Category Archives: BUSINESS

Economy on right track, says Imran as he reveals current account surplus of $424m in July

Prime Minister Imran Khan on Monday said the country’s current account balance had recorded a surplus of $424 million in July, signalling that the economy was “on the right track”.

Hailing the development in a message on Twitter, the premier noted that in July last year, Pakistan had a current account deficit (CAD) of $613 million while last month the deficit stood at $100m.

He attributed the “strong turnaround” in the current account balance to “record remittances” and “continuing recovery in exports, which rose [by] 20 per cent compared to June 2020”.

According to data released by the State Bank of Pakistan (SBP) last week, the country received record-high remittances of $2.768 billion in the first month of the new fiscal year, following the record $23bn received during the outgoing financial year.

“This ($2.768bn) is the highest-ever level of remittances in a single month in Pakistan,” SBP had said.

“More good news for Pakistan economy,” Prime Minister Imran Khan had tweeted last week. “Remittances from overseas Pakistanis reached $2768 million in July 2020, highest ever amount in one month in the history of Pakistan.”

Separately, Planning Minister Asad Umar also [lauded the current account surplus3 for July 2020 in a tweet today, recalling that the PTI government had “inherited” a deficit of $2 billion “as a legacy of PML-N”, which was in power until 2018.

“Remember the current account deficits have led to massive external debt and compromises our independence and security,” he added

Earlier this month, while quoting data released by the Finance Ministry, Media had reported that since the PTI came to power, CAD had been brought down from $20bn to $3bn while exports were up despite Covid-19 demand stagnation while cost of borrowing had been brought down due to better debt management.

CCI agrees on water resource distribution in a Month

ISLAMABAD: The Council of Common Interests (CCI) on Thursday made a number of important decisions, including resolution of 30-year-old controversies among the provinces over the 1991 Water Accord through consensual distribution of water resources in one month.

The 42nd meeting of the CCI chaired by Prime Minister Imran Khan referred the issue of appointment of chairman of the Water and Power Development Authority and other officers to the federal cabinet.

It decided that the voice of the provinces would be included in decision making by the Oil and Gas Regulatory Authority (Ogra).

The CCI unanimously approved the Alternative and Renewable Energy Policy 2019.

The meeting was apprised that the county would face major gas shortage by the winter 2021-22.

Decides to include provinces’ voice in decision-making by Ogra

Implementation status of decisions of the previous meeting of the CCI was also reviewed.

According to an official press release, the meeting discussed recommendations of the attorney general for Pakistan on the Water Accord 1991. The CCI was informed that a committee comprising technical experts of the federal and the provincial governments had been constituted to look into the issue of fair distribution of water among the provinces. The CCI directed the committee to complete its work in one month.

A source told Dawn that since 1991, Sindh and Punjab have some differences over the water accord as Sindh demands distribution of water under para 2 of the accord under which Punjab’s share will be cut by 4 to 5 million acre feet while Punjab insists that distribution should be made under para 14 of the accord, which says that the provinces will get water with the same ratio they were receiving before 1991 unless new dams are constructed in the country.

The source said that though Sindh had not agreed on the distribution formula since 1991, it has been accepting the majority decision of the council with a dissenting note.

The meeting was apprised about the progress in installation of telemetry system.

The press release said that the meeting considered proposed amendment to the Oil & Gas Regulatory Authority Ordinance-2002, as suggested by the government of Sindh.

The CCI asked the ministry of petroleum to explore the possibility of providing the provinces with a mechanism to give their input to the regulatory body.

The meeting considered the request of Punjab for transfer of control of lower portion of Chashma Right Bank Canal from Wapda to the government of the Punjab. Agreeing to the proposal, the CCI constituted a committee comprising representatives of the Indus River System Authority and the government of Punjab and Khyber Pakhtunkhwa to work out modalities and finalise a bilateral agreement between the two provinces in this regard.

The CCI deliberated upon the future role and functioning of the National Commission for Human Development and Basic Education Community Schools. It was decided, in principle, to hand over the schools, currently run by the federal Ministry of Education and Professional Training, to education departments of respective provinces/regions. The process will be completed before the end of the current financial year. The CCI directed that the ministry to formulate a transition and integration plan in consultation with the provinces, which will be presented during next CCI meeting.

