AKD Quotidian about — OGDC subscribes to PPTFC; GoP maps out adjustments

Karachi, September 12, 2012 (PPI-OT): The Government of Pakistan has approved the cash neutral transaction offsetting OGDC receivables against PKR 82 billion in Privately Placed Term Finance Certificates (PPTFC) issued by Power Holding (Private) Limited in an effort to partially reduce the circular debt balance within the energy chain.

According to AKD Securities, OGDCL will adjust receivables from oil refiners as well as gas companies while companies within the energy chain will adjust receivables and payables based on the Government’s pre-set mapping. Based on AKD Securities’ initial discussions, PSO will receive PKR 70.5 billion from power companies mainly KAPCO (PKR 30 billion) and Hub Power (PKR 40 billion) and will offset payables to refiners. Details of the TFC include a duration of 7 years with a 3 year grace period with an interest rate of KIBOR +1% payables semi-annually. OGDC’s stock price has reacted negatively to the announcement down approximately 1% yesterday. As a one-off, AKD Securities views the transaction as a positive giving the energy sector space as well as leading to interest income for OGDC (estimated at PKR 1.4/share) against previously held-up receivables. That said, AKD Securities views the risk of the GoP taking recurring recourse to exploration company balance sheets with concern particularly if future cash flow generation trails upcoming exploration and development expenditures. At current market price, AKD Securities recommends an Accumulate stance on OGDC with a target price of PKR 201/share!

Indian Precedence: AKD Securities views the recent transaction as taking precedence from the Indian Government’s practice of issuing Oil Bonds between 2005-2006 and 2008-2009 to partially offset oil marketing company under-recoveries. Bonds were issued in several tranches between the aforementioned period with a maturity of 20 years and interest rates ranging from 6%-9%. In 2010-2011 the Indian Government discontinued the practice of issuing oil bonds, instead providing cash assistance from budgetary sources as well as under-recovery burden sharing between upstream NOCs (discounts to realized crude price) and oil marketing companies. Under-recoveries are based after subsidy adjustment (PDS Kerosene and domestic LPG) where cash assistance from budgetary sources remains ad-hoc usually at more than half the amount of total under-recovery.

GoP Pre-Set Mapping: The GoP has present the mapping of PPTFC adjustment within the energy chain where PSO will net off PKR 70.5 billion. Details of the mapping for OGDC and PSO is provided on RHS tables. PSO has performed with the news flow where the stock gained 1.6% yesterday. That said, similar to past TFC transactions AKD Securities views the PPTFC as interim relief where continued accretion in circular debt will likely rebuild cash flow stress within the energy chain over the next 3-6 months. ATRL based on AKD Securities’ initial discussion will likely take away the larger adjustments will PKR 31 billion to be offset followed by Pakistan Refinery at PKR 16 billion and NRL at PKR 9.5 billion. As a one-off, AKD Securities views the transaction as a positive giving the energy sector space as well as leading to interest income for OGDC (estimated at PKR 1.4/share) against previously held-up receivables. That said, AKD Securities views the risk of the GoP taking recurring recourse to exploration company balance sheets with concern particularly if future cash flow generation trail upcoming exploration and development expenditures.

World Bank approves two credits totalling $220 million for Punjab government

Islamabad, September 12, 2012 (PPI-OT): The Punjab Government’s holistic approach to developing rural and urban areas in tandem received impetus on Tuesday when the World Bank’s Board of Executive Directors approved two credits totaling $220 million.

The $150 million Punjab Cities Governance Improvement Project is aimed at realizing the growth potential of five largest cities of the province through strengthening systems for improved planning, resource management and accountability.

The additional financing of $70 million for Punjab Land Records Management and Information Systems Project is meant for further strengthening and expanding better service delivery of land record management throughout the province.

“Punjab is leading the way in fusing together the rural and urban development agenda”, said Rachid Benmessaoud, World Bank Country Director for Pakistan. “Improved management of land records bolsters existing and potential landholders’ confidence, especially the small holders who are the most vulnerable, and attracts investment in the sector. Improved planning, resource management, and accountability in larger cities of the province will turn them into true engines of growth, improving quality of life for citizens and reducing poverty. The project will also improve Punjab’s capacity to respond to emergency situations.”

Lahore, the capital of Punjab is currently home to about 8 million people. The province has four other cities with populations in excess of one million, namely Faisalabad (3 million), Gujranwala and Rawalpindi (2 million each), and Multan (1.7 million). Collectively, about half of the urban population in Punjab is concentrated in these five cities. In addition, three other large cities (Sialkot, Bahawalpur and Sargodha) are poised to cross the one-million mark.

