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Bring on a balanced rent control act! ISLAMABAD ONLINE
Ikhlaq Abbasi, Prseident, Traders Welfare Association G-9 Markaz visited Islamabad Chamber of Commerce and Industry for a meeting with Zafar Bakhtawari, President of ICCI. Speaking on the occasion, Zafar Bakhtawari, President of ICCI said that traders of Federal Capital were facing many problems which should be solved on priority basis by the Government. He said that a balanced Rent Control Act in Islamabad would greatly reduce and resolve the rental issues of traders of the Federal Capital. He said that in the absence of a balanced Rent Control Act in Islamabad, frequency of disputes was rising day by day and the business community was feeling insecure in such environment. He said Islamabad Chamber has struggled a lot in bringing changes in the Rent Control Act after consultation with the all stakeholders and representatives of the business community. He said that with the efforts of ICCI, document of a balanced rent control act has reached the parliament, Thus Government should execute this law in the larger interest of the traders, he added. During the meeting,Ikhlaq Abbasi, president Traders Welfare Association G-9 Markaz thanked the ICCI’s team for inviting them in Chamber House and said that G-9 Markaz is a great trading center but it has been facing different issues since long. Munawar Mughal, Former President ICCI said that these interactions provided us opportunity to discuss problems being faced by the traders of different sectors and highlighted the same at relevant forums for resolving them.
Bailout package does nada for PSM Government’s Rs14.6bn bailout package not helping Pakistan Steel’s revival g PSM officials say money being released in ‘piece meals’ not serving the purpose g Government issued only Rs3bn against PSM’s Rs25bn demand for raw material g Steel Mill keeps making a monthly loss of Rs 1.5bn g Scarce raw material brought down production from 82pc to 17pc in Dec, 2012 g PSM’s liabilities account for over Rs 85bn g Much of bailout funds to cater inductions of over 5000 employees on political basis g CBA granted Charters of Demand worth billions of rupees g Govt inactive over recovery of embezzled Rs22bn g
KARACHI
I
ISMAIL DILAWAR
F officials at the Pakistan Steel Mills (PSM) are to be believed the cash-strapped federal government has not hit the bull’s eye when it comes to the usage of a bailout package of billions to keep the loss-making public sector entity afloat. On July 23 this year, the resource-constrained federal government had declared a bailout package of Rs 14.6 billion to be injected into the Mill in three installments. Whereas so far two installments worth Rs 8.8 billion have been released, Rs 3.8 billion in August and Rs 5 billion in December, to the PSM, the injection of billions seems to have served its purpose not at all. According to well-placed officials at Pakistan Steel, the Mill’s production of steel was persistently depleting and had contracted from 82 percent in July 2008 to 17 percent during the current month, December 2012. Further, the entity is making a loss of Rs 1.5 billion every month. The PSM officials claim that the government’s fresh bailout package would, at the end of the day, go to waste as a major chunk of the public money was being sucked up by the banks on account of interest and liabilities. The PSM’s liabilities, the officials said, amounted to Rs 85 billion which had piled up over the last four years during which the Mill registered a total loss of Rs 80 billion. The government did not take any serious measures turning a profitable entity into a continuous loss maker unit which has gained profit of about Rs 20 billion from 2000 to 2008 and now go to a loss of Rs 80 billion in just four years with Rs 85 billion liabilities. Whereas the economic managers are prioritizing other needs, the supply of raw material, a PSM official said, was the factor that would once again turn the entity into a profitable enterprise. “The monthly loss of Rs 1.5 billion is on account of lower output and increased operational cost. Pakistan Steel facing a serious shortage of raw material from last four years,” said the official adding that the PSM had been plagued by such a worse condition since 2009 when the raw material supply chain had interrupted. While the PSM is hardly managing to import raw materials like iron ore
PSM delegation leaves for Iran to discuss iron ore import KARACHI: A four-member delegation of Pakistan Steel Mills (PSM) Saturday flew to Iran on a four-day visit that would see the PSM chief explore the ways and possibilities to procure iron ore for Pakistan Steel. According to a PSM spokesman, Major Gen (Rtd) Mohammad Javed, Chief Executive Officer of the PSM is leading the delegation that includes member board of director and conveynor Price Committee Engr. Abdul Jabbar, Member board of Pakistan Steel Nayyar Hussain Bukhari and General Manager Bulk Material Department Pakistan Steel Captain(R) Shamsi Hasan. He said the main purpose of the visit was to finding possibilities for supply chain restoration of iron ore to Pakistan Steel, from Iran. He added that PSM is facing difficulties from importing iron ore from Australia, Canada, Brazil etc as it takes about 50-60 days long journey, expensive freight rates than a 10-12 day cost effective journey from a neighboring country. He said that PSM delegation will meet 5 Iranian companies in this visit and also discuss a way out option through a barter deal for Iranian iron ore with metallurgical coke which is produced by Pakistan Steel. STAFF REPORT and coal the government was releasing the bailout money in what the officials described it “piece meals”. Recently, a ship carrying 55,000 metric tons of Australian coal arrived at the Steel Mill jetty of the Port Qasim with the Mill declaring to have started finalizing tenders for the import of over 0.1 million MT ofimported iron ore. “But, for raw material the PSM just got