The strategy to combat Covid-19 was also discussed by the CCI. It appreciated the strategy adopted by the government to curb the spread of the pandemic.

Discussing the issue of sharing of windfall levy, the meeting decided that 50 per cent share of the receipts, collected under the head of windfall levy on crude and condensate and natural gas under Petroleum Policy, 2012, would be shared with the province concerned.

The meeting approved placement of annual reports for the years 2017-18, 2018-19 and 2019-20 before the Senate and the National Assembly.

The special assistant to the prime minister on petroleum gave a presentation to the CCI on annual demand and supply situation of gas with special reference to future requirements and dwindling domestic gas reserves.

While presenting gas production, consumption and transmission data from the provinces, he said that the country would face major gas shortage by the winter 2021-2022.

It was recommended that a national consensus should be built for a major push for new exploration and production, conservation of domestic gas and rationalisation of price mechanisms to prevent impending crisis.

The meeting was informed that the federal government was organising a summit of industry experts to discuss various options to meet this impending challenge and requested the provinces for their active participation.

PIA employees being offered voluntary separation scheme

ISLAMABAD: The government plans to set up another entity named ‘Mainline-1 Authority’ for smooth implementation of $6.8bn China-funded Karachi to Peshawar rail track besides offering voluntary separation scheme (VSS) to the employees of Pakistan International Airlines (PIA).

This is part of institutional reforms for restructuring and strengthening of key institutions of economic governance of Dr Ishrat Husain, the prime minister’s adviser on austerity and institutional reforms.

The Executive Committee of the National Economic Council (Ecnec) led by Dr Abdul Hafeez Shaikh, the prime minister’s adviser on finance and revenue, is expected to approve on Wednesday (today) the upgradation and improvement of 1,733km Mainline-1 (ML-1). On completion, the project is expected to double the speed to 160km and 140km per hour of passenger and cargo trains, respectively.

The prime minister has approved the restructuring plan of Pakistan Railways under which the Railway Holding Company on the pattern of Pakistan Electric Power Company as umbrella organisation, besides Freight Traffic Management Company, Passenger Traffic Management Company and Infrastructure Management Company would be carved out.

Authority to implement $6.8bn Karachi-Peshawar rail track

Also, a totally separate ML-1 Authority will also be established for dedicated and focused coordination with the Chinese side. This restructuring exercise will be completed within four months. It will now be the second independent authority to deal with the Chinese investments after the creation of China-Pakistan Economic Corridor Authority (CPEC-A) for which a draft law is under debate for introduction in the National Assembly to provide it legal cover. An ordinance on the CPEC-A had expired a couple of months ago.

Moreover, the selection process for new chief executive officer of Pakistan Railways has been started and would be completed in two months while the railways board is being revitalised through induction of members from the private sector and the railway headquarters is being strengthened through induction of four market experts in management pay scales.

The government has also decided to outsource 15 passenger and two freight trains and public-private partnership (PPP) projects would be launched shortly for development and management of railways land and stations.

In June this year, the Central Development Working Party had recommended the project cost at $7.2bn and referred it to Ecnec for formal approval.

The Planning Commission on Tuesday, however, said the estimated cost referred to Ecnec for approval was $6.8bn. This is because of culmination of railway line to Peshawar instead of earlier target of Torkham while the Karachi-Hyderabad section will be built on commercial lines under the PPP mode. ML-1 is a high priority project of Pakistan government irrespective of the political divide.

The project remained under debate because of its huge financial impact, the US opposition to Chinese investments in Pakistan and the limitations of the government of Pakistan under the debt sustainability perspective of the International Monetary Fund. Pakistan Railways had worked out the project cost at $9.2bn which was scaled down by the Planning Commission and the Ministry of Communications through a series of cost cutting measures. The two governments would now finalise the financial arrangements after Ecnec formally approves the project on Wednesday.

The PIA’s restructuring plan has been finalised under which a Strategic Business Plan would be approved by the Economic Coordination Committee (ECC) of the Cabinet within the current month. A Human Resource Rationalisation Plan will also be brought before the ECC for approval within the current month before offering VSS to PIA employees.