“The largest component of Punjab Cities Project is annual performance grants to cities who meet targets in seven governance areas, said Raja Rehan Arshad, World Bank Task Team Leader for the project. To qualify for performance grants, participating cities will be assessed each year for meeting the targets in resource planning, procurement, reporting of flow of funds between City District Governments and city entities, revenue collection, service delivery planning, public disclosure, access to information, and accountability for effective and transparent feedback and grievance redress mechanism.”

The other two components of the project support the cities and province through technical assistance and capacity building to achieve governance related targets and enhancement in revenue, and preparedness for rapid response to a natural disaster, emergency, and/or catastrophic event as needed.

Making land rights secure, reducing the potential for disputes and enabling an improved investment climate have been prioritized at the highest levels of the Government of Punjab. The Punjab Land Records Management and Information Systems Project supports the government’s vision to move to a title-based system of land registration.

This will entail further institutional, legal and policy changes, as well as continued investment in human resource development, information systems, and improvement in the available data bases on land. As a key first phase in this long-term program, the provincial government is focusing on modernization of the land records system. The additional financing for the project will allow the government to complete this first phase throughout the province.

“Improving the land records service delivery of the province of Punjab will contribute to long-lasting tenure security and more efficient functioning of land markets, said Edward Cook, World Bank Task Team Leader for the project. “It will also establish a basis for fuller integration of information associated with rights in land.”

The four components of the project deal with institutional capacity building and changes in business processes, development and establishment of the automated land records system, stakeholder outreach and operation of the new system, as well as system monitoring and evaluation and project management.

For more details on Punjab Cities Governance Improvement Project please click on http://www.worldbank.org.pk/external/projects/main?pagePK=64283627 and PK=73230 and theSitePK=293052 and menuPK=293085 and Projected=P112901

For more details on Punjab Land Records Management and Information Systems Project please click on http://www.worldbank.org.pk/external/projects/main?pagePK=64283627 and piPK=73230 and the SitePK=293052 and menuPK=293085 and Projected=P131266

The credits are from the International Development Association (IDA), the World Bank’s concessionary lending arm. These carry a 0.75% service charge, and 1.25 percent interest rate, 5 years of grace period and a maturity of 25 years.

For more information, contact:
Mariam Sara Altaf
Public Information Associate
The World Bank, Islamabad
Phone: +9251-2279641(6 lines); ext 139
Fax: +9251-2823295
E-mail: mariamaltaf@worldbank.org
http://www.worldbank.org.pk

Dr. Peter Lavoy concludes successful visit to Pakistan

Islamabad, September 12, 2012 (PPI-OT): Dr. Peter Lavoy, Principal Deputy Assistant Secretary of Defense for Asian and Pacific Security Affairs, visited Pakistan from September 9-12. Dr. Lavoy met with senior Pakistani military and government officials, including Secretary of Defense Lt. Gen (Retd.) Asif Yasin Malik, Chairman of the Joint Chiefs of Staff Committee General Khalid Shameem Wynne, Chief of General Staff Lt. Gen Waheed Arshad, Chief of Naval Staff Admiral Muhammad Asif Sandila, and Deputy Chief of Air Staff Air Marshal Waseem-ud-Din. During his visit he engaged in productive discussions on issues of mutual interest regarding U.S.-Pakistan defense cooperation.

For more information, contact:
Public Affairs Section
Embassy of the United States of America
Diplomatic Enclave, Ramna 5
Islamabad, Pakistan
Tel: +9251-208 0000
Fax: +9251-227 8607
E-mail: webmasterisb@state.gov

Islamabad Women’s Chamber of Commerce and Industry, Indian Chamber signs deal to intensify cooperation

Islamabad, September 12, 2012 (PPI-OT): Islamabad Women’s Chamber of Commerce and Industry (IWCCI) and PHD (Punjab, Haryana, Delhi) Chamber of Commerce and Industry have signed a MoU to promote trade and investment and improve linkages between the business communities of two countries.

The MoU was signed by Samina Fazil, founder President, IWCCI and Mr Ravi Vig, former president, PHD Chamber which was witnessed by a large number of business leaders from the two countries.

IWCCI and PHD Chamber have agreed to establish and develop commercial links between the business communities of both countries in general and their respective members in particular.

According to the MoU, both trade bodies will constantly endeavour to improve cooperation, assist trade missions, exchange information and find other methods for promotion of trade.

The two chambers will jointly organise seminars, conferences, exhibitions, trade fairs and other promotional activities to further business relations between two countries.

Speaking on the occasion, Samina Fazil said that the objective of MoU signing is to develop policies in trade, investment and tourism between Pakistan and India and expand existing business base and increase understanding.

