profitepaper pakistantoday 19th february, 2012

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Asia evades the US mousetrap Page 03

profit.com.pk

Sunday, 19 February, 2012

Pakistan, Qatar clinch deal to import 500mcfeet LPG daily

KPT litigates FBR for Rs8.2b T tax deduction g g g

PM announces restoration of son-quota in KPT KPT employees given one-month bonus KPT attracted over $1bn FDI in various projects KARACHI

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ISMAIL DILAWAR

arachi Port Trust (KPT) has gone in litigation against the Federal Board revenue (FBr) for an “unjustified” tax deduction of rs8.2 billion from the port operator’s sources. also, on Saturday Prime Minister Yusuf raza Gilani announced the long-demanded restoration of son-quota in KPT. “You are requested to direct the FBr not to tax KPT which is a Trust,” chairman KPT aslam hayat called upon Prime Minister Yusuf raza Gilani while addressing a groundbreaking ceremony here at KPT which is reconstructing its berths, from 15 to 17 including Ship repair Berths, at a cost of rs8.3 billion with the World Bank funding.

KPT, which has been making an operational profit of rs12 billion during last the four years, had challenged the taxing of the non-profit Trust by the federal tax collector, in a court of law, said hayat. according to KPT chief, the berths would be completed in next two years, by 2014, at a cost of rs9 billion and the spent money would be recovered within a couple years of their

completion as KPT’s annual earnings for these berths amounted to rs2 billion. “KPT, despite all existing odds, attracted a Foreign Direct investment of over one billion dollars,” the chairman said. in his speech, Prime Minister Gilani, lauding the 125-year-old KPT for proving itself a centre of progress over the years, announced the restoration of son quota in KPT. The premier also announced a one-month bonus for the cheering KPT employees saying the daily wagers and others employed on ad-hoc basis also be regularised. asking KPT to donate 50 mobile vans to the Sindh government, the prime minister directed that locals be preferred in employments at the jetties at Baba and Bhit islands. also, PM asked KPT to build a football ground for the people of Keamari. “Let me compliment KPT, PQa and PNSc which have increased their annual operational profits to rs18 billion,” Gilani said. Federal Secretary for Ports and Shipping Sarwar raza Qazalbash said the 922-meter long and 16-meter deep berths would enable KPT to accommodate postPanamax vessels and that PNSc had successfully replaced its aging fleet with the new one, mainly comprising of double-hull oil tankers.

KARACHI

he energy-starved Pakistan has signed a Memorandum of Understanding (MoU) with the government of Qatar for import of 500 million cubic feet of Liquefied Natural Gas (LNG) per day.

This was stated by Prime Minister Yusuf raza Gilani while inaugurating the rs2.55 billion LPG Terminal here on Saturday at Port Qasim. “i am happy to inform you that during my recent visit to the brotherly country of Qatar, Pakistan concluded a Memorandum of Understanding with the government of Qatar for import of 500 million cubic feet of LNG per day,” the prime minister told at the inaugural ceremony, which was attended by the federal and provincial ministers along with other dignitaries.

To be imported through SSGc-LPG Terminal, the imported LNG, PM said, would be provided to power houses to generate 2,500 megawatt of power in the country. Slamming the previous successive government for their failure to give due focus to the energy sector, the prime minister said the key mega projects undertaken by his government to meet the energy demands include Diamir Basha dam, Thar coal power project, TaPi project, and caSa-1000 in addition to dozens of small and medium-sized dams across the country. Pakistan, he said, was also committed to iran-Pakistan gas pipeline project, which would help the country overcome its energy problem to a large extent.

“The implementation of these mega projects will not only enhance overall energy supplies and provide energy diversity, but will also lead to a greater energy security,” he said.

Despite economic constraints imposed by natural disasters, energy deficits, global recession and war on terrorism, the fundamentals of Pakistan’s economy were showing positive signs, he said. Gilani said, given the size and diversity of Pakistan’s economy, the country’s total energy requirements were expected to grow substantially during the next decade. “it is in this context that achieving selfsufficiency is a key factor to keep the engine

of economy running as well as meeting the future demands of the economic growth.” according to the premier, Pakistan was meeting 53 per cent of its total energy requirements through indigenous oil and gas production, whereas, other indigenous resources further meet 19 per cent of the country’s energy needs.

The remaining 27 per cent of the energy needs were currently being met through imports, he said.