Separately, a committee led by finance secretary Naveed Kamran Baloch has been assigned to finalise within this month financial restructuring of PIA’s Balance Sheet which is overloaded with government guarantees and local and international loans and liabilities. On top of that, non-core functions of the airline would be completely separated by December 2020.

The federal government has already decided to retain 324 out of 441 organisational entities. Of the remaining, 10 entities are being transferred to the provinces and relevant divisions while nine entities have been notified for wind up or liquidation and 17 others being merged.

A total of 43 entities would be privatised or transferred to Sarmaya-i-Pakistan and an implementation committee of the cabinet is overseeing the process on a weekly basis.

Affordable housing: an uphill virtuous task

THE incentivised Naya Pakistan Housing Project (NPHP) for building 100,000 homes offers both banks and construction industry an opportunity to benefit from the stimulus package with risks in real estate business and housing finance somewhat minimised in these hard times.

The PTI’s flagship housing scheme is a major initiative to shore up labour-intensive construction and allied industries, kick-start the economy, create jobs and provide affordable houses to low- and middle-income groups.

The success of the project depends on the response of the private housing sector and commercial banks as well as current housing demand.

The share in housing finance in Pakistan is a mere 0.2 per cent of the total loan portfolio as compared to 10pc in India and 90pc in Europe. The stated reasons for this are (a)first and foremost the absence of foreclosure laws (b) the want of clear land titles and (c) largely informal activity in the construction industry.

Businesses hold the view that the formalisation of the informal economy is only possible if high tax rates are cut and the stifling investment and business regulatory regime is rationalised

To encourage mortgage financing, the government promulgated an ordinance in July 2019 to remove hurdles in the way of efficient recovery of mortgage-backed security. It was approved by National Assembly in November last year.

An analyst says that the ordinance provides immense protection to the interest of lenders but has stipulations to protect the rights of the borrowers. The commercial banks want apparently a foreclosure law that gives them the right to sell the mortgaged property to recover the bad debt without getting involved in any process which they consider inadvisable.

Also, under the housing package, the risk in banks’ mortgage lending has been reduced by making the housing units ‘affordable’ for buyers.

The government is providing a Rs30 billion subsidy for individual house-builders. Every owner of the first 0.1 million housing units will get Rs0.3m subsidy. Similarly, individual borrowers will be eligible to the subsidised interest rate of 5pc for building a five-marla house and 6pc for a 10-marla unit.

Critics, however, doubt whether households would have enough savings for investment in housing units when joblessness and poverty are on the rise and livelihoods of employees and wage earners remain under threat. Salaries have been reduced or not increased despite the sharp rise in food prices. It is also pointed out that no exercise has been undertaken by the provinces who are supposed to identify housing demand.

The government is trying to encourage the construction and housing sector to enter the formal economy through a tax amnesty valid up to Dec­ember 31. No questions will be asked about the sources of funds invested in the housing sector. Given past experiences, it may lead to some documentation making the industry eligible for housing loans.

So far builders have been generally putting their initial equity while raising funds from instalments paid by buyers to finance and complete housing projects.

Businesses have also held the view that the formalisation of the informal economy is only possible if high tax rates are cut and the stifling investment and business regulatory regime is rationalised. The housing policy is addressing both issues including the quick approval of projects.

The government has abolished 90pc of the tax under section 111 of the Income-Tax Ordinance for NPHP while provincial taxes have been reduced. Besides, the tax regime for the entire construction sector has also been changed to a more industry-convenient fixed rate system.

No doubt the problem of error-free titles of rural land holdings is far from resolved despite marked progress in digitalisation of records. The digitalisation of urban land even for cities like Lahore or Islamabad is in the initial stages. Analysts stress the need for a land bank. The authorities have expressed their determination to solve problems they encounter in the way forward.

The federal government has asked the State Bank of Pakistan (SBP) and commercial banks to raise the share of housing finance from the current 0.2pc to 5pc of their total loan portfolio. It is estimated that Rs330bn would thus be made available for house financing.

However, according to JS Research, the banks are averse to fresh lending despite such measures as space in capital requirements, increase in borrowing limits and extension in regulatory credits announced by the State Bank of Pakistan. The JS report says the overall loan growth remained flat in the last quarter of 2019-20.