Both parties have agreed to a working plan, the scope of which will cover effective information sharing, networking, exploration of opportunities, search for problem solving, joint initiatives, reaching international markets together and providing training, she informed.

Samina said that we have great economic potential which calls for development of professional human resources with focus on energy and automation industry, supplier and services industry, IT, garments, fashion industry, handicrafts and research and development.

She lauded the role of Malik Sohail Hussain, Special Adviser to IWCCI and Chairman Media FPCCI who employed all his energies to make visit of IWCCI delegation to India a success which will go a long way in building more cross border partnerships to help improve the socioeconomic life of the people.

IWCCI is the first ever women’s chamber in Pakistan which has signed MoU with a foreign chamber, Samina told audience.

Mr. Ravi Vig and other business leaders of the PHD Chambers said that we aim to build solid relations between the two countries by working-out ways and means for the betterment of the business community.

Highlighting the importance and basic objective of the MoU, they said it will help us enhance mutual cooperation and take benefit from each other experiences.

It is a good initiative between the chambers which are now strategic partners; the step will prove a step in the right direction which will encourage others too.

For more information, contact:
Samina Fazil
President
Islamabad Women’s Chamber of Commerce and Industry
Mobile: +92323 5343199
Tel: +9251 2252256

Federal Board of Revenue officials without drinking water for the last six months

Lahore, September 12, 2012 (PPI-OT): The Federal Board of Revenue’s Regional Tax Office, having staff of hundreds of people and where over thousands of taxpayers visit daily, has been without drinking water for the last six months.

Hundreds of taxpayers, who visit the RTO I and II daily, complained that it was strange for them that this was the only department which collects billions of rupees from taxpayers but have no facility of drinking water for them.

The officials of the RTO also complained that every private as well as the government office provide their staff drinking water, but this is probably the single office which is straightly refusing this facility.

They said that though there is water storage facility in the FBR, but this water is not drinkable, as it is contaminated and even dengue larva has also been found when it was tested in labs. They said the staff has many times went on strike in protest but the higher authorities are not ready to provide them this basic facility.

The FBR union central president Mian Abdul Qayyum said that there is no potable water in the office since the summer season started.

“We have several times asked the authorities, writing dozens of applications, but all in vain. Recently, we have invited the attention of the newly-transferred chief commissioner Ashraf Khan to this issue and he assured the matter would be resolved within a week, but all in vain.” The union did not want to go on strike due to this issue to avoid the tension, he added. However, he warned if the issue was not resolved, they might resort to come to streets.

He said that the union had suggested the govt to install a water filtration plant, which will cost maximum of Rs700,000, but no one is ready to listen them. He said that all branches and regional tax offices of other cities are provided funds of millions of rupees for this facility but only RTO I and II are the victim of this cruelty. Even, the flour where the office of LTO is situated, is provided with this facility. He appealed the FBR chairman Ali Arshad Hakeem to get the notice of this ruthlessness and negligence of higher authorities of the board.

For more information, contact:
Federal Board of Revenue
Mujeeb-ur-Rehman Talpur
Second Secretary (Public Relations)
FATE Wing, Federal Board of Revenue,
Constitution Avenue, Sector G-5,
Islamabad, Pakistan
Phone: +92 51 921 7267
Fax: +92 51 9208456
Email: mujeeb.talpur@fbr.gov.pk , talpur35@gmail.com

Sindh government offers provision of land to Iran for establishment of Industrial area

Karachi, September 12, 2012 (PPI-OT): A high power delegation Iran traders and industrialists headed by President Tehran Chamber of Commerce and former Minister for Commerce, Industries, and Mines Dr. Yahah Al-e Ishaq today had a meeting with Senior Minister Education Pir Mazharul Haq at Chief Minister House.

The meeting was attended by Consul General of Islamic Republic of Iran Mr. Abbas Ali Abdollahi, Chairman Sindh Board of Investment Mr. Zubair Motiwala, Principal Secretary to C.M Sindh Mr. Muhammad Siddique Memon, Senior Special Assistant to C.M Rashid Rabbani, Special Assistant Waqar Mehdi A and eight member delegation of Tehran Chamber of Commerce.

Senior Minister Education on behalf of Chief Minister and Government of Sindh warmly welcomed the delegation of Tehran Chamber of Commerce and said that Iran is not only neighbouring country but also an Islamic and brother country of Pakistan.

He added that there are religious, cultural, literary and socio –economic relations between people of both countries. Pir Mazharul Haq said that Pakistan give importance to Iran and investors, traders and industrialists had given priority to work with Iran in different walks of life.