only about Rs 3 billion which is the main need of the Mill to revive and survive,” said the official adding “Other amount was taken away by the banks against the interest and liabilities”. Other secondary category raw materials like dolomite, limestone are, however, available in the PSM stock. For an uninterrupted supply of raw material, the officials said, the PSM needed at least Rs 25 billion and that too
in a single installment. “We are for last three years demanding Rs 25 billion, but the government is providing money in piece meals that could never produce proper results due to operational expenses and break in the next installment for purchasing raw materials,” they said. The officials also complained of misappropriation of the taxpayers’ money by the current PSM management in the face of politically-motivated inductions and the grant of Charters of Demand to appease the People’s Workers Union-led CBA. Such cost-intensive measures, they said, were adding billions to the loss-making Mill’s operational cost. Unable to estimate the volume of PSM’s current operational expenditures, the officials said despite huge losses the PSM management and its Board of Directors on a “political pressure” had hired some 5000 employees as well approved two Charters of Demand to the CBA. “The same demands cost the Mill around Rs 3 billion in 2008 and Rs 2 billion in 2010,” recalled the officials. Moreover, the officials said the government had also been unable to swiftly respond to the Supreme Court’s suo moto notice and the consequent verdict on the Mill’s corruption cases. “There is still no good progress on the Supreme Court’s suo moto action against the PSM corruption cases,” they lamented. The apex court’s action, the officials said, was widely seen as a hope for the recovery of a huge amount embezzled by the past managements. The looted money, they said, amounted to Rs 22 billion. When contacted a PSM spokesman refrained from commenting on the above statements. He, however, said the prevailing international market conditions for steel were very favorable for Pakistan. He said once the supply chain of raw material was restored the PSM would take not more than 18 months to come back on tract. “The market condition is so good for the PSM that once raw material supply chain is restored the PSM would reach to profit line within next 18 months, God willing,” the spokesman said. He, however, said international hurdles like the US sanctions on Iran, one of Pakistan Steel’s hottest picks for the import of iron ore, were creating difficulties for the PSM management to procure cost and time effective raw material.
CONCESSIONAL LENDING
IMF extends zero interest rates on poorer-country loans ISLAMABAD ONLINE
International Monetary Fund (IMF)has approved a two-year extension to the zero interest rates charged on loans to low-income countries. The extension is part of a wider strategy to support concessional lending to poorer countries as they combat the effects of the global economic crisis. Following further weakening of global growth and lowincome countries’ declining ability to weather the crisis, the IMF approved a second extension to the exceptional interest waiver on loans under its Poverty Reduction and Growth
Trust (PRGT). The move, approved by the IMF Executive Board December 21, extends the waiver through 2014. In addition, the IMF announced a postponement by one year, to end 2014, of the next review of PRGT interest rates. “The Executive Board decision to keep interest rates at zero for all concessional loans for a further two years is testament to the Fund’s continued support for low-income countries since the global economic crisis hit in 2009,” said IMF Managing Director Christine Lagarde. The zero interest-rate extension follows other recent steps by the IMF to bolster lending to poorer countries that include increased resources, higher borrowing limits, and more
flexible terms. These moves stem from the major overhaul of the Fund’s support programs for low-income countries in mid-2009, which created a new framework for loans to the world’s poorest nations and initially set zero interest rates on concessional loans through 2011. This is the second extension of the zero interest rates. After the first bi-annual review under the PRGT interest rate mechanism in December 2011, the IMF decided that the significant downside risks to the global economic outlook required a one year extension, through 2012, of zero interest rates on concessional facilities. After the global financial crisis first erupted in 2008, the IMF stepped up its lending to low-income countries to
combat the impact of the ensuing recession. Initially, poorer countries succeeded in adjusting policies to offset the worst effects of the crisis. But this success was partially reversed in 2011, with many low-income countries having limited fiscal space and running current account deficits that were higher than pre-crisis levels. Low-income countries face the slow pace of the global recovery and increased volatility in food and fuel prices. A recent review of low-income countries facilities noted a strong and continuous demand for fund support. Furthermore, empirical evidence shows that over the long term, IMF backed programs help raise growth, reduce poverty, and boost resilience to shocks in low-income economies
Sunday, 23 December, 2012