduled electricity load-shed- ding and intervention by various provincial departments. The LCCI President Irfan Qaiser Sheikh was talking to a 25-member delegation of cottage industry belong- ing to Daroghawala and Sultan Mehmood Road Industrial areas and headed by Chairman All Pakistan Cot- tage Industry and Small Traders Ghu- lam Sarwar Malik. Haji Sultan Mehmood Sabri, Haji Barkat Munir were prominent among the delegates. The LCCI President while assuring the cottage industry delegation of his full support said that the LESCO Chief would be informed of the situation being faced by these small businessmen and would asked to ensure power sup- ply for at least 8 to10 hours at a stretch. The LCCI President said that the high rates of electricity being charged from them and longer hours power cuts have totally destroyed the small businesses therefore the government should come up with a package of incentives in shape of cut in electricity tariff and power outages duration. He said that it is beyond the understanding of the La- hore chamber of commerce and indus- try that why these clusters of the cottage industry have not so far been given the industrial area status. He said that the government must understand the importance of cottage industry in the country as it is not only generating revenue for the government but also providing jobs to million of people. He said that it was very unfortunate that while preparing schedule for power cuts the LESCO authorities do not con- sult the stakeholders. He said that Darogawala Industrial area that has yet not been granted the status of in- dustrial area despite repeated assur- ances by the government is a hub of cottage industry and now-a-days these small businessmen are sitting idle only because of senseless power cuts by the LESCO. Saturday, 28 July, 2012 Unearthing independent schemes g NA body directs OGDCL for independent development schemes ISLAMABAD ONLINE A Parliamentary panel on Friday directed the Oil and Gas Development Company Limited (OGDCL) to initiate independent development schemes in the Sindh to avoid the duplication of the amount. Meeting of the National Assembly sub- committee on Petroleum and Natural re- sources held under the chair of Nawab Ali Wassan in which development and welfare schemes carried out by the oil and gas pro- ducing companies in Sindh were dis- cussed. During the meeting officials of OGDCL told the committee that company dis- bursed more than 320 million rupees for infrastructure development in different areas of Sindh. Officials told that hundred million were spent to establish disaster center in Mirpur Mathelo while 465 mil- lion spent for petroleum training center to award technical training to the youngsters. Officials informed that for 2012-13 seven million would be spent to provide free medical facilities to the people of Tando Adam, Bobi Kunar, Qadir pur and other areas. They told that 880 million rupees would be utilized to different projects of gas supply to different areas. Officials said that in several areas of province projects of education and health were initiated in collaboration of govern- ment. Standing committee directed the MD OGDCL to continue the projects sepa- rately as it would be helpful to avoid dou- bling of funds. S Korea's Kia sees small drop in Q2 net profit SEOUL AGENCIES South Korea's second largest automaker Kia Motors said Friday its second-quarter net profit fell 2.8 percent from a year earlier due to losses on shareholdings in affiliates. Net profit in April-June was 1.09 trillion won ($954 million) compared to 1.12 tril- lion won a year earlier, the company said. Sales rose 8.4 percent to 12.6 trillion won, while operating profit jumped 18 percent to 1.2 trillion won. For the first half net profit rose 10.4 percent year-on-year to 2.3 trillion won on the back of strong overseas sales. The company sold 1.39 million units glob- ally in the first six months, up 12 percent from a year earlier. Kia is an affiliate of South Korea's largest automaker Hyundai Motor. The two together form the world's fifth-largest carmaking group by sales. KARACHI ISMAIL DILAWAR T HE cash-strapped government whereas has put the heavily- weighted sovereign guarantees on sale, the commercial banks are the ones to hold much of the risk-free papers that are adding huge sums to the latter’s profits. The funds-starved govern- ment auctioned government papers, in- cluding Market Treasury Bills (MTBs), Pakistan Investment Bonds (PIBs) and Ijara Sukuk, to the tune of almost Rs 4 tril- lion by the end of Fiscal Year 2011-12. Ac- cording to central bank data, the scheduled banks and non-bank corporate investors purchased the government securities worth over Rs 3.95 trillion up to 30th June, 2012. To cater to its ever-burgeoning budg- etary needs, the resource-constrained fed- eral and provincial governments borrowed over Rs 2.793 trillion through selling out government papers to the scheduled banks which, the State Bank said, held 71 percent of the total securities auctioned. The government borrowed over Rs 1.156 trillion from the non-bank lenders in- cluding insurance companies, mutual funds and other corporate entities. This ac- counts for 29.3 percent of total borrowings