Aware of intricate long-term issues, the State Bank Governor Dr Raza Baqir has set up a steering committee to prepare and implement a road map to ensure sustainable market-led financing of housing projects and housing mortgage.

In the first meeting of the steering committee chaired by Dr Baqir, various sub-committees were formed to work in parallel on different work streams including developer finance, end-users housing finance, use of technology, development of the capital market and the long-term yield curve, risk mitigation and removal of legal and regulatory hurdles in housing finance.

Governor Baqir also made it clear to the committee members that housing finance was a priority area for the central bank. The committee includes presidents of selected scheduled banks, Deputy SBP Governor Jameel Ahmed and Naya Pakistan Housing Development Authority Chairman Lt Gen (rtd) Anwar Ali Haider.

Looking at the bigger picture, the prime minister’s think tank in its meeting held on July 11 discussed measures with the stated purpose as to how to make the lending facility reach the people and encourage the banking and finance sector to bring about improvements in the economy.

“Money ends up being trapped in the financial sector rather being invested in other things,” says Kate Raworth, author of the book ‘Doughnut Economics’ published in 2017 and translated into 18 languages. Pakistan is no exception to what she says about the developed financial markets.

The State Bank data shows that scheduled banks’ investments in government papers shot up by 40pc during 2019-20 to reach a record high of over Rs11 trillion.

Pakistan is suffering from both supply and demand shocks. And to quote Raworth there is no equilibrium in supply and demand in the real world. Economic theories, she says, overlook the unpredictable boom and bust cycles.

Her advice to policymakers is: forget economic theories and concentrate on welfare. And common good requires that fairness should trump greed.

Base less propaganda against the city of dream Blue World Islamabad.

Blue World City is a mega housing project by Blue Group of Companies located in proximity to both Rawalpindi and Islamabad city. It will be the first Pak-China housing society in Pakistan whose development will be done by the Chinese.

It is one of the most affordable housing projects in the area right now and has become quite popular among the investors and people who are looking for a place in a budget with a good installment plane.

Blue World City is located on the main Chakri Road near Chakri Interchange on Lahore-Islamabad Motorway M2. It is also one of the societies that are near to Islamabad and Rawalpindi cities as well as Islamabad Airport.

It is a sensational housing society with tremendous surroundings and is situated far away from the hustle and bustle of the main city.

(RDA) has issued the NOC to Blue World City against the Vide Letter no. RDA/MP&TF/F-PHS-PTR-10/148. Dated: 19-02-2019 In the beginning, Preliminary Planning Permission for around 427 Kanal of land was granted to the society, after which another application was submitted to get the Planning and Advertising permission for 5,000 Kanal of land.

With Prime Minister Of Pakistan

The application was under process with the RDA for months until Aug 2018. This new permission is granted for phase 1, covering 5000 Kanal. The NOC situation of this society resembles that of Capital Smart City, another society waiting for approval of NOC of its extension area.

This housing project will be a wonder of Chinese development and architecture. Not only it is the most affordable housing society in the area it is also specifically planned to meet the need to accommodate the influx of over 2 million Chinese residents moving into Pakistan for the CPEC route project in the next few years.

To fulfill this requirement it has become essential for the society to introduce international standard facilities and infrastructure to not only facilitate Chinese residents but also to improve the standard of living for Pakistani citizens.

The housing project will introduce the following futuristic, never before seen amenities to its residents

Baseless propaganda has been launched to damaging the project..

In response to the baseless story which had been circulated by the none stream media for Personal purpose,Saad Nazeer (Charimain BW) said, Planning permission with 13thousand kennel has been submitted as a sponsor of the scheme to RDA.which under process as per the SOP.

We are facing cultural inbuilt faults in the system during land acquisition. Saad Nazeer

Planning approvals are submitting in phase-wise which is as per the law of RDA.

Fruitful meeting with the concerned authorities held a few days ago about the notification of Chief Secretary Punjab to approval planing in 60 days. Saad Nazeer

Meeting with Commissioner Rawalpindi

More then 13tousand Kanal land planning approval has been submitted to RDA for approval.

Mr.Saad Nazir

Chairman Blue World Society said 10 thousand kennels land is in pipeline of purchasing.we are following the Standard Operating procedure of the Rawalpindi Development authorities.