“The energy imports are likely to increase as domestic gas production and supply presently fail to meet the demand of the domestic users, the industrial sector and power generation,” he said adding due to their allpervasive use by these sectors, the country’s gas reserves may be insufficient to meet the rising demand and will deplete fast. “Such a situation will force the country to resort to importing large volumes of gas at international prices to feed the domestic market if local production is not enhanced in relation to demand,” PM said. he said it was well known that escalating energy import bill would put the economy under stress and hamper the country’s economic revival, the government was alive to the dramatic changes that had taken place in the price and cost environment of the international oil and gas industry. The fluctuating nature of crude oil prices in the international market had posed serious challenges to the global economies. “hence, reliance on imports cannot be a feasible long-term solution,” said the prime minister. The situation, he said, was calling for adopting a creative approach to respond to emergent energy challenges as well as work out a comprehensive strategy on sustainable basis. “i am pleased to inform you that the federal cabinet in the last meeting approved the National Petroleum exploration and Production Policy 2012,” he informed.

Prime minister said the policy recognised the operating challenges and key considerations facing Pakistan’s oil exploration and development industry. “it signifies the government’s commitment to provide fiscal and regulatory incen-

tives to e&P companies, which will provide an impetus to them to speed up their exploration and development programmes with a view to maximise domestic oil and gas production in the coming years,” he added. The core policy objectives of this policy, the prime minister said, were to accelerate exploration and production activities in country with the purpose to achieve optimum self-sufficiency in energy by increasing oil and gas production, to promote direct foreign investment in the country’s energy sector by increasing competitiveness of its terms of investment, to encourage the Pakistani oil and gas companies, to get fully involved in the investment opportunities and to promote increased e&P activity in the onshore frontier areas by providing globally competitive incentives.

“The salient features of this policy are indigenous production and decreased reliance on imported energy in a phased manner. it is in this background that recourse to LNG and LPG is critical to bridge the gap between demand and supply and ease pressure on the local production,” he said. Gilani said establishment of the country’s first SSGc-LPG Terminal at Bin Qasim would greatly facilitate the handling of energy imports in the shortest possible time-frame.

“The gap between demand and supply has hampered the socio-economic development of the country,” he said.

On the occasion, advisor to Prime Minister on Petroleum and Natural resources Dr asim hussain said the country was facing an acute gas shortage that would be met through LPG import.

Managing Director SSGc azeem iqbal Siddiqui said his company started this business in view of the increasing demand for gas in the country. he said his company had acquired SSGc-LPG Terminal at a cost of rs2.25 billion and LPG ships would be accommodated at the terminal with the storage facility being at PQa. Others who attended the event included Governor Sindh Dr ishrat-ulebad Khan, chief Minister Sindh Qaim ali Shah and provincial ministers and members of Sindh assembly. ISMAIL DILAWAR

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Sunday, 19 February, 2012

news DRUG REGULATORY AUTHORITY

LCCI APPRECIATES GOVERNMENT DECISION Pak Vanaspati Manufacturers announce strike KARACHI: Pakistan Vanaspati Manufacturers association (PVMa) has announced to go on strike by shutting down ghee and cooking oil mills all over the country from Saturday onwards, after an unfortunate incident of burning of four National Logistic cell tankers carrying consignments of edible oil from Port Qasim. as per details of the incident, the imported consignments of edible oil were cleared from Port Qasim and loaded on NLc containers for transportation to the ghee and cooking oil mills. The incident took place despite clear orders of the Sindh high court that no party will take lw in its own hands and both NLc and private transporters would continue smooth transportation of edible oil from Karachi to other destinations across the country. The incident has also shown helplessness of the ghee and cooking oil mills at the hands of transport mafia, which has deliberately burnt the oil tankers, causing loss to the concerned industry. Prices of vegetable ghee and cooking oil are expected to rise after closure of ghee and cooking oil mills across the country. STAFF REPORT

LAHORE STAFF REPORT

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ahOre chamber of commerce and industry (Lcci) Saturday appreciated the government’s decision to form a much-needed Drug regulatory authority saying the early establishment of the authority would help ensure availability of quality medicines to the people at cheaper rates.

While talking to a delegation of pharmaceutical industry, Lcci President irfan Qaiser Sheikh said pharma-

ceutical sector was facing a lot of troubles due to non-functioning of the Drug regulatory authority. he said the government decision would not only save the businessmen from a huge loss on account of imported raw materials and finished medicines, but would also help check the shortage of life saving drugs.