through the sale of bonds. A break up shows that, the government, through the central bank’s Open Market Operations, auctioned MTBs, PIBs and Ijara Sukuk (Is- lamic bonds) worth Rs 2.59 trillion, Rs 974 billion and Rs 383 billion, respectively. Of these, the banks bought treasury bills worth Rs 1.94 trillion (75 percent), invest- ment bonds of Rs 510 billion (52 percent) and Islamic bonds of Rs 340 billion (89 per- cent). This heavy investment in the sovereign guarantees had cumulatively fetched around Rs 66 billion for the country’s four leading banks including Habib Bank, United Bank, MCB Bank and Allied Bank, during last fiscal year. This amount profit was up 27 percent over FY10. The above four banks contribute over 50 percent share of the listed private banks’ deposits, contribute 70 percent of the market capitalization and represent, approx- imately, 60 percent of the total branch net- work in Pakistan. The banking analysts attribute this growth in the banks’ net inter- est income to higher returns on advances and better yield on the heavily-weighted gov- ernment papers. As the banks adopt a risk- averse behavior, perceivably due to their rising bad debts, called Non-Performing Loans in banking terms, in the ongoing re- cessionary climate, the economists foresee disastrous repercussions for the country’s ailing economy. The economic observers are concerned that whereas most of the eco- nomic indicators were setting in the red zone, the banks were not playing their due role in extending a helping hand to the eco- nomic mangers to revitalize the troubled economy. The analysts say this risk-averse trend would continue until the government take serious steps to curtail its ever-widening budget deficit that makes the government borrow heavily from the banking system. Risk-averse banks hold heavily-weighed government papers worth Rs 2.793tn SINGAPORE AGENCIES A pledge by European Central Bank president Mario Draghi to "do whatever it takes to preserve the euro" supported the single currency as well as crude prices in Asia Friday, analysts said. New York's main contract, light sweet crude for delivery in September, was up nine cents to $89.48 a barrel and Brent North Sea crude for September delivery gained five cents to $105.31. Draghi's rousing vow of support for the single European currency issued late Thursday inspired crude traders to enter the market again, analysts said. "Markets cheered after European Central Bank president Mario Draghi said yesterday that the ECB is ready, within its mandate, 'to do whatever its takes to preserve the euro'," DBS Group Research said in a report. Draghi's statements helped boost the euro against the dollar, lending support to dollar-priced oil. The euro was trading at $1.2277 in early Asia trade Friday from $1.2280 in overnight trade. The single currency had climbed to a two- week high of $1.2330 following Draghi's pledge. Draghi's remarks also fuelled speculation the ECB would make fur- ther bond purchases to help bring down high sovereign borrowing costs, particularly for Italy and Spain. A painful paper cut Railways on track? g Steps being taken to overcome present crisis-like situation ISLAMABAD APP Several steps are being taken to over- come present crisis-like situation being faced by Pakistan Railways,a source in Ministry of Railways told APP on Friday. The source said that Railway Administra- tion's strategy includes repair and main- tenance of existing locomotives and procurement of new locomotives through revenue/PSDP budget, bank loans, as well as, private sector participation. Pakistan Railways, he said, is making ef- forts to get sufficient funds from the Government for rehabilitation of re- quired locomotives, rolling stock, and purchase of spares parts and fuel etc. The source informed that Pakistan Rail- ways is inviting private sector to partici- pate in different activities of P.R i.e rehabilitation of aging locomotives, de- velopment of Dry Ports and commercial Management of Passenger trains etc. He said that at operational level, steps are being taken to control the deficit and the initiative of ECO train has been taken to capitalize through establishing inter- national linkages. New agreement with Pakistan State Oil has been done for uninterrupted supply of fuel and three trains (Shalimar, Rohi and Hazara Express) have been out- sourced while a new train (Business Ex- press) has been launched as a joint venture with the private sector. More- over efforts are underway to outsource additional trains, and efforts are being made to recover outstanding amount due from other departments/com- panies. New signaling system is being installed on the net- work to minimize deten- tions and saving in fuel expenditure. The management is reaching out to the pri- vate sector to utilize idle capacity in the Railway system through the Track Ac- cess Policy. Rail fares on both freight and passenger sides have been in- creased although much less than pro- portionately, to re- cover some of the costs from increase in the prices of pe- troleum and pe- troleum products, he added. Traders, industrialists condemn power tariff hike. Yep. Again… Draghi drags oil up PRO 27-07-2012_Layout 1 7/28/2012 5:54 AM Page 1