Sindh Education Minister said that first Persian translation of Holy Quran in sub-continent was made by renowned spiritual saint and scholar Makhdoom Nooh of Hala while the wife of our great leader Shaheed Zulfiqar Ali Bhutto, and mother of Shaheed Benazir Bhutto – Begum Nusrat Bhutto also belonged to Isfahan (Iran).

He said that there had been cultural and trade relations between Pakistan and Iran. Pir Mazharul Haq thanked the Government and people of Iran, on their assistance to flood and rain affected people of province of Sindh, which included tents, medicines, ration etc.

Pir Mazharul Haq said that there are many opportunities of investments in the field of agriculture, industries particularly in Energy sector. He said that for power generation all sources of coal energy, wind energy and solar energy can be utilized. He further said that it is in the larger interest of both countries that socio- economic relations are further strengthened.

Chairman BOI Mr. Zubair Motiwala said that it is essential that trade relations are restored between both countries. He added that Pak-Iran Investment Co be activated , while schemes under joint venture be encouraged, which include Shrimp Farming, Livestock, Textile, Milk and others. He added that President of Pakistan had yesterday signed MoU thereby allowing establishment of Special Economic Zones in the country.

The meeting on behalf of Government of Sindh offered the delegation to establish Special Economic Zone of Iran in Sindh, for which land will be provided. The President of Tehran Chamber of Commerce Dr. Yahya Al-e Ishaq thanked the Chief Minister Sindh and his team for warm welcome and offered that Iranian companies are willing to invest in Pakistan.

He added that Government of both countries should work unitedly keeping in view the national interest. He said that Irani Government has brought the Gas pipeline upto the border of Pakistan for which there is investment of $250 million. He said that various aspects of investment for pipelines and gasification will be encouraged while Iranian government and investors were ready to finance for investment projects in Pakistan.

He added that Iran was ready to import Milk, Rice and other commodities, while the Chambers of Both countries should work jointly. He said that his chamber is in close coordination with heads of various government departments for solution of problems.

President of Tehran Chamber informed that we have resolved issues with China, India and Korea where as we are ready for investment of $ 200 million. He pointed out some banking problems, for which procedures will be resolved. It was decided that hindrance in border trade will be settled. Later, Senior Minister Education presented Shield, Ajraks and Sindhi Caps to delegation of Tehran Chambers.

For more information, contact:
Mr. Allah Bachayo Memon
Press Secretary
Chief Minister House
Tel: +9221 99202019
Cell: +92300-3524057 (Ext: 336)

United States will provide $12 million to fund construction of Waran Canal System in Khyber Pakhtunkhwa

Islamabad, September 12, 2012 (PPI-OT): The United States will provide $12 million to fund construction of the Waran Canal System that will supply year-round irrigation to 28,000 acres in Tank Tehsil, Khyber Pakhtunkhwa (KP). The Waran Canal will expand other U.S.-funded irrigation systems in the area to cover a total of 191,000 acres, enabling thousands of farmers to increase production of agricultural goods.

“Water is one of the biggest constraints on agriculture and economic growth in Pakistan. By helping to construct this irrigation system, we hope to increase employment opportunities and incomes for local communities,” said U.S. Agency for International Development (USAID) Country Director Jock Conly, at the project launch ceremony on September 12 in Islamabad. The project will be funded through USAID and implemented in cooperation with Pakistan’s Water and Power Development Authority.

Currently, the area only receives water only during floods in the summer season and even that is scarce. Due to the lack of irrigation, farmers are only able to grow one crop each year, Rabi wheat. The construction of the Waran Canal irrigation system will make irrigation water available for two crop seasons, allowing farmers to plant a second crop each year and increase their overall productivity. The new irrigation system will also increase fodder production and make more water available for livestock.

The Waran Canal project includes construction of a 37 km-long main canal, 127 km of secondary canals, and related structures such as bridges and falls. A drainage system and other structures serving 33 villages situated alongside the canal are also part of the project plan.

Irrigation system improvements and the Gomal Zam Dam project are a part of U.S. efforts to help Pakistan improve agricultural productivity through water management improvements. The dam will generate electricity for 39,000 households, store irrigation water, and provide flood protection for the Tank and Dera Ismail Khan districts.

In addition, the United States plans to work with the KP Department of Agriculture to introduce high-value crops, such as off-season vegetables and fruits, as well as better animal breed stocks to build on the benefits of bringing water back to Tank and Dera Ismail Khan.

For more information, contact:
Public Affairs Section
Embassy of the United States of America
Diplomatic Enclave, Ramna 5
Islamabad, Pakistan
Tel: +9251-208 0000
Fax: +9251-227 8607
E-mail: webmasterisb@state.gov