Lcci President hoped pharmaceutical industry would extend every possible help and cooperation to the government for early establishment of Drug regulatory authority as it is need of the hour. it is pertinent to men-

tion here that President asif ali Zardari on Friday promulgated an Ordinance to form the ‘Drug regulatory authority’ after all provinces gave it the mandatory green light. as stated in the Ordinance, the drug watchdog will consist of 14 members, including all provincial health secretaries, and is tasked with regulating countrywide manufacturing, licensing, registration and sale of drugs in line with Drugs act, 1976. headed by the chief executive officer, Dra will have one technical representative, each of the federal government, doctors,

pharmacists and pharmaceutical industry.

With headquarters in islamabad, it will work under the administrative control of the secretary of the cabinet division. Under article 147 of the constitution, the central drug watchdog can be established only after the provinces’ concurrence and approval.

Sindh, Balochistan and Khyber Pakhtunkhwa gave it a green signal long ago. and Punjab followed suit on Wednesday by getting a resolution passed by the provincial assembly in its favour.

CORPORATE CORNER EVO customers win exciting prizes in lucky draw ISLAMABAD: Pakistan Telecommunication company Limited (PTcL) has announced the names of 30 lucky draw winners from amongst its eVO customers who have recently re-charged their accounts. The lucky draws are a part of PTcL’s “eVO extravaganza” offer launched last month to benefit those of its pre and post paid eVO customers who have revived their subscriptions since December 2011 or earlier. The lucky winners from across Pakistan have won exciting prizes, including eVO Tab, eVO Wi-Fi cloud and eVO Nitro devices. held at PTcL headquarters in islamabad, the first lucky draw was supervised by an impartial judge committee comprising Managing Director Tera Data, Mr Khurram rahat; chief coordinator rozan, Ms Shabana arif; and head of Sales ciScO, Mr Majid Siddiqui. PRESS RELEASE

BOK assets reach Rs68 billion LAHORE: The Bank of Khyber (BoK) assets reached rs68 Billion as of 31st December 2011.

This was stated by Mr Bilal Mustafa, Managing Director BoK, while inaugurating BoK annual Manager’s conference 2012. Mr Bilal Mustafa while reviewing the operational results as on 31st December 2011 mentioned that the BoK’s operational results shows a tremendous growth in all key areas despite depressed economic situation. he specially emphasised on home remittances business and mentioned that during 2011, BoK procured over rs13 billion as home remittances which was 28 per cent higher than the corresponding period. PRESS RELEASE

BISP launches Benazir Card in AJK MUZAFFARABAD: Benazir income support Programme (BiSP) has now introduced Benazir card in azad Kashmir. The beneficiary families would now be able to get their monthly cash grant not only from BiSP delivery centres, but also through aTM machines by using this modern facility. While addressing the launch ceremony of Benazir card, Prime Minister aJK ch abdul Majeed thanked the federal government and chairperson BiSP, Madam Farzana raja for initiating Benazir card scheme in the region on priority basis. PRESS RELEASE

NHA welcomes special envoy to Malaysian PM ISLAMABAD: Secretary communications Dr anwar ahmad Khan while briefing Mr Datuk Seri Vellu, special envoy of Malaysian Prime Minister on india and South asia (infrastructure) said that Ministry of communication is following an open-ended policy for convenience of the investors and will provide all incentives to them. The special envoy to Malaysian PM is on visit to Pakistan to explore investment opportunities in Pakistan. Secretary communications told that a number of Nha projects are available for foreign investment. he offered rehabilitation and modernisation of toll collection system of M-2, conversion of M-3 into 6 lane motorway, construction of 100 Km 4-Lane Khanewal-Lodhran expressway, construction of 385 Km 4-Lane Lodhran-Sukkur expressway and rehabilitation and improvement of 350 Km Sukhar-hyderabad highway to the visiting delegation on Public Private Partnership (PPP) basis. PRESS RELEASE

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Sunday, 19 February, 2012

debate

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Asia evades the US mousetrap g

While Washington ups the ante on Iranian sanctions, Asian giants pay no heed to US objections KunwAR KHuLdunE sHAHId

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ashington’s attempts to squeeze iran into submission, via its sanctions, haven’t exactly transpired the way the US thinktanks thought they would pan out with asian oil importing heavyweights, Japan and South Korea, brushing off the US policy making. and the word is that india and china might even up their oil purchases from iran, to further forestall the US efforts of forcing iran into parting ways with its nuclear programme by targeting its economic nerve center. These four aforementioned countries combined for 60 per cent of iranian oil sales last year, and the US is relentlessly trying to convince them into opting out of these imports and in turn give Tehran a $100 billion economic jolt – which would surely be the final nail in the coffin of iranian resistance. all the same, all american endeavours are being parried away, as Washington receives a reality check that nations would rather act in synchrony with their national needs than aid the US policies that could hinder their own economic growth.

With the eU in Washington’s pocket, the eU embargo – scheduled to kick in July – was always going to be a foregone conclusion, and this would result in some losses for iran. But what it would also do is force iran into lowering the oil prices for the asian buyers, and this would be a tailormade opportunity for these nations, who would then be able to lower their oil purchase expenditure

considerably. The ramifications on the iranian budget would still be considerable, but it would be hard to convince the asian countries to eschew purchasing oil at a considerably cheaper rate.

South Korea – evidently the closest of US’s asian allies – is the one targeted by the american hierarchy to turn the tide in Washington’s favour. Seoul imports 10 per cent of iranian oil, and being an american chum historically, it would be the easiest one to influence into cutting down on the imports from iran.

Nevertheless, with a complete dearth of similar alternatives for black gold, Seoul is refusing to take the bait for the time being. Japan, again, imports 10 per cent of its crude oil from iran, and are warding off US approaches citing the insufficiency of oil availability from other

Fool’s gold? Pakistan mine rift exposes investor risk

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REutERs

aKiSTaN’S reko Diq, an untapped copper and gold mine of fabulous potential, was meant to be the biggest foreign investment in the country’s mining sector, but it’s beginning to look more like fool’s gold to the companies involved. Set in one of the bleakest places on earth, a Baluchistan desert at the foot of an extinct volcano, reko Diq was expected to yield revenues of at least $60 billion over the 56-year life of the mine.

Tethyan copper company (Tcc), a joint venture between chile’s antofagasta and canadian-based Barrick Gold, had sunk $220 million over the past five years into exploring the deposit in the ochre sand desert, where temperatures reach 130 degrees Fahrenheit in the summer. it was planning to invest a total of $3.3 billion when the provincial government abruptly refused to grant a mining license last year.

Tcc says it never did get an explanation. “it’s been difficult to define what their actual issues were,” Tim Livesey, ceO

of Tcc, told reuters in an exclusive interview. “We went back to them for clarification, as many of their issues are not covered in the Baluchistan Mining regulations.”a local government official, who requested anonymity, said Tcc took too long to complete its feasibility study and that it was “cheating” Baluchistan by under-valuing the worth of the copper and gold. “They are the monopoly,” the official said angrily. “They are the monopolists of the gold! They don’t want to disclose the worth of the gold in Baluchistan.” The case is now before the Pakistan Supreme court, and Tcc has filed for international arbitration. The Baluchistan government, meanwhile, has recently handed out exploration permits in the area around reko Diq to new Pakistani and chinese companies with no mining experience. Pakistan is already viewed as a high risk investment due to chronic civil and sectarian conflict, terrorism, corruption, poor regulation and chronic power outages. Legal uncertainty would only add to that list.

Middle eastern countries. china, meanwhile, increasingly becoming a close iranian ally, completely turned its back on the efforts of american Treasury Secretary Timothy Geithner during a January visit, and labeled the Western efforts as being detrimental to global economy. china and the US of course have no love lost between each other and, averaging about 550,000 barrels per day in 2011, Beijing imported around 10 per cent of its oil from iran. and with the oil prices scheduled to take a nosedive, it’s going to be a mouth watering prospect for the chinese to further enhance themselves, while the americans continue to pursue their geopolitical dogfights. it is evident that china wants to build a

strategic reserve of crude oil and with iranians under the US’s cosh, it has the upper hand on the negotiation table with Tehran as well. india has recently been upping the ante with regards to oil purchase from iran, raising it as high as 550,000 barrels per day in January. and with New Delhi perceiving it as a stern competitor for influence in the region – both economic and otherwise – it would be hard to imagine the indians letting go of their oil import from iran – especially again, since it is going to be available at cut-price.

Furthermore, a lot of indian refineries are designed specifically with processing iranian crude oil in mind, and they would find it inconvenient to reshape their dynamics. hence, the indian front looks like being continuing to be oblivious to US objections as well.

This leaves the US in a veritable fix, since merely the eU embargo will not suffice in the proverbial arm twisting that Washington is vying to sermon. What seems like happening is that with these four asian giants paying no heed to the US stance over iran, the disparity that the eU embargo might create on the Tehran exchequer, would be covered by the transfer of those particular barrels eastwards into asia.

The writer is Sub-Editor, Pakistan Today.

He can be reached at khulduneshahid@ gmail.com